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                                                                     EXHIBIT 4.1





                              NEOTHERAPEUTICS, INC.

                          EMPLOYEE STOCK PURCHASE PLAN


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                              NEOTHERAPEUTICS, INC.

                          EMPLOYEE STOCK PURCHASE PLAN

                                TABLE OF CONTENTS

                                                                           PAGE
                                                                           ----
1.  Definitions...........................................................   1

2.  Stock Subject to the Plan.............................................   3

3.  Grant of Options......................................................   3

4.  Exercise of Options; Option Price.....................................   5

5.  Withdrawal from the Plan..............................................   6

6.  Termination of Employment.............................................   6

7.  Restriction upon Assignment...........................................   7

8.  No Rights of Stockholders until Shares Issued.........................   7

9.  Changes in the Stock and Corporate Events; Adjustment of Options......   7

10. Use of Funds; No Interest Paid........................................   9

11. Dividends.............................................................   9

12. Amendment, Suspension or Termination of the Plan......................   9

13. Administration by Committee; Rules and Regulations...................    9

14. Designation of Subsidiary Corporations...............................   10

15. No Rights as an Employee.............................................   10

16. Term; Approval by Stockholders.......................................   11

17. Effect upon Other Plans..............................................   11

18. Conditions to Issuance of Stock Certificates.........................   11

19. Notification of Disposition..........................................   11

20. Notices..............................................................   12

21. Additional Restrictions of Rule 16b-3................................   12

22. Equal Rights and Privileges..........................................   12

23. Headings.............................................................   12

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                            THE NEOTHERAPEUTICS, INC.

                          EMPLOYEE STOCK PURCHASE PLAN

         NeoTherapeutics, Inc., a Delaware corporation (the "Company"), hereby
adopts the NeoTherapeutics, Inc. Employee Stock Purchase Plan (the "Plan"),
effective as of January 26, 2001.

         The purposes of the Plan are as follows:

                  (1) To assist eligible employees of the Company and its
         Designated Subsidiaries (as defined below) in acquiring stock ownership
         in the Company pursuant to a plan which is intended to qualify as an
         "employee stock purchase plan," within the meaning of Section 423(b) of
         the Code (as defined below).

                  (2) To help such employees provide for their future security
         and to encourage them to remain in the employment of the Company and
         its Subsidiary Corporations.

         1. DEFINITIONS. Whenever any of the following terms is used in the Plan
with the first letter or letters capitalized, it shall have the following
meaning unless context clearly indicates to the contrary (such definitions to be
equally applicable to both the singular and the plural forms of the terms
defined):

            (a) "ACCOUNT" shall mean the account established for a Participant
under the Plan with respect to an Offering Period.

            (b) "AGENT" shall mean the brokerage firm, bank or other financial
institution, entity or person(s), if any, engaged, retained, appointed or
authorized to act as the agent of the Company or an Employee with regard to the
Plan.

            (c) "AUTHORIZATION" shall mean a Participant's payroll deduction
authorization with respect to an Offering Period provided by such Participant in
accordance with Section 3(b).

            (d) "COMPENSATION" of an Employee shall mean all compensation
received by such Employee from the Company or any Designated Subsidiary on each
Payday as compensation for services to the Company or any Designated Subsidiary,
including all salary, wages (including amounts elected to be deferred by the
Employee, but would otherwise have been paid, under any cash or deferred
arrangement established by the Company or a Designated Subsidiary), overtime
pay, sales commissions, bonuses, and other remuneration paid directly to the
Employee; but excluding the cost of employee benefits paid by the Company or a
Designated Subsidiary, education or tuition reimbursements, imputed income
arising under any Company or Designated Subsidiary group insurance or benefit
program, travel expenses, business and moving reimbursements, income received in
connection with stock options, contributions made by the Company or a Designated
Subsidiary under any employee benefit plan, and similar items of compensation.

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

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


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            (g) "COMMITTEE" means the committee of the Board appointed to
administer the Plan pursuant to Section 13.

            (h) "COMPANY" means NeoTherapeutics, Inc., a Delaware corporation.

            (i) "DATE OF EXERCISE" of any Option means the date on which such
Option is exercised, which shall be the last Trading Day of the Offering Period
with respect to which the Option was granted, in accordance with Section 4(a)
(except as provided in Section 9).

            (j) "DATE OF GRANT" of any Option means the date on which such
Option is granted, which shall be the first Trading Day of the Offering Period
with respect to which the Option was granted, in accordance with Section 3(a).

            (k) "DESIGNATED SUBSIDIARY" means any Subsidiary Corporation
designated by the Board in accordance with Section 14.

            (l) "ELIGIBLE EMPLOYEE" means an Employee of the Company or any
Designated Subsidiary Corporation who does not, immediately after the Option is
granted, own (directly or through attribution) stock possessing five percent
(5%) or more of the total combined voting power or value of all classes of Stock
or other stock of the Company, a Parent Corporation or a Subsidiary Corporation
(as determined under Section 423(b)(3) of the Code). For purposes of the
foregoing, the rules of Section 424(d) of the Code with regard to the
attribution of stock ownership shall apply in determining the stock ownership of
an individual, and stock which an Employee may purchase under outstanding
options shall be treated as stock owned by the Employee.

            (m) "EMPLOYEE" shall mean an individual who renders services to the
Company or a Subsidiary Corporation in the status of an "employee," within the
meaning of Code Section 3401(c). During a leave of absence meeting the
requirements of Treasury Regulation Section 1.421-7(h)(2), an individual shall
be treated as an Employee of the Company or Subsidiary Corporation employing
such individual immediately prior to such leave. "Employee" shall not include
any director of the Company or a Subsidiary Corporation who does not render
services to the Company or a Subsidiary Corporation in the status of an
"employee," within the meaning of Code Section 3401(c).

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

            (o) "OFFERING PERIOD" shall mean each six-month period commencing on
(1) any June 21 and ending on the subsequent December 20, or (2) commencing on
any December 21 and ending on the subsequent June 20; provided, however, that
the first Offering Period shall commence on January 26, 2001 and end June 20,
2001. Options shall be granted on the Date of Grant and exercised on the Date of
Exercise, as provided in Sections 3(a) and 4(a), respectively.

            (p) "OPTION" means an option to purchase shares of Stock granted
under the Plan to a Participant in accordance with Section 3(a).

            (q) "OPTION PRICE" means the option price per share of Stock
determined in accordance with Section 4(b).

            (r) "PARENT CORPORATION" means any corporation, other than the
Company, in an unbroken chain of corporations ending with the Company if, at the
time of the granting of the Option, each of the corporations other than the
Company owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.



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            (s) "PARTICIPANT" means an Eligible Employee who has elected to
participate in the Plan, in accordance with the provisions of Section 3(b).

            (t) "PAYDAY" means the regular and recurring established day for
payment of Compensation to an Employee of the Company or any Subsidiary
Corporation.

            (u) "PLAN" means the NeoTherapeutics, Inc. Employee Stock Purchase
Plan.

            (v) "STOCK" means the shares of the Company's Common Stock, $.001
par value.

            (w) "SUBSIDIARY CORPORATION" means any corporation, other than the
Company, in an unbroken chain of corporations beginning with the Company if, at
the time of the granting of the Option, each of the corporations other than the
last corporation in an unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

            (x) "TRADING DAY" means a day on which the National Stock Exchanges
and the National Association of Securities Dealers Automated Quotation (NASDAQ)
System are open for trading.

         2. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 9
hereof (relating to adjustments upon changes in the Stock) and Section 12 hereof
(relating to amendments of the Plan), the Stock that may be sold pursuant to
Options granted under the Plan shall not exceed in the aggregate Three Hundred
Thousand (300,000) shares of Stock. The shares of Stock sold pursuant to Options
granted under the Plan may be unissued shares or treasury shares of Stock, or
shares reacquired in private transactions or open market purchases. If and to
the extent that any right to purchase reserved shares shall not be exercised by
any Participant for any reason, or if such right to purchase shall terminate as
provided herein, shares that have not been so purchased hereunder shall again
become available for the purposes of this Plan, unless this Plan shall have been
terminated, but all shares sold under this Plan, regardless of source, shall be
counted against the limitation set forth above.

         3. GRANT OF OPTIONS.

            (a) Option Grants. The Company shall grant Options under the Plan to
all Participants in successive Offering Periods until the earlier of: (i) the
date on which the number of shares of Stock available under the Plan have been
sold, or (ii) the date on which the Plan is suspended or terminates. Each
Participant shall be granted an Option with respect to an Offering Period on the
Date of Grant. Each Option shall expire on the Date of Exercise immediately
after the automatic exercise of the Option in accordance with Section 4(a),
unless such Option terminates earlier in accordance with Section 5, 6 or 9. The
number of shares of Stock subject to a Participant's Option shall equal the
cumulative payroll deductions authorized by such Participant in accordance with
subsection (b) for the Option Period (if any), divided by the Option Price;
provided, however, that the number of shares of Stock subject to such Option
shall not exceed Five Thousand (5,000) shares; and, provided, further, that the
number of shares of Stock subject to such Option shall not exceed the number
determined in accordance with subsection (c). The Company shall not grant an
Option with respect to an Offering Period to any Participant who is not an
Eligible Employee on the first day of such Offering Period.


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            (b) Election to Participate; Payroll Deduction Authorization. Except
as provided in subsection (e), an Eligible Employee shall become a Participant
in the Plan only by means of payroll deduction. Each such Participant who elects
to participate in the Plan with respect to an Offering Period shall deliver to
the Company, not later than fifteen (15) days before the first day of the
Offering Period, a completed and executed written payroll deduction
authorization in a form prepared by the Committee (the "AUTHORIZATION")
provided, however, that for the first Offering Period under the Plan, such
Authorization shall be delivered to the Company no later than the first day of
such Offering Period. Each Participant's Authorization shall give notice of such
Participant's election to participate in the Plan for the next following
Offering Period (and subsequent Offering Periods) and shall designate a whole
percentage of such Participant's Compensation to be withheld by the Company or
the Designated Subsidiary employing such Participant on each Payday during the
Offering Period. A Participant may designate any whole percentage of
Compensation which is not be less than one percent (1%) and not more than
fifteen percent (15%). A Participant's Compensation payable during an Offering
Period shall be reduced each Payday through payroll deduction in an amount equal
to the percentage specified in the Authorization, and such amount shall be
credited to such Participant's Account under the Plan. A Participant may
increase or decrease the percentage of Compensation designated in the
Authorization, subject to the limits of this subsection (b), or may suspend the
Authorization, up to two times during an Offering Period, provided, that any
such change or suspension must be made no later than three (3) business days
before the end of a payroll period for such change or suspension to apply with
respect to the payday for such payroll period. Any Authorization shall remain in
effect for each subsequent Offering Period, unless the Participant submits a new
Authorization pursuant to this subsection (b), withdraws from the Plan pursuant
to Section 5, ceases to be an Eligible Employee as defined in Section 1(l) or
terminates employment as provided in Section 6. Notwithstanding the foregoing,
to the extent necessary to comply with Section 423(b)(8) of the Code and
Sections 3(a), (c) and (d) of the Plan, the Company may reduce a Participant's
rate of payroll deductions to zero at such time during any Offering Period.
Payroll deductions will recommence at the rate provided by the Participant in
his or her payroll deduction authorization to the extent such payroll deductions
may be applied to purchase shares of Stock in accordance with Code Section
423(b)(8) and Sections 3(a), (c) and (d) of the Plan, unless terminated by the
Participant as provided in Section 5 of the Plan.

            (c) $25,000 Limitation. No Participant shall be granted an Option
under the Plan which permits his rights to purchase shares of Stock under the
Plan, together with other options to purchase shares of Stock or other stock
under all other employee stock purchase plans of the Company, any Parent
Corporation or any Subsidiary Corporation subject to the Section 423, to accrue
at a rate which exceeds $25,000 of fair market value of such shares of Stock or
other stock (determined at the time the Option or other option is granted) for
each calendar year in which the Option is outstanding. For purpose of the
limitation imposed by this subsection, (i) the right to purchase shares of Stock
or other stock under an Option or other option accrues when the Option or other
option (or any portion thereof) first becomes exercisable during the calendar
year, (ii) the right to purchase shares of Stock or other stock under an Option
or other option accrues at the rate provided in the Option or other option, but
in no case may such rate exceed $25,000 of the fair market value of such Stock
or other stock (determined at the time such Option or other option is granted)
for any one calendar year, and (iii) a right to purchase Stock or other stock
which has accrued under an Option or other option may not be carried over to any
other Option or other option. This limitation shall be applied in accordance
with Section 423(b)(8) of the Code and the Treasury Regulations thereunder.

            (d) 5 Percent Holders. No Employee will be granted an option under
this Plan if immediately after the grant, such Employee (or any other person
whose stock would be attributed to such Employee pursuant to Section 424(d) of
the Code) would own stock and/or hold outstanding options to purchase 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 Subsidiary Corporation or
Parent Corporation.


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         4. EXERCISE OF OPTIONS; OPTION PRICE.

            (a) Option Exercise. Each Participant automatically and without any
act on such Participant's part shall be deemed to have exercised such
Participant's Option on the Date of Exercise to the extent that the balance then
in the Participant's Account is sufficient to purchase, at the Option Price,
shares of the Stock subject to the Option, provided, however, that any balance
that is insufficient to purchase full shares of Stock shall be carried over to
the next Offering Period and shall remain credited to Participant.

            (b) Option Price Defined. The option price per share of Stock (the
"Option Price") to be paid by a Participant upon the exercise of the
Participant's Option shall be equal to 85% of the lesser of: (i) the Fair Market
Value of a share of Stock on the Date of Exercise and (ii) the Fair Market Value
of a share of Stock on the Date of Grant. The Fair Market Value of a share of
Stock as of a given date shall be: (A) the closing price of a share of Stock on
the principal exchange on which the Stock is then trading, if any, on such date
(or, if shares of Stock were not traded on such date, then on the next preceding
trading day during which a sale occurred); (B) if the Stock is not traded on an
exchange, but is quoted on Nasdaq or a successor quotation system, (I) the last
sales price (if the Stock is then listed as a National Market Issue under the
NASD National Market System), or (II) the mean between the closing
representative bid and asked prices (in all other cases) for a share of Stock on
such date (or, if shares of Stock were not traded on such date, then on the next
preceding trading day during which a sale occurred) as reported by Nasdaq or
such successor quotation system; (iii) if the Stock is not publicly traded on an
exchange and not quoted on Nasdaq or a successor quotation system, the mean
between the closing bid and asked prices for a share of Stock on such date (or,
if shares of Stock were not traded on such date, then on the next preceding
trading day during which a sale occurred), as determined in good faith by the
Committee; or (iv) if the Stock is not publicly traded, the fair market value of
a share of Stock established by the Committee acting in good faith.

            (c) Book Entry/Share Certificates. As soon as practicable after the
purchase of shares of Stock upon the exercise of an Option by a Participant, the
Company shall issue the shares of Stock to such Participant and such shares
shall be held in the custody of the Company, or if applicable, the Agent, for
the benefit of the Participant. The Company or the Agent shall make an entry on
its books and records indicating that the shares of Stock purchased in
connection with such exercise (including any partial share) have been duly
issued as of that date to such Participant. A Participant shall have the right
at any time to request in writing a certificate or certificates for all or a
portion of the whole shares of Stock purchased hereunder. Upon receipt of a
Participant's written request for any such certificate, the Company shall (or
shall cause the Agent to), within ten (10) days after the date of such receipt,
deliver any such certificate to the Participant; provided, however, that no
certificate shall be issued to a Participant with respect to Stock purchased
hereunder until the expiration of two (2) years from the Date of Grant of the
underlying Option exercised to purchase such Stock. Nothing in this subsection
(c) shall prohibit the sale or other disposition by a Participant of shares of
Stock purchased hereunder. In the event the Company is required to obtain
authority from any commission or agency to issue any certificate or certificates
for all or a portion of the whole shares of Stock purchased hereunder, the
Company shall seek to obtain such authority as soon as reasonably practicable.



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            (d) Pro Rata Allocations. If the total number of shares of Stock for
which Options are to be exercised on any date exceeds the number of shares of
Stock remaining unsold under the Plan (after deduction for all shares of Stock
for which Options have theretofore been exercised), the Committee shall make a
pro rata allocation of the available remaining shares of Stock in as nearly a
uniform manner as shall be practicable and the balance of the amount credited to
the Account of each Participant which has not been applied to the purchase of
shares of Stock shall be paid to such Employee in one lump sum in cash within
thirty (30) days after the Date of Exercise, without any interest thereon.

            (e) Information Statement. The Company shall provide each
Participant whose Option is exercised with an information statement in
accordance with Section 6039(a) of the Code and the Treasury Regulations
thereunder. The Company shall maintain a procedure for identifying certificates
of shares of Stock sold upon the exercise of Options in accordance with Section
6039(b) of the Code.

         5. WITHDRAWAL FROM THE PLAN.

            (a) Withdrawal Election. A Participant may withdraw from
participation under the Plan at any time, except that a Participant may not
withdraw during the last ten (10) days of any Option Period. A Participant
electing to withdraw from the Plan must deliver to the Company a notice of
withdrawal in a form prepared by the Committee (the "Withdrawal Election"), not
later than ten (10) days prior to the Date of Exercise for such Option Period.
Upon receipt of a Participant's Withdrawal Election, the Company or Subsidiary
Corporation employing the Participant shall pay to the Participant the amount
credited to the Participant's Account in one lump sum payment in cash, without
any interest thereon, and subject to Section 4(c), the Company shall (or shall
cause the Agent to) deliver to the Participant certificates for any whole shares
of Stock previously purchased by the Participant, in either case within thirty
(30) days of receipt of the Participant's Withdrawal Election. Upon receipt of a
Participant's Withdrawal Election by the Company, the Participant shall cease to
participate in the Plan and the Participant's Option for such Option Period
shall terminate.

            (b) Eligibility following Withdrawal. A Participant who withdraws
from the Plan with respect to an Option Period, and who is still an Eligible
Employee, may elect to participate again in the Plan for any subsequent Offering
Period by delivering to the Company an Authorization pursuant to Section 3(b).

         6. TERMINATION OF EMPLOYMENT.

            (a) Termination of Employment Other than by Death. If the employment
of a Participant with the Company or a Designated Subsidiary terminates other
than by death, the Participant's participation in the Plan automatically and
without any act on the Participant's part shall terminate as of the date of the
termination of the Participant's employment. As soon as practicable after such a
termination of employment, the Company or Designated Subsidiary employing the
Participant shall pay to the Participant the amount credited to the
Participant's Account in one lump sum payment in cash, without any interest
thereon, and subject to Section 4(c), the Company shall (or shall cause the
Agent to) deliver to the Participant certificates for any whole shares of Stock
previously purchased by the Participant. Upon a Participant's termination of
employment covered by this subsection, the Participant's Authorization and
Option under the Plan shall terminate.

            (b) Termination by Death. If the employment of a Participant is
terminated by the Participant's death, the executor of the Participant's will or
the administrator of the Participant's estate, by written notice to the Company,
may request payment of the balance in the Participant's Account, in which event
the Company or Designated Subsidiary employing the Participant shall pay the
amount credited to the Participant's Account in one lump sum payment in cash,
without




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any interest thereon, and subject to Section 4(c), the Company shall (or shall
cause the Agent to) deliver to the Participant certificates for any whole shares
of Stock previously purchased by the Participant as soon as practicable after
receiving such notice. Upon receipt of such notice, the Participant's
Authorization and Option under the Plan shall terminate. If the Company does not
receive such notice prior to the next Date of Exercise, the Participant's Option
shall be deemed to have been exercised on such Date of Exercise.

         7. RESTRICTION UPON ASSIGNMENT. An Option granted under the Plan shall
not be transferable other than by will or the laws of descent and distribution,
and is exercisable during the Participant's lifetime only by the Participant.
Except as provided in Section 6(b) hereof, an Option may not be exercised to any
extent except by the Participant. The Company shall not recognize and shall be
under no duty to recognize any assignment or alienation of the Participant's
interest in the Plan, the Participant's Option or any rights under the
Participant's Option.

         8. NO RIGHTS OF STOCKHOLDERS UNTIL SHARES ISSUED. With respect to
shares of Stock subject to an Option, a Participant shall not be deemed to be a
stockholder of the Company, and the Participant shall not have any of the rights
or privileges of a stockholder, until such shares have been issued to the
Participant following exercise of the Participant's Option. No adjustments shall
be made for dividends (ordinary or extraordinary, whether in cash securities, or
other property) or distribution or other rights for which the record date occurs
prior to the date of such issuance, except as otherwise expressly provided
herein.

         9. CHANGES IN THE STOCK AND CORPORATE EVENTS; ADJUSTMENT OF OPTIONS.

            (a) Subject to Section 9(c), in the event that the Committee, in its
sole discretion, determines that any dividend or other distribution (whether in
the form of cash, 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 Stock or other
securities of the Company, issuance of warrants or other rights to purchase
Stock or other securities of the Company, or other similar corporate transaction
or event, affects the Stock such that an adjustment is 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 an Option, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of:

                (i)   the number and kind of shares of Stock (or other
                      securities or property) with respect to which Options may
                      be granted (including, but not limited to, adjustments of
                      the limitation in Section 3(a) on the maximum number of
                      shares of Stock which may be purchased),

                (ii)  the number and kind of shares of Stock (or other
                      securities or property) subject to outstanding Options,
                      and

                (iii) the exercise price with respect to any Option.

            (b) Subject to Section 9(c), in the event of any transaction or
event described in Section 9(a) or any unusual or nonrecurring transactions or
events affecting the Company, any affiliate of the Company, or the financial
statements of the Company or any affiliate, or of changes in applicable laws,
regulations, or accounting principles, the Committee, in its sole discretion,
and on such terms and conditions as it deems appropriate, either by the terms of
the Option or by action taken prior to the occurrence of such transaction or
event and either



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automatically or upon the Participant's request, is hereby authorized to take
any one or more of the following actions whenever the Committee determines that
such action is 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 under the Plan, to facilitate such transactions or
events or to give effect to such changes in laws, regulations or principles:

                (i)   To provide that all Options outstanding shall terminate
                      without being exercised on such date as the Committee
                      determines in its sole discretion;

                (ii)  To provide that all Options outstanding shall be exercised
                      prior to the Date of Exercise of such Options on such date
                      as the Committee determines in its sole discretion and
                      such Options shall terminate immediately after such
                      exercises.

                (iii) To provide for either the purchase of any Option
                      outstanding for an amount of cash equal to the amount that
                      could have been obtained upon the exercise of such Option
                      had such Option been currently exercisable, or the
                      replacement of such Option with other rights or property
                      selected by the Committee in its sole discretion;

                (iv)  To provide that such Option be assumed by the successor or
                      survivor corporation, or a parent or subsidiary thereof,
                      or shall be substituted for by similar options, 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; and

                (v)   To make adjustments in the number and type of shares of
                      Stock (or other securities or property) subject to
                      outstanding Options, or in the terms and conditions of
                      outstanding Options, or Options which may be granted in
                      the future.

            (c) No adjustment or action described in this Section 9 or in any
other provision of the Plan shall be authorized to the extent that such
adjustment or action would cause the Plan to fail to satisfy the requirements of
Section 423 of the Code. Furthermore, no such adjustment or action shall be
authorized to the extent such adjustment or action would result in short-swing
profits liability under Section 16 of the Exchange Act, or violate the exemptive
conditions of Rule 16b-3 unless the Committee determines that the Option is not
to comply with such exemptive conditions. The number of shares of Common Stock
subject to any Option shall always be rounded to the next whole number.

            (d) The existence of the Plan and the Options 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 Stock or the rights thereof of which are convertible into or
exchangeable for 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.




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<PAGE>   11

         10. USE OF FUNDS; NO INTEREST PAID. All funds received or held by the
Company under the Plan shall be included in the general funds of the Company
free of any trust or other restriction and may be used for any corporate
purpose. No interest will be paid to any Participant or credited to any
Participant's Account with respect to such funds.

         11. DIVIDENDS.

            (a) Cash dividends and other cash distributions received by the
Company, or if applicable, the Agent, with respect to Stock held in its custody
hereunder will be credited to each Participant's Account in accordance with such
Participant's interests in such Stock, and shall be applied, as soon as
practicable after the receipt thereof, to the purchase in the open market at
prevailing market prices of the number of whole shares of Stock that may be
purchased with such funds (after deductions of any bank service fees, brokerage
charges, transfer taxes, and any other transaction fee, expense or cost payable
in connection with the purchase of such shares of Stock and not otherwise paid
by the Employer.)

            (b) All purchases of shares of Stock made pursuant to this Section
11 will be made in the name of the Company, or if applicable, the Agent or its
nominee, and shall be transferred and credited to the Account(s) of the
Participants to which such dividends or other distributions were credited.
Dividends paid in the form of shares of Stock will be allocated by the Company,
or if applicable, the Agent, as and when received, with respect to Stock held in
its custody hereunder to the Account of each Participant in accordance with such
Participant's interests in such Stock. Property, other than Stock or cash,
received by the Company, or if applicable, the Agent as a distribution on Stock
held in its custody hereunder, shall be sold for the accounts of Participants,
and the Company, or if applicable, the Agent shall treat the proceeds of such
sale in the same manner as cash dividends received by the Company or Agent on
Stock held in its custody hereunder.

         12. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN. The Board may
amend, suspend, or terminate the Plan at any time and from time to time,
provided that approval by a vote of the holders of the outstanding shares of the
Company's capital stock entitled to vote shall be required to amend the Plan:
(a) to increase the number of shares of Stock that may be sold pursuant to
Options under the Plan, or (b) in any manner that would cause the Plan to no
longer be an "employee stock purchase plan" within the meaning of Section 423(b)
of the Code.

         13. ADMINISTRATION BY COMMITTEE; RULES AND REGULATIONS.

            (a) Appointment of Committee. The Plan shall be administered by the
Committee, which shall be composed of not less than two members of the Board,
each of whom shall be a "non-employee director" within the meaning of Rule 16b-3
which has been adopted by the Securities and Exchange Commission under the
Exchange Act. Each member of the Committee shall serve for a term commencing on
a date specified by the Board and continuing until the member dies, resigns or
is removed from office by the Board. The Committee at its option may utilize the
services of an agent to assist in the administration of the Plan, including
establishing and maintaining an individual securities account under the Plan for
each Participant.

            (b) Duties and Powers of Committee. It shall be the duty of the
Committee to conduct the general administration of the Plan in accordance with
the provisions of the Plan. The Committee shall have the power to interpret the
Plan and the terms of the Options and to adopt such rules for the
administration, interpretation, and application of the Plan as are consistent
therewith and to interpret, amend or revoke any such rules. In its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under the Plan.



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<PAGE>   12

            (c) Majority Rule. The Committee shall act by a majority of its
members in office. The Committee may act either by vote at a meeting or by a
memorandum or other written instrument signed by a majority of the Committee.

            (d) Compensation; Professional Assistance; Good Faith Actions. All
expenses and liabilities incurred by members of the Committee in connection with
the administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers or other persons. The Committee, the Company and its
officers and directors shall be entitled to rely upon the advice, opinions or
valuations of any such persons. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon all Participants, the Company and all other interested persons. No member
of the Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Options, and
all members of the Committee shall be fully protected by the Company in respect
to any such action, determination, or interpretation.

         14. DESIGNATION OF SUBSIDIARY CORPORATIONS. The Board shall designate
from among the Subsidiary Corporations, as determined from time to time, the
Subsidiary Corporation or Subsidiary Corporations whose Employees shall be
eligible to be granted Options under the Plan. The Board may designate a
Subsidiary Corporation, or terminate the designation of a Subsidiary
Corporation, without the approval of the stockholders of the Company.

         15. NO RIGHTS AS AN EMPLOYEE. Nothing in the Plan shall be construed to
give any person (including any Participant) the right to remain in the employ of
the Company, a Parent Corporation or a Subsidiary Corporation or to affect the
right of the Company, any Parent Corporation or any Subsidiary Corporation to
terminate the employment of any person (including any Participant) at any time,
with or without cause.



                                       10
<PAGE>   13

         16. TERM; APPROVAL BY STOCKHOLDERS. Subject to approval by the
stockholders of the Company in accordance with this Section, the Plan shall be
in effect until December 20, 2010, unless sooner terminated in accordance with
Section 12. No Option may be granted during any period of suspension of the Plan
or after termination of the Plan. The Plan shall be submitted for the approval
of the Company's stockholders within twelve (12) months after the date of the
adoption of the Plan by the Board. Options may be granted prior to such
stockholder approval; provided, however, that such Options shall not be
exercisable prior to the time when the Plan is approved by the Company's
stockholders; and, provided, further, that if such approval has not been
obtained by the end of said 12-month period, all Options previously granted
under the Plan shall thereupon terminate without being exercised.

         17. EFFECT UPON OTHER PLANS. The adoption of the Plan shall not affect
any other compensation or incentive plans in effect for the Company, any Parent
Corporation or any Subsidiary Corporation. Nothing in this Plan shall be
construed to limit the right of the Company, any Parent Corporation or any
Subsidiary Corporation to: (a) establish any other forms of incentives or
compensation for employees of the Company, any Parent Corporation or any
Subsidiary Corporation or (b) grant or assume options otherwise than under the
Plan in connection with any proper corporate purpose, including, but not by way
of limitation, the grant or assumption of options in connection with the
acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, firm or association.

         18. CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES. The Company shall not
be required to issue or deliver any certificate or certificates for shares of
Stock purchased upon the exercise of Options prior to fulfillment of all the
following conditions:

            (a) The admission of such shares to listing on all stock exchanges,
if any, on which is then listed; and

            (b) 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 Committee shall, in its absolute discretion, deem necessary or
advisable; and

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

            (d) The payment to the Company of all amounts which it is required
to withhold under federal, state or local law upon exercise of the Option; and

            (e) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may from time to time establish for
reasons of administrative convenience.

        19. NOTIFICATION OF DISPOSITION. Each Participant shall give prompt
notice to the Company of any disposition or other transfer of any shares of
Stock purchased upon exercise of an Option if such disposition or transfer is
made: (a) within two (2) years from the Date of Grant of the Option, or (b)
within one (1) year after the transfer of such shares of Stock to such
Participant upon exercise of such Option. Such notice shall specify the date of
such disposition or other transfer and the amount realized, in cash, other
property, assumption of indebtedness or other consideration, by the Participant
in such disposition or other transfer.



                                       11
<PAGE>   14

        20. NOTICES. Any notice to be given under the terms of the Plan to the
Company shall be addressed to the Company in care of its Secretary and any
notice to be given to any Participant shall be addressed to such Participant at
such Participant's last address as reflected in the Company's records. By a
notice given pursuant to this Section, either party may designate a different
address for notices to be given to it, him or her. Any notice which is required
to be given to a Participant shall, if the Participant is then deceased, be
given to the Participant's personal representative if such representative has
previously informed the Company of his status and address by written notice
under this Section. Any notice shall have been deemed duly given if enclosed in
a properly sealed envelope or wrapper addressed as aforesaid at the time it is
deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.

         21. ADDITIONAL RESTRICTIONS OF RULE 16b-3. The terms and conditions of
options granted hereunder to, and the purchase of shares by, persons subject to
Section 16 of the Exchange Act will comply with the applicable provisions of
Rule 16b-3. This Plan will be deemed to contain, and such options will contain,
and the shares issued upon exercise thereof will be subject to, such additional
conditions and restrictions as may be required by Rule 16b-3 to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions.

         22. EQUAL RIGHTS AND PRIVILEGES. All Eligible Employees of the Company
(or of any Designated Subsidiary) will have equal rights and privileges under
this Plan so that this Plan qualifies as an "employee stock purchase plan"
within the meaning of Section 423 of the Code or applicable Treasury regulations
thereunder. Any provision of this Plan that is inconsistent with Section 423 or
applicable Treasury regulations will, without further act or amendment by the
Company or the Board, be reformed to comply with the equal rights and privileges
requirement of Section 423 or applicable Treasury regulations.

         23. HEADINGS. Headings are provided herein for convenience only and are
not to serve as a basis for interpretation or construction of the Plan.



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