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                                                                     EXHIBIT 4.2


                         PACIFICARE HEALTH SYSTEMS INC.
                        2001 EMPLOYEE STOCK PURCHASE PLAN

              ADOPTED BY THE BOARD OF DIRECTORS SEPTEMBER 11, 2001
                   APPROVED BY STOCKHOLDERS ____________, 2001


1.   PURPOSE.

     (a)  The purpose of the Plan is to provide a means by which Employees of
the Company and certain designated Related Corporations may be given an
opportunity to purchase shares of the Common Stock of the Company.

     (b)  The Company, by means of the Plan, seeks to retain the services of
such 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 and its Related Corporations.

     (c)  The Company intends that the Purchase Rights granted under the Plan be
considered options issued under an Employee Stock Purchase Plan.

2.   DEFINITIONS.

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

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

     (c)  "COMMITTEE" means a committee appointed by the Board in accordance
with Section 3(c) of the Plan.

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

     (e)  "COMPANY" means PacifiCare Health Systems Inc., a Delaware
corporation.

     (f)  "CORPORATE TRANSACTION" means the occurrence, in a single transaction
or in a series of related transactions, of any one or more of the following
events:

          (i) a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company;

          (ii) a sale or other disposition of at least ninety percent (90%) of
the outstanding securities of the Company;

          (iii) a merger, consolidation or similar transaction following which
the Company is not the surviving corporation; or

          (iv) a merger, consolidation or similar transaction following which
the Company is the surviving corporation but the shares of Common Stock
outstanding immediately


                                       1.
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preceding the merger, consolidation or similar transaction are converted or
exchanged by virtue of the merger, consolidation or similar transaction into
other property, whether in the form of securities, cash or otherwise.

     (g)  "DIRECTOR" means a member of the Board.

     (h)  "ELIGIBLE EMPLOYEE" means an Employee who meets the requirements set
forth in the Offering for eligibility to participate in the Offering, provided
that such Employee also meets the requirements for eligibility to participate
set forth in the Plan.

     (i)  "EMPLOYEE" means any person, including Officers and Directors, who is
employed for purposes of Section 423(b)(4) of the Code by the Company or a
Related Corporation. Neither service as a Director nor payment of a director's
fee shall be sufficient to make an individual an Employee of the Company or a
Related Corporation.

     (j)  "EMPLOYEE STOCK PURCHASE PLAN" means a plan that grants Purchase
Rights intended to be options issued under an "employee stock purchase plan," as
that term is defined in Section 423(b) of the Code.

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

     (l)  "FAIR MARKET VALUE" means the value of a security, as determined in
good faith by the Board. If the security is listed on any established stock
exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market,
the Fair Market Value of the security, unless otherwise determined by the Board,
shall be the closing sales price (rounded up where necessary to the nearest
whole cent) for such security (or the closing bid, if no sales were reported) as
quoted on such exchange or market (or the exchange or market with the greatest
volume of trading in the relevant security of the Company) on the Trading Day
prior to the relevant determination date, as reported in The Wall Street Journal
or such other source as the Board deems reliable.

     (m)  "OFFERING" means the grant of Purchase Rights under the Plan to
Eligible Employees.

     (n)  "OFFERING DATE" means a date selected by the Board for an Offering to
commence.

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

     (p)  "PARTICIPANT" means an Eligible Employee who holds an outstanding
Purchase Right granted pursuant to the Plan and who has enrolled in the Plan and
applicable Offering in accordance with the provisions of subsection 8(a) herein
and the respective Offering.

     (q)  "PLAN" means this PacifiCare Health Systems Inc. 2001 Employee Stock
Purchase Plan.


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     (r)  "PURCHASE DATE" means one or more dates during an Offering established
by the Board on which Purchase Rights granted under the Plan shall be exercised
and as of which purchases of shares of Common Stock shall be carried out in
accordance with such Offering.

     (s)  "PURCHASE PERIOD" means a period of time specified within an Offering
beginning on the Offering Date or on the next day following a Purchase Date
within an Offering and ending on a Purchase Date, at the end of which there
shall be purchased shares of Common Stock on behalf of Participants. An Offering
may consist of one or more Purchase Periods.

     (t)  "PURCHASE RIGHT" means an option to purchase shares of Common Stock
granted pursuant to the Plan.

     (u)  "RELATED CORPORATION" means, with respect to the Company, any parent
corporation or subsidiary corporation, whether now or hereafter existing, as
those terms are defined in Sections 424(e) and (f), respectively, of the Code.

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

     (w)  "TRADING DAY" means any day the exchange(s) or market(s) on which
shares of Common Stock are listed, whether it be any established stock exchange,
the Nasdaq National Market, the Nasdaq SmallCap Market or otherwise, is open for
trading.

3.   ADMINISTRATION.

     (a)  The Board shall administer the Plan unless and until the Board
delegates administration to a Committee, as provided in Section 3(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 (or the Committee) shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:

          (i) To determine when and how Purchase Rights shall be granted and the
provisions of each Offering of such Purchase Rights (which need not be
identical).

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

          (iii) To construe and interpret the Plan and Purchase Rights granted
under the Plan, and to establish, amend and revoke rules and regulations for the
administration of the Plan. The Board, in the 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 Section 15.


                                       3.
<PAGE>

          (v) Generally, to exercise such powers and to perform such acts as it
deems necessary or expedient to promote the best interests of the Company and
its Related Corporations and to carry out the intent that the Plan be treated as
an Employee Stock Purchase Plan.

     (c)  The Board may delegate administration of the Plan to a Committee of
the Board composed of one (1) or more members of the Board. 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. If administration is delegated to a Committee, references to the Board
in this Plan and in the Offering document shall thereafter be deemed to be to
the Board or the Committee, as the case may be.

4.   SHARES OF COMMON STOCK SUBJECT TO THE PLAN.

     (a)  Subject to the provisions of Section 14 relating to adjustments upon
changes in stock, the shares of Common Stock that may be sold pursuant to
Purchase Rights granted under the Plan shall not exceed in the aggregate one
million one hundred thousand (1,100,000) shares of Common Stock. If any Purchase
Right granted under the Plan shall for any reason terminate without having been
exercised, the shares not purchased under such Purchase Right shall again become
available for issuance under the Plan.

     (b)  The shares of Common Stock subject to the Plan may be unissued shares
or shares that have been bought on the open market at prevailing market prices
or otherwise.

5.   GRANT OF PURCHASE RIGHTS; OFFERING.

     (a)  The Board may from time to time grant or provide for the grant of
Purchase Rights under the Plan to Eligible Employees in an Offering (consisting
of one or more Purchase Periods) on an Offering Date or Offering Dates selected
by the Board. Each Offering shall be in such form and shall contain such terms
and conditions as the Board shall deem appropriate, which shall comply with the
requirement of Section 423(b)(5) of the Code that all Employees granted Purchase
Rights under the Plan shall have the same rights and privileges. The terms and
conditions of an Offering shall be incorporated by reference into the Plan and
treated as part of the Plan. 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 document comprising the Offering or
otherwise) the period during which the Offering shall be effective, which period
shall not exceed twenty-seven (27) months beginning with the Offering Date, and
the substance of the provisions contained in Sections 6 through 9, inclusive.

     (b)  If a Participant has more than one Purchase Right outstanding under
the Plan, unless he or she otherwise indicates in agreements or notices
delivered hereunder: (i) each agreement or notice delivered by that Participant
shall be deemed to apply to all of his or her Purchase Rights under the Plan,
and (ii) a Purchase Right with a lower exercise price (or an earlier-granted
Purchase Right, if different Purchase Rights have identical exercise prices)
shall be exercised to the fullest possible extent before a Purchase Right with a
higher exercise price (or

                                       4.
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a later-granted Purchase Right, if different Purchase Rights have identical
exercise prices) shall be exercised.

6.   ELIGIBILITY.

     (a)  Purchase Rights may be granted only to Employees of the Company or, as
the Board may designate as provided in Section 3(b), to Employees of a Related
Corporation. Except as provided in Section 6(b), an Employee shall not be
eligible to be granted Purchase Rights under the Plan unless, on the Offering
Date, such Employee has been in the employ of the Company or the Related
Corporation, as the case may be, for such continuous period preceding such
Offering Date as the Board may require, but in no event shall the required
period of continuous employment be greater than two (2) years. In addition, the
Board may provide that no Employee shall be eligible to be granted Purchase
Rights under the Plan unless, on the Offering Date, such Employee's customary
employment with the Company or the Related Corporation is twenty (20) hours or
more per week and more than five (5) months per calendar year.

     (b)  The Board may provide that each person who, during the course of an
Offering, first becomes an Eligible Employee shall, on a date or dates specified
in the Offering which coincides with the day on which such person becomes an
Eligible Employee or which occurs thereafter, receive a Purchase Right under
that Offering, which Purchase Right shall thereafter be deemed to be a part of
that Offering. Such Purchase Right shall have the same characteristics as any
Purchase Rights originally granted under that Offering, as described herein,
except that:

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

          (ii) the period of the Offering with respect to such Purchase Right
shall begin on its Offering Date and end coincident with the end of such
Offering; and

          (iii) the Board may provide that if such person first becomes an
Eligible Employee within a specified period of time before the end of the
Offering, he or she shall not receive any Purchase Right under that Offering.

     (c)  No Employee shall be eligible for the grant of any Purchase Rights
under the Plan if, immediately after any such Purchase 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 Related
Corporation. For purposes of this Section 6(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 Purchase Rights and
options shall be treated as stock owned by such Employee.

     (d)  As specified by Section 423(b)(8) of the Code, an Eligible Employee
may be granted Purchase Rights under the Plan only if such Purchase Rights,
together with any other rights granted under all Employee Stock Purchase Plans
of the Company and any Related Corporations, do not permit such Eligible
Employee's rights to purchase stock of the Company or any Related Corporation to
accrue at a rate which exceeds twenty five thousand dollars


                                       5.
<PAGE>

($25,000) of Fair Market Value of such stock (determined at the time such rights
are granted, and which, with respect to the Plan, shall be determined as of
their respective Offering Dates) for each calendar year in which such rights are
outstanding at any time.

     (e)  Officers of the Company and any designated Related Corporation, if
they are otherwise Eligible Employees, shall be eligible to participate in
Offerings under the Plan. Notwithstanding the foregoing, the Board may provide
in an Offering that Employees who are highly compensated Employees within the
meaning of Section 423(b)(4)(D) of the Code shall not be eligible to
participate.

7.   PURCHASE RIGHTS; PURCHASE PRICE.

     (a)  On each Offering Date, each Eligible Employee, pursuant to an Offering
made under the Plan, shall be granted a Purchase Right to purchase up to that
number of shares of Common Stock purchasable either with a percentage or with a
maximum dollar amount, as designated by the Board, but in either case not
exceeding fifteen percent (15%), of such Employee's Earnings (as defined by the
Board in each Offering) during the period that begins on the Offering Date (or
such later date as the Board determines for a particular Offering) and ends on
the date stated in the Offering, which date shall be no later than the end of
the Offering.

     (b)  The Board shall establish one (1) or more Purchase Dates during an
Offering as of which Purchase Rights granted under the Plan and pursuant to that
Offering shall be exercised and purchases of shares of Common Stock shall be
carried out in accordance with such Offering.

     (c)  In connection with each Offering made under the Plan, the Board may
specify a maximum number of shares of Common Stock that may be purchased by any
Participant on any Purchase Date during such Offering. In connection with each
Offering made under the Plan, the Board may specify a maximum aggregate number
of shares of Common Stock that may be purchased by all Participants pursuant to
such Offering. In addition, in connection with each Offering that contains more
than one Purchase Date, the Board may specify a maximum aggregate number of
shares of Common Stock that may be purchased by all Participants on any given
Purchase Date under the Offering. If the aggregate purchase of shares of Common
Stock issuable upon exercise of Purchase Rights granted under the Offering would
exceed any such maximum aggregate number, then, in the absence of any Board
action otherwise, a pro rata allocation of the shares of Common Stock available
shall be made in as nearly a uniform manner as shall be practicable and
equitable.

     (d)  Subject to the provisions of subsection 7(e) herein, the purchase
price of shares of Common Stock acquired pursuant to Purchase Rights granted
under the Plan shall be not less than the lesser of:

          (i) an amount equal to eighty-five percent (85%) of the Fair Market
Value of the shares of Common Stock on the Offering Date; or

          (ii) an amount equal to eighty-five percent (85%) of the Fair Market
Value of the shares of Common Stock on the applicable Purchase Date;


                                       6.
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     (e)  Notwithstanding the foregoing, in the event that the exercise of
Purchase Rights under an Offering is contingent upon receiving stockholder
approval and such stockholder approval is obtained, the purchase price shall not
be less than the lesser of:

          (i) an amount equal to eighty-five percent (85%) of the Fair Market
Value of the shares of Common Stock on the date on which such stockholder
approval is obtained; or

          (ii) an amount equal to eighty-five percent (85%) of the Fair Market
Value of the shares of Common Stock on the applicable Purchase Date.

8.   PARTICIPATION; WITHDRAWAL; TERMINATION.

     (a)  An Eligible Employee may become a Participant in the Plan pursuant to
an Offering by delivering a participation agreement to the Company within the
time specified in the Offering, in such form as the Company may provide. Each
such agreement shall authorize payroll deductions of up to the maximum
percentage specified by the Board of such Participant's Earnings (as defined in
each Offering) during the Offering. The payroll deductions made for each
Participant shall be credited to a bookkeeping account for such Participant
under the Plan and shall be deposited with the general funds of the Company. To
the extent provided in the Offering, a Participant may reduce (including to
zero) or increase such payroll deductions. To the extent provided in the
Offering, a Participant may begin such payroll deductions after the beginning of
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 already had the maximum permitted amount withheld during the Offering.

     (b)  At any time during an Offering, 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 may provide.
Such withdrawal may be elected at any time prior to the end of the Offering,
except as provided 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 shares of Common Stock for the Participant) under the
Offering, without interest (unless otherwise specified in the Offering), and
such Participant's interest in that Offering shall be automatically terminated.
A Participant's withdrawal from an Offering shall have no effect upon such
Participant's eligibility to participate in any other Offerings under the Plan,
but such Participant shall be required to deliver a new participation agreement
in order to participate in subsequent Offerings under the Plan.

     (c)  Purchase Rights granted pursuant to any Offering under the Plan shall
terminate immediately upon a Participant ceasing to be an Employee for any
reason or for no reason (subject to any post-employment participation period
required by law) or other lack of eligibility. The Company shall distribute to
such terminated or otherwise ineligible Employee all of his or her accumulated
payroll deductions (reduced to the extent, if any, such deductions have been
used to acquire shares of Common Stock for the terminated or otherwise
ineligible Employee) under the Offering, without interest (unless otherwise
specified in the Offering).


                                       7.
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     (d)  Purchase Rights granted under the Plan shall not be transferable by a
Participant otherwise than by will or the laws of descent and distribution, or
by a beneficiary designation as provided in Section 13 and, during a
Participant's lifetime, shall be exercisable only by such Participant.

9.   EXERCISE.

     (a)  Except as otherwise provided herein, on each Purchase Date during an
Offering, each Participant's accumulated payroll deductions and other additional
payments specifically provided for in the Offering (without any increase for
interest) shall be applied to the purchase of shares of Common Stock up to the
maximum number of shares of Common Stock 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 Purchase
Rights granted under the Plan unless specifically provided for in the Offering.

     (b)  If any amount of accumulated payroll deductions remains in a
Participant's account after the purchase of shares of Common Stock and such
remaining amount is less than the amount required to purchase one share of
Common Stock on the final Purchase Date of an Offering, then such remaining
amount shall be held in each such Participant's account for the purchase of
shares of Common Stock under the next Offering under the Plan, unless such
Participant withdraws from such next Offering, as provided in Section 8(b), or
is not eligible to participate in such Offering, as provided in Section 6, in
which case such amount shall be distributed to the Participant after said final
Purchase Date, without interest (unless otherwise specified in the Offering). If
any amount of accumulated payroll deductions remains in a Participant's account
after the purchase of shares of Common Stock and such remaining amount is equal
to the amount required to purchase one (1) or more whole shares of Common Stock
on the final Purchase Date of the Offering, then such remaining amount shall be
distributed in full to the Participant at the end of the Offering without
interest (unless otherwise specified in the Offering).

     (c)  No Purchase Rights granted under the Plan may be exercised to any
extent unless the shares of Common Stock to be issued upon such exercise under
the Plan are covered by an effective registration statement pursuant to the
Securities Act and the Plan is in material compliance with all applicable
federal, state, foreign and other securities and other laws applicable to the
Plan. If on a Purchase Date during any Offering hereunder the shares of Common
Stock are not so registered or the Plan is not in such compliance, no Purchase
Rights granted under the Plan or any Offering shall be exercised on such
Purchase Date, and the Purchase Date shall be delayed until the shares of Common
Stock are subject to such an effective registration statement and the Plan is in
such compliance, except that the Purchase Date shall not be delayed more than
twelve (12) months and the Purchase Date shall in no event be more than
twenty-seven (27) months from the Offering Date. If, on the Purchase Date under
any Offering hereunder, as delayed to the maximum extent permissible, the shares
of Common Stock are not registered and the Plan is not in such compliance, no
Purchase Rights granted under the Plan or any Offering shall be exercised and
all payroll deductions accumulated during the Offering (reduced to the extent,
if any, such deductions have been used to acquire shares of Common Stock) shall
be distributed to the Participants, without interest (unless otherwise specified
in the Offering).


                                       8.
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     (d)  Notwithstanding the foregoing, in the event that the exercise of
Purchase Rights under an Offering is contingent upon receiving stockholder
approval and such stockholder approval is not obtained, no Purchase Rights
granted under the Plan or such Offering shall be exercised and all payroll
deductions accumulated during the Offering shall be distributed to the
Participants, without interest (unless otherwise specified in the Offering).

10.  COVENANTS OF THE COMPANY.

     (a)  During the terms of the Purchase Rights granted under the Plan, the
Company shall ensure that the amount of shares of Common Stock required to
satisfy such Purchase Rights are available.

     (b)  The Company shall seek to obtain from each federal, state, foreign or
other regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to issue and sell shares of Common Stock upon
exercise of the Purchase Rights granted under the Plan. If, after reasonable
efforts, the Company is unable to obtain from any such regulatory commission or
agency the authority that counsel for the Company deems necessary for the lawful
issuance and sale of shares of Common Stock under the Plan, the Company shall be
relieved from any liability for failure to issue and sell shares of Common Stock
upon exercise of such Purchase Rights unless and until such authority is
obtained.

11.  USE OF PROCEEDS FROM SHARES OF COMMON STOCK.

     Proceeds from the sale of shares of Common Stock pursuant to Purchase
Rights granted under the Plan shall constitute general funds of the Company.

12.  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, shares of Common Stock subject to
Purchase Rights granted under the Plan unless and until the Participant's shares
of Common Stock acquired upon exercise of Purchase Rights granted under the Plan
are recorded in the books of the Company (or its transfer agent).

13.  DESIGNATION OF BENEFICIARY.

     (a)  A Participant may file a written designation of a beneficiary who is
to receive any shares of Common Stock and/or cash, if any, from the
Participant's account under the Plan in the event of such Participant's death
subsequent to the end of an Offering but prior to delivery to the Participant of
such shares of Common Stock or 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
during an Offering.

     (b)  The Participant may change such designation of beneficiary 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 of Common Stock
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


                                       9.
<PAGE>

knowledge of the Company), the Company, in its sole discretion, may deliver such
shares of Common Stock 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 known to the Company, then to such other person as the Company may
designate.

14.  ADJUSTMENTS UPON CHANGES IN SECURITIES; CORPORATE TRANSACTIONS.

     (a)  If any change is made in the shares of Common Stock, subject to the
Plan, or subject to any Purchase Right, without the receipt of consideration by
the Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan shall be appropriately adjusted in the
type(s), class(es) and maximum number of shares of Common Stock subject to the
Plan pursuant to Section 4(a), and the outstanding Purchase Rights granted under
the Plan shall be appropriately adjusted in the type(s), class(es), number of
shares and purchase limits of such outstanding Purchase Rights. The Board shall
make such adjustments, and its determination shall be final, binding and
conclusive. (The conversion of any convertible securities of the Company shall
not be treated as a "transaction not involving the receipt of consideration by
the Company.")

     (b)  In the event of a Corporate Transaction, then: (i) any surviving or
acquiring corporation may continue or assume Purchase Rights outstanding under
the Plan or may substitute similar rights (including a right to acquire the same
consideration paid to stockholders in the Corporate Transaction) for those
outstanding under the Plan, or (ii) if any surviving or acquiring corporation
does not assume such Purchase Rights or does not substitute similar rights for
Purchase Rights outstanding under the Plan, then, the Participants' accumulated
payroll deductions (exclusive of any accumulated interest that cannot be applied
toward the purchase of shares of Common Stock under the terms of the Offering)
shall be used to purchase shares of Common Stock immediately prior to the
Corporate Transaction under the ongoing Offering, and the Participants' Purchase
Rights under the ongoing Offering shall terminate immediately after such
purchase.

15.  AMENDMENT OF THE PLAN.

     (a)  The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 14 relating to adjustments upon changes
in securities and except as to amendments solely to benefit the administration
of the Plan, to take account of a change in legislation or to obtain or maintain
favorable tax, exchange control or regulatory treatment for Participants or the
Company or any Related Corporation, no amendment shall be effective unless
approved by the stockholders of the Company to the extent stockholder approval
is necessary for the Plan to satisfy the requirements of Section 423 of the Code
or other applicable laws or regulations.

     (b)  It is expressly contemplated that the Board may amend the Plan in any
respect the Board deems necessary or advisable to provide Employees with the
maximum benefits provided or to be provided under the provisions of the Code and
the regulations promulgated thereunder


                                      10.
<PAGE>

relating to Employee Stock Purchase Plans and/or to bring the Plan and/or
Purchase Rights granted under the Plan into compliance therewith.

     (c)  The rights and obligations under any Purchase Rights granted before
amendment of the Plan shall not be impaired by any amendment of the Plan except
(i) with the consent of the person to whom such Purchase Rights were granted,
(ii) as necessary to comply with any laws or governmental regulations, or (iii)
as necessary to ensure that the Plan and/or Purchase Rights granted under the
Plan comply with the requirements of Section 423 of the Code.

16.  TERMINATION OR SUSPENSION OF THE PLAN.

     (a)  The Board in its discretion may suspend or terminate the Plan at any
time. Unless sooner terminated, the Plan shall terminate at the time that all of
the shares of Common Stock reserved for issuance under the Plan, as increased
and/or adjusted from time to time, have been issued under the terms of the Plan.
No Purchase Rights may be granted under the Plan while the Plan is suspended or
after it is terminated.

     (b)  Any benefits, privileges, entitlements and obligations under any
Purchase Rights granted under the Plan while the Plan is in effect shall not be
impaired by suspension or termination of the Plan except (i) as expressly
provided in the Plan or with the consent of the person to whom such Purchase
Rights were granted, (ii) as necessary to comply with any laws, regulations, or
listing requirements, or (iii) as necessary to ensure that the Plan and/or
Purchase Rights granted under the Plan comply with the requirements of Section
423 of the Code.

17.  EFFECTIVE DATE OF PLAN.

     The Plan shall become effective as determined by the Board, but, subject to
the provisions of subsection 9(d) herein, no Purchase Rights granted under the
Plan shall be exercised unless and until the Plan has been approved by the
stockholders of the Company within twelve (12) months before or after the date
the Plan is adopted by the Board.

18.  MISCELLANEOUS PROVISIONS.

     (a)  The Plan and Offering do not constitute an employment contract.
Nothing in the Plan or in the Offering shall in any way alter the at will nature
of a Participant's employment or be deemed to create in any way whatsoever any
obligation on the part of any Participant to continue in the employ of the
Company or a Related Corporation, or on the part of the Company or a Related
Corporation to continue the employment of a Participant.

     The provisions of the Plan shall be governed by the laws of the State of
California without resort to that state's conflicts of laws rules.


                                      11.