<PAGE>   1


                                                                    EXHIBIT 10.2


                          EMPLOYEE STOCK PURCHASE PLAN


SECTION 1. PURPOSE OF THE PLAN

        The purpose of the Plan is to provide Eligible Employees with an
opportunity to increase their proprietary interest in the success of the Company
by purchasing Stock from the Company on favorable terms and to pay for such
purchases through payroll deductions. The Plan is intended to qualify under
Section 423 of the Code.

SECTION 2. ADMINISTRATION OF THE PLAN.

        (a) Committee Composition. The Plan shall be administered by the
Committee.

        (b) Committee Responsibilities. The Committee shall interpret the Plan
and make all other policy decisions relating to the operation of the Plan. The
Committee may adopt such rules, guidelines and forms as it deems appropriate to
implement the Plan. The Committee's determinations under the Plan shall be final
and binding on all persons.

SECTION 3. ENROLLMENT AND PARTICIPATION.

(a) Offering Periods. While the Plan is in effect, two Offering Periods shall
commence in each calendar year. The Offering Periods shall consist of the
six-month periods commencing on each April 1 and October 1.

(b) Enrollment. Any individual who, on the day preceding the first day of an
Offering Period, qualifies as an Eligible Employee may elect to become a
Participant in the Plan for such Offering Period by executing the enrollment
form prescribed for this purpose by the Committee. The enrollment form shall be
filed with the Company at the prescribed location not later than three (3) days
prior to the commencement of such Offering Period.

(c) Duration of Participation. Once enrolled in the Plan, a Participant shall
continue to participate in the Plan until he or she ceases to be an Eligible
Employee, withdraws from the Plan under Section 5(a) or reaches the end of the
Offering Period in which his or her employee contributions were discontinued
under Section 4(d) or 8(b). A Participant who discontinued employee
contributions under Section 4(d) or withdrew from the Plan under Section 5(a)
may again become a Participant, if he or she then is an Eligible Employee, by
following the procedure described in Subsection (b) above. A Participant whose
employee contributions were discontinued automatically under Section 8(b) shall
automatically resume participation at the beginning of the earliest Offering
Period ending in the next calendar year, if he or she then is an Eligible
Employee.

SECTION 4. EMPLOYEE CONTRIBUTIONS.

(a) Frequency of Payroll Deductions. A Participant may purchase shares of Stock
under the Plan solely by means of payroll deductions. Payroll deductions, as
designated by the Participant pursuant to Subsection (b) below, shall occur on
each payday during participation in the Plan.

(b) Amount of Payroll Deductions. An Eligible Employee shall designate on the
enrollment form the portion of his or her Compensation that he or she elects to
have withheld for the purchase of Stock. Such portion shall be a whole
percentage of the Eligible Employee's Compensation, but not less than one
percent (1%) nor more than ten percent (10%).

(c) Changing Withholding Rate. If a Participant wishes to change the rate of
payroll withholding, he or she may do so by filing a new enrollment form with
the Company at the prescribed location at any time. The new withholding rate
shall be


<PAGE>   2

effective as soon as reasonably practicable after such form has been received by
the Company.

(d) Discontinuing Payroll Deductions. If a Participant wishes to discontinue
employee contributions entirely, he or she may do so by filing a new enrollment
form with the Company at the prescribed location at any time. Payroll
withholding shall cease as soon as reasonably practicable after such form has
been received by the Company. (In addition, employee contributions may be
discontinued automatically pursuant to Section 8(b).) A Participant who has
discontinued employee contributions may resume such contributions by filing a
new enrollment form with the Company at the prescribed location. Payroll
withholding shall resume as soon as reasonably practicable after such form has
been received by the Company.

(e) Limit on Number of Elections. No Participant shall make more than four (4)
elections under Subsection (c) or (d) above during any Offering Period.

SECTION 5. WITHDRAWAL FROM THE PLAN.

(a) Withdrawal. A Participant may elect to withdraw from the Plan by filing the
prescribed form with the Company at the prescribed location at any time before
the last day of an Offering Period. As soon as reasonably practicable
thereafter, payroll deductions shall cease and the entire amount credited to the
Participant's Plan Account shall be refunded to him or her in cash, without
interest. No partial withdrawals shall be permitted.

(b) Re-enrollment After Withdrawal. A former Participant who has withdrawn from
the Plan shall not be a Participant until he or she re-enrolls in the Plan under
Section 3(c). Re-enrollment may be effective only at the commencement of an
Offering Period.

SECTION 6. CHANGE IN EMPLOYMENT STATUS.

(a) Termination of Employment. Termination of employment as an Eligible Employee
for any reason, including death, shall be treated as an automatic withdrawal
from the Plan under Section 5(a). (A transfer from one Participating Company to
another shall not be treated as a termination of employment.)

(b) Leave of Absence. For purposes of the Plan, employment shall not be deemed
to terminate when the Participant goes on a military leave, a sick leave or
another bona fide leave of absence, if the leave was approved by the Company in
writing. Employment, however, shall be deemed to terminate 90 days after the
Participant goes on a leave, unless a contract or statute guarantees his or her
right to return to work. Employment shall be deemed to terminate in any event
when the approved leave ends, unless the Participant immediately returns to
work.

(c) Death. In the event of the Participant's death, the amount credited to his
or her Plan Account shall be paid to a beneficiary designated by him or her for
this purpose on the prescribed form or, if none, to the Participant's estate.
Such form shall be valid only if it was filed with the Company at the prescribed
location before the Participant's death.

SECTION 7. PLAN ACCOUNTS AND PURCHASE OF SHARES.

(a) Plan Accounts. The Company shall maintain a Plan Account on its books in the
name of each Participant. Whenever an amount is deducted from the Participant's
Compensation under the Plan, such amount shall be credited to the Participant's
Plan Account. Amounts credited to Plan Accounts shall not be trust funds and may
be commingled with the Company's general assets and applied to general corporate
purposes. No interest shall be credited to Plan Accounts.

(b) Purchase Price. The Purchase Price for each share of Stock purchased at the
close of an Offering Period shall be the lower of:

(i) 85% of the Fair Market Value of such share on the last trading day in such
Offering Period; or


<PAGE>   3

(ii) 85% of the Fair Market Value of such share on the last trading day before
the commencement of such Offering Period.

(c) Number of Shares Purchased. As of the last day of each Offering Period, each
Participant shall be deemed to have elected to purchase the number of shares of
Stock calculated in accordance with this Subsection (c), unless the Participant
has previously elected to withdraw from the Plan in accordance with Section
5(a). The amount then in the Participant's Plan Account shall be divided by the
Purchase Price, and the number of shares that results shall be purchased from
the Company with the funds in the Participant's Plan Account. The foregoing
notwithstanding, no Participant shall purchase more than one thousand (1,000)
shares of Stock with respect to any Offering Period nor more than the amounts of
Stock set forth in Sections 8(b) and 13(a). Any fractional share, as calculated
under this Subsection (c), shall be rounded down to the next lower whole share.

(d) Available Shares Insufficient. In the event that the aggregate number of
shares that all Participants elect to purchase during an Offering Period exceeds
the maximum number of shares remaining available for issuance under Section
13(a), then the number of shares to which each Participant is entitled shall be
determined by multiplying the number of shares available for issuance by a
fraction, the numerator of which is the number of shares that such Participant
has elected to purchase and the denominator of which is the number of shares
that all Participants have elected to purchase.

(e) Issuance of Stock. Certificates representing the shares of Stock purchased
by a Participant under the Plan shall be issued to him or her as soon as
reasonably practicable after the close of the applicable Offering Period, except
that the Committee may determine that such shares shall be held for each
Participant's benefit by a broker designated by the Committee (unless the
Participant has elected that certificates be issued to him or her). Shares may
be registered in the name of the Participant or jointly in the name of the
Participant and his or her spouse as joint tenants with right of survivorship or
as community property.

(f) Unused Cash Balances. Any amount remaining in the Participant's Plan Account
that represents the Purchase Price for a fractional share shall be carried over
in the Participant's Plan Account to the next Offering Period. Any amount
remaining in the Participant's Plan Account that represents the Purchase Price
for whole shares that could not be purchased by reason of Subsection (c) above,
Section 8(b) or Section 13(a) shall be refunded to the Participant in cash,
without interest.

(g) Shareholder Approval. Any other provision of the Plan notwithstanding, no
shares of Stock shall be purchased under the Plan unless and until the Company's
shareholders have approved the adoption of the Plan.

SECTION 8. LIMITATIONS ON STOCK OWNERSHIP.

(a) Five Percent Limit. Any other provision of the Plan notwithstanding, no
Participant shall be granted a right to purchase Stock under the Plan if such
Participant, immediately after his or her election to purchase such Stock, would
own stock possessing more than 5% of the total combined voting power or value of
all classes of stock of the Company or any parent or Subsidiary of the Company.
For purposes of this Subsection (a), the following rules shall apply:

(i) Ownership of stock shall be determined after applying the attribution rules
of Section 424(d) of the Code;

(ii) Each Participant shall be deemed to own any stock that he or she has a
right or option to purchase under this or any other plan; and

(iii) Each Participant shall be deemed to have the right to purchase one
thousand (1,000) shares of Stock under this Plan with respect to each Offering
Period.

(b) Dollar Limit. Any other provision of the Plan notwithstanding, no
Participant shall purchase Stock with a Fair Market Value in excess of the
following limit:


<PAGE>   4

        (i) In the case of Stock purchased during an Offering Period that
commenced in the current calendar year, the limit shall be equal to (A) $25,000
minus (B) the Fair Market Value of the Stock that the Participant previously
purchased in the current calendar year under this Plan.

(ii) In the case of Stock purchased during an Offering Period that commenced in
the immediately preceding calendar year, the limit shall be equal to (A) $50,000
minus (B) the Fair Market Value of the Stock that the Participant previously
purchased under this Plan in the current calendar year and in the immediately
preceding calendar year.

For purposes of this Subsection (b), the Fair Market Value of Stock shall be
determined in each case as of the beginning of the Offering Period in which such
Stock is purchased. If a Participant is precluded by this Subsection (b) from
purchasing additional Stock under the Plan, then his or her employee
contributions shall automatically be discontinued and shall resume at the
beginning of the earliest Offering Period ending in the next calendar year (if
he or she then is an Eligible Employee).

SECTION 9. RIGHTS NOT TRANSFERABLE.

The rights of any Participant under the Plan, or any Participant's interest in
any Stock or moneys to which he or she may be entitled under the Plan, shall not
be transferable by voluntary or involuntary assignment or by operation of law,
or in any other manner other than by beneficiary designation or the laws of
descent and distribution. If a Participant in any manner attempts to transfer,
assign or otherwise encumber his or her rights or interest under the Plan, other
than by beneficiary designation or the laws of descent and distribution, then
such act shall be treated as an election by the Participant to withdraw from the
Plan under Section 5(a).

SECTION 10. NO RIGHTS AS AN EMPLOYEE.

Nothing in the Plan or in any right granted under the Plan shall confer upon the
Participant any right to continue in the employ of a Participating Company for
any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Participating Companies or of the Participant, which
rights are hereby expressly reserved by each, to terminate his or her employment
at any time and for any reason, with or without cause.

SECTION 11. NO RIGHTS AS A SHAREHOLDER.

A Participant shall have no rights as a shareholder with respect to any shares
of Stock that he or she may have a right to purchase under the Plan until such
shares have been purchased on the last day of the applicable Offering Period.

SECTION 12. SECURITIES LAW REQUIREMENTS.

Shares of Stock shall not be issued under the Plan unless the issuance and
delivery of such shares comply with (or are exempt from) all applicable
requirements of law, including (without limitation) the Securities Act of 1933,
as amended, the rules and regulations promulgated thereunder, state securities
laws and regulations, and the regulations of any stock exchange or other
securities market on which the Company's securities may then be traded.

SECTION 13. STOCK OFFERED UNDER THE PLAN.

(a) Authorized Shares. The aggregate number of shares of Stock available for
purchase under the Plan shall be seven hundred and fifty thousand (750,000)
subject to adjustment pursuant to this Section 13.

(b) Antidilution Adjustments. The aggregate number of shares of Stock offered
under the Plan, the one thousand (1,000) share limitation described in Section
7(c) and the price of shares that any Participant has elected to purchase shall
be adjusted proportionately by the Committee for any increase or decrease in the
number of outstanding shares of Stock resulting from a subdivision or
consolidation of shares or the payment of a stock dividend, any other increase
or decrease in such


<PAGE>   5

shares effected without receipt or payment of consideration by the Company, the
distribution of the shares of a Subsidiary to the Company's shareholders or a
similar event.

        (c) Reorganizations. Any other provision of the Plan notwithstanding,
immediately prior to the effective time of a Corporate Reorganization, the
Offering Period then in progress shall terminate and shares shall be purchased
pursuant to Section 7, unless the Plan is assumed by the surviving corporation
or its parent corporation pursuant to the plan of merger or consolidation. The
Plan shall in no event be construed to restrict in any way the Company's right
to undertake a dissolution, liquidation, merger, consolidation or other
reorganization.

SECTION 14. AMENDMENT OR DISCONTINUANCE.

The Board shall have the right to amend, suspend or terminate the Plan at any
time and without notice. Except as provided in Section 13, any increase in the
aggregate number of shares of Stock to be issued under the Plan shall be subject
to approval by a vote of the shareholders of the Company. In addition, any other
amendment of the Plan shall be subject to approval by a vote of the shareholders
of the Company to the extent required by an applicable law or regulation.

SECTION 15. DEFINITIONS.

(a) "Board" means the Board of Directors of the Company, as constituted from
time to time.

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

(c) "Committee" means the Compensation Committee of the Board.

(d) "Company" means N2H2, Inc., a Washington corporation.

(e) "Compensation" means (i) the total compensation paid in cash to a
Participant by a Participating Company, including salaries, wages, bonuses,
incentive compensation, commissions, overtime pay and shift premiums, plus (ii)
any pre-tax contributions made by the Participant under Section 401(k) or 125 of
the Code. "Compensation" shall exclude all non-cash items, moving or relocation
allowances, cost-of-living equalization payments, car allowances, tuition
reimbursements, imputed income attributable to cars or life insurance, severance
pay, fringe benefits, contributions or benefits received under employee benefit
plans, income attributable to the exercise of stock options, and similar items.
The Committee shall determine whether a particular item is included in
Compensation.

(f) "Corporate Reorganization" means:

(i) The consummation of a merger or consolidation of the Company with or into
another entity, or any other corporate reorganization; or

(ii) The sale, transfer or other disposition of all or substantially all of the
Company's assets or the complete liquidation or dissolution of the Company.

(g) "Eligible Employee" means any employee of a Participating Company whose
customary employment is for more than five months per calendar year and for more
than 20 hours per week.

        The foregoing notwithstanding, an individual shall not be considered an
Eligible Employee if his or her participation in the Plan is prohibited by the
law of any country which has jurisdiction over him or her or if he or she is
subject to a collective bargaining agreement that does not provide for
participation in the Plan.

        (h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

        (i) "Fair Market Value" means the market price of Stock, determined by
the Committee as follows:


<PAGE>   6

               (i) If Stock was traded on The Nasdaq National Market on the date
in question, then the Fair Market Value shall be equal to the last sale price
quoted for such date by The Nasdaq National Market;

               (ii) If Stock was traded on a stock exchange on the date in
question, then the Fair Market Value shall be equal to the closing price
reported by the applicable composite transactions report for such date; or

               (iii) If none of the foregoing provisions is applicable, then the
Fair Market Value shall be determined by the Committee in good faith on such
basis as it deems appropriate.

        Whenever possible, the determination of Fair Market Value by the
Committee shall be based on the prices reported in the Wall Street Journal or as
reported directly to the Company by Nasdaq or a stock exchange. Such
determination shall be conclusive and binding on all persons.

        (j) "Offering Period" means a six-month period with respect to which the
right to purchase Stock may be granted under the Plan, as determined pursuant to
Section 3(a).

        (k) "Participant" means an Eligible Employee who elects to participate
in the Plan, as provided in Section 3(b).

        (l) "Participating Company" means (i) the Company and (ii) each present
or future Subsidiary designated by the Committee as a Participating Company.

        (m) "Plan" means this N2H2, Inc. Employee Stock Purchase Plan, as it may
be amended from time to time.

        (n) "Plan Account" means the account established for each Participant
pursuant to Section 7(a).

        (o) "Purchase Price" means the price at which Participants may purchase
Stock under the Plan, as determined pursuant to Section 7(b).

        (p) "Stock" means the Common Stock of the Company, no par value per
share.

        (q) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the 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.