EXHIBIT 99.2

                          BORLAND SOFTWARE CORPORATION
                        1999 EMPLOYEE STOCK PURCHASE PLAN

1.   ESTABLISHMENT, PURPOSE AND TERM OF PLAN.
     ---------------------------------------

     1.1 ESTABLISHMENT. The Borland Software Corporation 1999 Employee Stock
Purchase Plan (the "PLAN") is hereby established effective as of the date on
which it is approved by the stockholders of the Company (the "EFFECTIVE DATE").

     1.2 PURPOSE. The purpose of the Plan is to advance the interests of Company
and its stockholders by providing an incentive to attract, retain and reward
Eligible Employees of the Participating Company Group and by motivating such
persons to contribute to the growth and profitability of the Participating
Company Group. The Plan provides such Eligible Employees with an opportunity to
acquire a proprietary interest in the Company through the purchase of Stock. The
Company intends that the Plan qualify as an "employee stock purchase plan" under
Section 423 of the Code (including any amendments or replacements of such
section), and the Plan shall be so construed.

     1.3 TERM OF PLAN. The Plan shall continue in effect until the earlier of
its termination by the Board or the date on which all of the shares of Stock
available for issuance under the Plan have been issued.

2.   DEFINITIONS AND CONSTRUCTION.
     ----------------------------

     2.1 DEFINITIONS. Any term not expressly defined in the Plan but defined for
purposes of Section 423 of the Code shall have the same definition herein.
Whenever used herein, the following terms shall have their respective meanings
set forth below:

          (a) "BOARD" means the Board of Directors of the Company. If one or
     more Committees have been appointed by the Board to administer the Plan,
     "Board" also means such Committee(s).

          (b) "CODE" means the Internal Revenue Code of 1986, as amended, and
     any applicable regulations promulgated thereunder.

          (c) "COMMITTEE" means a committee of the Board duly appointed to
     administer the Plan and having such powers as specified by the Board.
     Unless the powers of the Committee have been specifically limited, the
     Committee shall have all of the powers of the Board granted herein,
     including, without limitation, the power to amend or terminate the Plan at
     any time, subject to the terms of the Plan and any applicable limitations
     imposed by law.

          (d) "COMPANY" means Borland Software Corporation, a Delaware
     corporation, or any successor corporation thereto.


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          (e) "COMPENSATION" means, with respect to any Offering Period, base
     wages or salary, overtime, bonuses, commissions, shift differentials,
     payments for paid time off, payments in lieu of notice, and compensation
     deferred under any program or plan, including, without limitation, pursuant
     to Section 401(k) or Section 125 of the Code. Compensation shall be limited
     to amounts actually payable in cash or deferred during the Offering Period.
     Compensation shall not include moving allowances, payments pursuant to a
     severance agreement, termination pay, relocation payments, sign-on bonuses,
     any amounts directly or indirectly paid pursuant to the Plan or any other
     stock purchase or stock option plan, or any other compensation not included
     above.

          (f) "ELIGIBLE EMPLOYEE" means an Employee who meets the requirements
     set forth in Section 5 for eligibility to participate in the Plan.

          (g) "EMPLOYEE" means a person treated as an employee of a
     Participating Company for purposes of Section 423 of the Code. A
     Participant shall be deemed to have ceased to be an Employee either upon an
     actual termination of employment or upon the corporation employing the
     Participant ceasing to be a Participating Company. For purposes of the
     Plan, an individual shall not be deemed to have ceased to be an Employee
     while on any military leave, sick leave, or other bona fide leave of
     absence approved by the Company of ninety (90) days or less. If an
     individual's leave of absence exceeds ninety (90) days, the individual
     shall be deemed to have ceased to be an Employee on the ninety-first (91st)
     day of such leave unless the individual's right to reemployment with the
     Participating Company Group is guaranteed either by statute or by contract.
     The Company shall determine in good faith and in the exercise of its
     discretion whether an individual has become or has ceased to be an Employee
     and the effective date of such individual's employment or termination of
     employment, as the case may be. For purposes of an individual's
     participation in or other rights, if any, under the Plan as of the time of
     the Company's determination, all such determinations by the Company shall
     be final, binding and conclusive, notwithstanding that the Company or any
     governmental agency subsequently makes a contrary determination.

          (h) "FAIR MARKET VALUE" means, as of any date, if the Stock is then
     listed on a national or regional securities exchange or market system or is
     regularly quoted by a recognized securities dealer, the closing sale price
     of a share of Stock (or the mean of the closing bid and asked prices if the
     Stock is so quoted instead) as quoted on the Nasdaq National Market, the
     Nasdaq SmallCap Market or such other national or regional securities
     exchange or market system constituting the primary market for the Stock, or
     by such recognized securities dealer, as reported in The Wall Street
     Journal or such other source as the Company deems reliable. If the relevant
     date does not fall on a day on which the Stock has traded on such
     securities exchange or market system or has been quoted by such securities
     dealer, the date on which the Fair Market Value is established shall be the
     last day on which the Stock was so traded or quoted prior to the relevant
     date, or such other appropriate day as determined by the Board, in its
     discretion. If, on the relevant date, the Stock is not then listed on a
     national or regional securities exchange or market system or regularly
     quoted by a recognized securities dealer, the Fair Market Value of a share
     of Stock shall be as determined in good faith by the Board.


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          (i) "OFFERING" means an offering of Stock as provided in Section 6.

          (j) "OFFERING DATE" means, for any Offering, the first day of the
     Offering Period.

          (k) "OFFERING PERIOD" means a period established in accordance with
     Section 6.1, including an Annual Offering Period and a Half-Year Offering
     Period as provided in Section 6.1.

          (l) "PARENT CORPORATION" means any present or future "parent
     corporation" of the Company, as defined in Section 424(e) of the Code.

          (m) "PARTICIPANT" means an Eligible Employee who has become a
     participant in an Offering Period in accordance with Section 7 and remains
     a participant in accordance with the Plan.

          (n) "PARTICIPATING COMPANY" means the Company or any Parent
     Corporation or Subsidiary Corporation designated by the Board as a
     corporation the Employees of which may, if Eligible Employees, participate
     in the Plan. The Board shall have the sole and absolute discretion to
     determine from time to time which Parent Corporations or Subsidiary
     Corporations shall be Participating Companies.

          (o) "PARTICIPATING COMPANY GROUP" means, at any point in time, the
     Company and all other corporations collectively which are then
     Participating Companies.

          (p) "PURCHASE DATE" means, for any Purchase Period, the last day of
     such period.

          (q) "PURCHASE PERIOD" means a period established in accordance with
     Section 6.2.

          (r) "PURCHASE PRICE" means the price at which a share of Stock may be
     purchased under the Plan, as determined in accordance with Section 9.

          (S) "PURCHASE RIGHT" means an option granted to a Participant pursuant
     to the Plan to purchase such shares of Stock as provided in Section 8,
     which the Participant may or may not exercise during the Offering Period in
     which such option is outstanding. Such option arises from the right of a
     Participant to withdraw any accumulated payroll deductions of the
     Participant not previously applied to the purchase of Stock under the Plan
     and to terminate participation in the Plan at any time during an Offering
     Period.

          (t) "STOCK" means the common stock of the Company, as adjusted from
     time to time in accordance with Section 4.2.


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          (u) "SUBSCRIPTION AGREEMENT" means a written agreement in such form as
     specified by the Company, stating an Employee's election to participate in
     the Plan and authorizing payroll deductions under the Plan from the
     Employee's Compensation.

          (v) "SUBSCRIPTION DATE" means the last business day prior to the
     Offering Date of an Offering Period or such earlier date as the Company
     shall establish.

          (w) "SUBSIDIARY CORPORATION" means any present or future "subsidiary
     corporation" of the Company, as defined in Section 424(f) of the Code.

     2.2 CONSTRUCTION. Captions and titles contained herein are for convenience
only and shall not affect the meaning or interpretation of any provision of the
Plan. Except when otherwise indicated by the context, the singular shall include
the plural and the plural shall include the singular. Use of the term "or" is
not intended to be exclusive, unless the context clearly requires otherwise.

3.   ADMINISTRATION.
     --------------

     3.1 ADMINISTRATION BY THE BOARD. The Plan shall be administered by the
Board. All questions of interpretation of the Plan, of any form of agreement or
other document employed by the Company in the administration of the Plan, or of
any Purchase Right shall be determined by the Board and shall be final and
binding upon all persons having an interest in the Plan or the Purchase Right.
Subject to the provisions of the Plan, the Board shall determine all of the
relevant terms and conditions of Purchase Rights; provided, however, that all
Participants granted Purchase Rights shall have the same rights and privileges
within the meaning of Section 423(b)(5) of the Code. All expenses incurred in
connection with the administration of the Plan shall be paid by the Company.

     3.2 AUTHORITY OF OFFICERS. Any officer of the Company shall have the
authority to act on behalf of the Company with respect to any matter, right,
obligation, determination or election that is the responsibility of or that is
allocated to the Company herein, provided that the officer has apparent
authority with respect to such matter, right, obligation, determination or
election.

     3.3 POLICIES AND PROCEDURES ESTABLISHED BY THE COMPANY. The Company may,
from time to time, consistent with the Plan and the requirements of Section 423
of the Code, establish, change or terminate such rules, guidelines, policies,
procedures, limitations, or adjustments as deemed advisable by the Company, in
its discretion, for the proper administration of the Plan, including, without
limitation, (a) a minimum payroll deduction amount required for participation in
an Offering, (b) a limitation on the frequency or number of changes permitted in
the rate of payroll deduction during an Offering, (c) an exchange ratio
applicable to amounts withheld in a currency other than United States dollars,
(d) a payroll deduction greater than or less than the amount designated by a
Participant in order to adjust for the Company's delay or mistake in processing
a Subscription Agreement or in otherwise effecting a Participant's election
under the Plan or as advisable to comply with the requirements of Section 423 of
the Code, and


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(e) determination of the date and manner by which the Fair Market Value of a
share of Stock is determined for purposes of administration of the Plan.

4.   SHARES SUBJECT TO PLAN.
     ----------------------

     4.1 MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to adjustment as provided in
Section 4.2, the maximum aggregate number of shares of Stock that may be issued
under the Plan shall be two million two hundred thousand (2,200,000) and shall
consist of authorized but unissued or reacquired shares of Stock, or any
combination thereof. If an outstanding Purchase Right for any reason expires or
is terminated or canceled, the shares of Stock allocable to the unexercised
portion of that Purchase Right shall again be available for issuance under the
Plan.

     4.2 ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event of any stock
dividend, stock split, reverse stock split, recapitalization, combination,
reclassification or similar change in the capital structure of the Company, or
in the event of any merger (including a merger effected for the purpose of
changing the Company's domicile), sale of assets or other reorganization in
which the Company is a party, appropriate adjustments shall be made in the
number and class of shares subject to the Plan and each Purchase Right and in
the Purchase Price. If a majority of the shares of the same class as the shares
subject to outstanding Purchase Rights are exchanged for, converted into, or
otherwise become (whether or not pursuant to an Ownership Change Event) shares
of another corporation (the "NEW SHARES"), the Board may unilaterally amend the
outstanding Purchase Rights to provide that such Purchase Rights are exercisable
for New Shares. In the event of any such amendment, the number of shares subject
to, and the Purchase Price of, the outstanding Purchase Rights shall be adjusted
in a fair and equitable manner, as determined by the Board, in its discretion.
Notwithstanding the foregoing, any fractional share resulting from an adjustment
pursuant to this Section 4.2 shall be rounded down to the nearest whole number,
and in no event may the Purchase Price be decreased to an amount less than the
par value, if any, of the stock subject to the Purchase Right. The adjustments
determined by the Board pursuant to this Section 4.2 shall be final, binding and
conclusive.

5.   ELIGIBILITY.
     -----------

     5.1 EMPLOYEES ELIGIBLE TO PARTICIPATE. Each Employee of a Participating
Company is eligible to participate in the Plan and shall be deemed an Eligible
Employee, except the following:

          (a) Any Employee who is customarily employed by the Participating
     Company Group for less than twenty (20) hours per week; or

          (b) Any Employee who is customarily employed by the Participating
     Company Group for not more than five (5) months in any calendar year.


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     5.2 EXCLUSION OF CERTAIN STOCKHOLDERS. Notwithstanding any provision of the
Plan to the contrary, no Employee shall be granted a Purchase Right under the
Plan if, immediately after such grant, the Employee would own or hold options to
purchase stock of the Company or of any Parent Corporation or Subsidiary
Corporation possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of such corporation, as determined in
accordance with Section 423(b)(3) of the Code. For purposes of this Section 5.2,
the attribution rules of Section 424(d) of the Code shall apply in determining
the stock ownership of such Employee.

6.   OFFERINGS.
     ---------

     6.1 OFFERING PERIODS. Except as otherwise set forth below, the Plan shall
be implemented by two series of Offerings. One series shall be of sequential
Offerings of approximately twelve (12) months duration or such other duration as
the Board shall determine (an "ANNUAL OFFERING PERIOD"). The second series shall
be of Offerings of approximately six (6) months duration or such other duration
as the Board shall determine (a "HALF-YEAR OFFERING PERIOD"). Annual Offering
Periods shall commence on or about December 1 of each year and end on or about
the first November 30 occurring thereafter. Half-Year Offering Periods shall
commence on or about June 1 of each year and end on or about the first November
30 occurring thereafter. However, provided that the Effective Date occurs on or
before July 1, 1999, an initial Offering (the "INITIAL OFFERING PERIOD") shall
commence on or about July 1, 1999 and end on or about November 30, 1999.
Notwithstanding the foregoing, the Board may establish a different duration for
one or more Offering Periods or different commencing or ending dates for such
Offering Periods; provided, however, that no Offering Period may have a duration
exceeding twenty-seven (27) months. If the first or last day of an Offering
Period is not a day on which the national securities exchanges or Nasdaq Stock
Market are open for trading, the Company shall specify the trading day that will
be deemed the first or last day, as the case may be, of the Offering Period.

     6.2 PURCHASE PERIODS. Each Annual Offering Period shall consist of two (2)
consecutive Purchase Periods of approximately six (6) months duration, or such
other number or duration as the Board determines. A Purchase Period commencing
on or about December 1 shall end on or about the next May 31. A Purchase Period
commencing on or about June 1 shall end on or about the next November 30. Each
Half-Year Offering Period shall consist of a single Purchase Period of
approximately six (6) months duration coterminous with such Offering Period.
However, provided that the Effective Date occurs on or before July 1, 1999, the
Initial Offering Period shall consist of a single Purchase Period ending on or
about November 30, 1999. Notwithstanding the foregoing, the Board may establish
a different duration for one or more Purchase Periods or different commencing or
ending dates for such Purchase Periods. If the first or last day of a Purchase
Period is not a day on which the national securities exchanges or Nasdaq Stock
Market are open for trading, the Company shall specify the trading day that will
be deemed the first or last day, as the case may be, of the Purchase Period.


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7.   PARTICIPATION IN THE PLAN.
     -------------------------

     7.1 INITIAL PARTICIPATION. An Eligible Employee may become a Participant in
an Offering Period by delivering a properly completed Subscription Agreement to
the office designated by the Company not later than the close of business for
such office on the Subscription Date established by the Company for that
Offering Period. An Eligible Employee who does not deliver a properly completed
Subscription Agreement to the Company's designated office on or before the
Subscription Date for an Offering Period shall not participate in the Plan for
that Offering Period or for any subsequent Offering Period unless the Eligible
Employee subsequently delivers a properly completed Subscription Agreement to
the appropriate office of the Company on or before the Subscription Date for
such subsequent Offering Period. An Employee who becomes an Eligible Employee
after the Offering Date of an Offering Period shall not be eligible to
participate in that Offering Period but may participate in any subsequent
Offering Period provided the Employee is still an Eligible Employee as of the
Offering Date of such subsequent Offering Period.

     7.2 CONTINUED PARTICIPATION. A Participant shall automatically participate
in the next Offering Period commencing immediately after the final Purchase Date
of each Offering Period in which the Participant participates provided that the
Participant remains an Eligible Employee on the Offering Date of the new
Offering Period and has not either (a) withdrawn from the Plan pursuant to
Section 12.1 or (b) terminated employment as provided in Section 13. A
Participant who may automatically participate in a subsequent Offering Period,
as provided in this Section, is not required to deliver any additional
Subscription Agreement for the subsequent Offering Period in order to continue
participation in the Plan. However, a Participant may deliver a new Subscription
Agreement for a subsequent Offering Period in accordance with the procedures set
forth in Section 7.1 if the Participant desires to change any of the elections
contained in the Participant's then effective Subscription Agreement. Eligible
Employees may not participate simultaneously in more than one Offering under the
Plan. Accordingly, a Participant in an Annual Offering Period may not
participate simultaneously in the Half-Year Offering Period commencing during
the term of an Annual Offering Period.

8.   RIGHT TO PURCHASE SHARES.
     ------------------------

     8.1 GRANT OF PURCHASE RIGHT. Except as set forth below, on the Offering
Date of each Offering Period, each Participant in that Offering Period shall be
granted automatically a Purchase Right determined as follows:

          (a) ANNUAL OFFERING PERIOD. Each Purchase Right granted on the
     Offering Date of an Annual Offering Period shall consisting of an option to
     purchase the lesser of (i) that number of whole shares of Stock determined
     by dividing Twenty-Five Thousand Dollars ($25,000) by the Fair Market Value
     of a share of Stock on the Offering Date or (ii) two thousand five hundred
     (2,500) shares of Stock.


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          (b) HALF-YEAR OFFERING PERIOD. Each Purchase Right granted on the
     Offering Date of a Half-Year Offering Period shall consist of an option to
     purchase the lesser of (i) that number of whole shares of Stock determined
     by dividing Twelve Thousand Five Hundred Dollars ($12,500) by the Fair
     Market Value of a share of Stock on the Offering Date or (ii) one thousand
     two hundred fifty (1,250) shares of Stock.

          (c) INITIAL OFFERING PERIOD. Each Purchase Right granted on the
     Offering Date of the Initial Offering Period shall consist of an option to
     purchase the lesser of (i) that number of whole shares of Stock determined
     by dividing Twelve Thousand Five Hundred Dollars ($12,500) by the Fair
     Market Value of a share of Stock on the Offering Date or (ii) one thousand
     two hundred fifty (1,250) shares of Stock.

No Purchase Right shall be granted on an Offering Date to any person who is not,
on such Offering Date, an Eligible Employee.

     8.2 PRO RATA ADJUSTMENT OF PURCHASE RIGHT. Notwithstanding the provisions
of Section 8.1, if the Board establishes an Offering Period (other than the
Initial Offering Period) of any duration other than twelve months or six months,
then (a) the dollar amount in Section 8.1 shall be determined by multiplying
$2,083.33 by the number of months (rounded to the nearest whole month) in the
Offering Period and rounding to the nearest whole dollar, and (b) the share
amount in Section 8.1 shall be determined by multiplying 208.33 shares by the
number of months (rounded to the nearest whole month) in the Offering Period and
rounding to the nearest whole share.

     8.3 CALENDAR YEAR PURCHASE LIMITATION. Notwithstanding any provision of the
Plan to the contrary, no Participant shall be granted a Purchase Right which
permits his or her right to purchase shares of Stock under the Plan to accrue at
a rate which, when aggregated with such Participant's rights to purchase shares
under all other employee stock purchase plans of a Participating Company
intended to meet the requirements of Section 423 of the Code, exceeds
Twenty-Five Thousand Dollars ($25,000) in Fair Market Value (or such other
limit, if any, as may be imposed by the Code) for each calendar year in which
such Purchase Right is outstanding at any time. For purposes of the preceding
sentence, the Fair Market Value of shares purchased during a given Offering
Period shall be determined as of the Offering Date for such Offering Period. The
limitation described in this Section 8.3 shall be applied in conformance with
applicable regulations under Section 423(b)(8) of the Code.


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9.   PURCHASE PRICE.
     --------------

     The Purchase Price at which each share of Stock may be acquired in an
Offering Period upon the exercise of all or any portion of a Purchase Right
shall be established by the Board; provided, however, that the Purchase Price
shall not be less than eighty-five percent (85%) of the lesser of (a) the Fair
Market Value of a share of Stock on the Offering Date of the Offering Period or
(b) the Fair Market Value of a share of Stock on the Purchase Date. Unless
otherwise provided by the Board prior to the commencement of an Offering Period,
the Purchase Price for that Offering Period shall be eighty-five percent (85%)
of the lesser of (a) the Fair Market Value of a share of Stock on the Offering
Date of the Offering Period, or (b) the Fair Market Value of a share of Stock on
the Purchase Date.

10.  ACCUMULATION OF PURCHASE PRICE THROUGH PAYROLL DEDUCTION.
     --------------------------------------------------------

     Shares of Stock acquired pursuant to the exercise of all or any portion of
a Purchase Right may be paid for only by means of payroll deductions from the
Participant's Compensation accumulated during the Offering Period for which such
Purchase Right was granted, subject to the following:

     10.1 AMOUNT OF PAYROLL DEDUCTIONS. Except as otherwise provided herein, the
amount to be deducted under the Plan from a Participant's Compensation on each
payday during an Offering Period shall be determined by the Participant's
Subscription Agreement. The Subscription Agreement shall set forth the
percentage of the Participant's Compensation to be deducted on each payday
during an Offering Period in whole percentages of not less than one percent (1%)
(except as a result of an election pursuant to Section 10.3 to stop payroll
deductions effective following the first payday during an Offering) or more than
fifteen percent (15%). Notwithstanding the foregoing, the Board may change the
foregoing limits on payroll deductions effective as of any future Offering Date.

     10.2 COMMENCEMENT OF PAYROLL DEDUCTIONS. Payroll deductions shall commence
on the first payday following the Offering Date and shall continue to the end of
the Offering Period unless sooner altered or terminated as provided herein.

     10.3 ELECTION TO CHANGE OR STOP PAYROLL DEDUCTIONS. During an Offering
Period, a Participant may elect to increase or decrease the rate of or to stop
deductions from his or her Compensation by delivering to the Company's
designated office an amended Subscription Agreement authorizing such change on
or before the "Change Notice Date." The "CHANGE NOTICE DATE" shall be a date
prior to the beginning of the first pay period for which such election is to be
effective as established by the Company from time to time and announced to the
Participants. A Participant who elects, effective following the first payday of
an Offering Period, to decrease the rate of his or her payroll deductions to
zero percent (0%) shall nevertheless remain a Participant in the current
Offering Period unless such Participant withdraws from the Plan as provided in
Section 12.1.


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     10.4 ADMINISTRATIVE SUSPENSION OF PAYROLL DEDUCTIONS. The Company may, in
its sole discretion, suspend a Participant's payroll deductions under the Plan
as the Company deems advisable to avoid accumulating payroll deductions in
excess of the amount that could reasonably be anticipated to purchase the
maximum number of shares of Stock permitted (a) under the Participant's Purchase
Right or (b) during a calendar year under the limit set forth in Section 8.3.
Payroll deductions shall be resumed at the rate specified in the Participant's
then effective Subscription Agreement at the beginning, respectively, of (a) the
next Offering Period or (b) the next Purchase Period the Purchase Date of which
falls in the following calendar year, unless the Participant has either
withdrawn from the Plan as provided in Section 12.1 or has ceased to be an
Eligible Employee.

     10.5 PARTICIPANT ACCOUNTS. Individual bookkeeping accounts shall be
maintained for each Participant. All payroll deductions from a Participant's
Compensation shall be credited to such Participant's Plan account and shall be
deposited with the general funds of the Company. All payroll deductions received
or held by the Company may be used by the Company for any corporate purpose.

     10.6 NO INTEREST PAID. Interest shall not be paid on sums deducted from a
Participant's Compensation pursuant to the Plan.

     10.7 VOLUNTARY WITHDRAWAL FROM PLAN ACCOUNT. A Participant may withdraw all
or any portion of the payroll deductions credited to his or her Plan account and
not previously applied toward the purchase of Stock by delivering to the
Company's designated office a written notice on a form provided by the Company
for such purpose. A Participant who withdraws the entire remaining balance
credited to his or her Plan account shall be deemed to have withdrawn from the
Plan in accordance with Section 12.1. Amounts withdrawn shall be returned to the
Participant as soon as practicable after the Company's receipt of the notice of
withdrawal and may not be applied to the purchase of shares in any Offering
under the Plan. The Company may from time to time establish or change
limitations on the frequency of withdrawals permitted under this Section,
establish a minimum dollar amount that must be retained in the Participant's
Plan account, or terminate the withdrawal right provided by this Section.

11.  PURCHASE OF SHARES.
     ------------------

     11.1 EXERCISE OF PURCHASE RIGHT. On each Purchase Date of an Offering
Period, each Participant who has not withdrawn from the Plan and whose
participation in the Offering has not otherwise terminated before such Purchase
Date shall automatically acquire pursuant to the exercise of the Participant's
Purchase Right the number of whole shares of Stock determined by dividing (a)
the total amount of the Participant's payroll deductions accumulated in the
Participant's Plan account during the Offering Period and not previously applied
toward the purchase of Stock by (b) the Purchase Price. However, in no event
shall the number of shares purchased by the Participant during an Offering
Period exceed the number of shares subject to the Participant's Purchase Right.
No shares of Stock shall be purchased on a Purchase Date on behalf of a
Participant whose participation in the Offering or the Plan has terminated
before such Purchase Date.


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     11.2 PRO RATA ALLOCATION OF SHARES. If the number of shares of Stock which
might be purchased by all Participants in the Plan on a Purchase Date exceeds
the number of shares of Stock available in the Plan as provided in Section 4.1,
the Company shall make a pro rata allocation of the remaining shares in as
uniform a manner as practicable and as the Company determines to be equitable.
Any fractional share resulting from such pro rata allocation to any Participant
shall be disregarded.

     11.3 DELIVERY OF CERTIFICATES. As soon as practicable after each Purchase
Date, the Company shall arrange the delivery to each Participant, as
appropriate, of a certificate representing the shares acquired by the
Participant on such Purchase Date; provided that the Company may deliver such
shares to a broker designated by the Company that will hold such shares for the
benefit of the Participant. Shares to be delivered to a Participant under the
Plan shall be registered in the name of the Participant, or, if requested by the
Participant, in the name of the Participant and his or her spouse, or, if
applicable, in the names of the heirs of the Participant.

     11.4 RETURN OF CASH BALANCE. Any cash balance remaining in a Participant's
Plan account following any Purchase Date shall be refunded to the Participant as
soon as practicable after such Purchase Date. However, if the cash balance to be
returned to a Participant pursuant to the preceding sentence is less than the
amount that would have been necessary to purchase an additional whole share of
Stock on such Purchase Date, the Company may retain the cash balance in the
Participant's Plan account to be applied toward the purchase of shares of Stock
in the subsequent Purchase Period or Offering Period, as the case may be.

     11.5 TAX WITHHOLDING. At the time a Participant's Purchase Right is
exercised, in whole or in part, or at the time a Participant disposes of some or
all of the shares of Stock he or she acquires under the Plan, the Participant
shall make adequate provision for the federal, state, local and foreign tax
withholding obligations, if any, of the Participating Company Group which arise
upon exercise of the Purchase Right or upon such disposition of shares,
respectively. The Participating Company Group may, but shall not be obligated
to, withhold from the Participant's compensation the amount necessary to meet
such withholding obligations.

     11.6 EXPIRATION OF PURCHASE RIGHT. Any portion of a Participant's Purchase
Right remaining unexercised after the end of the Offering Period to which the
Purchase Right relates shall expire immediately upon the end of the Offering
Period.

     11.7 PROVISION OF REPORTS AND STOCKHOLDER INFORMATION TO PARTICIPANTS. Each
Participant who has exercised all or part of his or her Purchase Right shall
receive, as soon as practicable after the Purchase Date, a report of such
Participant's Plan account setting forth the total payroll deductions
accumulated prior to such exercise, the number of shares of Stock purchased, the
Purchase Price for such shares, the date of purchase and the cash balance, if
any, remaining immediately after such purchase that is to be refunded or
retained in the Participant's Plan account pursuant to Section 11.4. The report
required by this Section may be delivered in such form and by such means,
including by electronic transmission, as the Company may


                                       11
<PAGE>


determine. In addition, each Participant shall be provided information
concerning the Company equivalent to that information provided generally to the
Company's common stockholders.

12.  WITHDRAWAL FROM OFFERING OR PLAN.
     --------------------------------

     12.1 VOLUNTARY WITHDRAWAL FROM THE PLAN. A Participant may withdraw from
the Plan by signing and delivering to the Company's designated office a written
notice of withdrawal on a form provided by the Company for such purpose. Such
withdrawal may be elected at any time prior to the end of an Offering Period;
provided, however, that if a Participant withdraws from the Plan after a
Purchase Date, the withdrawal shall not affect shares of Stock acquired by the
Participant on such Purchase Date. A Participant who voluntarily withdraws from
the Plan is prohibited from resuming participation in the Plan in the same
Offering from which he or she withdrew, but may participate in any subsequent
Offering by again satisfying the requirements of Sections 5 and 7.1. The Company
may impose, from time to time, a requirement that the notice of withdrawal from
the Plan be on file with the Company's designated office for a reasonable period
prior to the effectiveness of the Participant's withdrawal.

     12.2 AUTOMATIC WITHDRAWAL FROM AN OFFERING. If the Fair Market Value of a
share of Stock on the Offering Date of the Half-Year Offering Period commencing
immediately following the first Purchase Date of the concurrent Annual Offering
Period is less than the Fair Market Value of a share of Stock on the Offering
Date of such concurrent Annual Offering Period, then every Participant in such
concurrent Annual Offering Period automatically shall be (a) withdrawn from the
concurrent Annual Offering Period after the acquisition of shares of Stock on
the Purchase Date and (b) enrolled in the new Half-Year Offering Period
effective on its Offering Date. A Participant may elect not to be automatically
withdrawn from an Annual Offering Period pursuant to this Section 12.2 by
delivering to the Company's designated office not later than the close of
business on Offering Date of the new Half-Year Offering Period a written notice
indicating such election.

     12.3 RETURN OF PAYROLL DEDUCTIONS. Upon a Participant's voluntary
withdrawal from the Plan pursuant to Sections 12.1 or automatic withdrawal from
an Offering pursuant to Section 12.2, the Participant's accumulated payroll
deductions which have not been applied toward the purchase of shares of Stock
(except, in the case of an automatic withdrawal pursuant to Section 12.2, for an
amount necessary to purchase an additional whole share as provided in Section
11.4) shall be refunded to the Participant as soon as practicable after the
withdrawal, without the payment of any interest, and the Participant's interest
in the Plan or the Offering, as applicable, shall terminate. Such accumulated
payroll deductions to be refunded in accordance with this Section may not be
applied to any other Offering under the Plan.

13.  TERMINATION OF EMPLOYMENT OR ELIGIBILITY.
     ----------------------------------------

     Upon a Participant's ceasing, prior to a Purchase Date, to be an Employee
of the Participating Company Group for any reason, including retirement,
disability or death, or upon the failure of a Participant to remain an Eligible
Employee, the Participant's participation in the Plan shall terminate
immediately. In such event, the Participant's accumulated payroll deductions


                                       12
<PAGE>


which have not been applied toward the purchase of shares shall, as soon as
practicable, be returned to the Participant or, in the case of the Participant's
death, to the Participant's legal representative, and all of the Participant's
rights under the Plan shall terminate. Interest shall not be paid on sums
returned pursuant to this Section 13. A Participant whose participation has been
so terminated may again become eligible to participate in the Plan by satisfying
the requirements of Sections 5 and 7.1.

14.  CHANGE IN CONTROL.
     -----------------

     14.1 DEFINITIONS.

          (a) An "OWNERSHIP CHANGE EVENT" shall be deemed to have occurred if
     any of the following occurs with respect to the Company: (i) the direct or
     indirect sale or exchange in a single or series of related transactions by
     the stockholders of the Company of more than fifty percent (50%) of the
     voting stock of the Company; (ii) a merger or consolidation in which the
     Company is a party; (iii) the sale, exchange, or transfer of all or
     substantially all of the assets of the Company; or (iv) a liquidation or
     dissolution of the Company.

          (b) A "CHANGE IN CONTROL" shall mean an Ownership Change Event or a
     series of related Ownership Change Events (collectively, the "TRANSACTION")
     wherein the stockholders of the Company immediately before the Transaction
     do not retain immediately after the Transaction, in substantially the same
     proportions as their ownership of shares of the Company's voting stock
     immediately before the Transaction, direct or indirect beneficial ownership
     of more than fifty percent (50%) of the total combined voting power of the
     outstanding voting stock of the Company or the corporation or corporations
     to which the assets of the Company were transferred (the "TRANSFEREE
     CORPORATION(S)"), as the case may be. For purposes of the preceding
     sentence, indirect beneficial ownership shall include, without limitation,
     an interest resulting from ownership of the voting stock of one or more
     corporations which, as a result of the Transaction, own the Company or the
     Transferee Corporation(s), as the case may be, either directly or through
     one or more subsidiary corporations. The Board shall have the right to
     determine whether multiple sales or exchanges of the voting stock of the
     Company or multiple Ownership Change Events are related, and its
     determination shall be final, binding and conclusive.

     14.2 EFFECT OF CHANGE IN CONTROL ON PURCHASE RIGHTS. In the event of a
Change in Control, the surviving, continuing, successor, or purchasing
corporation or parent corporation thereof, as the case may be (the "ACQUIRING
CORPORATION"), may assume the Company's rights and obligations under the Plan.
If the Acquiring Corporation elects not to assume the Company's rights and
obligations under outstanding Purchase Rights, the Purchase Date of the then
current Purchase Period shall be accelerated to a date before the date of the
Change in Control specified by the Board, but the number of shares of Stock
subject to outstanding Purchase Rights shall not be adjusted. All Purchase
Rights which are neither assumed by the Acquiring Corporation in connection with
the Change in Control nor exercised as of the date of the Change in Control
shall terminate and cease to be outstanding effective as of the date of the
Change in Control.


                                       13
<PAGE>


15.  NONTRANSFERABILITY OF PURCHASE RIGHTS.
     -------------------------------------

     Neither payroll deductions credited to a Participant's Plan account nor a
Participant's Purchase Right may be assigned, transferred, pledged or otherwise
disposed of in any manner other than as provided by the Plan or by will or the
laws of descent and distribution. Any such attempted assignment, transfer,
pledge or other disposition shall be without effect, except that the Company may
treat such act as an election to withdraw from the Plan as provided in Section
12.1. A Purchase Right shall be exercisable during the lifetime of the
Participant only by the Participant.

16.  COMPLIANCE WITH SECURITIES LAW.
     ------------------------------

     The issuance of shares under the Plan shall be subject to compliance with
all applicable requirements of federal, state and foreign law with respect to
such securities. A Purchase Right may not be exercised if the issuance of shares
upon such exercise would constitute a violation of any applicable federal, state
or foreign securities laws or other law or regulations or the requirements of
any securities exchange or market system upon which the Stock may then be
listed. In addition, no Purchase Right may be exercised unless (a) a
registration statement under the Securities Act of 1933, as amended, shall at
the time of exercise of the Purchase Right be in effect with respect to the
shares issuable upon exercise of the Purchase Right, or (b) in the opinion of
legal counsel to the Company, the shares issuable upon exercise of the Purchase
Right may be issued in accordance with the terms of an applicable exemption from
the registration requirements of said Act. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company's legal counsel to be necessary to the lawful issuance and
sale of any shares under the Plan shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to the exercise of a
Purchase Right, the Company may require the Participant to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with
any applicable law or regulation, and to make any representation or warranty
with respect thereto as may be requested by the Company.

17.  RIGHTS AS A STOCKHOLDER AND EMPLOYEE.
     ------------------------------------

     A Participant shall have no rights as a stockholder by virtue of the
Participant's participation in the Plan until the date of the issuance of a
certificate for the shares purchased pursuant to the exercise of the
Participant's Purchase Right (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company). No
adjustment shall be made for dividends, distributions or other rights for which
the record date is prior to the date such certificate is issued, except as
provided in Section 4.2. Nothing herein shall confer upon a Participant any
right to continue in the employ of the Participating Company Group or interfere
in any way with any right of the Participating Company Group to terminate the
Participant's employment at any time.


                                       14
<PAGE>


18.  LEGENDS.
     -------

     The Company may at any time place legends or other identifying symbols
referencing any applicable federal, state or foreign securities law restrictions
or any provision convenient in the administration of the Plan on some or all of
the certificates representing shares of Stock issued under the Plan. The
Participant shall, at the request of the Company, promptly present to the
Company any and all certificates representing shares acquired pursuant to a
Purchase Right in the possession of the Participant in order to carry out the
provisions of this Section. Unless otherwise specified by the Company, legends
placed on such certificates may include but shall not be limited to the
following:

     "THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO
THE REGISTERED HOLDER UPON THE PURCHASE OF SHARES UNDER AN EMPLOYEE STOCK
PURCHASE PLAN AS DEFINED IN SECTION 423 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED. THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY SHALL NOTIFY THE
CORPORATION IMMEDIATELY OF ANY TRANSFER OF THE SHARES BY THE REGISTERED HOLDER
HEREOF. THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE PLAN IN
THE REGISTERED HOLDER'S NAME (AND NOT IN THE NAME OF ANY NOMINEE)."

19.  NOTIFICATION OF DISPOSITION OF SHARES.
     -------------------------------------

     The Company may require the Participant to give the Company prompt notice
of any disposition of shares acquired by exercise of a Purchase Right within two
years from the date of granting such Purchase Right or one year from the date of
exercise of such Purchase Right. The Company may require that until such time as
a Participant disposes of shares acquired upon exercise of a Purchase Right, the
Participant shall hold all such shares in the Participant's name (or, if elected
by the Participant, in the name of the Participant and his or her spouse but not
in the name of any nominee) until the lapse of the time periods with respect to
such Purchase Right referred to in the preceding sentence. The Company may
direct that the certificates evidencing shares acquired by exercise of a
Purchase Right refer to such requirement to give prompt notice of disposition.

20.  NOTICES.
     -------

     All notices or other communications by a Participant to the Company under
or in connection with the Plan shall be deemed to have been duly given when
received in the form specified by the Company at the location, or by the person,
designated by the Company for the receipt thereof.

21.  INDEMNIFICATION.
     ---------------

     In addition to such other rights of indemnification as they may have as
members of the Board or officers or employees of the Participating Company
Group, members of the Board


                                       15
<PAGE>


and any officers or employees of the Participating Company Group to whom
authority to act for the Board or the Company is delegated shall be indemnified
by the Company against all reasonable expenses, including attorneys' fees,
actually and necessarily incurred in connection with the defense of any action,
suit or proceeding, or in connection with any appeal therein, to which they or
any of them may be a party by reason of any action taken or failure to act under
or in connection with the Plan, or any right granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such person is liable for gross negligence, bad faith or
intentional misconduct in duties; provided, however, that within sixty (60) days
after the institution of such action, suit or proceeding, such person shall
offer to the Company, in writing, the opportunity at its own expense to handle
and defend the same.

22.  AMENDMENT OR TERMINATION OF THE PLAN.
     ------------------------------------

     The Board may at any time amend or terminate the Plan, except that (a) such
termination shall not affect Purchase Rights previously granted under the Plan,
except as permitted under the Plan, and (b) no amendment may adversely affect a
Purchase Right previously granted under the Plan (except to the extent permitted
by the Plan or as may be necessary to qualify the Plan as an employee stock
purchase plan pursuant to Section 423 of the Code or to obtain qualification or
registration of the shares of Stock under applicable federal, state or foreign
securities laws). In addition, an amendment to the Plan must be approved by the
stockholders of the Company within twelve (12) months of the adoption of such
amendment if such amendment would authorize the sale of more shares than are
authorized for issuance under the Plan or would change the definition of the
corporations that may be designated by the Board as Participating Companies.


                                       16
<PAGE>


                                  PLAN HISTORY
                                  ------------

March 22, 1999    Board adopts the Plan, with an initial reserve of 800,000
                  shares, to replace the Company's 1997 Employee Stock Purchase
                  Plan.

June 4, 1999      Stockholders approve Plan, with an initial reserve of 800,000
                  shares.

June 8, 2000      Board approves a 500,000 share increase in the Plan's reserve
                  (from 800,000 to 1,300,000 shares).

July 25, 2000     Stockholders approve 500,000 share reserve increase, bringing
                  the reserve to 1,300,000 shares).

March 31, 2002    Board approves a 900,000 share increase in the Plan's reserve
                  (from 1,300,000 to 2,200,000 shares).

May 16, 2002      Stockholders approve 900,000 share reserve increase, bringing
                  the Reserve to 2,200,000.