<PAGE>
                                                                     Exhibit 4.2

                                 NETMANAGE, INC.

                          EMPLOYEE STOCK PURCHASE PLAN

                     Restated effective as of April 25, 2002

        1. PURPOSE.


      (a) The purpose of the Employee Stock Purchase Plan (the "Plan") is to
provide a means by which employees of NetManage, Inc., a Delaware corporation
(the "Company"), and its Affiliates, as defined in subparagraph 1(b), which are
designated as provided in subparagraph 2(b), may be given an opportunity to
purchase stock of the Company.

      (b) The word "Affiliate" as used in the Plan means any parent corporation
or subsidiary corporation of the Company, as those terms are defined in Sections
424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended
(the "Code").

      (c) The Company, by means of the Plan, seeks to retain the services of its
employees, to secure and retain the services of new employees, and to provide
incentives for such persons to exert maximum efforts for the success of the
Company.

      (d) The Company intends that the rights to purchase stock of the Company
granted under the Plan be considered options issued under an "employee stock
purchase plan" as that term is defined in Section 423(b) of the Code.

        2. ADMINISTRATION.


      (a) The Plan shall be administered by the Board of Directors (the "Board")
of the Company unless and until the Board delegates administration to a
Committee, as provided in subparagraph 2(c). Whether or not the Board has
delegated administration, the Board shall have the final power to determine all
questions of policy and expediency that may arise in the administration of the
Plan.

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

            (i) To determine when and how rights to purchase stock of the
      Company shall be granted and the provisions of each offering of such
      rights.

            (ii) To designate from time to time which Affiliates of the Company
      shall be eligible to participate in the Plan.

            (iii) To construe and interpret the Plan and rights granted under
      it, and to establish, amend and revoke rules and regulations for its
      administration. The Board, in the

                                       1
<PAGE>
      exercise of this power, may correct any defect, omission or inconsistency
      in the Plan, in a manner and to the extent it shall deem necessary or
      expedient to make the Plan fully effective.

            (iv) To amend the Plan as provided in paragraph 13.

            (v) 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.

      (c) The Board may delegate administration of the Plan to a Committee
composed of not fewer than two (2) members of the Board (the "Committee"). 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, 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.

      3. SHARES SUBJECT TO THE PLAN.


      (a) Subject to the provisions of paragraph 12 relating to adjustments upon
changes in stock, the stock that may be sold pursuant to rights granted under
the Plan shall not exceed in the aggregate 6,900,000 shares of the Company's
common stock (the "Common Stock"). This reserve is comprised of (i) the
600,000(1) share reserve initially approved by the Board on July 22, 1993, (ii)
the aggregate 4,800,000 -share increases approved by the Board and stockholders
subsequently and (iii) the 1,500,000-share increase approved by the Board on
April 25, 2002, subject to stockholder approval at the 2002 Annual Stockholders
Meeting. If any right granted under the Plan shall for any reason terminate
without having been exercised, the Common Stock not purchased under such right
shall again become available for the Plan.

      (b) The number of shares of Common Stock available for issuance under the
Plan shall automatically increase on the first trading day of January each
calendar year during the term of the Plan, beginning with calendar year 2003, by
an amount equal to one percent (1%) of the total number of shares of Common
Stock outstanding on the last trading day in December of the immediately
preceding calendar year, but in no event shall any such annual increase exceed
750,000 shares.

      (c) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.

      4. GRANT OF RIGHTS; OFFERING.


            The Board or the Committee may from time to time grant or provide
for the grant of rights to purchase Common Stock of the Company under the Plan
to eligible employees (an "Offering") on a date or dates (the "Offering
Date(s)") selected by the Board or the Committee.

(1) Adjusted to reflect the 3-for-1 stock split to be effected in connection
with the Company's reincorporation.


                                       2
<PAGE>
Each Offering shall be in such form and shall contain such terms and conditions
as the Board or the Committee shall deem appropriate. If an employee has more
than one right outstanding under the Plan, unless he or she otherwise indicates
in agreements or notices delivered hereunder: (1) each agreement or notice
delivered by that employee will be deemed to apply to all of his or her rights
under the Plan, and (2) a right with a lower exercise price (or an
earlier-granted right, if two rights have identical exercise prices), will be
exercised to the fullest possible extent before a right with a higher exercise
price (or a later-granted right, if two rights have identical exercise prices)
will be exercised. The provisions of separate Offerings need not be identical,
but each Offering shall include (through incorporation of the provisions of this
Plan by reference in the Offering or otherwise) the substance of the provisions
contained in paragraphs 5 through 8, inclusive.

      5. ELIGIBILITY.


      (a) Rights may be granted only to employees of the Company or, as the
Board or the Committee may designate as provided in subparagraph 2(b), to
employees of any Affiliate of the Company. Except as provided in subparagraph
5(b), an employee of the Company or any Affiliate shall not be eligible to be
granted rights under the Plan, unless, on the Offering Date, such employee has
been in the employ of the Company or any Affiliate for such continuous period
preceding such grant as the Board or the Committee may require, but in no event
shall the required period of continuous employment be equal to or greater than
two (2) years. In addition, unless otherwise determined by the Board or the
Committee and set forth in the terms of the applicable Offering, no employee of
the Company or any Affiliate shall be eligible to be granted rights under the
Plan, unless, on the Offering Date, such employee's customary employment with
the Company or such Affiliate is at least twenty (20) hours per week and at
least five (5) months per calendar year.

      (b) The Board or the Committee may provide that, each person who, during
the course of an Offering, first becomes an eligible employee of the Company or
designated Affiliate will, on a date or dates specified in the Offering which
coincides with the day on which such person becomes an eligible employee or
occurs thereafter, receive a right under that Offering, which right shall
thereafter be deemed to be a part of that Offering. Such right shall have the
same characteristics as any rights originally granted under that Offering, as
described herein, except that:

            (i) the date on which such right is granted shall be the "Offering
      Date" of such right for all purposes, including determination of the
      exercise price of such right;

            (ii) the Purchase Period (as defined below) for such right shall
      begin on its Offering Date and end coincident with the end of such
      Offering; and

            (iii) the Board or the Committee may provide that if such person
      first becomes an eligible employee within a specified period of time
      before the end of the Purchase Period (as defined below) for such
      Offering, he or she will not receive any right under that Offering.

                                       3
<PAGE>
      (c) No employee shall be eligible for the grant of any rights under the
Plan if, immediately after any such rights are granted, such employee owns stock
possessing five percent (5%) or more of the total combined voting power or value
of all classes of stock of the Company or of any Affiliate. For purposes of this
subparagraph 5(c), the rules of Section 424(d) of the Code shall apply in
determining the stock ownership of any employee, and stock which such employee
may purchase under all outstanding rights and options shall be treated as stock
owned by such employee.

      (d) An eligible employee may be granted rights under the Plan only if such
rights, together with any other rights granted under "employee stock purchase
plans" of the Company and any Affiliates, as specified by Section 423(b)(8) of
the Code, do not permit such employee's rights to purchase stock of the Company
or any Affiliate to accrue at a rate which exceeds twenty-five thousand dollars
($25,000) of fair market value of such stock (determined at the time such rights
are granted) for each calendar year in which such rights are outstanding at any
time.

      (e) Officers of the Company and any designated Affiliate shall be eligible
to participate in Offerings under the Plan, provided, however, that the Board
may provide in an Offering that certain employees who are highly compensated
employees within the meaning of Section 423(b)(4)(D) of the Code shall not be
eligible to participate.

      6. RIGHTS; PURCHASE PRICE.

      (a) On each Offering Date, each eligible employee, pursuant to an Offering
made under the Plan, shall be granted the right to purchase up to the number of
shares of Common Stock of the Company purchasable with a percentage designated
by the Board or the Committee not exceeding fifteen percent (15%) of such
employee's Earnings (as defined in Section 7(a)) during the period which begins
on the Offering Date (or such later date as the Board or the Committee
determines for a particular Offering) and ends on the date stated in the
Offering, which date shall be no more than twenty-seven (27) months after the
Offering Date (the "Purchase Period"). In connection with each Offering made
under this Plan, the Board or the Committee shall specify a maximum number of
shares which may be purchased by any employee as well as a maximum aggregate
number of shares which may be purchased by all eligible employees pursuant to
such Offering. In addition, in connection with each Offering which contains more
than one Exercise Date (as defined in the Offering), the Board or the Committee
may specify a maximum aggregate number of shares which may be purchased by all
eligible employees on any given Exercise Date under the Offering. If the
aggregate purchase of shares upon exercise of rights granted under the Offering
would exceed any such maximum aggregate number, the Board or the Committee shall
make a pro rata allocation of the shares available in as nearly a uniform manner
as shall be practicable and as it shall deem to be equitable.

      (b) The purchase price of stock acquired pursuant to rights granted under
the Plan shall be not less than the lesser of:


                                       4
<PAGE>
            (i) an amount equal to eighty-five percent (85%) of the fair market
      value of the stock on the Offering Date; or

            (ii) an amount equal to eighty-five percent (85%) of the fair market
      value of the stock on the Exercise Date.

      7. PARTICIPATION; WITHDRAWAL; TERMINATION.


      (a) An eligible employee may become a participant in an Offering by
delivering a participation agreement to the Company within the time specified in
the Offering, in such form as the Company provides. Each such agreement shall
authorize payroll deductions of up to the maximum percentage specified by the
Board or the Committee of such employee's Earnings during the Purchase Period.
"Earnings" is defined as the total compensation paid to an employee, including
all salary, wages (including amounts elected to be deferred by the employee,
that would otherwise have been paid, under any cash or deferred arrangement
established by the Company), overtime pay, commissions, bonuses, and other
remuneration paid directly to the employee, but excluding profit sharing, the
cost of employee benefits paid for by the Company, education or tuition
reimbursements, imputed income arising under any Company group insurance or
benefit program, traveling expenses, business and moving expense reimbursements,
income received in connection with stock options, contributions made by the
Company under any employee benefit plan, and similar items of compensation. The
payroll deductions made for each participant shall be credited to an account for
such participant under the Plan and shall be deposited with the general funds of
the Company. A participant may reduce (including to zero), increase or begin
such payroll deductions after the beginning of any Purchase Period only as
provided for in the Offering. A participant may make additional payments into
his or her account only if specifically provided for in the Offering and only if
the participant has not had the maximum amount withheld during the Purchase
Period.

      (b) At any time during a Purchase Period a participant may terminate his
or her payroll deductions under the Plan and withdraw from the Offering by
delivering to the Company a notice of withdrawal in such form as the Company
provides. Such withdrawal may be elected at any time prior to the end of the
Purchase Period except as provided by the Board or the Committee in the
Offering. Upon such withdrawal from the Offering by a participant, the Company
shall distribute to such participant all of his or her accumulated payroll
deductions (reduced to the extent, if any, such deductions have been used to
acquire stock for the participant) under the Offering, without interest, and
such participant's interest in that Offering shall be automatically terminated.
A participant's withdrawal from an Offering will have no effect upon such
participant's eligibility to participate in any other Offerings under the Plan
but such participant will be required to deliver a new participation agreement
in order to participate in subsequent Offerings under the Plan.

      (c) Rights granted pursuant to any Offering under the Plan shall terminate
immediately upon cessation of any participating employee's employment with the
Company and any designated Affiliate, for any reason, and the Company shall
distribute to such terminated employee all of his or her accumulated payroll
deductions (reduced to the extent, if any, such


                                       5
<PAGE>
deductions have been used to acquire stock for the terminated employee), under
the Offering, without interest.

      (d) Rights granted under the Plan shall not be transferable, and shall be
exercisable only by the person to whom such rights are granted.

      8. EXERCISE.


      (a) On each exercise date, as defined in the relevant Offering (an
"Exercise Date"), each participant's accumulated payroll deductions and other
additional payments specifically provided for in the Offering (without any
increase for interest) will be applied to the purchase of whole shares of stock
of the Company, up to the maximum number of shares permitted pursuant to the
terms of the Plan and the applicable Offering, at the purchase price specified
in the Offering. No fractional shares shall be issued upon the exercise of
rights granted under the Plan. The amount, if any, of accumulated payroll
deductions remaining in each participant's account after the purchase of shares
which is less than the amount required to purchase one share of stock on the
final Exercise Date of an Offering shall be held in each such participant's
account for the purchase of shares under the next Offering under the Plan,
unless such participant withdraws from such next Offering, as provided in
subparagraph 7(b), or is no longer eligible to be granted rights under the Plan,
as provided in paragraph 5, in which case such amount shall be distributed to
the participant after said final Exercise Date, without interest. The amount, if
any, of accumulated payroll deductions remaining in any participant's account
after the purchase of shares which is equal to the amount required to purchase
whole shares of stock on the final Exercise Date of an Offering shall be
distributed in full to the participant after such Exercise Date, without
interest.

      (b) No rights granted under the Plan may be exercised to any extent unless
the Plan (including rights granted thereunder) is covered by an effective
registration statement pursuant to the Securities Act of 1933, as amended (the
"Securities Act"). If on an Exercise Date of any Offering hereunder the Plan is
not so registered, no rights granted under the Plan or any Offering shall be
exercised on said Exercise Date and the Exercise Date shall be delayed until the
Plan is subject to such an effective registration statement, except that the
Exercise Date shall not be delayed more than two (2) months and the Exercise
Date shall in no event be more than twenty-seven (27) months from the Offering
Date. If on the Exercise Date of any Offering hereunder, as delayed to the
maximum extent permissible, the Plan is not registered, no rights granted under
the Plan or any Offering shall be exercised and all payroll deductions
accumulated during the purchase period (reduced to the extent, if any, such
deductions have been used to acquire stock) shall be distributed to the
participants, without interest.

      9. COVENANTS OF THE COMPANY.


      (a) During the terms of the rights granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such rights.

                                       6
<PAGE>
      (b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the rights granted under the
Plan. 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 stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell stock
upon exercise of such rights unless and until such authority is obtained.

      10. USE OF PROCEEDS FROM STOCK.


      Proceeds from the sale of stock pursuant to rights granted under the Plan
shall constitute general funds of the Company.

      11. RIGHTS AS A STOCKHOLDER.


      A participant shall not be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to rights granted
under the Plan unless and until certificates representing such shares shall have
been issued.

      12. ADJUSTMENTS UPON CHANGES IN STOCK.


      (a) If any change is made in the stock subject to the Plan, or subject to
any rights granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Plan and outstanding
rights will be appropriately adjusted in the class(es) and maximum number of
shares subject to the Plan, the class(es) and maximum number of shares by which
the share reserve may increase annually and the class(es) and number of shares
and price per share of stock subject to outstanding rights.

      (b) In the event of: (1) a dissolution or liquidation of the Company; (2)
a merger or consolidation in which the Company is not the surviving corporation;
(3) a reverse merger in which the Company is the surviving corporation but the
shares of the Company's 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; or (4) any other capital reorganization
in which more than fifty percent (50%) of the shares of the Company entitled to
vote are exchanged, then, as determined by the Board in its sole discretion (i)
any surviving corporation may assume outstanding rights or substitute similar
rights for those under the Plan, (ii) such rights may continue in full force and
effect, or (iii) participants' accumulated payroll deductions may be used to
purchase Common Stock immediately prior to the transaction described above and
the participants' rights under the ongoing Offering terminated.

                                       7
<PAGE>
      13. AMENDMENT OF THE PLAN.


      (a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 12 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders of
the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will:

            (i) Increase the number of shares reserved for rights under the
      Plan;

            (ii) Modify the provisions as to eligibility for participation in
      the Plan (to the extent such modification requires stockholder approval in
      order for the Plan to obtain employee stock purchase plan treatment under
      Section 423 of the Code or to comply with the requirements of Rule 16b-3
      promulgated under the Securities Exchange Act of 1934, as amended ("Rule
      16b-3")); or

            (iii) Modify the Plan in any other way if such modification requires
      stockholder approval in order for the Plan to obtain employee stock
      purchase plan treatment under Section 423 of the Code or to comply with
      the requirements of Rule 16b-3.

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 employee stock purchase plans
and/or to bring the Plan and/or rights granted under it into compliance
therewith.

      (b) Rights and obligations under any rights granted before amendment of
the Plan shall not be altered or impaired by any amendment of the Plan, except
with the consent of the person to whom such rights were granted or except as
necessary to comply with any laws or governmental regulation.

      14. DESIGNATION OF BENEFICIARY.


      (a) A participant may file a written designation of a beneficiary who is
to receive any shares and cash, if any, from the participant's account under the
Plan in the event of such participant's death subsequent to a purchase under the
Offering but prior to delivery to him of such shares and cash. In addition, a
participant may file a written designation of a beneficiary who is to receive
any cash from the participant's account under the Plan in the event of such
participant's death prior to a purchase under the Offering.

      (b) Such designation of beneficiary may be changed by the participant at
any time by written notice. In the event of the death of a participant and in
the absence of a beneficiary validly designated under the Plan who is living at
the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge

                                       8
<PAGE>
of the Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is know to the Company, then
to such other person as the Company may designate.

      15. TERMINATION OR SUSPENSION OF THE PLAN.


      (a) The Board may suspend or terminate the Plan without stockholder
approval or ratification at any time. Unless sooner terminated, the Plan shall
terminate on April 30, 2012. No rights may be granted under the Plan while the
Plan is suspended or after it is terminated.

      (b) Rights and obligations under any rights granted while the Plan is in
effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom such rights were granted or
except as necessary to comply with any laws or governmental regulation.

      16. EFFECTIVE DATE OF PLAN.


      The Plan became effective in connection with the initial public offering
of the Common Stock and was approved by the Board on July 22, 1993. The Plan was
amended on April 18, 2000, to increase the share reserve by 1,000,000 shares.
The Plan was amended and restated on April 25, 2002, subject to stockholder
approval at the 2002 Annual Stockholders Meeting to (i) increase the share
reserve by 1,500,000 shares, (ii) implement an automatic share reserve increase
each year beginning with the year 2003 and (iii) extend the term of the Plan to
April 30, 2012. No rights granted under the Plan shall be exercised, and no
shares of Common Stock shall be issued hereunder, until (i) the Plan shall have
been approved by the stockholders of the Company and (ii) the Company shall have
complied with all applicable requirements of the 1933 Act (including the
registration of the shares of Common Stock issuable under the Plan on a Form S-8
registration statement filed with the Securities and Exchange Commission), all
applicable listing requirements of any stock exchange (or the Nasdaq National
Market, if applicable) on which the Common Stock is listed for trading and all
other applicable requirements established by law or regulation.


                                       9