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Contigo Software, Inc.
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1999 STOCK OPTION PLAN
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(as amended through January 6, 2000)
ARTICLE ONE
GENERAL PROVISIONS
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I. GIST OF THE PLAN; ELIGIBILITY
Under this 1999 Stock Option Plan (the "Plan"), the persons eligible
to be granted non-qualified options to purchase shares of common stock of the
Corporation are as follows:
A. Directors, officers or employees of the Corporation who render or
have rendered services which contribute to the management, growth and financial
success of the Corporation; and
B. those consultants or other independent contractors who provide or
have provided valuable services to the Corporation.
No one person participating in the Plan may receive options for more
than 260,000 (1,040,000, post-December 1999 stock dividend) shares of Common
Stock in the aggregate over the term of the Plan.
II. ADMINISTRATION OF THE PLAN
A. This Plan shall be administered by the Board (the "Plan
Administrator").
B. The Plan Administrator shall have full power and authority
(subject to the express provisions of the Plan) to establish such rules and
regulations as it may deem appropriate for the proper administration of the Plan
and to make such determinations under, and issue such interpretations of, the
Plan and any outstanding option grants as it may deem necessary or advisable.
Decisions of the Plan Administrator shall be final and binding on all parties
who have an interest in the Plan or any outstanding option.
III. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of authorized
but unissued common stock of the Corporation ("Common Stock"). The maximum
number of shares of Common Stock which may be issued over the term of the Plan
shall not exceed 1,200,000 (4,800,000, post-December 1999 stock dividend)
shares.
B. Shares of Common Stock subject to outstanding options shall be
available for subsequent issuance under the Plan to the extent (i) the options
expire or terminate for any reason prior to exercise in full or (ii) the options
are cancelled in accordance with the
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cancellation-regrant provisions of Article Two. All shares issued under the
Plan, whether or not those shares are subsequently repurchased by the
Corporation, shall reduce on a share-for-share basis the number of shares of
Common Stock available for subsequent issuance under the Plan. In addition,
should the exercise price of an option under the Plan be paid with shares of
Common Stock or should shares of Common Stock otherwise issuable under the Plan
be withheld by the Corporation in satisfaction of the withholding taxes incurred
in connection with the exercise of an option under the Plan, then the number of
shares of Common Stock available for issuance under the Plan shall be reduced by
the gross number of shares for which the option is exercised, and not by the net
number of shares of Common Stock issued to the holder of such option.
C. Should any change be made to the Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration, appropriate adjustments
shall be made to (i) the maximum number and/or class of securities issuable
under the Plan, (ii) the number and/or class of securities for which any one
person may be granted options over the term of the Plan, and (iii) the number
and/or class of securities and the exercise price per share in effect under each
outstanding option in order to prevent the dilution or enlargement of benefits
thereunder. The adjustments determined by the Plan Administrator shall be final,
binding and conclusive.
IV. SHAREHOLDER RIGHTS
The holder of an option ("Optionee") shall have no shareholder rights
with respect to the shares subject to the option until such person shall have
exercised the option, paid the exercise price and become a holder of record of
the purchased shares.
ARTICLE TWO
I. OPTION TERMS
Each option shall be a non-qualified stock option and shall be
evidenced by one or more documents in the form approved by the Plan
Administrator; provided, however, that each such document shall comply with the
terms specified below.
A. Exercise Price.
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1. The exercise price per share shall be fixed by the Plan
Administrator in its sole discretion.
2. The exercise price shall become immediately due upon
exercise of the option and shall be payable in cash on the exercise date.
B. Exercise and Term of Options. Each option shall be exercisable
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at such time or times, during such period and for such number of shares as shall
be determined by the Plan Administrator and set forth in the documents
evidencing the option.
C. Effect of Termination of Service.
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The Plan Administrator shall have the discretion, exercisable either
at the time an option is granted or at any time while the option remains
outstanding, to:
(i) extend the period of time for which the option is to
remain exercisable following the Optionee's cessation of Service from the
period otherwise in effect for that option to such greater period of time
as the Plan Administrator shall deem appropriate, and/or
(ii) permit the option to be exercised, during any
applicable post-Service exercise period, not only with respect to the
number of vested shares of Common Stock for which such option is
exercisable at the time of the Optionee's cessation of Service but also
with respect to one or more additional installments in which the Optionee
would have vested under the option had the Optionee continued in Service.
D. Repurchase Rights. The Plan Administrator shall have the
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discretion to grant options subject to the exercise condition that the Optionee
enter into a contract giving the Corporation the right to repurchase the shares.
The terms upon which such repurchase right shall be exercisable (including the
period and procedure for exercise and the appropriate vesting schedule for the
purchased shares) shall be established by the Plan Administrator and set forth
in the document evidencing such repurchase right.
II. ACCELERATION; EXIT TRANSACTION
A. The Plan Administrator shall have the discretion, exercisable
either at the time an option is granted under the Plan, or at any time while the
option or stock remains outstanding, to provide for the acceleration of one or
more outstanding options and the termination of repurchase rights on one or more
outstanding shares upon the occurrence of such events as the Plan Administrator
may determine, including upon an Exit Transaction regardless or whether or not
such options are to be assumed or replaced or the repurchase rights are to be
assigned in the Exit Transaction.
B. Notwithstanding Paragraph A, in the event of any Exit
Transaction, each outstanding option shall automatically accelerate so that each
such option shall, immediately prior to the effective date of the Exit
Transaction, become fully exercisable for all of the shares of Common Stock at
the time subject to such option and may be exercised for any or all of those
shares as fully-vested shares of Common Stock. However, an outstanding option
shall not so accelerate if and to the extent: (i) such option is, in connection
with the Exit Transaction, either to be assumed by the successor entity (or
parent thereof) or to be replaced with a comparable option to purchase shares of
the capital stock of the successor entity (or parent thereof), (ii) such option
is to be replaced with a cash incentive program of the successor entity which
preserves the spread existing on the unvested option shares at the time of the
Exit Transaction and provides for subsequent payout in accordance with the same
vesting schedule applicable to such option or (iii) the acceleration of such
option is subject to other limitations imposed by the Plan Administrator at the
time of the option grant. The determination of option comparability under clause
(i) above shall be made by the Plan Administrator, and its determination shall
be final, binding and conclusive.
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C. All outstanding repurchase rights shall also terminate
automatically, and the shares of Common Stock subject to those terminated rights
shall immediately vest in full, in the event of any Exit Transaction, except to
the extent: (i) those repurchase rights are to be assigned to the successor
entity (or parent thereof) in connection with such Exit Transaction or (ii) such
accelerated vesting is precluded by other limitations imposed by the Plan
Administrator at the time the repurchase right is issued.
D. Immediately following the consummation of the Exit Transaction,
all outstanding options shall terminate and cease to be outstanding, except to
the extent assumed by the successor entity (or parent thereof).
E. Each option which is assumed in connection with an Exit
Transaction shall be appropriately adjusted, immediately after such Exit
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Exit Transaction had the
option been exercised immediately prior to such Exit Transaction. Appropriate
adjustments shall also be made to (i) the number and class of securities
available for issuance under the Plan on both an aggregate and per Optionee
basis following the consummation of such Exit Transaction and (ii) the exercise
price payable per share under each outstanding option, provided the aggregate
exercise price payable for such securities shall remain the same.
F. Any options which are assumed or replaced in the Exit Transaction
and do not otherwise accelerate at that time, shall automatically accelerate
(and any of the Corporation's outstanding repurchase rights which do not
otherwise terminate at the time of the Exit Transaction) shall automatically
terminate and the shares of Common Stock subject to those terminated rights
shall immediately vest in full in the event the Optionee's Service should
subsequently terminate by reason of an Involuntary Termination within eighteen
(18) months following the effective date of such Exit Transaction. Any options
so accelerated shall remain exercisable for fully-vested shares until the
earlier of (i) the expiration of the option term or (ii) the expiration of the
one (1)-year period measured from the effective date of the Involuntary
Termination.
G. The grant of options under the Plan shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
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III. AUTOMATIC GRANTS FOR DIRECTORS
Notwithstanding anything in this Plan to the contrary, on January 31
of each year each Director then serving shall automatically receive a fully-
vested option under the Plan to purchase 20,000 shares of Common Stock
(equivalent to 5,000 shares before the December 1999 stock dividend), with an
exercise price per share equal to the fair market value of the Common Stock last
determined by the Board before such January 31. Such automatic-grant options
shall not be subject to a repurchase-right agreement. Each such option shall
expire 10 years after its grant date. If the Optionee's Service ends before
such scheduled expiration date, the time the option shall cease to be
exercisable shall be in accordance with the policies which are, as of the date
of automatic grant, generally in effect for employee options.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution new options covering the same or different number of shares of
Common Stock but with a different exercise price per share.
ARTICLE THREE
MISCELLANEOUS
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I. FINANCING
A. The Plan Administrator may permit any Optionee to pay the option
exercise price by delivering a promissory note payable in one or more
installments. The terms of any such promissory note (including the interest rate
and the terms of repayment) shall be established by the Plan Administrator in
its sole discretion. Promissory notes may be authorized with or without security
or collateral. In all events, the maximum credit available to the Optionee may
not exceed the sum of (i) the aggregate option exercise price plus (ii) any
Federal, state and local income and employment tax liability incurred by the
Optionee in connection with the option exercise.
B. The Plan Administrator may, in its discretion, determine that one
or more such promissory notes shall be subject to forgiveness by the Corporation
in whole or in part upon such terms as the Plan Administrator may deem
appropriate.
II. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock
upon the exercise of options under the Plan shall be subject to the satisfaction
of all applicable Federal, state and local income and employment tax withholding
requirements.
B. The Plan Administrator may, in its discretion, provide any or all
Optionees with the right to use shares of Common Stock in satisfaction of all or
part of the federal, state and
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local income or employment taxes incurred by such holders in connection with the
exercise of their options. Such right may be provided to any such holder in
either or both of the following formats:
1. Stock Withholding: The election to have the Corporation
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withhold, from the shares of Common Stock otherwise issuable upon the exercise
of such option, a portion of those shares with an aggregate Fair Market Value
equal to the percentage of such taxes (not to exceed one hundred percent (100%))
designated by the holder.
2. Stock Delivery: The election to deliver to the Corporation,
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at the time the option is exercised, one or more shares of Common Stock
previously acquired by such holder (other than in connection with the option
exercise triggering the taxes) with an aggregate Fair Market Value equal to the
percentage of such taxes (not to exceed one hundred percent (100%)) designated
by the holder.
III. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan shall become effective on the date the Plan is adopted
by the Board, and options may be granted from and after the effective date.
B. The Plan shall terminate upon the earliest of (i) July 17, 2007,
(ii) the date on which all shares available for issuance under the Plan shall
have been issued pursuant to the exercise of the options or (iii) the
termination of all outstanding options in connection with an Exit Transaction.
Upon such Plan termination, all options outstanding on such date shall
thereafter continue to have force and effect in accordance with the provisions
of the documents evidencing such options.
IV. AMENDMENT OF THE PLAN
The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects. However, no such amendment or
modification shall adversely affect the rights and obligations with respect to
options at the time outstanding under the Plan unless the Optionee consents to
such amendment or modification.
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
of Common Stock under the Plan shall be used for general corporate purposes.
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any option under
the Plan and the issuance of any shares of Common Stock upon the exercise of any
option shall be subject to the Corporation's procurement of all approvals and
permits required by regulatory authorities having jurisdiction over the Plan,
the options granted under it and the shares of Common Stock issued pursuant to
it.
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B. No shares of Common Stock or other assets shall be issued or
delivered under the Plan unless and until there shall have been compliance with
all applicable requirements of Federal and state securities laws, and all
applicable listing requirements of any stock exchange (or the Nasdaq Stock
Market, if applicable) on which Common Stock is then listed for trading.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation or of the Optionee,
which rights are hereby expressly reserved by each, to terminate such person's
Service at any time for any reason, with or without cause.
VIII. DEFINITIONS
Capitalized terms not otherwise defined in this Plan shall have the
meanings assigned to such terms in the attached Appendix.
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APPENDIX
The following definitions shall be in effect under the Plan:
A. Board shall mean the Corporation's Board of Directors.
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B. Corporation shall mean Contigo Software, Inc., a California
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corporation.
C. Exit Transaction shall mean any of the following shareholder-
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approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which the Corporation is
not the surviving entity, except for a transaction the principal purpose of
which is to change the State of the Corporation's organization or its
entity form,
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in liquidation or
dissolution of the Corporation, or
(iii) any reverse merger in which the Corporation is the
surviving entity but in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Corporation's outstanding
securities are transferred to holders different from those who held such
securities immediately prior to such merger.
D. Fair Market Value per share of Common Stock on any relevant date
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shall be the fair market value per share determined by the Board in good faith.
E. Involuntary Termination shall mean the termination of the Service
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of any individual which occurs by reason of:
(i) such individual's involuntary dismissal or discharge
by the Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following (A)
a change in his or her position with the Corporation which materially
reduces his or her level of responsibility, (B) a reduction in his or her
level of compensation (including base salary, fringe benefits and any non-
discretionary and objective-standard incentive payment or bonus award) by
more than fifteen percent (15%) or (C) a relocation of such individual's
place of employment by more than fifty (50) miles, provided and only if
such change, reduction or relocation is effected by the Corporation without
the individual's consent.
F. Misconduct shall mean the commission of any act of fraud,
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embezzlement or dishonesty by the Optionee, any unauthorized use or disclosure
by such person of confidential information or trade secrets of the Corporation,
or any other intentional misconduct by such person adversely affecting the
business or affairs of the Corporation in a material manner. The foregoing
definition shall not be deemed to be inclusive of all the acts or
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omissions which the Corporation may consider as grounds for the dismissal or
discharge of any Optionee or other person in the Service of the Corporation.
G. Service shall mean the provision of services to the Corporation
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by an individual in the capacity of an employee, a non-employee member of the
Board or a consultant or independent contractor.
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