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                                                                     EXHIBIT 4.2

                      AMERICAN BANK NOTE HOLOGRAPHICS, INC.

                            2000 STOCK INCENTIVE PLAN

                     (AS AMENDED EFFECTIVE AUGUST 10, 2001)

1. Purpose. The purpose of the 2000 Stock Incentive Plan is to establish a
flexible vehicle through which the Company can offer Options to purchase shares
of Common Stock, including Incentive Stock Options and Non-Qualified Stock
Options, to members of the Board, to officers and other employees of the Company
and its Affiliates and to consultants and other independent contractors of the
Company and its Affiliates with a view toward promoting the long-term financial
success of the Company and enhancing stockholder value.

2. Definitions. For purposes of the Plan, the following terms shall have the
following meanings:

         (a) "AFFILIATE" shall mean an affiliate within the meaning of Rule
         12b-2 under the Exchange Act.

         (b) "BOARD" shall mean the Board of Directors of the Company.

         (c) "CAUSE" shall, except as otherwise determined by the Committee at
         the time of grant, have the following meaning: (i) in the case where
         there is no employment or consulting agreement between the participant
         and the Company or its Affiliates at the time of grant or where such an
         agreement exists but does not define "cause" (or words of like import),
         the participant's dishonesty, fraud, insubordination, willful
         misconduct, refusal to perform services, unsatisfactory performance of
         services or material breach of any written agreement between the
         participant and the Company or its Affiliates which breach is not cured
         within fifteen (15) days after written notice thereof, or (ii) in the
         case where there is an employment or consulting agreement between the
         participant and the Company or its Affiliates at the time of grant
         which defines "cause" (or words of like import), the meaning ascribed
         to such term (or words of like import) under such agreement.

         (d) "CHANGE IN CONTROL" shall mean: (i) a consolidation or merger in
         which the Company is not the surviving corporation or which results in
         the acquisition of all or substantially all of the Company's
         outstanding shares of Common Stock by a single person or entity or by a
         group of persons and/or entities acting in concert, (ii) the sale or
         other disposition of all or substantially all of the Company's assets
         or (iii) the approval by the stockholders of the Company of a plan of
         complete liquidation or dissolution of the Company.

         (e) "CODE" shall mean the Internal Revenue Code of 1986, as amended.

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         (f) "COMMITTEE" shall mean the committee appointed by the Board to
         administer the Plan pursuant to Section 3 or, if no such committee is
         appointed the Board.

         (g) "COMMON STOCK" shall mean the Company's common stock, par value
         $0.01.

         (h) "COMPANY" shall mean American Bank Note Holographics, Inc., a
         Delaware corporation, and any successor thereto.

         (i) "DISABILITY" shall mean, except as otherwise determined by the
         Committee at the time of grant, "permanent and total" disability within
         the meaning of Section 22(e)(3) of the Code.

         (j) "EFFECTIVE DATE" shall mean the date on which the Plan was adopted
         by the Board, subject to the approval of the Company's stockholders
         within twelve (12) months of such date.

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

         (l) "FAIR MARKET VALUE" shall mean, as of any date, the closing sale
         price per share of Common Stock as published by the principal national
         securities exchange on which the Common Stock is traded on such date
         or, if there is no sale of Common Stock on such date, the average of
         the bid and asked prices on such exchange at the close of trading on
         such date, or if shares of the Common Stock are not listed on a
         national securities exchange on such date, the last reported trading
         price or, if none, the average of the bid and asked prices in the
         over-the-counter market at the close of trading on such date, or if the
         Common Stock is not traded on a national securities exchange or the
         over-the-counter market, the value of a share of the Common Stock on
         such date as determined in good-faith by the Committee.

         (m) "INCENTIVE STOCK OPTION" or "ISO" shall mean an Option that is
         intended to be an "incentive stock option" within the meaning of
         Section 422 of the Code.

         (n) "NON-EMPLOYEE DIRECTOR" shall mean any member of the Board who is
         not employed by the Company or any Parent or Subsidiary.

         (o) "NON-QUALIFIED STOCK OPTION" or "NQSO" shall mean an Option that is
         not an Incentive Stock Option.

         (p) "OPTION" shall mean an Incentive Stock Option or a Non-Qualified
         Stock Option granted pursuant to the Plan.

         (q) "PARENT" shall mean any "parent corporation" of the Company within
         the meaning of Section 424(e) of the Code.

         (r) "PLAN" shall mean this American Bank Note Holographics, Inc. 2000
         Stock Incentive Plan, as amended from time to time.


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         (s) "RETIREMENT" shall mean with respect to a participant's termination
         of employment or other service with the Company and its Affiliates, a
         termination of employment or other service with the Company and its
         Affiliates (at a time when Cause does not exist) by a participant who
         has attained: (i) at least age sixty-five (65), or (ii) such earlier
         age after age fifty-five (55) as approved by the Committee, in its sole
         discretion.

         (t) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

         (u) "SUBSIDIARY" shall mean any "subsidiary corporation" of the Company
         within the meaning of Section 424(f) of the Code.

         (v) "TEN PERCENT STOCKHOLDER" shall mean a person owning, at the time
         of grant, stock possessing more than ten percent (10%) of the total
         combined voting power of all classes of stock of the Company or any
         Parent or Subsidiary.

3.       Administration.

         (a) Committee. The Plan shall be administered by a committee appointed
         by the Board or, if no such committee is appointed, the Board.
         Notwithstanding the foregoing, the Plan shall be administered solely by
         the Board with respect to awards made to Non-Employee Directors.

         (b) Authority of Committee. Subject to the limitations of the Plan, the
         Committee, acting in its sole and absolute discretion, shall have full
         power and authority to: (i) select the persons to whom awards shall be
         granted under the Plan, (ii) grant Options to such persons and
         prescribe the terms and conditions of such awards (including, but not
         limited to, the exercise or purchase price (if any), and any vesting or
         forfeiture conditions applicable thereto), (iii) interpret and apply
         the provisions of the Plan and of any agreement or other document
         evidencing an Option granted under the Plan, (iv) carry out any
         responsibility or duty specifically reserved to the Committee under the
         Plan, and (v) make any and all determinations and interpretations and
         take such other actions as may be necessary or desirable in order to
         carry out the provisions, intent and purposes of the Plan. A majority
         of the members of the Committee shall constitute a quorum. The
         Committee may act by the vote of a majority of its members present at a
         meeting at which there is a quorum or by unanimous written consent. The
         determinations of the Committee, including with regard to questions of
         construction, interpretation and administration, shall be final,
         binding and conclusive on all persons.

         (c) Indemnification. The Company shall indemnify and hold harmless each
         member of the Committee and the Board and any employee of the Company
         or its Affiliates who provides assistance with the administration of
         the Plan from and against any loss, cost, liability (including any sum
         paid in settlement of a claim with the approval of the Board), damage
         and expense (including the advancement of reasonable legal and other
         expenses incident thereto) arising out of or incurred in connection
         with the Plan, unless and except to the extent attributable to such
         person's fraud or willful misconduct.


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4. Eligibility. Options may be granted under the Plan to any member of the Board
(whether or not an employee of the Company or its Affiliates), to any officer or
other employee of the Company or its Affiliates (including prospective officers
and employees) and to any consultant or other independent contractor who
performs or will perform services for the Company or its Affiliates.
Notwithstanding the foregoing, Incentive Stock Options may only be granted to
persons who are employed by the Company or any Subsidiary or Parent at the time
of grant. In addition, Non-Employee Directors shall receive automatic grants of
Non-Qualified Stock Options under the Plan.

5. Available Shares. Subject to adjustment as provided in Section 10, the
maximum number of shares of Common Stock that may be issued under the Plan shall
not exceed 1,350,000 shares and the maximum number of shares of Common Stock
with respect to which Options may be granted under the Plan to any employee
during any calendar year shall be 400,000 shares. In determining the number of
shares that remain available for issuance under the Plan at any time, the
following shares shall be deemed available: (a) shares underlying any Option
that terminates, expires or is canceled, and (b) shares that are withheld in
order to satisfy the minimum tax withholding obligations associated with
Options. Shares of Common Stock available for issuance under the Plan may be
either authorized and unissued or held by the Company in its treasury. No
fractional shares of Common Stock may be issued under the Plan.

6.       Discretionary Stock Options.

         (a) Type of Options. Subject to the provisions hereof, the Committee
         may grant ISOs and NQSOs to eligible personnel upon such terms and
         conditions as the Committee deems appropriate, provided that the
         Committee may only grant ISOs to employees of the Company or any
         Subsidiary or Parent.

         (b) Option Term. Unless sooner terminated, all Options granted pursuant
         to this Section 6 shall expire not more than ten (10) years after the
         date the Option is granted (or, in the case of an ISO granted to a Ten
         Percent Stockholder, not more than five (5) years).

         (c) Exercise Price. The exercise price per share of Common Stock
         covered by an Option granted pursuant to this Section 6 shall be
         determined by the Committee at the time the Option is granted, provided
         that: the exercise price per share of Common Stock covered by an Option
         may not be less than the Fair Market Value of the Common Stock at the
         time of grant (or, in the case of an ISO granted to a Ten Percent
         Stockholder, one hundred ten percent (110%) of the Fair Market Value of
         the Common Stock at the time of grant).

         (d) Vesting Conditions. The Committee may establish such vesting
         conditions and other restrictions on the exercise of an Option and/or
         upon the disposition of the shares of Common Stock acquired upon the
         exercise of an Option as it deems appropriate. If the Committee
         provides, in its discretion, that an Option is exercisable upon the
         attainment of certain vesting conditions, the Committee may waive or
         accelerate such conditions on exercisability at any time, in whole or
         in part.


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         (e) Exercise of Options. An Option may be exercised by transmitting to
         the Company: (i) a notice specifying the number of shares to be
         purchased, and (ii) payment of the exercise price, together with the
         amount, if any, deemed necessary by the Committee to enable the Company
         to satisfy its minimum federal, state, foreign or other tax withholding
         obligations with respect to such exercise (unless other arrangements
         acceptable to the Committee are made with respect to the satisfaction
         of such withholding obligations). The Committee may establish such
         rules and procedures as it deems appropriate for the exercise of
         Options. The exercise price of shares of Common Stock acquired pursuant
         to the exercise of an Option may be paid in cash, certified or bank
         check and/or such other form of payment as may be permitted by the
         Committee from time to time, including, without limitation, shares of
         Common Stock which have been owned by the holder for at least six (6)
         months (free and clear of any liens and encumbrances).

         (f) Rights as a Stockholder. No shares of Common Stock shall be issued
         in respect of the exercise of an Option until full payment therefor has
         been made, and the applicable income tax withholding obligation has
         been satisfied or provided for. The holder of an Option shall have no
         rights as a stockholder with respect to any shares covered by the
         Option until the date a stock certificate for such shares is issued to
         the holder. Except as otherwise provided herein, no adjustments shall
         be made for dividend distributions or other rights for which the record
         date is prior to the date such stock certificate is issued.

7.       Automatic Grants of Stock Options to Non-Employee Directors.

         (a) Automatic Grants. Without further action by the Board or the
         Company's stockholders, each individual who is appointed or elected to
         the Board as a Non-Employee Director on or after the Effective Date
         shall be granted an Option to purchase 25,000 shares of Common Stock on
         the first trading day following the date he or she commences service as
         a Non-Employee Director.

         (b) Exercise Price. The exercise price per share covered by an Option
         granted pursuant to this Section 7 shall be equal to the Fair Market
         Value of the Common Stock on the date of grant.

         (c) Vesting Conditions. Each Option granted pursuant to this Section 7
         shall become exercisable, in cumulative increments, with respect to
         twenty (20%) percent of the shares initially covered thereby on each of
         the first five anniversaries of the date of grant, provided that the
         optionee remains in continuous service as a director of the Company
         through each applicable vesting date. Notwithstanding the foregoing or
         anything herein to the contrary, if a participant's service as a
         director of the Company is involuntarily terminated in connection with,
         or in anticipation of, a Change in Control, each Option granted
         pursuant to this Section 7 shall immediately become fully exercisable.

         (d) Effect of Termination of Service. If a director's service on the
         Board is terminated due to his or her death or Disability, then: (i)
         any portion of an Option granted pursuant to this Section 7 that is not
         exercisable on the date of termination shall immediately terminate, and
         (ii) any portion of an Option granted pursuant to this Section


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         7 that is exercisable on the date of termination shall remain
         exercisable by the optionee (or his or her representative or
         beneficiary) during the one year period following the date of
         termination or, if sooner, until the expiration of the stated term
         thereof, and, to the extent not exercised during such period, shall
         thereupon terminate. If a director's service on the Board terminates
         for any reason other than death or Disability, then: (1) any portion of
         an Option granted pursuant to this Section 7 that is not exercisable on
         the date of termination shall immediately terminate, and (2) any
         portion of an Option granted pursuant to this Section 7 that is
         exercisable on the date of termination shall remain exercisable during
         the ninety (90) day period following the date of termination or, if
         sooner, until the expiration of the stated term thereof and, to the
         extent not exercised during such period, shall thereupon terminate.

         (e) Transferability. All or a portion of any Option granted pursuant to
         this Section 7 may be transferred to: (i) the optionee's "family
         members" (as defined in General Instruction A to Form S-8 under the
         Securities Act)("Family Members"); (ii) a trust in which the Family
         Members have more than fifty percent (50%) of the beneficial interest;
         (iii) a foundation in which the Family Members and/or the optionee
         control the management of assets; or (iv) any other entity in which the
         Family Members and/or the optionee own more than fifty percent (50%) of
         the voting interests.

         (f) Transactions. The provisions of Section 10 (as modified by this
         Section 7) shall apply to outstanding Options granted pursuant to this
         Section 7.

         (g) Expiration. Except as otherwise provided herein, if not previously
         exercised, each Option granted pursuant to this Section 7 shall expire
         on the tenth anniversary of the date of grant.

8. Non-Transferability. No Options shall be transferable by a participant other
than upon the participant's death to a beneficiary designated by the
participant, or, if no designated beneficiary shall survive the participant,
pursuant to the participant's will or by the laws of descent and distribution.
All Options shall be exercisable during a participant's lifetime only by the
participant. Any attempt to transfer any Option shall be void, and no such
Option shall in any manner be liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person who shall be entitled to such
Option, nor shall it be subject to attachment or legal process for or against
such person. Notwithstanding the foregoing pursuant to this Section 8, the
Committee may determine at the time of grant or thereafter that a NQSO granted
pursuant to Section 6 is transferable by an optionee in whole or part to such
persons, under such circumstances, and subject to such conditions as the
Committee may prescribe from time to time.

9. Effect of Termination of Employment or Service. Except as otherwise provided
herein or determined by the Committee at grant or, if no rights of the
participant are thereby reduced, thereafter, and subject to earlier termination
in accordance with the provisions hereof, the following rules shall apply with
regard to Options (other than Options granted pursuant to Section 7 above) held
by a participant at the time of his or her termination of employment or service
with the Company and its Affiliates:


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         (a) Termination due to Death, Retirement or Disability. Except as
         provided in Section 9(b) below, if a participant's employment or
         service terminates due to his or her death, Retirement or Disability,
         then: (i) any Option held by the participant that is not exercisable on
         the date of termination shall immediately terminate, and (ii) any
         Option that is exercisable on the date of termination shall remain
         exercisable, to the extent exercisable on the date of termination, by
         the participant (or the participant's designated beneficiary or
         representative) during the one year period following the date of
         termination or, if sooner, until the expiration of the stated term
         thereof, and, to the extent not exercised during such period, shall
         thereupon terminate.

         (b) Termination for Cause or at a Time when Cause Exists. If a
         participant's employment or service is terminated by the Company or an
         Affiliate for Cause or if, at the time of his or her termination,
         grounds for a termination for Cause exist, then any Option held by the
         participant (whether or not then exercisable) shall immediately
         terminate and cease to be exercisable.

         (c) Other Termination. Except as provided in Section 9(a) or Section
         9(b) above, if a participant's employment or service terminates for any
         reason or no reason, then: (i) any Option held by the participant that
         is not exercisable on the date of termination shall immediately
         terminate, and (ii) any Option that is exercisable on the date of
         termination shall remain exercisable, to the extent exercisable on the
         date of termination, by the participant during the ninety (90) day
         period following the date of termination or, if sooner, until the
         expiration of the stated term thereof, and, to the extent not exercised
         during such period, shall thereupon terminate.

10.      Capital Changes; Transactions.

         (a) Adjustments upon Changes in Capitalization. If any change is made
         to the Common Stock by reason of any stock split, reverse stock split,
         stock dividend, recapitalization, combination of shares, exchange of
         shares or other change affecting the outstanding Common Stock as a
         class without the Company's receipt of consideration, appropriate
         adjustments shall be made to: (i) the maximum number and/or class of
         securities available for issuance under the Plan, (ii) the maximum
         number and/or class of securities with respect to which any employee
         may be granted Options under the Plan for any calendar year, (iii) the
         number and/or class of securities and the exercise price per share in
         effect under each outstanding Option (including, without limitation,
         outstanding Options granted to Non-Employee Directors pursuant to
         Section 7). Such adjustments to the outstanding Options are to be
         effected in a manner which shall preclude the substantial enlargement
         or dilution of rights and benefits under outstanding Options.

         (b) Change in Control. Each Option outstanding at the time of a Change
         in Control that is not otherwise fully exercisable shall automatically
         accelerate so that each such Option shall, at least fifteen (15) days
         prior to the Change in Control, become fully exercisable (and the Board
         shall notify each participant of such acceleration at least fifteen
         (15) days prior to the Change in Control), provided that no
         acceleration of exercisability shall occur with respect to an
         outstanding Option if and to the extent such Option is, in connection
         with the Change in Control, to be assumed or otherwise


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         continued in full force or effect by the successor entity (or parent
         thereof) pursuant to the terms of the Change in Control transaction.
         Upon the consummation of the Change in Control, all outstanding Options
         shall terminate and cease to be outstanding, except to the extent
         assumed by the successor entity (or parent thereof) or otherwise
         expressly continued in full force and effect pursuant to the terms of
         the Change in Control transaction. Each Option which is assumed (or is
         otherwise to continue in effect) in connection with a Change in Control
         shall be appropriately adjusted, immediately after such Change in
         Control, to apply to the number and class of securities which would
         have been issuable to the participant upon consummation of such Change
         in Control had the Option been exercised immediately prior to such
         Change in Control, provided the aggregate exercise price of an Option
         payable for such securities shall remain the same.

         (c) Fractional Shares. In the event of any adjustment in the number of
         shares covered by an Option, any fractional shares resulting from such
         adjustment will be disregarded, and each such Option will cover only
         the number of full shares resulting from the adjustment.

         (d) Determination of Board to be Final. All adjustments under this
         Section 10 shall be made by the Board, and its determination as to what
         adjustments shall be made, and the extent thereof, shall be final,
         binding and conclusive.

11. Tax Withholding. As a condition to the exercise of any award or the delivery
of any shares of Common Stock pursuant to any Option or the lapse of
restrictions on any shares of Common Stock, or in connection with any other
event that gives rise to a federal or other governmental tax withholding
obligation on the part of the Company or its subsidiaries: (a) the Company may
deduct or withhold (or cause to be deducted or withheld) from any payment or
distribution to a participant whether or not pursuant to the Plan, and (b) the
Company shall be entitled to require that the grantee remit cash to the Company
(through payroll deduction or otherwise), in each case in an amount sufficient
in the opinion of the Company to satisfy such withholding obligation. If the
event giving rise to the withholding obligation involves a transfer of shares of
Common Stock, then, unless the applicable award agreement provides otherwise, at
the discretion of the Committee, the participant may satisfy the withholding
obligation described under this Section 11 by electing to have the Company
withhold shares of Common Stock (which withholding shall be at a rate not in
excess of the statutory minimum rate) or by tendering previously-owned shares of
Common Stock, in each case having a Fair Market Value equal to the amount of tax
to be withheld (or by any other mechanism as may be required or appropriate to
conform with local tax and other rules).

12. Amendment and Termination. The Board may amend or terminate the Plan at any
time, provided that no such action may adversely affect the rights of the holder
of any outstanding award without his or her consent. Except as otherwise
provided in Section 10, any amendment which increases the aggregate number of
shares of Common Stock that may be issued under the Plan or modifies the class
of employees eligible to receive Options under the Plan shall, to the extent
required by applicable law, be subject to the approval of the Company's
stockholders. The Committee may amend the terms of any agreement or certificate
made or issued hereunder at any time and from time to time provided that any
amendment which would adversely affect the rights of the holder may not be made
without his or her consent.


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13. Term of the Plan. The Plan shall be effective on the Effective Date. The
Plan will terminate on the tenth anniversary of the Effective Date, unless
sooner terminated by the Board. The rights of any person with respect to an
award made under the Plan that is outstanding at the time of the termination of
the Plan shall not be affected solely by reason of the termination of the Plan
and shall continue in accordance with the terms of the award (as then in effect
or thereafter amended) and the Plan.

14.      Miscellaneous.

         (a) Documentation. Each Option granted made under the Plan shall be
         evidenced by a written agreement or other written instrument the terms
         of which shall be established by the Committee. To the extent not
         inconsistent with the provisions of the Plan, the written agreement or
         other instrument evidencing an Option shall govern the rights and
         obligations of the participant (and any person claiming through the
         participant) with respect to the Option.

         (b) No Rights Conferred. Nothing contained herein shall be deemed to
         give any individual any right to be retained in the employ or service
         of the Company or its Affiliates.

         (c) Governing Law. The Plan shall be governed by the laws of the State
         of Delaware, without regard to its principles of conflicts of law.

         (d) Decisions and Determinations. All decisions or determinations made
         by the Board pursuant to the provisions hereof and, except to the
         extent rights or powers under the Plan are reserved specifically to the
         discretion of the Board, all decisions and determinations of the
         Committee shall be final, binding and conclusive.

         (e) Severability. In the event any provision of the Plan shall be held
         illegal or invalid for any reason, the illegality or invalidity shall
         not affect the remaining parts of the Plan, and the Plan shall be
         construed and enforced as if the illegal or invalid provision had not
         been included.

         (f) Requirements of Law. The grant of awards and issuance of shares
         under the Plan shall be subject to compliance with all applicable laws,
         rules, and regulations, and to such approvals by any governmental
         agencies or national securities exchanges as the Committee deems
         necessary or desirable.

         (g) Listing and Other Conditions. As long as the Common Stock is listed
         on a national securities exchange or system sponsored by a national
         securities association, the issue of any shares of Common Stock
         pursuant to an Option shall be conditioned upon such shares being
         listed on such exchange or system. If at any time counsel to the
         Company shall be of the opinion that any sale or delivery of shares of
         Common Stock pursuant to an Option is or may in the circumstances be
         unlawful or result in the imposition of excise taxes on the Company
         under the statutes, rules or regulations of any applicable
         jurisdiction, the Company shall have no obligation to make such sale or
         delivery, or to make any application or to effect or to maintain any
         qualification or


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         registration under the Securities Act or otherwise with respect to
         shares of Common Stock or Options, and the right to exercise any Option
         shall be suspended until, in the opinion of said counsel, such sale or
         delivery shall be lawful or shall not result in the imposition of
         excise taxes on the Company


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