Document:

<PAGE>

                                                                    Exhibit 10.2
                                                                    ------------

                              AVICI SYSTEMS INC.

                     2000 Stock Option and Incentive Plan
                     ------------------------------------

1.  Purpose and Eligibility
    -----------------------

     The purpose of this 2000 Stock Option and Incentive Plan (the "Plan") of
                                                                    ----
Avici Systems Inc. (the "Company") is to provide stock options and other equity
                         -------
interests in the Company (each an "Award") to employees, officers, directors,
consultants and advisors of the Company and its Subsidiaries, all of whom are
eligible to receive Awards under the Plan.  Any person to whom an Award has been
granted under the Plan is called a "Participant".  Additional definitions are
                                    -----------
contained in Section 8.

2.  Administration
    --------------

     a.  Administration by Board of Directors.  The Plan will be administered by
         ------------------------------------
the Board of Directors of the Company (the "Board").  The Board, in its sole
                                            -----
discretion, shall have the authority to grant and amend Awards, to adopt, amend
and repeal rules relating to the Plan and to interpret and correct the
provisions of the Plan and any Award.   All decisions by the Board shall be
final and binding on all interested persons. Neither the Company nor any member
of the Board shall be liable for any action or determination relating to the
Plan.

     b.  Appointment of Committees.  To the extent permitted by applicable law,
         -------------------------
the Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a "Committee").  All references in the
                                             ---------
Plan to the "Board" shall mean such Committee or the Board.
             -----

     c.  Delegation to Executive Officers.  To the extent permitted by
         --------------------------------
applicable law, the Board may delegate to one or more executive officers of the
Company the power to grant Awards and exercise such other powers under the Plan
as the Board may determine, provided that the Board shall fix the maximum number
                            -------------
of Awards to be granted and the maximum number of shares issuable to any one
Participant pursuant to Awards granted by such executive officers.

3.  Stock Available for Awards
    --------------------------

     a.  Number of Shares.  Subject to adjustment under Section 3(c), the
         ----------------
aggregate number of shares of Common Stock of the Company (the "Common Stock")
                                                                ------------
that may be issued pursuant to the Plan is equal to the number of shares of
Common Stock not issued under the 1997 Stock Incentive Plan of the Company, as
amended, on or before the date of the initial public offering of the Company's
Common Stock (the "Initial Public Offering") (the "Available Shares").  If any
                   -----------------------         ----------------
Award expires, or is terminated, surrendered or forfeited, in whole or in part,
the unissued Common Stock covered by such Award
<PAGE>

shall again be available for the grant of Awards under the Plan. If shares of
Common Stock issued pursuant to the Plan are repurchased by, or are surrendered
or forfeited to, the Company at no more than cost, such shares of Common Stock
shall again be available for the grant of Awards under the Plan;
provided, however, that the cumulative number of such shares that may be so
-----------------
reissued under the Plan will not exceed the Available Shares. Shares issued
under the Plan may consist in whole or in part of authorized but unissued shares
or treasury shares.

     b.  Per-Participant Limit.  Subject to adjustment under Section 3(c), no
         ---------------------
Participant may be granted Awards during any one fiscal year to purchase more
than 500,000 shares of Common Stock.

     c.  Adjustment to Common Stock.  In the event of any stock split, stock
         --------------------------
dividend, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation, spin-off, split-up,
or other similar change in capitalization or event, (i) the number and class of
securities available for Awards under the Plan and the per-Participant share
limit, (ii) the number and class of securities, vesting schedule and exercise
price per share subject to each outstanding Option, (iii) the repurchase price
per security subject to repurchase, and (iv) the terms of each other outstanding
stock-based Award shall be adjusted by the Company (or substituted Awards may be
made) to the extent the Board shall determine, in good faith, that such an
adjustment (or substitution) is appropriate. If Section 7(e)(i) applies for any
event, this Section 3(c) shall not be applicable.

4.  Stock Options
    -------------

     a.  General.  The Board may grant options to purchase Common Stock (each,
         -------
an "Option") and determine the number of shares of Common Stock to be covered by
    ------
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option and the Common Stock
issued upon the exercise of each Option, including vesting provisions,
repurchase provisions and restrictions relating to applicable federal or state
securities laws, as it considers advisable.

     b.  Incentive Stock Options.  An Option that the Board intends to be an
         -----------------------
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
                                                                    ---------
Stock Option") shall be granted only to employees of the Company and shall be
------------
subject to and shall be construed consistently with the requirements of Section
422 of the Code.  The Board and the Company shall have no liability if an Option
or any part thereof that is intended to be an Incentive Stock Option does not
qualify as such. An Option or any part thereof that does not qualify as an
Incentive Stock Option is referred to herein as a "Nonstatutory Stock Option."
                                                   -------------------------

     c.  Exercise Price.  The Board shall establish the exercise price (or
         --------------
determine the method by which the exercise price shall be determined) at the
time each Option is granted and specify it in the applicable option agreement.

     d.  Duration of Options.  Each Option shall be exercisable at such times
         -------------------
and subject to such terms and conditions as the Board may specify in the
applicable option agreement.

                                      -2-
<PAGE>

     e.  Exercise of Option.  Options may be exercised only by delivery to the
         ------------------
Company of a written notice of exercise signed by the proper person together
with payment in full as specified in Section 4(f) for the number of shares for
which the Option is exercised.

     f.  Payment Upon Exercise.  Common Stock purchased upon the exercise of an
         ---------------------
Option shall be paid for by one or any combination of the following forms of
payment:

         (i) by check payable to the order of the Company;

         (ii) except as otherwise explicitly provided in the applicable option
agreement, and only if the Common Stock is then publicly traded, delivery of an
irrevocable and unconditional undertaking by a creditworthy broker to deliver
promptly to the Company sufficient funds to pay the exercise price, or delivery
by the Participant to the Company of a copy of irrevocable and unconditional
instructions to a creditworthy broker to deliver promptly to the Company cash or
a check sufficient to pay the exercise price; or

         (iii)  to the extent explicitly provided in the applicable option
agreement, by (x) delivery of shares of Common Stock owned by the Participant
valued at  fair market value (as determined by the Board or as determined
pursuant to the applicable option agreement), (y) delivery of a promissory note
of the Participant to the Company (and delivery to the Company by the
Participant of a check in an amount equal to the par value of the shares
purchased), or (z) payment of such other lawful consideration as the Board may
determine.

5.  Restricted Stock
    ----------------

     a.  Grants.  The Board may grant Awards entitling recipients to acquire
         ------
shares of Common Stock, subject to (i) delivery to the Company by the
Participant of a check in an amount at least equal to the par value of the
shares purchased, and (ii) the right of the Company to repurchase all or part of
such shares at their issue price or other stated or formula price from the
Participant in the event that conditions specified by the Board in the
applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award (each, a
"Restricted Stock Award").
 ----------------------

     b.  Terms and Conditions. The Board shall determine the terms and
         --------------------
conditions of any such Restricted Stock Award.  Any stock certificates issued in
respect of a Restricted Stock Award shall be registered in the name of the
Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee).  After the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or, if the Participant has died, to the
beneficiary designated by a Participant, in a manner determined by the Board, to
receive amounts due or exercise rights of the Participant in the event of the
Participant's death (the "Designated Beneficiary").  In the absence of an
                          ----------------------
effective designation by a Participant, Designated Beneficiary shall mean the
Participant's estate.

                                      -3-
<PAGE>

6.  Other Stock-Based Awards
    ------------------------

     The Board shall have the right to grant other Awards based upon the Common
Stock having such terms and conditions as the Board may determine, including,
without limitation, the grant of shares based upon certain conditions, the grant
of securities convertible into Common Stock and the grant of stock appreciation
rights, phantom stock awards or stock units.

7.  General Provisions Applicable to Awards
    ---------------------------------------

     a.  Transferability of Awards.  Except as the Board may otherwise determine
         -------------------------
or provide in an Award, Awards shall not be sold, assigned, transferred, pledged
or otherwise encumbered by the person to whom they are granted, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the life of the Participant, shall be exercisable only
by the Participant.  References to a Participant, to the extent relevant in the
context, shall include references to authorized transferees.

     b.  Documentation.  Each Award under the Plan shall be evidenced by a
         -------------
written instrument in such form as the Board shall determine or as executed by
an officer of the Company pursuant to authority delegated by the Board.  Each
Award may contain terms and conditions in addition to those set forth in the
Plan provided that such terms and conditions do not contravene the provisions of
     -------------
the Plan.

     c.  Board Discretion.  The terms of each type of Award need not be
         ----------------
identical, and the Board need not treat Participants uniformly.

     d.  Termination of Status.  The Board shall determine the effect on an
         ---------------------
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, or the Participant's legal
representative, conservator, guardian or Designated Beneficiary, may exercise
rights under the Award.

     e.  Acquisition of the Company
         --------------------------

         (i) Consequences of an Acquisition.
             ------------------------------

             (A) Upon the consummation of an Acquisition, the Board shall take
any one or more of the following actions with respect to then outstanding
Awards: (a) provide that outstanding Options shall be assumed, or equivalent
Options shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof), provided that any such Options substituted for Incentive
Stock Options shall satisfy, in the determination of the Board, the requirements
of Section 424(a) of the Code; (b) upon written notice to the Participants,
provide that all or a portion of then unexercised Options will become
exercisable in full or in part as of a specified time (the "Acceleration Time")
                                                            -----------------
prior to the Acquisition and will terminate immediately prior to the
consummation of such Acquisition, except to the extent exercised by the
Participants between the Acceleration Time and the consummation of such
Acquisition; (c) in the event of an Acquisition under the terms of which holders
of Common Stock will receive upon consummation thereof a cash payment for each
share of Common Stock surrendered pursuant to such Acquisition (the "Acquisition
                                                                     -----------
Price"), provide that all outstanding Options shall terminate upon
-----

                                      -4-
<PAGE>

consummation of such Acquisition and each Participant shall receive, in exchange
therefor, a cash payment equal to the amount (if any) by which (x) the
Acquisition Price multiplied by the number of shares of Common Stock subject to
such outstanding Options (whether or not then exercisable), exceeds (y) the
aggregate exercise price of such Options; (d) provide that all or any portion of
the Restricted Stock Awards then outstanding shall become free of all or certain
restrictions prior to the consummation of the Acquisition; and (e) provide that
any other stock-based Awards outstanding (x) shall become exercisable,
realizable or vested in full or in part, or shall be free of all or certain
conditions or restrictions, as applicable to each such Award, prior to the
consummation of the Acquisition, or (y), if applicable, shall be assumed, or
equivalent Awards shall be substituted, by the acquiring or succeeding
corporation (or an affiliate thereof); provided that in no event shall the Board
accelerate the vesting of any Option, Restricted Stock Award or other Award by a
period of more than one year.

             (B) Acquisition Defined. An "Acquisition" shall mean: (x) the sale
                 -------------------      -----------
of the Company by merger in which the shareholders of the Company in their
capacity as such no longer own a majority of the outstanding equity securities
of the Company (or its successor); or (y) any sale of all or substantially all
of the assets or capital stock of the Company (other than in a spin-off or
similar transaction) or (z) any other acquisition of the business of the
Company, as determined by the Board.

         (ii) Assumption of Options Upon Certain Events.  In connection with a
              -----------------------------------------
merger or consolidation of an entity with the Company or the acquisition by the
Company of property or stock of an entity, the Board may grant Awards under the
Plan in substitution for stock and stock-based awards issued by such entity or
an affiliate thereof.  The substitute Awards shall be granted on such terms and
conditions as the Board considers appropriate in the circumstances.

         (iii)  Pooling-of Interests-Accounting. If the Company proposes to
                -------------------------------
engage in an Acquisition intended to be accounted for as a pooling-of-interests,
and in the event that the provisions of this Plan or of any Award hereunder, or
any actions of the Board taken in connection with such Acquisition, are
determined by the Company's or the acquiring company's independent public
accountants to cause such Acquisition to fail to be accounted for as a pooling-
of-interests, then such provisions or actions shall be amended or rescinded by
the Board, without the consent of any Participant, to be consistent with
pooling-of-interests accounting treatment for such Acquisition.

         (iv) Parachute Awards. Notwithstanding the provisions of Section
              ----------------
7(e)(i)(A), if, in connection with an Acquisition described therein, a tax under
Section 4999 of the Code would be imposed on the Participant (after taking into
account the exceptions set forth in Sections 280G(b)(4) and 280G(b)(5) of the
Code), then the number of Awards which shall become exercisable, realizable or
vested as provided in such section shall be reduced (or delayed), to the minimum
extent necessary, so that no such tax would be imposed on the Participant (the
Awards not becoming so accelerated, realizable or vested, the "Parachute
                                                               ---------
Awards"); provided, however, that if the "aggregate present value" of the
------    -----------------
Parachute Awards would exceed the tax that, but for this sentence, would be
imposed on the Participant under Section 4999 of the Code in connection with the
Acquisition, then the Awards shall become immediately exercisable, realizable
and vested without regard to the provisions of this sentence.

                                      -5-
<PAGE>

For purposes of the preceding sentence, the "aggregate present value" of an
Award shall be calculated on an after-tax basis (other than taxes imposed by
Section 4999 of the Code) and shall be based on economic principles rather than
the principles set forth under Section 280G of the Code and the regulations
promulgated thereunder. All determinations required to be made under this
Section 7(e)(iv) shall be made by the Company.

     f.  Withholding.  Each Participant shall pay to the Company, or make
         -----------
provisions satisfactory to the Company for payment of, any taxes required by law
to be withheld in connection with Awards to such Participant no later than the
date of the event creating the tax liability.  The Board may allow Participants
to satisfy such tax obligations in whole or in part by transferring shares of
Common Stock, including shares retained from the Award creating the tax
obligation, valued at their fair market value (as determined by the Board or as
determined pursuant to the applicable option agreement).  The Company may, to
the extent permitted by law, deduct any such tax obligations from any payment of
any kind otherwise due to a Participant.

     g.  Amendment of Awards.  The Board may amend, modify or terminate any
         -------------------
outstanding Award including, but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that, except as otherwise provided in Section 7(e)(iii), the
Participant's consent to such action shall be required unless the Board
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.

     h.  Conditions on Delivery of Stock.  The Company will not be obligated to
         -------------------------------
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.

     i.  Acceleration.  The Board may at any time provide that any Options shall
         ------------
become immediately exercisable in full or in part, that any Restricted Stock
Awards shall be free of some or all restrictions, or that any other stock-based
Awards may become exercisable in full or in part or free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be, despite the fact that the foregoing actions may (i) cause the
application of Sections 280G and 4999 of the Code if a change in control of the
Company occurs, or (ii) disqualify all or part of the Option as an Incentive
Stock Option.

                                      -6-
<PAGE>

8.  Miscellaneous
    -------------

     a.  Definitions.
         -----------

         (i)  "Company," for purposes of eligibility under the Plan, shall
include any present or future subsidiary corporations of Avici Systems Inc., as
defined in Section 424(f) of the Code (a "Subsidiary"), and any present or
                                          ----------
future parent corporation of Avici Systems Inc., as defined in Section 424(e) of
the Code. For purposes of Awards other than Incentive Stock Options, the term
"Company" shall include any other business venture in which the Company has a
direct or indirect significant interest, as determined by the Board in its sole
discretion.

         (ii)  "Code" means the Internal Revenue Code of 1986, as amended, and
                ----
any regulations promulgated thereunder.

         (iii)  "employee" for purposes of eligibility under the Plan (but not
for purposes of Section 4(b)) shall include a person to whom an offer of
employment has been extended by the Company.

     b.  No Right To Employment or Other Status.  No person shall have any claim
         --------------------------------------
or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company.  The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan.

     c.  No Rights As Stockholder.  Subject to the provisions of the applicable
         ------------------------
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder thereof.

     d.  Effective Date and Term of Plan.  The Plan shall become effective on
         -------------------------------
the date on which it is adopted by the Board.  No Awards shall be granted under
the Plan after the completion of ten years from the date on which the Plan was
adopted by the Board, but Awards previously granted may extend beyond that date.

     e.  Amendment of Plan.  The Board may amend, suspend or terminate the Plan
         -----------------
or any portion thereof at any time.

     f.  Governing Law.  The provisions of the Plan and all Awards made
         -------------
hereunder shall be governed by and interpreted in accordance with the laws of
Delaware, without regard to any applicable conflicts of law.

                                      -7-<PAGE>

                                                                    Exhibit 10.3
                                                                    ------------

                              AVICI SYSTEMS, INC.

                       2000 EMPLOYEE STOCK PURCHASE PLAN

ARTICLE 1 - PURPOSE.
-------------------

   This 2000 Employee Stock Purchase Plan (the "Plan") is intended to encourage
stock ownership by all eligible employees of Avici Systems Inc. (the "Company"),
a Delaware corporation, and its participating subsidiaries (as defined in
Article 17) so that they may share in the growth of the Company by acquiring or
increasing their proprietary interest in the Company.  The Plan is designed to
encourage eligible employees to remain in the employment of the Company and its
participating subsidiaries.  The Plan is intended to constitute an "employee
stock purchase plan" within the meaning of Section 423(b) of the Internal
Revenue Code of 1986, as amended (the "Code").

ARTICLE 2 - ADMINISTRATION OF THE PLAN.
--------------------------------------

   The Plan may be administered by a committee appointed by the Board of
Directors of the Company (the "Committee").  The Committee shall consist of not
less than two members of the Company's Board of Directors.  The Board of
Directors may from time to time remove members from, or add members to, the
Committee.  Vacancies on the Committee, howsoever caused, shall be filled by the
Board of Directors.  The Committee may select one of its members as Chairman,
and shall hold meetings at such times and places as it may determine.  Acts by a
majority of the Committee, or acts reduced to or approved in writing by a
majority of the members of the Committee, shall be the valid acts of the
Committee.

   The interpretation and construction by the Committee of any provisions of the
Plan or of any option granted under it shall be final, unless otherwise
determined by the Board of Directors.  The Committee may from time to time adopt
such rules and regulations for carrying out the Plan as it may deem best,
provided that any such rules and regulations shall be applied on a uniform basis
to all employees under the Plan.  No member of the Board of Directors or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted under it.

   In the event the Board of Directors fails to appoint or refrains from
appointing a Committee, the Board of Directors shall have all power and
authority to administer the Plan.  In such event, the word "Committee" wherever
used herein shall be deemed to mean the Board of Directors.

ARTICLE 3 - ELIGIBLE EMPLOYEES.
------------------------------

   All employees of the Company or any of its participating subsidiaries whose
customary employment is more than 20 hours per week and for more than five
months in any calendar year and who have completed at least 7 days of employment
shall be eligible to receive options under the Plan to purchase common stock,
par value $0.0001 per share, of the Company (the "Common Stock"), and all
eligible employees shall have the same rights and privileges hereunder.  Persons
who are eligible employees on the first business day of the First Offering
Period (as defined in Article 5) shall receive their options as of such day.
Persons who become eligible employees after any date on which options
<PAGE>

                                      -2-

are granted under the Plan shall be granted options on the first day of the next
succeeding Offering Period (as defined in Article 5) on which options are
granted to eligible employees under the Plan. Persons who remain eligible
employees immediately following completion of any Offering Period in which they
participate shall be granted additional options on the first day of the next
succeeding Offering Period on which options are granted to eligible employees
under the Plan; it being the intention that employees may participate in
succeeding (but not overlapping) Offering Periods. In no event, however, may an
employee be granted an option if such employee, immediately after the option was
granted, would be treated as owning stock possessing five percent or more of the
total combined voting power or value of all classes of stock of the Company or
of any parent corporation or subsidiary corporation, as the terms "parent
corporation" and "subsidiary corporation" are defined in Section 424(e) and (f)
of the Code. For purposes of determining stock ownership under this paragraph,
the rules of Section 424(d) of the Code shall apply, and stock which the
employee may purchase under outstanding options shall be treated as stock owned
by the employee.

ARTICLE 4 - STOCK SUBJECT TO THE PLAN.
-------------------------------------

   The stock subject to the options under the Plan shall be shares of the
Company's authorized but unissued Common Stock or shares of Common Stock
reacquired by the Company, including shares purchased in the open market.  The
aggregate number of shares which may be issued pursuant to the Plan is 750,000,
subject to adjustment as provided in Article 12, which number shall
automatically increase on January 1 of each year, beginning with January 1,
2001, by such number of shares as is equal to the number of shares necessary to
cause the total number of shares then available to be issued pursuant to the
Plan (after deducting shares issued upon exercise of options under the Plan and
shares issuable pursuant to outstanding options under the plan as of the close
of business on the preceding December 31st) to be 750,000.  If any option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be exercisable in whole
or in part, the unpurchased shares subject thereto shall again be available
under the Plan.

ARTICLE 5 - OFFERING PERIODS, PAYMENT PERIODS AND STOCK OPTIONS.
---------------------------------------------------------------

   Offering Periods during which payroll deductions will be accumulated under
the Plan shall consist of twenty-four month overlapping periods commencing every
six months on January 1st and July 1st of each calendar year (each an "Offering
Period");  provided, however, that the first Offering Period shall commence on
the date on which the Common Stock is first publicly traded (the "Initial Public
Offering") and shall end on the last trading day on or before June 30th 2002
(the "First Offering Period").  Each Offering Period, with the exception of the
First Offering Period, shall consist of four consecutive six-month Payment
Periods (each a "Payment Period");  provided that the First Offering Period will
consist of four Payment Periods, the first commencing on the Initial Public
Offering and ending on December 31st 2000, the second commencing on January 1st
2001 and ending on June 30th 2001, the third commencing on July 1st 2001 and
ending on December 31st 2001 and the fourth commencing on January 1st 2002 and
ending on June 30th 2002.  The Committee shall have the power to change the
duration of Offering Periods and/or Payment Periods (including the commencement
dates thereof) with respect to future offerings without shareholder approval if
such change is announced at least five days prior to the scheduled beginning of
the first Offering Period to be affected thereafter.

   On the first business day of each Offering Period, the Company will grant to
each eligible employee who is then a participant in the Plan an option to
purchase on the last day of each Payment Period within such Offering Period, at
the Option Price hereinafter provided for, a maximum of 1,000 shares, on
condition that such employee remains eligible to participate in the Plan
throughout the
<PAGE>

                                      -3-

respective Payment Period. The participant shall be entitled to exercise the
option so granted only to the extent of the participant's accumulated payroll
deductions on the last day of the respective Payment Period. If the
participant's accumulated payroll deductions on the last day of the Payment
Period would enable the participant to purchase more than 1,000 shares except
for the 1,000-share limitation, the excess of the amount of the accumulated
payroll deductions over the aggregate purchase price of the 1,000 shares shall
be promptly refunded to the participant by the Company, without interest. The
Option Price per share for each Payment Period shall be the lesser of (i) 85% of
the average market price of the Common Stock on the first business day of the
Offering Period and (ii) 85% of the average market price of the Common Stock on
the last business day of the respective Payment Period, in either event rounded
up to avoid fractions of a dollar other than 1/4, 1/2 and 3/4 (the "Option
Price"). Provided, however, that with respect to each Payment Period within the
First Offering Period, the Option Price shall be the lesser of (i) 85% of the
price per share at which the Common Stock is initially sold to the public in the
Initial Public Offering (without regard to any applicable discounts or
commissions provided to the underwriters) and (ii) 85% of the average market
price of the Common Stock on the last business day of the respective Payment
Period, in either event rounded up to avoid fractions of a dollar other than
1/4, 1/2 and 3/4. The foregoing limitation on the number of shares subject to
options and the Option Price shall be subject to adjustment as provided in
Article 12.

   For purposes of the Plan, the term "average market price" on any date means
(i) the average (on that date) of the high and low prices of the Common Stock on
the principal national securities exchange on which the Common Stock is traded,
if the Common Stock is then traded on a national securities exchange; or
(ii) the last reported sale price (on that date) of the Common Stock on the
Nasdaq National Market, if the Common Stock is not then traded on a national
securities exchange; or (iii) the average of the closing bid and asked prices
last quoted (on that date) by an established quotation service for over-the-
counter securities, if the Common Stock is not reported on the Nasdaq National
Market. For purposes of determining the last reported sale price or the last
quoted price for the foregoing provision, the last reported or quoted price
shall mean as the case may be, at 4:00 p.m., New York time, on that day.

   For purposes of the Plan, the term "business day" means a day on which there
is trading on the Nasdaq National Market or the aforementioned national
securities exchange, whichever is applicable pursuant to the preceding
paragraph; and if neither is applicable, a day that is not a Saturday, Sunday or
legal holiday in the Commonwealth of Massachusetts.

   No employee shall be granted an option which permits the employee's right to
purchase stock under the Plan, and under all other Section 423(b) employee stock
purchase plans of the Company and any parent or subsidiary corporations, to
accrue at a rate which exceeds $25,000 of fair market value of such stock
(determined on the date or dates that options on such stock were granted) for
each calendar year in which such option is outstanding at any time.  The purpose
of the limitation in the preceding sentence is to comply with Section 423(b)(8)
of the Code.  If the participant's accumulated payroll deductions on the last
day of the Payment Period would otherwise enable the participant to purchase
Common Stock in excess of the Section 423(b)(8) limitation described in this
paragraph, the excess of the amount of the accumulated payroll deductions over
the aggregate purchase price of the shares actually purchased shall be promptly
refunded to the participant by the Company, without interest.

ARTICLE 6 - EXERCISE OF OPTION.
------------------------------

   Each eligible employee who continues to be a participant in the Plan on the
last day of a Payment Period shall be deemed to have exercised his or her option
on such date and shall be deemed to have
<PAGE>

                                      -4-

purchased from the Company such number of full shares of Common Stock reserved
for the purpose of the Plan as the participant's accumulated payroll deductions
on such date will pay for at the Option Price, subject to the 1,000-share limit
of the option and the Section 423(b)(8) limitation described in Article 5.
If the individual is not a participant on the last day of a Payment Period, then
he or she shall not be entitled to exercise his or her option. Only full shares
of Common Stock may be purchased under the Plan. Unused payroll deductions
remaining in a participant's account at the end of a Payment Period by reason of
the inability to purchase a fractional share shall be carried forward to the
next Payment Period.

ARTICLE 7 - AUTHORIZATION FOR ENTERING THE PLAN.
-----------------------------------------------

   An employee may elect to enter the Plan by filling out, signing and
delivering to the Company an authorization:

       A. Stating the percentage to be deducted regularly from the employee's
   pay;

       B. Authorizing the purchase of stock for the employee in each Payment
   Period in accordance with the terms of the Plan; and

       C. Specifying the exact name or names in which stock purchased for the
   employee is to be issued as provided under Article 11 hereof.

   Such authorization must be received by the Company at least seven days before
the first day of the next succeeding Offering Period and shall take effect only
if the employee is an eligible employee on the first business day of such
Offering Period; provided, however, that the Committee may, in its discretion,
choose to accept an authorization received less than seven days before the first
day of the next succeeding Offering Period.

   Unless a participant files a new authorization or withdraws from the Plan,
the deductions and purchases under the authorization the participant has on file
under the Plan will continue from one Offering Period to the next succeeding
(but not overlapping) Offering Period as long as the Plan remains in effect.
Notwithstanding any of the foregoing, if the average market price of the Common
Stock on the last business day of a respective Payment Period is lower than the
average market price of the Common Stock on the first business day of the
Offering Period, every participant shall be automatically withdrawn from the
Offering Period at the close of such Payment Period and after the acquisition of
shares of Common Stock for such Payment Period, and automatically enrolled in
the immediately following Offering Period as of the first day thereof.

   The Company will accumulate and hold for each participant's account the
amounts deducted from his or her pay.  No interest will be paid on these
amounts.

ARTICLE 8 - MAXIMUM AMOUNT OF PAYROLL DEDUCTIONS.
------------------------------------------------

   An employee may authorize payroll deductions in an amount (expressed as a
whole percentage) not less than one percent (1%) but not more than ten percent
(10%) (unless otherwise determined by the Committee) of the employee's total
compensation, including base pay or salary and any overtime, bonuses or
commissions paid during the Offering Period during which such authorization
relates.
<PAGE>

                                      -5-

ARTICLE 9 - CHANGE IN PAYROLL DEDUCTIONS.
----------------------------------------

   Each participant may increase or decrease the amount of his or her payroll
deduction not more than once during each Payment Period, subject to the
limitations set forth in Article 8, effective on the first day of the next
succeeding Payment Period.  However, a payroll deduction increase or decrease
will be given effect only if in writing and received by the Company seven days
before the first day of the next succeeding Payment Period.  A participant may
withdraw in full from an Offering Period.

ARTICLE 10 - WITHDRAWAL FROM THE PLAN.
-------------------------------------

   A participant may withdraw from the Plan (in whole but not in part) at any
time prior to the last day of a Payment Period by delivering a withdrawal notice
to the Company, in which event the Company will refund the entire balance of the
employee's deductions not previously used to purchase stock during such Offering
Period.

   To re-enter the Plan, an employee who has previously withdrawn must file a
new authorization at least seven days before the first day of the next Offering
Period in which he or she wishes to participate.  The employee's re-entry into
the Plan becomes effective at the beginning of such Offering Period, provided
that he or she is an eligible employee on the first business day of the Offering
Period.

ARTICLE 11 - ISSUANCE OF STOCK.
------------------------------

   Certificates for stock issued to participants shall be delivered as soon as
practicable after each Payment Period by the Company's transfer agent.

   Stock purchased under the Plan shall be issued only in the name of the
participant, or if the participant's authorization so specifies, in the name of
the participant and another person of legal age as joint tenants with rights of
survivorship.

ARTICLE 12 - ADJUSTMENTS.
------------------------

   Upon the happening of any of the following described events, a participant's
rights under options granted under the Plan shall be adjusted as hereinafter
provided:

       A. In the event that the shares of Common Stock shall be subdivided or
   combined into a greater or smaller number of shares or if, upon a
   reorganization, split-up, liquidation, recapitalization or the like of the
   Company, the shares of Common Stock shall be exchanged for other securities
   of the Company, each participant shall be entitled, subject to the conditions
   herein stated, to purchase such number of shares of Common Stock or amount of
   other securities of the Company as were exchangeable for the number of shares
   of Common Stock that such participant would have been entitled to purchase
   except for such action, and appropriate adjustments shall be made in the
   purchase price per share to reflect such subdivision, combination or
   exchange; and

       B. In the event the Company shall issue any of its shares as a stock
   dividend upon or with respect to the shares of stock of the class which shall
   at the time be subject to options hereunder, each participant upon exercising
   such an option shall be entitled to receive (for the purchase price paid upon
   such exercise) the shares as to which the participant is exercising his or
   her option and, in addition thereto (at no additional cost), such number of
   shares of the class or classes in which such stock dividend or dividends were
   declared or paid, and such amount of cash in
<PAGE>

                                      -6-

   lieu of fractional shares, as is equal to the number of shares thereof and
   the amount of cash in lieu of fractional shares, respectively, which the
   participant would have received if the participant had been the holder of the
   shares as to which the participant is exercising his or her option at all
   times between the date of the granting of such option and the date of its
   exercise.

   Upon the happening of any of the foregoing events, the class and aggregate
number of shares set forth in Article 4 hereof which are subject to options
which have been or may be granted under the Plan and the limitations set forth
in the second paragraph of Article 5 shall also be appropriately adjusted to
reflect the events specified in paragraphs A and B above.  Notwithstanding the
foregoing, any adjustments made pursuant to paragraphs A or B shall be made only
after the Committee, based on advice of counsel for the Company, determines
whether such adjustments would constitute a "modification" (as that term is
defined in Section 424 of the Code).  If the Committee determines that such
adjustments would constitute a modification, it may refrain from making such
adjustments.

   If the Company is to be consolidated with or acquired by another entity in a
merger, a sale of all or substantially all of the Company's assets or otherwise
(an "Acquisition"), the Committee or the board of directors of any entity
assuming the obligations of the Company hereunder (the "Successor Board") shall,
with respect to options then outstanding under the Plan, either (i) make
appropriate provision for the continuation of such options by arranging for the
substitution on an equitable basis for the shares then subject to such options
either (a) the consideration payable with respect to the outstanding shares of
the Common Stock in connection with the Acquisition, (b) shares of stock of the
successor corporation, or a parent or subsidiary of such corporation, or
(c) such other securities as the Successor Board deems appropriate, the fair
market value of which shall not materially exceed the fair market value of the
shares of Common Stock subject to such options immediately preceding the
Acquisition; or (ii) terminate each participant's options in exchange for a cash
payment equal to the excess of (a) the fair market value on the date of the
Acquisition, of the number of shares of Common Stock that the participant's
accumulated payroll deductions as of the date of the Acquisition could purchase,
at an option price determined with reference only to the first business day of
the applicable Payment Period and subject to the 1,000-share limitation, Code
Section 423(b)(8) and fractional-share limitations on the amount of stock a
participant would be entitled to purchase, over (b) the result of multiplying
such number of shares by such option price.

   The Committee or Successor Board shall determine the adjustments to be made
under this Article 12, and its determination shall be conclusive.

ARTICLE 13 - NO TRANSFER OR ASSIGNMENT OF EMPLOYEE'S RIGHTS.
-----------------------------------------------------------

   An option granted under the Plan may not be transferred or assigned and may
be exercised only by the participant.

ARTICLE 14 - TERMINATION OF EMPLOYEE'S RIGHTS.
---------------------------------------------

   Whenever a participant ceases to be an eligible employee because of
retirement, voluntary or involuntary termination, resignation, layoff,
discharge, death or for any other reason, his or her rights under the Plan shall
immediately terminate, and the Company shall promptly refund, without interest,
the entire balance of his or her payroll deduction account under the Plan.
Notwithstanding the foregoing, eligible employment shall be treated as
continuing intact while a participant is on military leave, sick leave or other
bona fide leave of absence, for up to 90 days, or, if longer than 90 days, for
so long as the participant's right to re-employment is guaranteed either by
statute or by contract.
<PAGE>

                                      -7-

ARTICLE 15 - TERMINATION AND AMENDMENTS TO PLAN.
-----------------------------------------------

   The Plan may be terminated at any time by the Company's Board of Directors
but such termination shall not affect options then outstanding under the Plan.
It will terminate in any case when all or substantially all of the unissued
shares of stock reserved for the purposes of the Plan have been purchased.
If at any time shares of stock reserved for the purpose of the Plan remain
available for purchase but not in sufficient number to satisfy all then unfilled
purchase requirements, the available shares shall be apportioned among
participants in proportion to the amount of payroll deductions accumulated on
behalf of each participant that would otherwise be used to purchase stock, and
the Plan shall terminate. Upon such termination or any other termination of the
Plan, all payroll deductions not used to purchase stock will be refunded,
without interest.

   The Committee or the Board of Directors may from time to time adopt
amendments to the Plan provided that, without the approval of the stockholders
of the Company, no amendment may (i) increase the number of shares that may be
issued under the Plan; (ii) change the class of employees eligible to receive
options under the Plan, if such action would be treated as the adoption of a new
plan for purposes of Section 423(b) of the Code; or (iii) cause Rule 16b-3 under
the Securities Exchange Act of 1934 to become inapplicable to the Plan.

ARTICLE 16 - LIMITS ON SALE OF STOCK PURCHASED UNDER THE PLAN.
-------------------------------------------------------------

   The Plan is intended to provide shares of Common Stock for investment and not
for resale.  The Company does not, however, intend to restrict or influence any
employee in the conduct of his or her own affairs.  An employee may, therefore,
sell stock purchased under the Plan at any time the employee chooses, subject to
compliance with any applicable federal or state securities laws and subject to
any restrictions imposed under Article 21 to ensure that tax withholding
obligations are satisfied.  THE EMPLOYEE ASSUMES THE RISK OF ANY MARKET
FLUCTUATIONS IN THE PRICE OF THE STOCK.

ARTICLE 17 - PARTICIPATING SUBSIDIARIES.
---------------------------------------

   The term "participating subsidiary" shall mean any present or future
subsidiary of the Company, as that term is defined in Section 424(f) of the
Code, which is designated from time to time by the Board of Directors to
participate in the Plan.  The Board of Directors shall have the power to make
such designation before or after the Plan is approved by the stockholders.

ARTICLE 18 - OPTIONEES NOT STOCKHOLDERS.
---------------------------------------

   Neither the granting of an option to an employee nor the deductions from his
or her pay shall constitute such employee as a stockholder of the shares covered
by an option until such shares have been actually purchased by the employee.

ARTICLE 19 - APPLICATION OF FUNDS.
---------------------------------

   The proceeds received by the Company from the sale of Common Stock pursuant
to options granted under the Plan will be used for general corporate purposes.
<PAGE>

                                      -8-

ARTICLE 20 - NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.
-----------------------------------------------------------

   By electing to participate in the Plan, each participant agrees to notify the
Company in writing immediately after the participant transfers Common Stock
acquired under the Plan, if such transfer occurs within two years after the
first business day of the Payment Period in which such Common Stock was
acquired.  Each participant further agrees to provide any information about such
a transfer as may be requested by the Company or any subsidiary corporation in
order to assist it in complying with the tax laws.  Such dispositions generally
are treated as "disqualifying dispositions" under Sections 421 and 424 of the
Code, which have certain tax consequences to participants and to the Company and
its participating subsidiaries.

ARTICLE 21 - WITHHOLDING OF ADDITIONAL INCOME TAXES.
---------------------------------------------------

   By electing to participate in the Plan, each participant acknowledges that
the Company and its participating subsidiaries are required to withhold taxes
with respect to the amounts deducted from the participant's compensation and
accumulated for the benefit of the participant under the Plan, and each
participant agrees that the Company and its participating subsidiaries may
deduct additional amounts from the participant's compensation, when amounts are
added to the participant's account, used to purchase Common Stock or refunded,
in order to satisfy such withholding obligations.  Each participant further
acknowledges that when Common Stock is purchased under the Plan the Company and
its participating subsidiaries may be required to withhold taxes with respect to
all or a portion of the difference between the fair market value of the Common
Stock purchased and its purchase price, and each participant agrees that such
taxes may be withheld from compensation otherwise payable to such participant.
It is intended that tax withholding will be accomplished in such a manner that
the full amount of payroll deductions elected by the participant under Article 7
will be used to purchase Common Stock.  However, if amounts sufficient to
satisfy applicable tax withholding obligations have not been withheld from
compensation otherwise payable to any participant, then, notwithstanding any
other provision of the Plan, the Company may withhold such taxes from the
participant's accumulated payroll deductions and apply the net amount to the
purchase of Common Stock, unless the participant pays to the Company, prior to
the exercise date, an amount sufficient to satisfy such withholding obligations.
Each participant further acknowledges that the Company and its participating
subsidiaries may be required to withhold taxes in connection with the
disposition of stock acquired under the Plan and agrees that the Company or any
participating subsidiary may take whatever action it considers appropriate to
satisfy such withholding requirements, including deducting from compensation
otherwise payable to such participant an amount sufficient to satisfy such
withholding requirements or conditioning any disposition of Common Stock by the
participant upon the payment to the Company or such subsidiary of an amount
sufficient to satisfy such withholding requirements.

ARTICLE 22 - GOVERNMENTAL REGULATIONS.
-------------------------------------

   The Company's obligation to sell and deliver shares of Common Stock under the
Plan is subject to the approval of any governmental authority required in
connection with the authorization, issuance or sale of such shares.

   Government regulations may impose reporting or other obligations on the
Company with respect to the Plan.  For example, the Company may be required to
identify shares of Common Stock issued under the Plan on its stock ownership
records and send tax information statements to employees and former employees
who transfer title to such shares.
<PAGE>

                                      -9-

ARTICLE 23 - GOVERNING LAW.
--------------------------

   The validity and construction of the Plan shall be governed by the laws of
Delaware, without giving effect to the principles of conflicts of law thereof.

ARTICLE 24 - APPROVAL OF BOARD OF DIRECTORS AND STOCKHOLDERS OF THE COMPANY.
---------------------------------------------------------------------------

   The Plan was adopted by the Board of Directors on May 3, 2000 and was
approved by the stockholders of the Company on June __, 2000.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00011-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00011-of-00352.parquet"}]]