Document:

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                                                                     EXHIBIT 4.1

                                ASK JEEVES, INC.

                           1999 EQUITY INCENTIVE PLAN

   (COMPOSITE PLAN DOCUMENT REFLECTING AMENDMENTS ADOPTED THROUGH APRIL 2003)

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                                TABLE OF CONTENTS

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                                                                  PAGE
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1.       PURPOSES...............................................    1

2.       DEFINITIONS............................................    1

3.       ADMINISTRATION.........................................    4

4.       SHARES SUBJECT TO THE PLAN.............................    5

5.       ELIGIBILITY............................................    5

6.       OPTION PROVISIONS......................................    6

7.       PROVISIONS OF RESTRICTED STOCK AWARDS..................    9

8.       COVENANTS OF THE COMPANY...............................   10

9.       USE OF PROCEEDS FROM STOCK.............................   10

10.      MISCELLANEOUS..........................................   10

11.      ADJUSTMENTS UPON CHANGES IN STOCK......................   12

12.      AMENDMENT OF THE PLAN AND STOCK AWARDS.................   13

13.      TERMINATION OR SUSPENSION OF THE PLAN..................   13

14.      EFFECTIVE DATE OF PLAN.................................   13

15.      CHOICE OF LAW..........................................   14
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                                ASK JEEVES, INC.

                           1999 EQUITY INCENTIVE PLAN

   COMPOSITE PLAN DOCUMENT INCORPORATING AMENDMENTS ADOPTED THROUGH APRIL 2003

                             ADOPTED APRIL 16, 1999
            APPROVED BY STOCKHOLDERS ON MAY 21, 1999 AND MAY 25, 2000

1.       PURPOSES.

         (a)      ELIGIBLE STOCK AWARD RECIPIENTS. The persons eligible to
receive Stock Awards are the Employees, Directors and Consultants of the Company
and its Affiliates.

         (b)      AVAILABLE STOCK AWARDS. The purpose of the Plan is to provide
a means by which eligible recipients of Stock Awards may be given an opportunity
to benefit from increases in value of the Common Stock through the granting of
the following Stock Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock
Options and (iii) rights to acquire restricted stock.

         (c)      GENERAL PURPOSE. The Company, by means of the Plan, seeks to
retain the services of the group of persons eligible to receive Stock Awards, to
secure and retain the services of new members of this group and to provide
incentives for such persons to exert maximum efforts for the success of the
Company and its Affiliates.

2.       DEFINITIONS.

         (a)      "AFFILIATE" means any parent corporation or subsidiary
corporation of the Company, whether now or hereafter existing, as those terms
are defined in Sections 424(e) and (f), respectively, of the Code.

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

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

         (d)      "COMMITTEE" means a committee of one or more members of the
Board appointed by the Board in accordance with subsection 3(c).

         (e)      "COMMON STOCK" means the common stock of the Company.

         (f)      "COMPANY" means Ask Jeeves, Inc., a Delaware corporation.

         (g)      "CONSULTANT" means any person, including an advisor, (i)
engaged by the Company or an Affiliate to render consulting or advisory services
and who is compensated for such services or (ii) who is a member of the Board of
Directors of an Affiliate. However, the term "Consultant" shall not include
either Directors who are not compensated by the Company for their services as
Directors or Directors who are merely paid a director's fee by the Company for
their services as Directors.

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         (h)      "CONTINUOUS SERVICE" means that the Participant's service with
the Company or an Affiliate, whether as an Employee, Director or Consultant, is
not interrupted or terminated. The Participant's Continuous Service shall not be
deemed to have terminated merely because of a change in the capacity in which
the Participant renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Participant
renders such service, provided that there is no interruption or termination of
the Participant's Continuous Service. For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate or a Director will not
constitute an interruption of Continuous Service. The Board or the chief
executive officer of the Company, in that party's sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of any
leave of absence approved by that party, including sick leave, military leave or
any other personal leave.

         (i)      "COVERED EMPLOYEE" means the chief executive officer and the
four (4) other highest compensated officers of the Company for whom total
compensation is required to be reported to stockholders under the Exchange Act,
as determined for purposes of Section 162(m) of the Code.

         (j)      "DIRECTOR" means a member of the Board of Directors of the
Company.

         (k)      "DISABILITY" means the permanent and total disability of a
person within the meaning of Section 22(e)(3) of the Code.

         (l)      "EMPLOYEE" means any person employed by the Company or an
Affiliate. Mere service as a Director or payment of a director's fee by the
Company or an Affiliate shall not be sufficient to constitute "employment" by
the Company or an Affiliate.

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

         (n)      "FAIR MARKET VALUE" means, as of any date, the value of the
Common Stock determined as follows:

                  (i)      If the Common Stock is listed on any established
stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap
Market, the Fair Market Value of a share of Common Stock shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or market (or the exchange or market with the greatest
volume of trading in the Common Stock) on the last market trading day prior to
the day of determination, as reported in The Wall Street Journal or such other
source as the Board deems reliable.

                  (ii)     In the absence of such markets for the Common Stock,
the Fair Market Value shall be determined in good faith by the Board.

         (o)      "INCENTIVE STOCK OPTION" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.

         (p)      "LISTING DATE" means the first date upon which any security of
the Company is listed (or approved for listing) upon notice of issuance on any
security exchange, or designated

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(or approved for designation) upon notice of issuance as a national market
security on an interdealer quotation system if such securities exchange or
interdealer quotation system has been certified in accordance with the provision
of the Section 25100(o) of the California Corporate Securities Law of 1968.

         (q)      "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not
a current Employee or Officer of the Company or its parent or a subsidiary, does
not receive compensation (directly or indirectly) from the Company or its parent
or a subsidiary for services rendered as a consultant or in any capacity other
than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act ("Regulation S-K")), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a "non-employee director" for purposes of Rule 16b-3.

         (r)      "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option.

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

         (t)      "OPTION" means an Incentive Stock Option or a Nonstatutory
Stock Option granted pursuant to the Plan.

         (u)      "OPTION AGREEMENT" means a written agreement between the '
Company and an Optionholder evidencing the terms and conditions of an individual
Option grant. Each Option Agreement shall be subject to the terms and conditions
of the Plan.

         (v)      "OPTIONHOLDER" means a person to whom an Option is granted
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Option.

         (w)      "OUTSIDE DIRECTOR" means a Director who either (i) is not a
current employee of the Company or an "affiliated corporation" (within the
meaning of Treasury Regulations promulgated under Section 162(m) of the Code),
is not a former employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an "affiliated corporation"
at any time and is not currently receiving direct or indirect remuneration from
the Company or an "affiliated corporation" for services in any capacity other
than as a Director or (ii) is otherwise considered an "outside director" for
purposes of Section 162(m) of the Code.

         (x)      "PARTICIPANT" means a person to whom a Stock Award is granted
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Stock Award.

         (y)      "PLAN" means this Ask Jeeves, Inc. 1999 Equity Incentive Plan.

         (z)      "RULE 16b-3" means Rule 16b-3 promulgated under the Exchange
Act or any successor to Rule 16b-3, as in effect from time to time.

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

         (bb)     "STOCK AWARD" means any right granted under the Plan,
including an Option and a right to acquire restricted stock.

         (cc)     "STOCK AWARD AGREEMENT" means a written agreement between the
Company and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.

         (dd)     "TEN PERCENT STOCKHOLDER" means a person who owns (or is
deemed to own pursuant to Section 424(d) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or of any of its Affiliates.

3.       ADMINISTRATION.

         (a)      ADMINISTRATION BY BOARD. The Board shall administer the Plan
unless and until the Board delegates administration to a Committee, as provided
in subsection 3(c). Any interpretation of the Plan by the Board and any decision
by the Board under the Plan shall be final and binding on all persons.

         (b)      POWERS OF BOARD. The Board shall have the power, subject to,
and within the limitations of, the express provisions of the Plan:

                  (i)      To determine from time to time which of the persons
eligible under the Plan shall be granted Stock Awards; when and how each Stock
Award shall be granted; what type or combination of types of Stock Award shall
be granted; the provisions of each Stock Award granted (which need not be
identical), including the time or times when a person shall be permitted to
receive Common Stock pursuant to a Stock Award; and the number of shares of
Common Stock with respect to which a Stock Award shall be granted to each such
person.

                  (ii)     To construe and interpret the Plan and Stock Awards
granted under it, and to establish, amend and revoke rules and regulations for
its administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award Agreement,
in a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective.

                  (iii)    To amend the Plan or a Stock Award as provided in
Section 12.

                  (iv)     Generally, to exercise such powers and to perform
such acts as the Board deems necessary or expedient to promote the best
interests of the Company which are not in conflict with the provisions of the
Plan.

         (C)      DELEGATION TO COMMITTEE.

                  (i)      GENERAL. The Board may delegate administration of the
Plan to a Committee or Committees of one (1) or more members of the Board, and
the term "Committee" shall apply to any person or persons to whom such authority
has been delegated. If administration is delegated to a Committee, the Committee
shall have, in connection with the

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administration of the Plan, the powers theretofore possessed by the Board,
including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to
the Board shall thereafter be to the Committee or subcommittee), subject,
however, to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board. The Board may abolish the
Committee at any time and revest in the Board the administration of the Plan.

                  (ii)     COMMITTEE COMPOSITION WHEN COMMON STOCK IS PUBLICLY
TRADED. At such time as the Common Stock is publicly traded, in the discretion
of the Board, a Committee may consist solely of two or more Outside Directors,
in accordance with Section 162(m) of the Code, and/or solely of two or more
Non-Employee Directors, in accordance with Rule 16b-3. Within the scope of such
authority, the Board or the Committee may (1) delegate to a committee of one or
more members of the Board who are not Outside Directors, the authority to grant
Stock Awards to eligible persons who are either (a) not then Covered Employees
and are not expected to be Covered Employees at the time of recognition of
income resulting from such Stock Award or (b) not persons with respect to whom
the Company wishes to comply with Section 162(m) of the Code and/or (2) delegate
to a committee of one or more members of the Board who are not Non-Employee
Directors the authority to grant Stock Awards to eligible persons who are not
then subject to Section 16 of the Exchange Act.

4.       SHARES SUBJECT TO THE PLAN.

         (a)      SHARE RESERVE. Subject to the provisions of Section 11
relating to adjustments upon changes in stock, the stock that may be issued
pursuant to Stock Awards shall not exceed in the aggregate three million eight
hundred seventy-five thousand (3,875,000) shares of Common Stock, plus an annual
increase to be added on the day of each Annual Stockholders Meeting beginning
with the Annual Stockholders Meeting in 2001, equal to the lesser of (i) seven
percent (7%) of the total number of shares of Common Stock outstanding on such
date, (ii) three million (3,000,000) shares, or (iii) such smaller number of
shares as determined by the Board.

         (b)      REVERSION OF SHARES TO THE SHARE RESERVE. If any Stock Award
shall for any reason expire or otherwise terminate, in whole or in part, without
having been exercised in full, the shares of Common Stock not acquired under
such Stock Award shall revert to and again become available for issuance under
the Plan.

         (c)      SOURCE OF SHARES. The shares of Common Stock subject to the
Plan may be unissued shares or reacquired shares, bought on the market or
otherwise.

5.       ELIGIBILITY.

         (a)      ELIGIBILITY FOR SPECIFIC STOCK AWARDS. Incentive Stock Options
may be granted only to Employees. Stock Awards other than Incentive Stock
Options may be granted to Employees, Directors and Consultants.

         (b)      TEN PERCENT STOCKHOLDERS. A Ten Percent Stockholder shall not
be granted an Incentive Stock Option unless the exercise price of such Option is
at least one hundred ten percent (110%) of the Fair Market Value of the Common
Stock at the date of grant and the Option is not exercisable after the
expiration of five (5) years from the date of grant.

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         (c)      SECTION 162(m) LIMITATION. Subject to the provisions of
Section 11 relating to adjustments upon changes in the shares of Common Stock,
no Employee shall be eligible to be granted Options covering more than five
hundred thousand (500,000) shares of the Common Stock during any calendar year.

         (d)      CONSULTANTS.

                  (i)      A Consultant shall not be eligible for the grant of a
Stock Award if, at the time of grant, a Form S-8 Registration Statement under
the Securities Act ("Form S-8") is not available to register either the offer or
the sale of the Company's securities to such Consultant because of the nature of
the services that the Consultant is providing to the Company, or because the
Consultant is not a natural person, or as otherwise provided by the rules
governing the use of Form S-8, unless the Company determines both (i) that such
grant (A) shall be registered in another manner under the Securities Act (e.g.,
on a Form S-3 Registration Statement) or (B) does not require registration under
the Securities Act in order to comply with the requirements of the Securities
Act, if applicable, and (ii) that such grant complies with the securities laws
of all other relevant jurisdictions.

                  (ii)     Form S-8 generally is available to consultants and
advisors only if (i) they are natural persons; (ii) they provide bona fide
services to the issuer, its parents, its majority-owned subsidiaries or
majority-owned subsidiaries of the issuer's parent; and (iii) the services are
not in connection with the offer or sale of securities in a capital-raising
transaction, and do not directly or indirectly promote or maintain a market for
the issuer's securities.

6.       OPTION PROVISIONS.

         Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. All Options shall be separately
designated Incentive Stock Options or Nonstatutory Stock Options at the time of
grant, and, if certificates are issued, a separate certificate or certificates
will be issued for shares of Common Stock purchased on exercise of each type of
Option. The provisions of separate Options need not be identical, but each
Option shall include (through incorporation of provisions hereof by reference in
the Option or otherwise) the substance of each of the following provisions:

         (a)      TERM. Subject to the provisions of subsection 5(b) regarding
Ten Percent Stockholders, no Incentive Stock Option shall be exercisable after
the expiration of ten (10) years from the date it was granted.

         (b)      EXERCISE PRICE OF AN INCENTIVE STOCK OPTION. Subject to the
provisions of subsection 5(b) regarding Ten Percent Stockholders, the exercise
price of each Incentive Stock Option shall be not less than one hundred percent
(100%) of the Fair Market Value of the Common Stock subject to the Option on the
date the Option is granted. Notwithstanding the foregoing, an Incentive Stock
Option may be granted with an exercise price lower than that set forth in the
preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section
424(a) of the Code.

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         (c)      EXERCISE PRICE OF A NONSTATUTORY STOCK OPTION. The exercise
price of each Nonstatutory Stock Option shall be not less than eighty-five
percent (85%) of the Fair Market Value of the Common Stock subject to the Option
on the date the Option is granted. Notwithstanding the foregoing, a Nonstatutory
Stock Option may be granted with an exercise price lower than that set forth in
the preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section
424(a) of the Code.

         (d)      CONSIDERATION. The purchase price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable
statutes and regulations, either (i) in cash at the time the Option is exercised
or (ii) at the discretion of the Board at the time of the grant of the Option
(or subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to
the Company of other Common Stock, (2) according to a deferred payment or other
similar arrangement with the Optionholder or (3) in any other form of legal
consideration that may be acceptable to the Board; provided, however, that at
any time that the Company is incorporated in Delaware, payment of the Common
Stock's "par value," as defined in the Delaware General Corporation Law, shall
not be made by deferred payment.

         In the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.

         (e)      TRANSFERABILITY OF AN INCENTIVE STOCK OPTION. An Incentive
Stock Option shall not be transferable except by will or by the laws of descent
and distribution and shall be exercisable during the lifetime of the
Optionholder only by the Optionholder. Notwithstanding the foregoing, the
Optionholder may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the Option.

         (f)      TRANSFERABILITY OF A NONSTATUTORY STOCK OPTION. A Nonstatutory
Stock Option shall be transferable to the extent provided in the Option
Agreement. If the Nonstatutory Stock Option does not provide for
transferability, then the Nonstatutory Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing, the Optionholder may, by delivering written
notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be
entitled to exercise the Option.

         (g)      VESTING GENERALLY. The total number of shares of Common Stock
subject to an Option may, but need not, vest and therefore become exercisable in
periodic installments that may, but need not, be equal. The Option may be
subject to such other terms and conditions on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The
provisions of this subsection 6(g) are subject to any Option provisions
governing the minimum number of shares of Common Stock as to which an Option may
be exercised.

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         (h)      TERMINATION OF CONTINUOUS SERVICE. In the event an
Optionholder's Continuous Service terminates (other than upon the Optionholder's
death or Disability), the Optionholder may exercise his or her Option (to the
extent that the Optionholder was entitled to exercise such Option as of the date
of termination) but only within such period of time ending on the earlier of (i)
the date three (3) months following the termination of the Optionholder's
Continuous Service (or such longer or shorter period specified in the Option
Agreement), or (ii) the expiration of the term of the Option as set forth in the
Option Agreement. If, after termination, the Optionholder does not exercise his
or her Option within the time specified in the Option Agreement, the Option
shall terminate.

         (i)      EXTENSION OF TERMINATION DATE. An Optionholder's Option
Agreement may also provide that if the exercise of the Option following the
termination of the Optionholder's Continuous Service (other than upon the
Optionholder's death or Disability) would be prohibited at any time solely
because the issuance of shares of Common Stock would violate the registration
requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in subsection
6(a) or (ii) the expiration of a period of three (3) months after the
termination of the Optionholder's Continuous Service during which the exercise
of the Option would not be in violation of such registration requirements.

         (j)      DISABILITY OF OPTIONHOLDER. In the event that an
Optionholder's Continuous Service terminates as a result of the Optionholder's
Disability, the Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise such Option as of the date of
termination), but only within such period of time ending on the earlier of (i)
the date twelve (12) months following such termination (or such longer or
shorter period specified in the Option Agreement) or (ii) the expiration of the
term of the Option as set forth in the Option Agreement. If, after termination,
the Optionholder does not exercise his or her Option within the time specified
herein, the Option shall terminate.

         (k)      DEATH OF OPTIONHOLDER. In the event (i) an Optionholder's
Continuous Service terminates as a result of the Optionholder's death or (ii)
the Optionholder dies within the period (if any) specified in the Option
Agreement after the termination of the Optionholder's Continuous Service for a
reason other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by
the Optionholder's estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
option upon the Optionholder's death pursuant to subsection 6(e) or 6(f), but
only within the period ending on the earlier of (1) the date twelve (12) months
following the date of death (or such longer or shorter period specified in the
Option Agreement) or (2) the expiration of the term of such Option as set forth
in the Option Agreement. If, after death, the Option is not exercised within the
time specified herein, the Option shall terminate.

         (l)      EARLY EXERCISE. The Option may, but need not, include a
provision whereby the Optionholder may elect at any time before the
Optionholder's Continuous Service terminates to exercise the Option as to any
part or all of the shares of Common Stock subject to the Option prior to the
full vesting of the Option. Any unvested shares of Common Stock so purchased may

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be subject to a repurchase option in favor of the Company or to any other
restriction the Board determines to be appropriate.

         (m)      RE-LOAD OPTIONS. Without in any way limiting the authority of
the Board to make or not to make grants of Options hereunder, the Board shall
have the authority (but not an obligation) to include as part of any Option
Agreement a provision entitling the Optionholder to a further Option (a "Re-Load
Option") in the event the Optionholder exercises the Option evidenced by the
Option Agreement, in whole or in part, by surrendering other shares of Common
Stock in accordance with this Plan and the terms and conditions of the Option
Agreement. Any such Re-Load Option shall (i) provide for a number of shares of
Common Stock equal to the number of shares of Common Stock surrendered as part
or all of the exercise price of such Option; (ii) have an expiration date which
is the same as the expiration date of the Option the exercise of which gave rise
to such Re-Load Option; and (iii) have an exercise price which is equal to one
hundred percent (100%) of the Fair Market Value of the Common Stock subject to
the Re-Load Option on the date of exercise of the original Option.
Notwithstanding the foregoing, a Re-Load Option shall be subject to the same
exercise price and term provisions heretofore described for Options under the
Plan.

         Any such Re-Load Option may be an Incentive Stock Option or a
Nonstatutory Stock Option, as the Board may designate at the time of the grant
of the original Option; provided, however, that the designation of any Re-Load
Option as an Incentive Stock Option shall be subject to the one hundred thousand
dollar ($100,000) annual limitation on the exercisability of Incentive Stock
Options described in subsection 10(d) and in Section 422(d) of the Code. There
shall be no Re-Load Options on a Re-Load Option. Any such Re-Load Option shall
be subject to the availability of sufficient shares of Common Stock under
subsection 4(a) and the "Section 162(m) Limitation" on the grants of Options
under subsection 5(c) and shall be subject to such other terms and conditions as
the Board may determine which are not inconsistent with the express provisions
of the Plan regarding the terms of Options.

7.       PROVISIONS OF RESTRICTED STOCK AWARDS.

         Each restricted stock purchase agreement shall be in such form and
shall contain such terms and conditions as the Board shall deem appropriate. The
terms and conditions of the restricted stock purchase agreements may change from
time to time, and the terms and conditions of separate restricted stock purchase
agreements need not be identical, but each restricted stock purchase agreement
shall include (through incorporation of provisions hereof by reference in the
agreement or otherwise) the substance of each of the following provisions:

         (a)      PURCHASE PRICE. The purchase price under each restricted stock
purchase agreement shall be such amount as the Board shall determine and
designate in such restricted stock purchase agreement. The purchase price shall
not be less than eighty-five percent (85%) of the Common Stock's Fair Market
Value on the date such award is made or at the time the purchase is consummated.

         (b)      CONSIDERATION. The purchase price of Common Stock acquired
pursuant to the restricted stock purchase agreement shall be paid either: (i) in
cash at the time of purchase; (ii) at the discretion of the Board, according to
a deferred payment or other similar arrangement with

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the Participant; or (iii) in any other form of legal consideration that may be
acceptable to the Board in its discretion; provided, however, that at any time
that the Company is incorporated in Delaware, then payment of the Common Stock's
"par value," as defined in the Delaware General Corporation Law, shall not be
made by deferred payment.

         (c)      VESTING. Shares of Common Stock acquired under the restricted
stock purchase agreement may, but need not, be subject to a share repurchase
option in favor of the Company in accordance with a vesting schedule to be
determined by the Board.

         (d)      TERMINATION OF PARTICIPANT'S CONTINUOUS SERVICE. In the event
a Participant's Continuous Service terminates, the Company may repurchase or
otherwise reacquire any or all of the shares of Common Stock held by the
Participant which have not vested as of the date of termination under the terms
of the restricted stock purchase agreement.

         (e)      TRANSFERABILITY. Rights to acquire shares under the restricted
stock purchase agreement shall be transferable by the Participant only upon such
terms and conditions as are set forth in the restricted stock purchase
agreement, as the Board shall determine in its discretion, so long as Common
Stock awarded under the restricted stock purchase agreement remains subject to
the terms of the restricted stock purchase agreement.

8.       COVENANTS OF THE COMPANY.

         (a)      AVAILABILITY OF SHARES. During the terms of the Stock Awards,
the Company shall keep available at all times the number of shares of Common
Stock required to satisfy such Stock Awards.

         (b)      SECURITIES LAW COMPLIANCE. The Company shall seek to obtain
from each regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to grant Stock Awards and to issue and sell shares
of Common Stock upon exercise of the Stock Awards; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain
from any such regulatory commission or agency the authority which counsel for
the Company deems necessary for the lawful issuance and sale of Common Stock
under the Plan, the Company shall be relieved from any liability for failure to
issue and sell Common Stock upon exercise of such Stock Awards unless and until
such authority is obtained.

9.       USE OF PROCEEDS FROM STOCK.

         Proceeds from the sale of Common Stock pursuant to Stock Awards shall
constitute general funds of the Company.

10.      MISCELLANEOUS.

         (a)      ACCELERATION OF EXERCISABILITY AND VESTING. The Board shall
have the power to accelerate the time at which a Stock Award may first be
exercised or the time during which a Stock Award or any part thereof will vest
in accordance with the Plan, notwithstanding the

                                       10

<PAGE>

provisions in the Stock Award stating the time at which it may first be
exercised or the time during which it will vest.

         (b)      STOCKHOLDER RIGHTS. No Participant shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares
of Common Stock subject to such Stock Award unless and until such Participant
has satisfied all requirements for exercise of the Stock Award pursuant to its
terms.

         (c)      NO EMPLOYMENT OR OTHER SERVICE RIGHTS. Nothing in the Plan or
any instrument executed or Stock Award granted pursuant thereto shall confer
upon any Participant any right to continue to serve the Company or an Affiliate
in the capacity in effect at the time the Stock Award was granted or shall
affect the right of the Company or an Affiliate to terminate (i) the employment
of an Employee with or without notice and with or without cause, (ii) the
service of a Consultant pursuant to the terms of such Consultant's agreement
with the Company or an Affiliate or (iii) the service of a Director pursuant to
the Bylaws of the Company or an Affiliate, and any applicable provisions of the
corporate law of the state in which the Company or the Affiliate is
incorporated, as the case may be.

         (d)      INCENTIVE STOCK OPTION $100,000 LIMITATION. To the extent that
the aggregate Fair Market Value (determined at the time of grant) of Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by any Optionholder during any calendar year (under all plans of the
Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof which exceed such limit (according to the order in
which they were granted) shall be treated as Nonstatutory Stock Options.

         (e)      INVESTMENT ASSURANCES. The Company may require a Participant,
as a condition of exercising or acquiring Common Stock under any Stock Award,
(i) to give written assurances satisfactory to the Company as to the
Participant's knowledge and experience in financial and business matters and/or
to employ a purchaser representative reasonably satisfactory to the Company who
is knowledgeable and experienced in financial and business matters and that he
or she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (ii) to
give written assurances satisfactory to the Company stating that the Participant
is acquiring Common Stock subject to the Stock Award for the Participant's own
account and not with any present intention of selling or otherwise distributing
the Common Stock. The foregoing requirements, and any assurances given pursuant
to such requirements, shall be inoperative if (iii) the issuance of the shares
of Common Stock upon the exercise or acquisition of Common Stock under the Stock
Award has been registered under a then currently effective registration
statement under the Securities Act or (iv) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws. The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the Common Stock.

         (f)      WITHHOLDING OBLIGATIONS. To the extent provided by the terms
of a Stock Award Agreement, the Participant may satisfy any federal, state or
local tax withholding obligation

                                       11

<PAGE>

relating to the exercise or acquisition of Common Stock under a Stock Award by
any of the following means (in addition to the Company's right to withhold from
any compensation paid to the Participant by the Company) or by a combination of
such means: (i) tendering a cash payment; (ii) authorizing the Company to
withhold shares of Common Stock from the shares of Common Stock otherwise
issuable to the Participant as a result of the exercise or acquisition of Common
Stock under the Stock Award; or (iii) delivering to the Company owned and
unencumbered shares of the Common Stock.

11.      ADJUSTMENTS UPON CHANGES IN STOCK.

         (a)      CAPITALIZATION ADJUSTMENTS. If any change is made in the
Common Stock subject to the Plan, or subject to any Stock Award, without the
receipt of consideration by the Company (through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or other transaction
not involving the receipt of consideration by the Company), the Plan will be
appropriately adjusted in the class(es) and maximum number of securities subject
to the Plan pursuant to subsection 4(a) and the maximum number of securities
subject to award to any person pursuant to subsection 5(c), and the outstanding
Stock Awards will be appropriately adjusted in the class(es) and number of
securities and price per share of Common Stock subject to such outstanding Stock
Awards. The Board shall make such adjustments, and its determination shall be
final, binding and conclusive. (The conversion of any convertible securities of
the Company shall not be treated as a transaction "without receipt of
consideration" by the Company.)

         (b)      CHANGE IN CONTROL--DISSOLUTION OR LIQUIDATION. In the event of
a dissolution or liquidation of the Company, then all outstanding Stock Awards
shall terminate immediately prior to such event.

         (c)      CHANGE IN CONTROL--ASSET SALE, MERGER, CONSOLIDATION OR
REVERSE MERGER. In the event of (i) a sale, lease or other disposition of all or
substantially all of the assets of the Company, (ii) a merger or consolidation
in which the Company is not the surviving corporation or (iii) a reverse merger
in which the Company is the surviving corporation but the shares of Common Stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise, then any surviving corporation or acquiring corporation shall assume
any Stock Awards outstanding under the Plan or shall substitute similar stock
awards (including an award to acquire the same consideration paid to the
stockholders in the transaction described in this subsection 11(c)) for those
outstanding under the Plan. In the event any surviving corporation or acquiring
corporation refuses to assume or continue such Stock Awards or to substitute
similar stock awards for those outstanding under the Plan, then with respect to
Stock Awards held by Participants whose Continuous Service has not terminated,
the vesting of such Stock Awards (and, if applicable, the time during which such
Stock Awards may be exercised) shall be accelerated in full, and the Stock
Awards shall terminate if not exercised (if applicable) by a time established by
the Board at or following the occurrence of such event. With respect to any
other Stock Awards outstanding under the Plan, such Stock Awards shall terminate
if not exercised (if applicable) at or prior to such event.

                                       12

<PAGE>

12.      AMENDMENT OF THE PLAN AND STOCK AWARDS.

         (a)      AMENDMENT OF PLAN. The Board at any time, and from time to
time, may amend the Plan. However, except as provided in Section 11 relating to
adjustments upon changes in Common Stock, no amendment shall be effective unless
approved by the stockholders of the Company to the extent stockholder approval
is necessary to satisfy the requirements of Section 422 of the Code, Rule 16b-3
or any Nasdaq or securities exchange listing requirements.

         (b)      STOCKHOLDER APPROVAL. The Board may, in its sole discretion,
submit any other amendment to the Plan for stockholder approval, including, but
not limited to, amendments to the Plan intended to satisfy the requirements of
Section 162(m) of the Code and the regulations thereunder regarding the
exclusion of performance-based compensation from the limit on corporate
deductibility of compensation paid to certain executive officers.

         (c)      CONTEMPLATED AMENDMENTS. It is expressly contemplated that the
Board may amend the Plan in any respect the Board deems necessary or advisable
to provide eligible Employees with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations promulgated
thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.

         (d)      NO IMPAIRMENT OF RIGHTS. Rights under any Stock Award granted
before amendment of the Plan shall not be impaired by any amendment of the Plan
unless (i) the Company requests the consent of the Participant and (ii) the
Participant consents in writing.

         (e)      AMENDMENT OF STOCK AWARDS. The Board at any time, and from
time to time, may amend the terms of any one or more Stock Awards; provided,
however, that the rights under any Stock Award shall not be impaired by any such
amendment unless (i) the Company requests the consent of the Participant and
(ii) the Participant consents in writing.

13.      TERMINATION OR SUSPENSION OF THE PLAN.

         (a)      PLAN TERM. The Board may suspend or terminate the Plan at any
time. Unless sooner terminated, the Plan shall terminate on the day before the
tenth (10th) anniversary of the date the Plan is adopted by the Board or
approved by the stockholders of the Company, whichever is earlier. No Stock
Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.

         (b)      NO IMPAIRMENT OF RIGHTS. Suspension or termination of the Plan
shall not impair rights and obligations under any Stock Award granted while the
Plan is in effect, except with the written consent of the Participant.

14.      EFFECTIVE DATE OF PLAN.

         The Plan became effective on the Listing Date. On May 25, 2000, the
Plan was amended and restated to change the annual increase in the number of
shares of Common Stock authorized for issuance under the Plan, beginning on the
date of the 2001 Annual Meeting of Stockholders, to the lesser of (i) 7% of the
total number of shares of Common Stock outstanding, (ii) 3,000,000 shares, or
(iii) such smaller number of shares as determined by the Board.

                                       13

<PAGE>

15.      CHOICE OF LAW.

         The law of the State of California shall govern all questions
concerning the construction, validity and interpretation of this Plan, without
regard to such state's conflict of laws rules.

                                       14

<PAGE>

                                   APPENDIX A

                          AUTOMATIC STOCK OPTION GRANTS
                             FOR ELIGIBLE DIRECTORS

         This Appendix A is adopted under and as a part of the Ask Jeeves, Inc.
1999 Equity Incentive Plan. This Appendix A provides for the automatic grant of
certain Options, on the terms and conditions set forth below, under the Plan to
certain eligible Directors. Capitalized terms used in this Appendix A are used
as defined in the Plan if not otherwise defined herein.

A.1      INTRODUCTION.

         (a)      PURPOSE. The Company, by granting stock options as provided
under this Appendix A, seeks to attract and retain the services of highly
qualified non-employee members of the Board by providing to them a significant
equity interest in the Company, to more closely link the interests of those
directors with the Company's stockholders, and to help provide those directors
with reasonable and fair compensation.

         (b)      EFFECTIVE DATE. This Appendix A is effective immediately upon
its approval by the Board (the date of such Board approval is referred to as the
"Appendix A Board Approval Date").

         (c)      ELIGIBLE DIRECTORS. The persons eligible to receive Options
under this Appendix A (each an "Eligible Director") are non-emeritus Directors
who are not employed by either the Company or one of its Affiliates. This
Appendix A applies only to Options granted to Eligible Directors pursuant to
this Appendix A. This Appendix A does not apply to any other Option or Stock
Award granted under the Plan. This Appendix A does not limit the authority of
the Board or a Committee to grant discretionary Options or other Stock Awards
under other provisions of the Plan.

         (d)      PLAN PROVISIONS. Any Option granted under this Appendix A
shall be governed by the provisions of this Appendix A and by the provisions of
the Plan. Each Option granted under this Appendix A shall be subject to, without
limitation, the provisions of Section 11 of the Plan.

         (e)      BOARD AUTHORITY. Options granted pursuant to this Appendix A
shall be automatic and, to the maximum extent possible, self-effectuating. The
Board's authority pursuant to Section 3 of the Plan shall, however, extend to
this Appendix A and Options granted hereunder.

         (f)      AMENDMENT. The Board may amend this Appendix A from time to
time pursuant to Section 12 of the Plan. The Board may suspend new Option grants
under this Appendix A or terminate this Appendix A as to new Option grants at
any time; provided that any such action shall not affect any Option theretofore
outstanding under this Appendix A.

         (g)      SHARE LIMIT. Options granted under this Appendix A shall be
subject to the limit set forth in Section 4(a) applicable to all Stock Awards
granted under the Plan. If one or more Options are to be granted on a specific
date and such Option(s) would otherwise exceed the number of shares that can
then be subject to Options granted under the Plan pursuant to Section

                                       A-1

<PAGE>

4(a) of the Plan, such Option(s) shall be granted and shall cover the maximum
number of shares (on a pro-rata basis in the event more than one Option is to be
granted) that are available for such purposes within the limits of Section 4(a)
of the Plan.

A.2      AUTOMATIC OPTION GRANTS.

         (a)      ONE-TIME GRANT. Each Eligible Director in office on the date
of, or elected to office at, the Company's 2003 annual meeting of stockholders
and who continues in office following such meeting shall automatically be
granted an Option as of that date to purchase 10,000 shares of Common Stock
(subject to adjustment pursuant to Section 11 of the Plan).

         (b)      NEW DIRECTOR GRANTS. Each individual who first becomes an
Eligible Director after the date of the Company's 2003 annual meeting of
stockholders (other than an individual who was employed by the Company or an
Affiliate at any time within the six-month period preceding the date on which he
or she first becomes an Eligible Director) shall automatically be granted an
Option as of the date he or she first becomes an Eligible Director to purchase
50,000 shares of Common Stock (subject to adjustment pursuant to Section 11 of
the Plan).

         (c)      QUARTERLY AWARDS. On the first business day of each calendar
quarter during the term of the Plan, commencing with the calendar quarter that
commences July 1, 2003, each person who is an Eligible Director on that date and
who has served as a member of the Board continuously for at least six months as
of that date shall automatically be granted an Option as of that date to
purchase 5,000 shares of Common Stock (subject to adjustment pursuant to Section
11 of the Plan).

         (d)      EXERCISE PRICE. Each Option granted under this Appendix A
shall have a per share exercise price equal to the Fair Market Value of a share
of Common Stock as of the day such Option is granted.

         (e)      VESTING. Each Option granted under this Appendix A shall be
exercisable only to the extent that it is vested. Each Option granted pursuant
to Section A.2(a) or Section A.2(c) shall vest as to 50% of the total number of
shares of Common Stock subject thereto on the date that is six months after the
grant date of the Option, shall vest as to an additional 25% of the total number
of shares of Common Stock subject thereto on the date that is nine months after
the grant date of the Option, and shall vest as to an additional 25% of the
total number of shares of Common Stock subject thereto on the first anniversary
of the grant date of the Option; provided, in each case, that the Eligible
Director who received the Option has remained in Continuous Service through the
respective vesting date. Each Option granted pursuant to Section A.2(b) shall
vest as to 25% of the total number of shares of Common Stock subject thereto on
the first anniversary of the grant date of the Option and as to an additional
1/48th of the total number of shares of Common Stock subject thereto on the
first day of each month for the thirty-six months following the month in which
the first anniversary of the grant date of the Option occurs; provided, in each
case, that the Eligible Director who received the Option has remained in
Continuous Service through the respective vesting date. The vesting schedule
applicable to an Option requires continued service through each applicable
vesting date as a condition to the vesting of the applicable installment of the
Option and the rights and benefits under this Plan. Service for only a portion
of a vesting period, even if substantial, will not entitle the Optionholder to
any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of services.

                                      A-2

<PAGE>

         (f)      EXPIRATION. Subject to earlier termination pursuant to Section
A.4 herein or Section 11 of the Plan, Options granted under this Appendix A
shall expire at the close of business on the day before the tenth anniversary of
the date of grant of the Option.

         (g)      CONSIDERATION. The purchase price of Common Stock acquired
pursuant to an Option granted under this Appendix A shall be paid in full at the
time of purchase, to the extent permitted by applicable statutes and
regulations, either (1) in cash, by electronic funds transfer or check payable
to the Company, (2) by notice and third party payment in such manner as may be
authorized by the Board or pursuant to such "cashless exercise" procedures with
third parties who provide financing of (or who otherwise facilitate) the
exercise of Options in such manner as may be authorized by the Board, or (3) by
delivery to the Company of other Common Stock; provided, however, that any
Common Stock delivered to pay such purchase price that was originally acquired
by the Optionholder from the Company, upon exercise of a stock option or
otherwise, must have been owned by the Optionholder for more than six months
before being so used to pay such purchase price. Shares of Common Stock used to
satisfy the exercise price of an Option shall be valued at their Fair Market
Value on the date of exercise of the Option.

         (h)      AGREEMENT. Options granted under this Appendix A will be
evidenced by an Option Agreement, signed by a duly authorized officer of the
Company and by the Option recipient. Each Option Agreement shall be in the form
attached as Exhibit A to this Appendix A, or such other form as may be approved
by the Board for use under this Appendix A from time to time, and shall be
subject to such other terms and conditions as may be set forth therein. Each
Option granted under this Plan shall be a Nonstatutory Stock Option and shall
not be an Incentive Stock Option.

A.3      NON-TRANSFERABILITY OF OPTIONS.

         An Option granted under this Appendix A shall not be subject in any
manner to sale, transfer, anticipation, alienation, assignment, pledge,
encumbrance or charge and shall be exercisable during the lifetime of the
Optionholder only by the Optionholder. Amounts payable or shares issuable
pursuant to any Option shall be delivered only to (or for the account of) the
Optionholder.

         The Board may permit Options granted under this Appendix A to be
exercised by and paid to certain persons or entities related to the Optionholder
pursuant to such conditions and procedures, including limitations on subsequent
transfers, as the Board may establish. Any permitted transfer shall be subject
to the condition that the Board receive evidence satisfactory to it that the
transfer (1) is being made for essentially estate and/or tax planning purposes
on a gratuitous or donative basis and without consideration (other than nominal
consideration or in exchange for an interest in a qualified transferee), and (2)
will not compromise the Company's ability to register shares issuable under the
Plan on SEC Form S-8 under the Securities Act, or to rely on such registration
in connection with an Option exercise.

         The exercise and transfer restrictions in the first paragraph of this
Section A.3 will not, however, apply to:

                  (1)  transfers to the Company,

                  (2)  the designation of a beneficiary to receive benefits in
                       the event of the Optionholder's death or, if the
                       Optionholder has died, transfers to or

                                      A-3

<PAGE>

                       exercises by the Optionholder's beneficiary, or, in the
                       absence of a validly designated beneficiary, transfers by
                       will or the laws of descent and distribution,

                  (3)  transfers to a family member (or former family member)
                       pursuant to a domestic relations order if received by the
                       Board prior to the exercise of the Option,

                  (4)  if the Optionholder has suffered a disability, permitted
                       transfers or exercises on behalf of the Optionholder by
                       his or her legal representative, or

                  (5)  the authorization by the Board of "cashless exercise"
                       procedures with third parties who provide financing for
                       the purpose of (or who otherwise facilitate) the exercise
                       of Options consistent with applicable laws and the
                       express authorization of the Board.

A.4      TERMINATION OF CONTINUOUS SERVICE.

         (a)      TERMINATION OF CONTINUOUS SERVICE. If an Optionholder's
Continuous Service terminates (for any reason other than upon the Optionholder's
death or Disability), then, subject to earlier termination pursuant to Section
11 of the Plan or Section A.2(f):

         -    the unvested portion of the Optionholder's Option shall
              automatically terminate as of such cessation of service;

         -    the Optionholder (or his or her permitted transferee, if
              applicable) may exercise his or her Option to the extent vested as
              of such cessation of service but only within the 90-day period
              following such cessation of service; and

         -    the portion of the Option that is vested on the Optionholder's
              cessation of service and is not exercised within such 90-day
              period shall automatically terminate on the 90th day following the
              date the Optionholder's Continuous Service terminated.

         (b)      DISABILITY OF OPTIONHOLDER. If an Optionholder's Continuous
Service terminates as a result of the Optionholder's Disability, then, subject
to earlier termination pursuant to Section 11 of the Plan or Section A.2(f):

         -    the unvested portion of the Optionholder's Option shall
              automatically terminate as of such cessation of service;

         -    the Optionholder (or his or her permitted transferee, if
              applicable) may exercise his or her Option to the extent vested as
              of such cessation of service but only within the one-year period
              following such cessation of service; and

         -    the portion of the Option that is vested on the Optionholder's
              cessation of service and is not exercised within such one-year
              period shall automatically terminate on the first anniversary of
              the date the Optionholder's Continuous Service terminated.

         (c)      DEATH OF OPTIONHOLDER. If an Optionholder's Continuous Service
terminates as a result of the Optionholder's death, then, subject to earlier
termination pursuant to Section 11 of

                                      A-4

<PAGE>

the Plan or Section A.2(f):

         -    the unvested portion of the Optionholder's Option shall
              automatically terminate as of such cessation of service;

         -    the Optionholder's estate, or person who acquired the right to
              exercise the Option by bequest or inheritance, or other person
              designated to exercise the option upon the Optionholder's death
              pursuant to Section A.3, as applicable, may exercise the
              Optionholder's Option to the extent vested as of such cessation of
              service but only within the one-year period following such
              cessation of service; and

         -    the portion of the Option that is vested on the Optionholder's
              cessation of service and is not exercised within such one-year
              period shall automatically terminate on the first anniversary of
              the date the Optionholder's death.

                                      A-5

<PAGE>

                                                                       EXHIBIT A

                                ASK JEEVES, INC.
                       ELIGIBLE DIRECTOR OPTION AGREEMENT

         This Agreement between Ask Jeeves, Inc., a Delaware corporation (the
"Company"), and _________________ (the "Grantee") sets forth the specific terms
and conditions of a stock option granted to the Grantee under Appendix A of the
Ask Jeeves, Inc. 1999 Equity Incentive Plan (the "Plan"). (All references to the
Plan in this Agreement include the provisions of Appendix A to the Plan.)

1.       AWARD OF STOCK OPTIONS. The Company hereby awards a nonqualified stock
option (the "Option") to the Grantee to purchase, subject to the terms and
conditions set forth below, the number of shares of the Company's common stock
("Common Stock") set forth below at the price per share set forth below:

         Date of Grant ("Award Date")               _____
         Total Number Shares Subject to Option(1)   _____
         Exercise Price Per Share(1)                _____
         Expiration Date(2)                         _____

2.       VESTING. [ALTERNATIVE FOR OPTIONS GRANTED PURSUANT TO SECTION A.2(a)
(ONE-TIME GRANT) OR A.2(c) (QUARTERLY AWARDS) OF THE PLAN: The Option shall vest
as to 50% of the total number of shares subject to the Option on the date that
is six months after the Award Date, as to an additional 25% of the total number
of shares subject to the Option on the date that is nine months after the Award
Date, and as to an additional 25% of the total number of shares subject to the
Option on the first anniversary of the Award Date; subject, in each case, to the
termination of service rules of Section A.4 of the Plan.] [ALTERNATIVE FOR
OPTIONS GRANTED PURSUANT TO SECTION A.2(b) (NEW DIRECTOR GRANTS) OF THE PLAN:
The Option shall vest as to 25% of the total number of shares subject to the
Option on the first anniversary of the Award Date and as to an additional 1/48th
of the total number of shares subject to the Option on the first day of each
month for the thirty-six months following the month in which the first
anniversary of the Award Date occurs; subject, in each case, to the termination
of service rules of Section A.4 of the Plan.] As provided in Section A.2(e) of
the Plan, there will be no pro-rated vesting if the Grantee's service terminates
for any reason between scheduled vesting dates.

3.       EXERCISE; TERMINATION. The Option is exercisable only to the extent
that it is vested and only on or before its expiration or earlier termination.
The expiration date of the Option is set forth above and, notwithstanding that
date, the Option is subject to earlier termination pursuant to Section A.2(f),
A.4 and Section 11 of the Plan. The Option shall be exercisable by the delivery
to the Secretary of the Company of a written notice (in such form as the Company
may require from time to time) stating the number of shares of Common Stock to
be purchased pursuant to the Option and accompanied by payment in full for the
exercise price of the shares to be purchased in a manner authorized pursuant to
Section A.2(g) of the Plan. Any such notice shall be effective only when
received by the Secretary of the Company. The Option may not be exercised as to
any fractional share and no fewer than 100(1) shares may be purchased at any one
time, unless the number purchased is the total number at the time exercisable
under the Option.

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

(1) Subject to adjustment pursuant to Section 11(a) of the Plan.

(2) Subject to earlier termination as provided herein.

                                       A-i

<PAGE>

4.       NO TRANSFER OR SERVICE RIGHTS. Nothing contained in this Agreement
constitutes an employment or service commitment by the Company or any affiliate,
confers upon the Grantee any right to remain in employ of or service to the
Company or any affiliate, interferes in any way with the right of the Company or
any affiliate at any time to terminate such employment service, or affects the
right of the Company or any affiliate to increase or decrease the recipient's
other compensation. The Option and any other rights of the Grantee under this
Agreement or the Plan are nontransferable and exercisable only by the Grantee,
except as set forth in Section A.3 of the Plan.

5.       THE PLAN GOVERNS. The Option and all rights of the Grantee under this
Agreement are subject to all of the terms and conditions of the Plan,
incorporated herein by this reference. In the event of a conflict or
inconsistency between the terms and conditions of this Agreement and of the
Plan, the terms and conditions of the Plan shall govern. Provisions of the Plan
that confer discretionary authority on the Board do not and shall not be deemed
to create any rights in the Grantee unless such rights are expressly set forth
herein or are otherwise conferred on the Grantee in the sole discretion, and by
appropriate action, of the Board after the date hereof. By executing this
Agreement, the Grantee represents that he/she is familiar with the terms and
conditions of this Agreement and the Plan, hereby acknowledges receipt of both
documents and the current Prospectus for the Plan, and hereby accepts the Option
subject to all of the terms and conditions hereof.

6.       ENTIRE AGREEMENT. This Agreement and the Plan together constitute the
entire agreement and supersede all prior understandings and agreements, written
or oral, of the parties hereto with respect to the subject matter hereof. The
Plan and this Agreement may be amended pursuant to Section 12 of the Plan. Such
amendment must be in writing and signed by the Company. The Company may,
however, unilaterally waive any provision hereof in writing to the extent such
waiver does not adversely affect the interests of the Grantee hereunder, but no
such waiver shall operate as or be construed to be a subsequent waiver of the
same provision or a waiver of any other provision hereof.

7.       GOVERNING LAW. This Agreement shall be construed in accordance with and
governed by the laws of the State of California without regard to conflict of
law principles thereunder.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Award Date set forth above.

                                        ASK JEEVES, INC.,
                                        a Delaware corporation

                                        By:_____________________________________

                                        Print Name:_____________________________

                                        Title:__________________________________

                                        GRANTEE

                                        ________________________________________
                                        Signature

                                      A-ii<PAGE>
                                                                    EXHIBIT 10.4

                          CAPSTONE TURBINE CORPORATION

                 AMENDED AND RESTATED 2000 EQUITY INCENTIVE PLAN

<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                            PAGE
<S>                                                                         <C>
1.  PURPOSES OF THE PLAN .................................................     1
2.  DEFINITIONS ..........................................................     1
3.  STOCK SUBJECT TO THE PLAN ............................................     5
4.  ADMINISTRATION OF THE PLAN ...........................................     5
5.  ELIGIBILITY ..........................................................     7
6.  LIMITATIONS ..........................................................     7
7.  TERM OF PLAN .........................................................     8
8.  TERM OF OPTION .......................................................     8
9.  OPTION EXERCISE PRICE AND CONSIDERATION ..............................     9
10. EXERCISE OF OPTION ...................................................    10
11. NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS .............    13
12. GRANTING OF OPTIONS TO INDEPENDENT DIRECTORS .........................    13
13. TERMS OF OPTIONS GRANTED TO INDEPENDENT DIRECTORS ....................    13
14. STOCK PURCHASE RIGHTS AND STOCK BONUSES ..............................    13
15. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR ASSET SALE .....    14
16. TIME OF GRANTING OPTIONS, STOCK PURCHASE RIGHTS AND STOCK BONUSES ....    17
17. AMENDMENT AND TERMINATION OF THE PLAN ................................    17
18. STOCKHOLDER APPROVAL .................................................    18
19. INABILITY TO OBTAIN AUTHORITY ........................................    18
20. RESERVATION OF SHARES ................................................    18
21. INFORMATION TO HOLDERS AND PURCHASERS ................................    18
22. REPURCHASE PROVISIONS ................................................    18
23. INVESTMENT INTENT ....................................................    19
24. GOVERNING LAW ........................................................    20
</Table>

<PAGE>

                          CAPSTONE TURBINE CORPORATION

                 AMENDED AND RESTATED 2000 EQUITY INCENTIVE PLAN

         1. Purposes of the Plan. The purposes of the Capstone Turbine
Corporation Amended and Restated 2000 Equity Incentive Plan are to attract and
retain the best available personnel for positions of substantial responsibility,
to provide additional incentive to Employees, Directors and Consultants and to
promote the success of the Company's business. Options granted under the Plan
may be Incentive Stock Options or Non-Qualified Stock Options, as determined by
the Administrator at the time of grant. Stock Purchase Rights and Stock Bonuses
may also be granted under the Plan.

         2. Definitions. As used herein, the following definitions shall apply:

                  (a) "Acquisition" means (i) any consolidation or merger of the
Company with or into any other corporation or other entity or person in which
the stockholders of the Company prior to such consolidation or merger own less
than fifty percent (50%) of the Company's voting power immediately after such
consolidation or merger, excluding any consolidation or merger effected
exclusively to change the domicile of the Company; or (ii) a sale of all or
substantially all of the assets of the Company.

                  (b) "Administrator" means the Board or the Committee
responsible for conducting the general administration of the Plan, as
applicable, in accordance with Section 4 hereof.

                  (c) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options, Stock Purchase Rights or
Stock Bonuses are granted under the Plan.

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

                  (e) "Cause" means (i) with respect to a Holder who is an
Employee, and whose employment contract expressly provides for termination of
such Holder in certain specified circumstances constituting "cause", those
circumstances that constitute "cause" under such Holder's employment contract;
(ii) with respect to a Holder who is an Employee, but who does not have an
employment contract or whose employment contract does not expressly provide for
termination of such Holder in certain specified circumstances constituting
"cause", (A) the commission of any act by such Holder involving fraud,
embezzlement or a felony, (B) the commission of any act by such Holder
constituting financial dishonesty against the Company or its Parent or any of
its Subsidiaries, (C) repeated and gross dereliction of duty to the Company or
its Parent or any of its Subsidiaries to which such Holder's duties extend, (D)
an act involving moral turpitude which (1) brings the Company or its Parent or
any of its Subsidiaries into public

                                       1
<PAGE>

disrepute or disgrace, or (2) causes material injury to the customer relations,
operations or the business prospects of the Company or its Parent or any of its
Subsidiaries, (E) the breach by such Holder of any of such Holder's obligations
under such Holder's employee or employment agreement with the Company or its
Parent or any of its Subsidiaries, or (F) the refusal or failure of such Holder
to follow the lawful directives of the Board, the President and Chief Executive
Officer of the Company or his designee or such Holder's supervisor; and (iii)
with respect to a Holder who is a Director, (A) the commission of any act by
such Holder involving fraud, embezzlement or a felony, (B) the commission of any
act by such Holder constituting financial dishonesty against the Company or its
Parent or any of its Subsidiaries, (C) repeated and gross dereliction of duty to
the Company or its Parent or any of its Subsidiaries to which such Holder's
duties extend, (D) an act involving moral turpitude which (1) brings the Company
or its Parent or any of its Subsidiaries into public disrepute or disgrace, or
(2) causes material injury to the customer relations, operations or the business
prospects of the Company or its Parent or any of its Subsidiaries.

                  (f) "Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute or statutes thereto. Reference to any
particular Code section shall include any successor section.

                  (g) "Committee" means a committee appointed by the Board in
accordance with Section 4 hereof.

                  (h) "Common Stock" means the Common Stock of the Company, par
value $0.001 per share.

                  (i) "Company" means Capstone Turbine Corporation, a Delaware
corporation.

                  (j) "Consultant" means any consultant or adviser if: (i) the
consultant or adviser renders bona fide services to the Company; (ii) the
services rendered by the consultant or adviser are not in connection with the
offer or sale of securities in a capital-raising transaction and do not directly
or indirectly promote or maintain a market for the Company's securities; and
(iii) the consultant or adviser is a natural person who has contracted directly
with the Company to render such services.

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

                  (l) "Employee" means any person, including an Officer or
Director, who is an employee (as defined in accordance with Section 3401(c) of
the Code) of the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety (90)
days, unless reemployment upon expiration of such leave is guaranteed by statute
or contract. Neither service

                                       2
<PAGE>

as a Director nor payment of a director's fee by the Company shall be
sufficient, by itself, to constitute "employment" by the Company.

                  (m) "Exchange Act" means the Securities Exchange Act of 1934,
as amended, or any successor statute or statutes thereto. Reference to any
particular Exchange Act section shall include any successor section.

                  (n) "Fair Market Value" means, as of any date, the value of a
share of Common Stock determined as follows:

                           (i) If the Common Stock is listed on any established
stock exchange or a national market system, including, without limitation, the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for a share of such stock
(or the closing bid, if no sales were reported) as quoted on such exchange or
system for the last market trading day prior to the time of determination, as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable;

                           (ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices for a
share of the Common Stock on the last market trading day prior to the day of
determination; or

                           (iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Administrator.

                  (o) "Holder" means a person who has been granted or awarded an
Option or Stock Purchase Right or who holds Shares acquired pursuant to the
exercise of an Option or Stock Purchase Right or pursuant to a Stock Bonus.

                  (p) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and which is designated as an Incentive Stock Option by the Administrator.

                  (q) "Independent Director" means a Director who is not an
Employee of the Company.

                  (r) "Non-Qualified Stock Option" means an Option (or portion
thereof) that is not designated as an Incentive Stock Option by the
Administrator, or which is designated as an Incentive Stock Option by the
Administrator but fails to qualify as an incentive stock option within the
meaning of Section 422 of the Code.

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

                                       3
<PAGE>

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

                  (u) "Option Agreement" means a written agreement between the
Company and a Holder evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.

                  (v) "Option Exchange Program" means a program whereby
outstanding Options are surrendered or cancelled in exchange for Options of the
same type (which may have a lower exercise price or purchase price), of a
different type and/or cash.

                  (w) "Parent" means any corporation, whether now or hereafter
existing (other than the Company), in an unbroken chain of corporations ending
with the Company if each of the corporations other than the last corporation in
the unbroken chain owns stock possessing more than fifty percent of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

                  (x) "Plan" means the Capstone Turbine Corporation Amended and
Restated 2000 Equity Incentive Plan.

                  (y) "Public Trading Date" means the first date upon which
Common Stock of the Company is listed (or approved for listing) upon notice of
issuance on any securities exchange or designated (or approved for designation)
upon notice of issuance as a national market security on an interdealer
quotation system.

                  (z) "Restricted Stock" means Shares acquired pursuant to the
exercise of an unvested Option in accordance with Section 10(h) below or
pursuant to a Stock Purchase Right granted under Section 14 below.

                  (aa) "Rule 16b-3" means that certain Rule 16b-3 under the
Exchange Act, as such Rule may be amended from time to time.

                  (bb) "Section 16(b)" means Section 16(b) of the Exchange Act,
as such Section may be amended from time to time.

                  (cc) "Securities Act" means the Securities Act of 1933, as
amended, or any successor statute or statutes thereto. Reference to any
particular Securities Act section shall include any successor section.

                  (dd) "Service Provider" means an Employee, Director or
Consultant.

                  (ee) "Share" means a share of Common Stock, as adjusted in
accordance with Section 15 below.

                  (ff) "Stock Bonus" means a grant of Common Stock granted
pursuant to Section 14(e) of the Plan.

                                       4
<PAGE>

                  (gg) "Stock Purchase Right" means a right to purchase Common
Stock pursuant to Section 14 below or the right to receive a bonus of Common
Stock for past services.

                  (hh) "Subsidiary" means any corporation, whether now or
hereafter existing (other than the Company), in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain owns stock possessing more than fifty
percent of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

         3. Stock Subject to the Plan. Subject to the provisions of Section 15
of the Plan, the shares of stock subject to Options, Stock Purchase Rights or
Stock Bonuses shall be Common Stock, initially shares of the Company's Common
Stock, par value $0.001 per share. Subject to the provisions of Section 15 of
the Plan, the maximum aggregate number of Shares which may be issued upon
exercise of such Options or Stock Purchase Rights or pursuant to such Stock
Bonuses is six million two hundred thousand (6,200,000) Shares, plus the number
of Shares previously authorized and remaining available under the Company's 1993
Stock Incentive Plan, as amended, as of the Public Trading Date, plus any Shares
covered by options granted under the Company's 1993 Stock Incentive Plan that
are forfeited or expire unexercised or otherwise become available after the
Public Trading Date; provided, however, that the maximum aggregate number of
Shares which may be issued upon exercise of Incentive Stock Options is three
million seven hundred thousand (3,700,000) Shares. Shares issued upon exercise
of Options or Stock Purchase Rights or pursuant to Stock Bonuses may be
authorized but unissued, or reacquired Common Stock. If an Option or Stock
Purchase Right expires or becomes unexercisable without having been exercised in
full, or is surrendered pursuant to an Option Exchange Program, the unpurchased
Shares which were subject thereto shall become available for future grant or
sale under the Plan (unless the Plan has terminated). Shares which are delivered
by the Holder or withheld by the Company upon the exercise of an Option or Stock
Purchase Right or in respect of a Stock Bonus under the Plan, in payment of the
exercise price thereof or tax withholding thereon, may again be optioned,
granted or awarded hereunder, subject to the limitations of this Section 3. If
Shares of Restricted Stock are repurchased by the Company at their original
purchase price, such Shares shall become available for future grant under the
Plan. Notwithstanding the provisions of this Section 3, no Shares may again be
optioned, granted or awarded if such action would cause an Incentive Stock
Option to fail to qualify as an Incentive Stock Option under Code Section 422.

         4. Administration of the Plan.

                  (a) Administrator. Unless and until the Board delegates
administration to a Committee as set forth below, the Plan shall be administered
by the Board. The Board may delegate administration of the Plan to a Committee
or Committees of one or more members of the Board, and the term "Committee"
shall apply to any person or persons to whom such authority has been delegated.
If administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, including the power to delegate to a subcommittee any of the
administrative powers the

                                       5
<PAGE>

Committee is authorized to exercise (and references in this Plan to the Board
shall thereafter be to the Committee or subcommittee), subject, however, to such
resolutions, not inconsistent with the provisions of the Plan, as may be adopted
from time to time by the Board. Notwithstanding the foregoing, however, from and
after the Public Trading Date, a Committee of the Board shall administer the
Plan and the Committee shall consist solely of two or more Independent Directors
each of whom is both an "outside director," within the meaning of Section 162(m)
of the Code, and a "non-employee director" within the meaning of Rule 16b-3.
Within the scope of such authority, the Board or the Committee may (i) delegate
to a committee of one or more members of the Board who are not Independent
Directors the authority to grant awards under the Plan to eligible persons who
are either (1) not then "covered employees," within the meaning of Section
162(m) of the Code and are not expected to be "covered employees" at the time of
recognition of income resulting from such award or (2) not persons with respect
to whom the Company wishes to comply with Section 162(m) of the Code and/or (ii)
delegate to a committee of one or more members of the Board who are not
"non-employee directors," within the meaning of Rule 16b-3, the authority to
grant awards under the Plan to eligible persons who are not then subject to
Section 16 of the Exchange Act. The Board may abolish the Committee at any time
and revest in the Board the administration of the Plan. Appointment of Committee
members shall be effective upon acceptance of appointment. Committee members may
resign at any time by delivering written notice to the Board. Vacancies in the
Committee may only be filled by the Board.

                  (b) Powers of the Administrator. Subject to the provisions of
the Plan and the specific duties delegated by the Board to such Committee, and
subject to the approval of any relevant authorities, the Administrator shall
have the authority in its sole discretion:

                           (i) to determine the Fair Market Value;

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

                           (iii) to determine the number of Shares to be covered
by each such award granted hereunder;

                           (iv) to approve forms of agreement for use under the
Plan;

                           (v) to determine the terms and conditions of any
award granted hereunder (such terms and conditions include, but are not limited
to, the exercise price, the time or times when Options or Stock Purchase Rights
may vest or be exercised (which may be based on performance criteria), any
vesting acceleration or waiver of forfeiture restrictions, and any restriction
or limitation regarding any award granted hereunder or the Common Stock relating
thereto, based in each case on such factors as the Administrator, in its sole
discretion, shall determine);

                                       6
<PAGE>

                           (vi) to reduce the exercise price of any Option or
Stock Purchase Right to the then current Fair Market Value if the Fair Market
Value of the Common Stock covered by such Option or Stock Purchase Right shall
have declined since the date the Option or Stock Purchase Right was granted;

                           (vii) to institute an Option Exchange Program;

                           (viii) to determine whether to offer to buyout a
previously granted Option as provided in subsection 10(i) and to determine the
terms and conditions of such offer and buyout (including whether payment is to
be made in cash or Shares);

                           (ix) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;

                           (x) to allow Holders to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right or pursuant to a Stock
Bonus that number of Shares having a Fair Market Value equal to the minimum
amount required to be withheld based on the statutory withholding rates for
federal and state tax purposes that apply to supplemental taxable income. The
Fair Market Value of the Shares to be withheld shall be determined on the date
that the amount of tax to be withheld is to be determined. All elections by
Holders to have Shares withheld for this purpose shall be made in such form and
under such conditions as the Administrator may deem necessary or advisable;

                           (xi) to amend the Plan or any Option or Stock
Purchase Right granted under the Plan as provided in Section 17; and

                           (xii) to construe and interpret the terms of the Plan
and awards granted pursuant to the Plan and to exercise such powers and perform
such acts as the Administrator deems necessary or desirable to promote the best
interests of the Company which are not in conflict with the provisions of the
Plan.

                  (c) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Holders.

         5. Eligibility. Non-Qualified Stock Options, Stock Purchase Rights and
Stock Bonuses may be granted to Service Providers. Incentive Stock Options may
be granted only to Employees. If otherwise eligible, an Employee or Consultant
who has been granted an Option, Stock Purchase Right or Stock Bonus may be
granted additional Options, Stock Purchase Rights or Stock Bonuses. In addition
to the foregoing, each Independent Director shall be eligible to be granted
Options at the times and in the manner set forth in Section 12.

         6. Limitations.

                                       7
<PAGE>

                  (a) Each Option shall be designated by the Administrator in
the Option Agreement as either an Incentive Stock Option or a Non-Qualified
Stock Option. However, notwithstanding such designations, to the extent that the
aggregate Fair Market Value of Shares subject to a Holder's Incentive Stock
Options and other incentive stock options granted by the Company, any Parent or
Subsidiary, which become exercisable for the first time during any calendar year
(under all plans of the Company or any Parent or Subsidiary) exceeds $100,000,
such excess Options or other options shall be treated as Non-Qualified Stock
Options.

                  For purposes of this Section 6(a), Incentive Stock Options
shall be taken into account in the order in which they were granted, and the
Fair Market Value of the Shares shall be determined as of the time of grant.

                  (b) None of the Plan, any Option, Stock Purchase Right or
Stock Bonus shall confer upon a Holder any right with respect to continuing the
Holder's employment or consulting relationship with the Company, nor shall they
interfere in any way with the Holder's right or the Company's right to terminate
such employment or consulting relationship at any time, with or without cause.

                  (c) No Service Provider shall be granted, in any calendar
year, Options, Stock Purchase Rights or Stock Bonuses to acquire more than three
million (3,000,000) Shares. The foregoing limitation shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 15. For purposes of this Section 6(c), if an Option is
canceled in the same calendar year it was granted (other than in connection with
a transaction described in Section 15), the canceled Option will be counted
against the limit set forth in this Section 6(c). For this purpose, if the
exercise price of an Option is reduced, the transaction shall be treated as a
cancellation of the Option and the grant of a new Option.

         7. Term of Plan. The Plan shall become effective upon its initial
adoption by the Board and shall continue in effect until it is terminated under
Section 17 of the Plan. No Options, Stock Purchase Rights or Stock Bonuses may
be issued under the Plan after the tenth (10th) anniversary of the earlier of
(i) the date upon which the Plan is adopted by the Board or (ii) the date the
Plan is approved by the stockholders.

         8. Term of Option. The term of each Option shall be stated in the
Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. In the case of an Incentive Stock
Option granted to a Holder who, at the time the Option is granted, owns (or is
treated as owning under Code Section 424) stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the term of the Option shall be five (5) years from the
date of grant or such shorter term as may be provided in the Option Agreement.

                                       8
<PAGE>

         9. Option Exercise Price and Consideration.

                  (a) Except as provided in Section 13, the per share exercise
price for the Shares to be issued upon exercise of an Option shall be such price
as is determined by the Administrator, but shall be subject to the following:

                           (i) In the case of an Incentive Stock Option

                                    (A) granted to an Employee who, at the time
of grant of such Option, owns (or is treated as owning under Code Section 424)
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the per Share
exercise price shall be no less than one hundred ten percent (110%) of the Fair
Market Value per Share on the date of grant.

                                    (B) granted to any other Employee, the per
Share exercise price shall be no less than one hundred percent (100%) of the
Fair Market Value per Share on the date of grant.

                  (ii) In the case of a Non-Qualified Stock Option

                                    (A) granted to a Service Provider who, at
the time of grant of such Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the exercise price shall be no less than one hundred ten percent
(110%) of the Fair Market Value per Share on the date of the grant.

                                    (B) granted to any other Service Provider,
the per Share exercise price shall be no less than eighty-five percent (85%) of
the Fair Market Value per Share on the date of grant.

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

                  (b) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration may consist of (1) cash,
(2) check, (3) with the consent of the Administrator, a full recourse promissory
note bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code) and payable upon such terms as may be
prescribed by the Administrator, (4) with the consent of the Administrator,
other Shares which (x) in the case of Shares acquired from the Company, have
been owned by the Holder for more than six (6) months on the date of surrender,
and (y) have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the

                                       9
<PAGE>

Shares as to which such Option shall be exercised, (5) with the consent of the
Administrator, surrendered Shares then issuable upon exercise of the Option
having a Fair Market Value on the date of exercise equal to the aggregate
exercise price of the Option or exercised portion thereof, (6) with the consent
of the Administrator, property of any kind which constitutes good and valuable
consideration, (7) with the consent of the Administrator, delivery of a notice
that the Holder has placed a market sell order with a broker with respect to
Shares then issuable upon exercise of the Options and that the broker has been
directed to pay a sufficient portion of the net proceeds of the sale to the
Company in satisfaction of the Option exercise price, provided, that payment of
such proceeds is then made to the Company upon settlement of such sale, or (8)
with the consent of the Administrator, any combination of the foregoing methods
of payment.

         10. Exercise of Option.

                  (a) Vesting; Fractional Exercises. Except as provided in
Section 13, Options granted hereunder shall be vested and exercisable according
to the terms hereof at such times and under such conditions as determined by the
Administrator and set forth in the Option Agreement; provided, however, that,
except with regard to Options granted to Officers, Directors or Consultants, in
no event shall an Option granted hereunder become vested and exercisable at a
rate of less than twenty percent (20%) per year over five (5) years from the
date the Option is granted, subject to reasonable conditions, such as continuing
to be a Service Provider. An Option may not be exercised for a fraction of a
Share.

                  (b) Deliveries upon Exercise. All or a portion of an
exercisable Option shall be deemed exercised upon delivery of all of the
following to the Secretary of the Company or his or her office:

                           (i) A written or electronic notice complying with the
applicable rules established by the Administrator stating that the Option, or a
portion thereof, is exercised. The notice shall be signed by the Holder or other
person then entitled to exercise the Option or such portion of the Option;

                           (ii) Such representations and documents as the
Administrator, in its sole discretion, deems necessary or advisable to effect
compliance with Applicable Laws. The Administrator may, in its sole discretion,
also take whatever additional actions it deems appropriate to effect such
compliance, including, without limitation, placing legends on share certificates
and issuing stop transfer notices to agents and registrars;

                           (iii) Upon the exercise of all or a portion of an
unvested Option pursuant to Section 10(h), a Restricted Stock purchase agreement
in a form determined by the Administrator and signed by the Holder or other
person then entitled to exercise the Option or such portion of the Option; and

                           (iv) In the event that the Option shall be exercised
pursuant to Section 10(f) by any person or persons other than the Holder,
appropriate proof of the right of such person or persons to exercise the Option.

                                       10
<PAGE>

                  (c) Conditions to Delivery of Share Certificates. The Company
shall not be required to issue or deliver any certificate or certificates for
Shares purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:

                           (i) The admission of such Shares to listing on all
stock exchanges on which such class of stock is then listed;

                           (ii) The completion of any registration or other
qualification of such Shares under any state or federal law, or under the
rulings or regulations of the Securities and Exchange Commission or any other
governmental regulatory body which the Administrator shall, in its sole
discretion, deem necessary or advisable;

                           (iii) The obtaining of any approval or other
clearance from any state or federal governmental agency which the Administrator
shall, in its sole discretion, determine to be necessary or advisable;

                           (iv) The lapse of such reasonable period of time
following the exercise of the Option as the Administrator may establish from
time to time for reasons of administrative convenience; and

                           (v) The receipt by the Company of full payment for
such Shares, including payment of any applicable withholding tax, which in the
sole discretion of the Administrator may be in the form of consideration used by
the Holder to pay for such Shares under Section 9(b).

                  (d) Termination of Relationship as a Service Provider. If a
Holder ceases to be a Service Provider other than by reason of the Holder's
disability or death, such Holder may exercise his or her Option within such
period of time as is specified in the Option Agreement to the extent that the
Option is vested on the date of termination (but in no event later than the
expiration of the term of the Option as set forth in the Option Agreement). In
the absence of a specified time in the Option Agreement, the Option shall remain
exercisable for three (3) months following the Holder's termination. If, on the
date of termination, the Holder is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option immediately cease to be
issuable under the Option and shall again become available for issuance under
the Plan. If, after termination, the Holder does not exercise his or her Option
within the time period specified herein, the Option shall terminate, and the
Shares covered by such Option shall again become available for issuance under
the Plan. If a Holder is terminated for Cause, the Option shall immediately
terminate, and the Shares covered by such Option shall again become available
for issuance under the Plan.

                  (e) Disability of Holder. If a Holder ceases to be a Service
Provider as a result of the Holder's disability, the Holder may exercise his or
her Option within such period of time as is specified in the Option Agreement to
the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the

                                       11
<PAGE>

Option Agreement). In the absence of a specified time in the Option Agreement,
the Option shall remain exercisable for twelve (12) months following the
Holder's termination. If such disability is not a "disability" as such term is
defined in Section 22(e)(3) of the Code, in the case of an Incentive Stock
Option such Incentive Stock Option shall automatically cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Non-Qualified
Stock Option from and after the day which is three (3) months and one (1) day
following such termination. If, on the date of termination, the Holder is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall immediately cease to be issuable under the Option
and shall again become available for issuance under the Plan. If, after
termination, the Holder does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall again become available for issuance under the Plan.

                  (f) Death of Holder. If a Holder dies while a Service
Provider, the Option may be exercised within such period of time as is specified
in the Option Agreement (but in no event later than the expiration of the term
of such Option as set forth in the Notice of Grant), by the Holder's estate or
by a person who acquires the right to exercise the Option by bequest or
inheritance, but only to the extent that the Option is vested on the date of
death. In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for twelve (12) months following the Holder's
termination. If, at the time of death, the Holder is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall
immediately cease to be issuable under the Option and shall again become
available for issuance under the Plan. The Option may be exercised by the
executor or administrator of the Holder's estate or, if none, by the person(s)
entitled to exercise the Option under the Holder's will or the laws of descent
or distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
again become available for issuance under the Plan. The Company shall notify the
Holder's estate or the person who acquires the right to exercise the Option by
bequest or inheritance of the existence of the Holder's outstanding Option and
the date of the expiration of the term of such Option as soon after the death of
the Holder as is practicable.

                  (g) Regulatory Extension. A Holder's Option Agreement may
provide that if the exercise of the Option following the termination of the
Holder's status as a Service Provider (other than upon the Holder's death or
Disability) would be prohibited at any time solely because the issuance of
shares would violate the registration requirements under the Securities Act,
then the Option shall terminate on the earlier of (i) the expiration of the term
of the Option set forth in Section 8 or (ii) the expiration of a period of three
(3) months after the termination of the Holder's status as a Service Provider
during which the exercise of the Option would not be in violation of such
registration requirements.

                  (h) Early Exercisability. The Administrator may provide in the
terms of a Holder's Option Agreement that the Holder may, at any time before the
Holder's status as a Service Provider terminates, exercise the Option in whole
or in part prior to the full vesting of the Option; provided, however, that
subject to Section 22, Shares acquired upon exercise of an

                                       12
<PAGE>

Option which has not fully vested may be subject to any forfeiture, transfer or
other restrictions as the Administrator may determine in its sole discretion.

         (i) Buyout Provisions. The Administrator may at any time offer to
buyout for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Holder at the time that such offer is made.

         11. Non-Transferability of Options and Stock Purchase Rights. Options
and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the Holder,
only by the Holder.

         12. Granting of Options to Independent Directors.

                  (a) During the term of the Plan, a person who is an
Independent Director as of the Public Trading Date, or a person who is initially
elected to the Board following the Public Trading Date and who is an Independent
Director at the time of such initial election, may be granted an Option to
purchase twenty-one thousand six hundred (21,600) shares of Common Stock
(subject to adjustment as provided in Section 15) on the Public Trading Date or
such initial election, as applicable (each, an "Initial Option"). Members of the
Board who are employees of the Company who subsequently retire from the Company
and remain on the Board will not receive an Initial Option. The Initial Option
grants authorized by this Section 12(a) shall be made by the Board.

         13. Terms of Initial Options. The per Share price of each Initial
Option granted to an Independent Director shall equal 100% of the Fair Market
Value of a share of Common Stock on the date the Initial Option is granted;
provided, however, that the per Share price of each Initial Option granted to an
Independent Director on the date of the initial public offering of Common Stock
shall equal the initial public offering price (net of underwriting discounts and
commissions) per Share. Initial Options granted to Independent Directors shall
become exercisable in cumulative annual installments of one third (1/3) of the
Shares subject to such option on each of the yearly anniversaries of the date of
Initial Option grant, commencing with the first such anniversary, such that each
Initial Option shall be one hundred percent (100%) vested on the third
anniversary of its date of grant, subject to the Independent Director remaining
a Director on each such date. Subject to Section 10, the term of each Initial
Option granted to an Independent Director shall be ten (10) years from the date
the Initial Option is granted. No portion of an Initial Option which is
unexercisable at the time of an Independent Director's termination of membership
on the Board shall thereafter become exercisable.

         14. Stock Purchase Rights and Stock Bonuses.

                  (a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with Options granted under the Plan
and/or cash awards made outside

                                       13
<PAGE>

of the Plan. After the Administrator determines that it will offer Stock
Purchase Rights under the Plan, it shall advise the offeree in writing of the
terms, conditions and restrictions related to the offer, including the number of
Shares that such person shall be entitled to purchase, the price to be paid, and
the time within which such person must accept such offer. The offer shall be
accepted by execution of a Restricted Stock purchase agreement in the form
determined by the Administrator.

                  (b) Repurchase Right. Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement shall grant the Company the
right to repurchase Shares acquired upon exercise of a Stock Purchase Right upon
the termination of the purchaser's status as a Service Provider for any reason.
Subject to Section 22, the purchase price for Shares repurchased by the Company
pursuant to such repurchase right and the rate at which such repurchase right
shall lapse shall be determined by the Administrator in its sole discretion, and
shall be set forth in the Restricted Stock purchase agreement.

                  (c) Other Provisions. The Restricted Stock purchase agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.

                  (d) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have rights equivalent to those of a shareholder
and shall be a shareholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company. No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 15 of
the Plan.

                  (e) Stock Bonuses. Notwithstanding any other provision of the
Plan, the Administrator may grant Stock Bonuses, as compensation or as bonuses,
to such Service Providers as the Administrator may select in its sole discretion
from time to time. Such Stock Bonuses may be issued either alone, in addition
to, or in tandem with Options or Stock Purchase Rights granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Bonuses under the Plan, it shall advise the offeree in
writing of the terms and conditions related to the offer, including the number
of Shares that such person shall be entitled to receive, the price to be paid,
if any, the time within which such person must accept such offer, and the manner
of acceptance of such offer.

         15. Adjustments upon Changes in Capitalization, Merger or Asset Sale.

                  (a) In the event that the Administrator determines that any
dividend or other distribution (whether in the form of cash, Common Stock, other
securities, or other property), recapitalization, reclassification, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, liquidation, dissolution, or sale, transfer, exchange
or other disposition of all or substantially all of the assets of the Company,
or exchange of Common Stock or other securities of the Company, issuance of
warrants or other

                                       14
<PAGE>

rights to purchase Common Stock or other securities of the Company, or other
similar corporate transaction or event, in the Administrator's sole discretion,
affects the Common Stock such that an adjustment is determined by the
Administrator to be appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan
or with respect to any Option, Stock Purchase Right or Restricted Stock, then
the Administrator shall, in such manner as it may deem equitable, adjust any or
all of:

                           (i) the number and kind of shares of Common Stock (or
other securities or property) with respect to which Options or Stock Purchase
Rights may be granted or awarded (including, but not limited to, adjustments of
the limitations in Section 3 on the maximum number and kind of shares which may
be issued and adjustments of the maximum number of Shares that may be purchased
by any Holder in any calendar year pursuant to Section 6(c));

                           (ii) the number and kind of shares of Common Stock
(or other securities or property) subject to outstanding Options, Stock Purchase
Rights or Restricted Stock; and

                           (iii) the grant or exercise price with respect to any
Option or Stock Purchase Right.

                  (b) In the event of any transaction or event described in
Section 15(a), the Administrator, in its sole discretion, and on such terms and
conditions as it deems appropriate, either by the terms of the Option, Stock
Purchase Right or Restricted Stock or by action taken prior to the occurrence of
such transaction or event and either automatically or upon the Holder's request,
is hereby authorized to take any one or more of the following actions whenever
the Administrator determines that such action is appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended by the
Company to be made available under the Plan or with respect to any Option, Stock
Purchase Right or Restricted Stock granted or issued under the Plan or to
facilitate such transaction or event:

                           (i) To provide for either the purchase of any such
Option, Stock Purchase Right or Restricted Stock for an amount of cash equal to
the amount that could have been obtained upon the exercise of such Option or
Stock Purchase Right or realization of the Holder's rights had such Option,
Stock Purchase Right or Restricted Stock been currently exercisable or payable
or fully vested or the replacement of such Option, Stock Purchase Right or
Restricted Stock with other rights or property selected by the Administrator in
its sole discretion;

                           (ii) To provide that such Option or Stock Purchase
Right shall be exercisable as to all shares covered thereby, notwithstanding
anything to the contrary in the Plan or the provisions of such Option or Stock
Purchase Right;

                                       15
<PAGE>

                           (iii) To provide that such Option, Stock Purchase
Right or Restricted Stock be assumed by the successor or survivor corporation,
or a parent or subsidiary thereof, or shall be substituted for by similar
options, rights or awards covering the stock of the successor or survivor
corporation, or a parent or subsidiary thereof, with appropriate adjustments as
to the number and kind of shares and prices;

                           (iv) To make adjustments in the number and type of
shares of Common Stock (or other securities or property) subject to outstanding
Options and Stock Purchase Rights, and/or in the terms and conditions of
(including the grant or exercise price), and the criteria included in,
outstanding Options, Stock Purchase Rights or Restricted Stock or Options, Stock
Purchase Rights or Restricted Stock which may be granted in the future; and

                           (v) To provide that immediately upon the consummation
of such event, such Option or Stock Purchase Right shall not be exercisable and
shall terminate; provided, that for a specified period of time prior to such
event, such Option or Stock Purchase Right shall be exercisable as to all Shares
covered thereby, and the restrictions imposed under an Option Agreement or
Restricted Stock purchase agreement upon some or all Shares may be terminated
and, in the case of Restricted Stock, some or all shares of such Restricted
Stock may cease to be subject to repurchase, notwithstanding anything to the
contrary in the Plan or the provisions of such Option, Stock Purchase Right or
Restricted Stock purchase agreement.

                  (c) Subject to Section 3, the Administrator may, in its sole
discretion, include such further provisions and limitations in any Option, Stock
Purchase Right, Restricted Stock agreement or certificate, as it may deem
equitable and in the best interests of the Company.

                  (d) If the Company undergoes an Acquisition, then any
surviving corporation or entity or acquiring corporation or entity, or affiliate
of such corporation or entity, may assume any Options, Stock Purchase Rights or
Restricted Stock outstanding under the Plan or may substitute similar stock
awards (including an award to acquire the same consideration paid to the
stockholders in the transaction described in this subsection 15(d)) for those
outstanding under the Plan. In the event any surviving corporation or entity or
acquiring corporation or entity in an Acquisition, or affiliate of such
corporation or entity, does not assume such Options, Stock Purchase Rights or
Restricted Stock or does not substitute similar stock awards for those
outstanding under the Plan, then with respect to (i) Options, Stock Purchase
Rights or Restricted Stock held by participants in the Plan whose status as a
Service Provider has not terminated prior to such event, the vesting of such
Options, Stock Purchase Rights or Restricted Stock (and, if applicable, the time
during which such awards may be exercised) shall be accelerated and made fully
exercisable and all restrictions thereon shall lapse at least ten (10) days
prior to the closing of the Acquisition (and the Options or Stock Purchase
Rights terminated if not exercised prior to the closing of such Acquisition),
and (ii) any other Options or Stock Purchase Rights outstanding under the Plan,
such Options or Stock Purchase rights shall be terminated if not exercised prior
to the closing of the Acquisition.

                                       16
<PAGE>

                  (e) In the event the Company undergoes an Acquisition and any
surviving corporation or entity or acquiring corporation or entity, or affiliate
of such corporation or entity, does assume any Options, Stock Purchase Rights or
Restricted Stock outstanding under the Plan (or substitutes similar stock
awards, including an award to acquire the same consideration paid to the
stockholders in the transaction described in this subsection 15(e), for those
outstanding under the Plan), then, with respect to each stock award held by
participants in the Plan then performing services as Employees or Directors, the
vesting of each such stock award (and, if applicable, the time during which such
stock award may be exercised) shall be accelerated and such stock award shall
immediately become fully vested and exercisable, if any of the following events
occurs within nine (9) months after the effective date of the Acquisition: (1)
the Employee status or Director status, as applicable, of the participant
holding such stock award is terminated by the Company without Cause; (2) the
Employee holding such stock award terminates his or her Employee status due to
the fact that the principal place of the performance of the responsibilities and
duties of the Employee is changed to a location more than fifty (50) miles from
such Employee's existing work location without the Employee's express consent
(this clause (2) is not applicable to Directors); or (3) the Employee holding
such stock award terminates his or her Employee status due to the fact that
there is a material reduction in such Employee's responsibilities and duties
without the Employee's express consent (this clause (3) is not applicable to
Directors).

                  (f) The existence of the Plan, any Option Agreement or
Restricted Stock purchase agreement and the Options or Stock Purchase Rights
granted hereunder shall not affect or restrict in any way the right or power of
the Company or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the Company,
any issue of stock or of options, warrants or rights to purchase stock or of
bonds, debentures, preferred or prior preference stocks whose rights are
superior to or affect the Common Stock or the rights thereof or which are
convertible into or exchangeable for Common Stock, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

         16. Time of Granting Options, Stock Purchase Rights and Stock Bonuses.
The date of grant of an Option, Stock Purchase Right or Stock Bonus shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, Stock Purchase Right or Stock Bonus, or such other date as
is determined by the Administrator. Notice of the determination shall be given
to each Employee or Consultant to whom an Option, Stock Purchase Right or Stock
Bonus is so granted within a reasonable time after the date of such grant.

         17. Amendment and Termination of the Plan.

                  (a) Amendment and Termination. The Board may at any time
wholly or partially amend, alter, suspend or terminate the Plan. However,
without approval of the Company's stockholders given within twelve (12) months
before or after the action by the

                                       17
<PAGE>

Board, no action of the Board may, except as provided in Section 15, increase
the limits imposed in Section 3 on the maximum number of Shares which may be
issued under the Plan or extend the term of the Plan under Section 7.

                  (b) Stockholder Approval. The Board shall obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

                  (c) Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Holder, unless mutually agreed otherwise between the Holder and the
Administrator, which agreement must be in writing and signed by the Holder and
the Company. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Options,
Stock Purchase Rights, Stock Bonuses or Restricted Stock granted or awarded
under the Plan prior to the date of such termination.

         18. Stockholder Approval. The Capstone Turbine Corporation 2000 Equity
Incentive Plan, as originally adopted, was submitted for the approval of the
Company's stockholders and such approval was received within twelve (12) months
after the date of the Board's initial adoption thereof. In addition, an
amendment to increase the number of Shares authorized for issuance hereunder
from 3,300,000 to 3,700,000 was approved by the Company's stockholders, and such
amendment is incorporated herein.

         19. Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

         20. Reservation of Shares. The Company, during the term of this Plan,
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

         21. Information to Holders and Purchasers. Prior to the Public Trading
Date and to the extent required by Section 260.140.46 of Title 10 of the
California Code of Regulations, the Company shall provide to each Holder and to
each individual who acquires Shares pursuant to the Plan, not less frequently
than annually during the period such Holder or purchaser has one or more Options
or Stock Purchase Rights outstanding, and, in the case of an individual who
acquires Shares pursuant to the Plan, during the period such individual owns
such Shares, copies of annual financial statements. Notwithstanding the
preceding sentence, the Company shall not be required to provide such statements
to key employees whose duties in connection with the Company assure their access
to equivalent information.

         22. Repurchase Provisions. The Administrator in its sole discretion may
provide that the Company may repurchase Shares acquired upon exercise of an
Option or Stock Purchase

                                       18
<PAGE>

Right upon the occurrence of certain specified events, including, without
limitation, a Holder's termination as a Service Provider, divorce, bankruptcy or
insolvency; provided, however, that any such repurchase right shall be set forth
in the applicable Option Agreement or Restricted Stock purchase agreement or in
another agreement referred to in such agreement and, provided, further, that to
the extent required by Section 260.140.41 and Section 260.140.42 of Title 10 of
the California Code of Regulations, any such repurchase right set forth in an
Option or Stock Purchase Right granted prior to the Public Trading Date to a
person who is not an Officer, Director or Consultant shall be upon the following
terms: (i) if the repurchase option gives the Company the right to repurchase
the shares upon termination as a Service Provider at not less than the Fair
Market Value of the shares to be purchased on the date of termination of status
as a Service Provider, then (A) the right to repurchase shall be exercised for
cash or cancellation of purchase money indebtedness for the shares within ninety
(90) days of termination of status as a Service Provider (or in the case of
shares issued upon exercise of Options or Stock Purchase Rights after such date
of termination, within ninety (90) days after the date of the exercise) or such
longer period as may be agreed to by the Administrator and the Plan participant
and (B) the right terminates when the shares become publicly traded; and (ii) if
the repurchase option gives the Company the right to repurchase the Shares upon
termination as a Service Provider at the original purchase price for such
Shares, then (A) the right to repurchase at the original purchase price shall
lapse at the rate of at least twenty percent (20%) of the shares per year over
five (5) years from the date the Option or Stock Purchase Right is granted
(without respect to the date the Option or Stock Purchase Right was exercised or
became exercisable) and (B) the right to repurchase shall be exercised for cash
or cancellation of purchase money indebtedness for the shares within ninety (90)
days of termination of status as a Service Provider (or, in the case of shares
issued upon exercise of Options or Stock Purchase Rights, after such date of
termination, within ninety (90) days after the date of the exercise) or such
longer period as may be agreed to by the Company and the Plan participant.

         23. Investment Intent. The Company may require a Plan participant, as a
condition of exercising or acquiring stock under any Option, Stock Purchase
Right or Stock Bonus, (i) to give written assurances satisfactory to the Company
as to the participant's knowledge and experience in financial and business
matters and/or to employ a purchaser representative reasonably satisfactory to
the Company who is knowledgeable and experienced in financial and business
matters and that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the Option or Stock
Purchase Right or accepting the Stock Bonus; and (ii) to give written assurances
satisfactory to the Company stating that the participant is acquiring the stock
subject to the Option, Stock Purchase Right or Stock Bonus for the participant's
own account and not with any present intention of selling or otherwise
distributing the stock. The foregoing requirements, and any assurances given
pursuant to such requirements, shall be inoperative if (A) the issuance of the
shares upon the exercise or acquisition of stock under the applicable Option,
Stock Purchase Right or Stock Bonus has been registered under a then currently
effective registration statement under the Securities Act or (B) as to any
particular requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then applicable
securities laws.

                                       19
<PAGE>

The Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the stock.

         24. Governing Law. The validity and enforceability of this Plan shall
be governed by and construed in accordance with the laws of the State of
Delaware without regard to otherwise governing principles of conflicts of law.

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                                       20

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