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                                                                     EXHIBIT 4.1

                            FALCONSTOR SOFTWARE, INC.

                       2000 STOCK OPTION PLAN, AS AMENDED

1.  PURPOSE OF THE PLAN.

            This 2000 Stock Option Plan,  as amended (the "Plan") is intended as
an  incentive,  to  retain  in  the  employ  of  and  as  directors,  employees,
consultants and advisors to FALCONSTOR  SOFTWARE,  INC., a Delaware  corporation
(the "Company") and any Subsidiary of the Company, within the meaning of Section
424(f) of the United  States  Internal  Revenue  Code of 1986,  as amended  (the
"Code") or any  entities  affiliated  with the  Company who were formed or whose
principal  place of  business  is Taiwan  ("Affiliate"),  persons  of  training,
experience and ability,  to attract new employees,  directors,  consultants  and
advisors  whose  services are  considered  valuable,  to encourage  the sense of
proprietorship  and to  stimulate  the active  interest  of such  persons in the
development and financial success of the Company and its Subsidiaries.

            It is further  intended that certain options granted pursuant to the
Plan shall constitute  incentive stock options within the meaning of Section 422
of the Code (the  "Incentive  Options")  while  certain  other  options  granted
pursuant to the Plan shall be  nonqualified  stock  options  (the  "Nonqualified
Options").  Incentive Options and Nonqualified  Options are hereinafter referred
to collectively as "Options."

            In all cases, the terms,  provisions,  conditions and limitations of
the Plan shall be construed and interpreted consistent with the Company's intent
as stated in this Section 1.

2.   ADMINISTRATION OF THE PLAN.

            The Board of Directors of the Company (the  "Board") may appoint and
maintain as administrator of the Plan a Committee (the  "Committee")  consisting
of two or more  directors  that shall serve at the pleasure of the Board.  Until
such a Committee is appointed, the Board shall have the full power and authority
to take any and all actions hereunder. The Committee,  subject to Sections 3 and
5 hereof,  shall  have full  power and  authority  to  designate  recipients  of
Options,  to determine the terms and conditions of respective  Option agreements
(which need not be identical)  and to interpret the provisions and supervise the
administration  of the Plan.  The Committee  shall have the  authority,  without
limitation, to designate which Options granted under the Plan shall be Incentive
Options and which shall be Nonqualified  Options.  To the extent any Option does
not qualify as an Incentive Option, it shall constitute a separate  Nonqualified
Option.

            Subject to the  provisions of the Plan,  the Committee  and/or Board
shall interpret the Plan and all Options granted under the Plan, shall make such
rules as it deems  necessary for the proper  administration  of the Plan,  shall
make all other  determinations  necessary or advisable for the administration of
the Plan and shall  correct any defects or supply any omission or reconcile  any
inconsistency in the Plan or in any Options granted under the Plan in the manner
and to the extent  that the  Committee  or Board deems  desirable  to carry into
effect the Plan or any Options.  The act or  determination  of a majority of the
Committee or Board shall be the act or  determination of the Committee or Board,
as  applicable,  and any  decision  reduced to writing  and signed by all of the
members of the Committee or the Board shall be fully effective as if it had been
made by a majority  at a meeting  duly held.  Subject to the  provisions  of the
Plan,  any action  taken or  determination  made by the  Committee  and/or Board
pursuant to this and the other  Sections of the Plan shall be  conclusive on all
parties.

            Until a Committee is appointed,  or in the event that for any reason
the Committee is unable to act, or if there shall be no such Committee, then the
Plan shall be administered by the Board, and references  herein to the Committee
(except in the proviso to this sentence) shall be deemed to be references to the
Board.

3.   DESIGNATION OF OPTIONEES.

            The persons eligible for  participation in the Plan as recipients of
Options (the "Optionees")  shall include  employees,  officers and directors of,
and consultants  and advisors to, the Company or any  Subsidiary;  provided that
Incentive  Options  may only be  granted to  employees  of the  Company  and the
Subsidiaries. In selecting Optionees, and in determining the number of shares to
be covered by each Option  granted to Optionees,  the Committee may consider the
office or position held by the Optionee or the  Optionee's  relationship  to the
Company,  the Optionee's  degree of  responsibility  for and contribution to the
growth and success of the Company or any  Subsidiary,  the Optionee's  length of
service, age, promotions, potential and any other factors that the Committee may
consider  relevant.  An Optionee who has been granted an Option hereunder may be
granted an additional Option or Options, if the Committee shall so determine.

4.  STOCK RESERVED FOR THE PLAN.

            Subject to  adjustment  as provided in Section 7 hereof,  a total of
10,662,296 shares of the Company's Common Stock,  $.001 par value per share (the
"Stock"),  shall be subject to the Plan. The shares of Stock subject to the Plan
shall  consist  of  unissued  shares or  previously  issued  shares  held by any
Subsidiary or Affiliate of the Company, and such amount of shares of Stock shall
be and is hereby reserved for such purpose. Any of such shares of Stock that may
remain unsold and that are not subject to outstanding Options at the termination
of the Plan shall cease to be reserved for the  purposes of the Plan,  but until
termination  of the Plan the  Company  shall at all times  reserve a  sufficient
number of  shares of Stock to meet the  requirements  of the  Plan.  Should  any
Option expire or be canceled  prior to its exercise in full or should the number
of shares of Stock to be  delivered  upon the  exercise  in full of an Option be
reduced for any reason,  the shares of Stock theretofore  subject to such Option
may be subject to future Options under the Plan.

5.     TERMS AND CONDITIONS OF OPTIONS.

            Options  granted  under the Plan shall be  subject to the  following
conditions  and  shall  contain  such  additional  terms  and  conditions,   not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:

            (a)  OPTION  PRICE.  The  purchase  price  of each  share  of  Stock
purchasable  under an Incentive  Option shall be  determined by the Committee or
the  Board at the time of  grant,  but  shall  not be less than 100% of the Fair
Market Value (as defined below) of such share of Stock on the date the Option is
granted;  provided,  however,  that with respect to an Optionee who, at the time
such Incentive Option is granted,  owns (within the meaning of Section 424(d) of
the Code) more than 10% of the total  combined  voting  power of all  classes of
stock of the Company or of any Subsidiary, the purchase price per share of Stock
shall be at least 110% of the Fair  Market  Value per share of Stock on the date
of  grant.  The  purchase  price  of each  share of  Stock  purchasable  under a
Nonqualified  Option shall not be less than 80% of the Fair Market Value of such
share of Stock on the date the Option is granted.  The  exercise  price for each
Option  shall be subject to  adjustment  as provided  in Section 7 below.  "Fair
Market Value" means the closing price of publicly  traded shares of Stock on the
principal securities exchange on which shares of Stock are listed (if the shares
of Stock are so listed),  or on the NASDAQ  Stock Market (if the shares of Stock
are  regularly  quoted  on the  NASDAQ  Stock  Market),  or, if not so listed or
regularly quoted,  the mean between the closing bid and asked prices of publicly
traded shares of Stock in the over-the-counter market, or, if such bid and asked
prices  shall  not  be  available,  as  reported  by any  nationally  recognized
quotation service selected by the Company,  or as determined by the Committee in
a manner  consistent  with the provisions of the Code.  Anything in this Section

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5(a) to the contrary notwithstanding,  in no event shall the purchase price of a
share of Stock be less  than the  minimum  price  permitted  under the rules and
policies of any  national  securities  exchange on which the shares of Stock are
listed.

            (b)  OPTION  TERM.  The  term of each  Option  shall be fixed by the
Committee, but no Option shall be exercisable more than ten years after the date
such  Option is granted  and in the case of an  Incentive  Option  granted to an
Optionee  who, at the time such  Incentive  Option is granted,  owns (within the
meaning  of  Section  424(d)  of the Code)  more than 10% of the total  combined
voting  power of all  classes of stock of the Company or of any  Subsidiary,  no
such Incentive  Option shall be exercisable  more than five years after the date
such Incentive Option is granted.

            (c) EXERCISABILITY; LOCK-UP. Subject to Section 5(j) hereof, Options
shall be  exercisable  at such  time or times  and  subject  to such  terms  and
conditions as shall be determined by the Committee at the time of grant.  Unless
otherwise  determined  by the  Committee or Board at grant,  each  Optionee will
agree  that  if so  requested  by  the  Company  or  any  representative  of the
underwriters  (the "Managing  Underwriter") in connection with a registration of
the offering of any equity securities of the Company under the Securities Act of
1933,  as  amended  (the  "Securities  Act"),  the  Optionee  shall  not sell or
otherwise  transfer  any Stock or other  securities  of the  Company  during the
180-day  period (or such  longer  period as may be  requested  in writing by the
Managing  Underwriter  and  agreed to in writing by the  Company)  (the  "Market
Standoff  Period")  following the effective date of a registration  statement of
the  Company  filed  under the  Securities  Act,  provided,  however,  that such
restriction shall apply only to the first registration  statement of the Company
to become effective under the Securities Act that includes securities to be sold
on behalf of the Company to the public in an underwritten  public offering under
the  Securities  Act.  The Company may impose  stop-transfer  instructions  with
respect to  securities  subject to the foregoing  restrictions  until the end of
such Market Standoff Period.

            (d) METHOD OF EXERCISE.  Options to the extent then  exercisable may
be exercised in whole or in part at any time during the option period, by giving
written  notice to the  Company  specifying  the number of shares of Stock to be
purchased,  accompanied by payment in full of the purchase price, in cash, or by
check  or such  other  instrument  as may be  acceptable  to the  Committee.  As
determined by the Committee, in its sole discretion,  at or after grant, payment
in full or in part may be made at the  election of the  Optionee (i) in the form
of Stock owned by the  Optionee  (based on the Fair Market Value of the Stock on
the trading day before the Option is exercised)  which is not the subject of any
pledge or security interest, (ii) in the form of shares of Stock withheld by the
Company  from the shares of Stock  otherwise to be received  with such  withheld
shares of Stock having a Fair Market Value on the date of exercise  equal to the
exercise  price  of the  Option,  or  (iii) by a  combination  of the  forgoing,
provided that the combined value of all cash and cash  equivalents  and the Fair
Market Value of any shares  surrendered to the Company is at least equal to such
exercise  price and except with  respect to (ii)  above,  such method of payment
will not cause a  disqualifying  disposition  of all or a  portion  of the Stock
received upon exercise of an Incentive  Option.  Not withstanding the foregoing,
an Optionee may not take any actions which are prohibited by the  Sarbanes-Oxley
Act of 2002 and the rules and  regulations  promulgated  by the  Securities  and
Exchange  Commission or any other agency thereunder.  An Optionee shall have the
right to dividends and other rights of a  stockholder  with respect to shares of
Stock  purchased  upon  exercise of an Option at such time as the  Optionee  has
given  written  notice of exercise and has paid in full for such shares and (ii)
has satisfied such conditions that may be imposed by the Company with respect to
the withholding of taxes.

            (e) NON-TRANSFERABILITY OF OPTIONS. Options are not transferable and
may be exercised  solely by the Optionee  during his lifetime or after his death
by the person or persons  entitled thereto under his will or the laws of descent
and distribution.  The Committee, in its sole discretion,  may permit a transfer

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of a Nonqualified  Option to (i) a trust for the benefit of the Optionee or (ii)
a member of the Optionee's immediate family (or a trust for his or her benefit).
Any attempt to transfer,  assign,  pledge or otherwise dispose of, or to subject
to  execution,  attachment  or  similar  process,  any  Option  contrary  to the
provisions  hereof shall be void and  ineffective and shall give no right to the
purported transferee.

            (f)  TERMINATION  BY  DEATH.  Unless  otherwise  determined  by  the
Committee at grant, if any Optionee's  employment with or service to the Company
or any  Subsidiary or Affiliate  terminates  by reason of death,  the Option may
thereafter be exercised,  to the extent then exercisable (or on such accelerated
basis  as the  Committee  shall  determine  at or  after  grant),  by the  legal
representative of the estate or by the legatee of the Optionee under the will of
the Optionee, for a period of one year after the date of such death or until the
expiration  of the  stated  term of such  Option  as  provided  under  the Plan,
whichever period is shorter.

            (g) TERMINATION BY REASON OF DISABILITY. Unless otherwise determined
by the Committee at grant,  if any Optionee's  employment with or service to the
Company  or any  Subsidiary  or  Affiliate  terminates  by  reason  of total and
permanent  disability,  any  Option  held by such  Optionee  may  thereafter  be
exercised,  to the extent it was  exercisable at the time of termination  due to
Disability (or on such accelerated  basis as the Committee shall determine at or
after grant), but may not be exercised after three months after the date of such
termination  of  employment  or service or the  expiration of the stated term of
such  Option,  whichever  period is shorter;  provided,  however,  that,  if the
Optionee dies within such three month  period,  any  unexercised  Option held by
such  Optionee  shall  thereafter be  exercisable  to the extent to which it was
exercisable at the time of death for a period of one year after the date of such
death or for the stated term of such Option, whichever period is shorter.

            (h) TERMINATION BY REASON OF RETIREMENT. Unless otherwise determined
by the Committee at grant,  if any Optionee's  employment with or service to the
Company or any  Subsidiary or Affiliate  terminates by reason of Normal or Early
Retirement (as such terms are defined  below),  any Option held by such Optionee
may thereafter be exercised to the extent it was exercisable at the time of such
Retirement (or on such accelerated  basis as the Committee shall determine at or
after grant), but may not be exercised after three months after the date of such
termination  of  employment  or service or the  expiration of the stated term of
such  Option,  whichever  period is shorter;  provided,  however,  that,  if the
Optionee dies within such three month  period,  any  unexercised  Option held by
such Optionee  shall  thereafter be  exercisable,  to the extent to which it was
exercisable  at the time of death,  for a period  of one year  after the date of
such death or for the stated term of such Option, whichever period is shorter.

            For purposes of this  paragraph (h) "Normal  Retirement"  shall mean
retirement  from  active  employment  with  the  Company  or any  Subsidiary  or
Affiliate on or after the normal  retirement  date  specified in the  applicable
Company or  Subsidiary  pension  plan or if no such  pension  plan,  age 65, and
"Early Retirement" shall mean retirement from active employment with the Company
or any Subsidiary or Affiliate  pursuant to the early  retirement  provisions of
the  applicable  Company or Subsidiary  pension plan or if no such pension plan,
age 55.

            (i) OTHER TERMINATION.  Unless otherwise determined by the Committee
at grant,  if any  Optionee's  employment  with or service to the Company or any
Subsidiary or Affiliate  terminates for any reason other than death,  Disability
or Normal or Early Retirement, the Option shall thereupon terminate, except that
the portion of any Option that was  exercisable on the date of such  termination
of  employment  or service may be exercised  for the lesser of 30 days after the
date of  termination  or the  balance of such  Option's  term if the  Optionee's
employment  or  service  with the  Company or any  Subsidiary  or  Affiliate  is
terminated by the Company or such Subsidiary without cause (the determination as
to whether termination was for cause to be made by the Committee).  The transfer

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of an Optionee  from the employ of or service to the Company to the employ of or
service to a Subsidiary or Affiliate,  or vice versa,  or from one Subsidiary or
Affiliate  to  another,  shall not be  deemed to  constitute  a  termination  of
employment or service for purposes of the Plan.

            (j) LIMIT ON VALUE OF INCENTIVE  OPTION.  The aggregate  Fair Market
Value,  determined as of the date the Incentive Option is granted,  of Stock for
which  Incentive  Options  are  exercisable  for the first time by any  Optionee
during any calendar  year under the Plan (and/or any other stock option plans of
the Company or any Subsidiary) shall not exceed $100,000.

            (k) TRANSFER OF INCENTIVE OPTION SHARES.  The stock option agreement
evidencing any Incentive  Options  granted under this Plan shall provide that if
the Optionee  makes a  disposition,  within the meaning of Section 424(c) of the
Code and  regulations  promulgated  thereunder,  of any share or shares of Stock
issued to him upon exercise of an Incentive Option granted under the Plan within
the two-year  period  commencing  on the day after the date of the grant of such
Incentive  Option or within a one-year  period  commencing  on the day after the
date of transfer of the share or shares to him  pursuant to the exercise of such
Incentive  Option, he shall,  within 10 days after such disposition,  notify the
Company  thereof  and  immediately  deliver to the  Company any amount of United
States federal, state and local income tax withholding required by law.

            (l) LIMIT ON GRANTS. No Optionee shall be granted, in total, Options
to purchase more than 15% of the shares of Stock reserved for the Plan.

6. TERM OF PLAN.

            No Option  shall be granted  pursuant to the Plan on or after May 1,
2010, but Options theretofore granted may extend beyond that date.

7.  CAPITAL CHANGE OF THE COMPANY.

            In  the  event  of  any   merger,   reorganization,   consolidation,
recapitalization,  stock  dividend,  or  other  change  in  corporate  structure
affecting  the Stock,  the  Committee  shall make an  appropriate  and equitable
adjustment in the number and kind of shares reserved for issuance under the Plan
and in the number  and option  price of shares  subject to  outstanding  Options
granted  under  the Plan,  to the end that  after  such  event  each  Optionee's
proportionate  interest shall be maintained as immediately before the occurrence
of such event.

8.  PURCHASE FOR INVESTMENT.

            Unless  the  Options  and  shares  covered  by the  Plan  have  been
registered  under the Securities  Act, or the Company has  determined  that such
registration is unnecessary, each person exercising an Option under the Plan may
be  required  by the  Company to give a  representation  in  writing  that he is
acquiring the shares for his own account for  investment and not with a view to,
or for sale in connection with, the distribution of any part thereof.

9. TAXES.

            The Company  may make such  provisions  as it may deem  appropriate,
consistent with applicable law, in connection with any Options granted under the
Plan with respect to the withholding of any taxes or any other tax matters.

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10. EFFECTIVE DATE OF PLAN.

            The Plan shall be effective on May 1, 2000, as approved by the Board
and by majority vote of the Company's stockholders as of such date.

11. AMENDMENT AND TERMINATION.

            The Board may amend,  suspend, or terminate the Plan, except that no
amendment  shall be made that would impair the rights of any Optionee  under any
Option theretofore  granted without the Optionee's  consent,  and except that no
amendment shall be made which,  without the approval of the  stockholders of the
Company would:

            (a)  materially  increase  the  number of shares  that may be issued
under the Plan, except as is provided in Section 7;

            (b) materially increase the benefits accruing to the Optionees under
the Plan;

            (c)  materially  modify  the  requirements  as  to  eligibility  for
participation in the Plan;

            (d) decrease the exercise price of an Incentive  Option to less than
100% of the Fair Market Value per share of Stock on the date of grant thereof or
the exercise price of a Nonqualified  Option to less than 80% of the Fair Market
Value per share of Stock on the date of grant thereof; or

            (e)  extend  the term of any  Option  beyond  that  provided  for in
Section 5(b).

            The Committee may amend the terms of any Option theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any Optionee without the Optionee's  consent.  The Committee may also substitute
new Options for previously  granted  Options,  including  options  granted under
other plans applicable to the participant and previously  granted Options having
higher option prices, upon such terms as the Committee may deem appropriate.

12.  GOVERNMENT REGULATIONS.

            The Plan, and the grant and exercise of Options  hereunder,  and the
obligation of the Company to sell and deliver  shares under such Options,  shall
be subject to all applicable laws, rules and regulations,  and to such approvals
by any  governmental  agencies,  national  securities  exchanges and interdealer
quotation systems as may be required.

13. GENERAL PROVISIONS.

            (a)  CERTIFICATES.  All  certificates  for shares of Stock delivered
under  the Plan  shall  be  subject  to such  stop  transfer  orders  and  other
restrictions  as the Committee may deem advisable  under the rules,  regulations
and other  requirements  of the  Securities  and Exchange  Commission,  or other
securities  commission  having  jurisdiction,  any  applicable  Federal or state
securities  law, any stock exchange or interdealer  quotation  system upon which
the  Stock is then  listed  or traded  and the  Committee  may cause a legend or
legends to be placed on any such  certificates to make appropriate  reference to
such restrictions.

            (b)  EMPLOYMENT  MATTERS.  The adoption of the Plan shall not confer
upon any Optionee of the Company or any  Subsidiary  or  Affiliate  any right to
continued employment or, in the case of an Optionee who is a director, continued
service as a director,  with the Company or a Subsidiary  or  Affiliate,  as the
case may be, nor shall it  interfere in any way with the right of the Company or
any Subsidiary or Affiliate to terminate the employment of any of its employees,
the service of any of its directors or the  retention of any of its  consultants
or advisors at any time.

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            (c)  LIMITATION  OF  LIABILITY.  No  member  of  the  Board  or  the
Committee,  or any officer or  employee  of the Company  acting on behalf of the
Board or the Committee, shall be personally liable for any action, determination
or interpretation  taken or made in good faith with respect to the Plan, and all
members of the Board or the  Committee  and each and any  officer or employee of
the Company  acting on their behalf  shall,  to the extent  permitted by law, be
fully  indemnified  and  protected by the Company in respect of any such action,
determination or interpretation.

            (d)  REGISTRATION OF STOCK.  Notwithstanding  any other provision in
the Plan,  no Option  may be  exercised  unless and until the Stock to be issued
upon the  exercise  thereof has been  registered  under the  Securities  Act and
applicable  state  securities  laws,  or are,  in the  opinion of counsel to the
Company,  exempt from such registration in the United States.  The Company shall
not be under any  obligation  to  register  under  applicable  federal  or state
securities  laws any Stock to be issued upon the  exercise of an Option  granted
hereunder in order to permit the exercise of an Option and the issuance and sale
of the Stock  subject  to such  Option,  although  the  Company  may in its sole
discretion  register such Stock at such time as the Company shall determine.  If
the Company  chooses to comply with such an  exemption  from  registration,  the
Stock issued  under the Plan may, at the  direction  of the  Committee,  bear an
appropriate  restrictive  legend restricting the transfer or pledge of the Stock
represented  thereby,  and the Committee may also give appropriate stop transfer
instructions with respect to such Stock to the Company's transfer agent.

                                      FALCONSTOR SOFTWARE, INC.

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