Document:

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                                                                     EXHIBIT 4.4

                                 NEW FOCUS, INC.

                            1990 INCENTIVE STOCK PLAN

                            (AS AMENDED MAY 4, 1998)

      1. Purposes of the Plan. The purposes of this Stock Plan are to attract
and retain the best available personnel, to provide additional incentive to the
Employees of New Focus, Inc. (the "Company") and to promote the success of the
Company's business.

            Options granted hereunder may be either Incentive Stock Options or
Nonstatutory Stock Options, at the discretion of the Board and as reflected in
the terms of the written option agreement. The Board also has the discretion to
grant Stock Purchase Rights.

      2. Definitions. As used herein, the following definitions shall apply:

            (a) "Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.

            (b) "Board" means any Committees if one has been appointed by the
Board in accordance with paragraph (a) of Section 4 of the Plan, or the Board of
Directors of the Company, if no Committee is appointed.

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

            (d) "Company" means New Focus, Inc., a California corporation.

            (e) "Committee" means the Committee appointed by the Board of
Directors in accordance with Section 4(a) of the Plan, if one is appointed.

            (f) "Consultant" means any person performing services for the
benefit of the Company or any Parent or Subsidiary as a director, an independent
consultant or advisor; provided that if and in the event the Company registers
any class of any equity security pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the term Consultant shall
thereafter not include directors who are not compensated for their services or
are paid only a director's fee by the Company.

            (g) "Continuous Status as an Employee or Consultant" means the
absence of any interruption or termination of the employment or consulting
relationship, as applicable. Continuous Status as an Employee or Consultant
shall not be considered interrupted in the case of: (i) sick leave; (ii)
military leave; (iii) any other for a period of not more than 90 days or
reemployment upon the expiration of such leave is guaranteed by contract or
statute or unless otherwise provided pursuant to formal policy adopted from time
to time by the Company and issued and promulgated to Employees in writing; or
(iv) in the case of transfers between locations of the Company or between the
Company, its Parent or its Subsidiaries.

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            (h) "Employee" means any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment", by the Company.

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

            (j) "Fair Market Value" means the value of Common Stock determined
as follows:

                     (i) The Common Stock is listed on any established stock
exchange or a national market system, included without limitation, the National
Market System of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, its Fair Market Value shall be the closing sales
price for such stock where the closing bid, if no sales were reported, as quoted
on such system or exchange (or the exchange with the greatest volume of trading
in common stock) for the last trading day prior to the time of determination, as
reported in the Wall Street Journal or such other source as the Administrator
deems reliable.

                     (ii) If the Common Stock is quoted on the NASDAQ System
(but not on the National Market System thereof) or regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high and low asked prices for the
Common Stock for the last day on which there are quoted prices prior to the time
of determination, or;

                     (iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

            (k) "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422A of the Code.

            (l) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.

            (m) "Option" means a stock option granted pursuant to the Plan.

            (n) "Optioned Stock" means the Stock subject to an Option.

            (o) "Optionee" means an Employee or Consultant who receives an
Option.

            (p) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 425(e) of the Code.

            (q) "Plan" means this 1990 Incentive Stock Plan.

            (r) "Purchaser" means an Employee or Consultant who exercises a
Stock Purchase Right.

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            (s) "Share" means a share of the Stock, as adjusted in accordance
with Section II of the Plan.

            (t) "Stock" means the Common Stock of the Company.

            (u) "Stock Purchase Right" means a right to purchase Stock pursuant
to the Plan or the right to receive a bonus of stock for past services rendered.

            (v) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 425(f) of the Code.

      In addition, the term "Rule 16b-3" and the term "Insiders" shall have the
meaning set forth, respectively, in Sections 4 and 8 below.

      3. Stock Subject to the Plan. Subject to the provisions of Section II of
the Plan, the maximum aggregate number of shares under the Plan is TWO MILLION
FOUR HUNDRED THOUSAND SEVENTY-FIVE (2,475,000) shares of Stock. The Shares may
be authorized, but unissued, or reacquired Stock.

            If an Option or Stock Purchase Right should expire or become
unexercisable for any reason without having been exercised in full, the
unpurchased Shares which were subject thereto shall, unless the Plan shall have
been terminated, become available for future grant or sale under the Plan.
Shares issued under the Plan and later repurchased by the Company in connection
with the Company's right to repurchase unvested shares shall become available
for future grant or sale under the Plan.

      4.  Administration of the Plan.  The Plan shall be administered by the
Board.

            (a) Administration Prior to Registration. Subject to subsection (b),
the Board may appoint a Committee consisting of not less than two members of the
Board, to administer the Plan on behalf of the Board, subject to such terms and
conditions as the Board may prescribe. Once appointed, the Committee shall
continue to serve until otherwise directed by the Board. Members of the Board
who are either eligible for Options or Stock Purchase Rights or who have been
granted Options or Stock Purchase Rights may vote on any matters affecting the
administration of the Plan or the grant of any Options or Stock Purchase Rights
pursuant to the Plan, except that no such member shall act upon the granting of
an Option or Stock Purchase Right to himself or herself, but any such member may
be counted in determining the existence of a quorum at any meeting of the Board
or Committee during which action is taken with respect to the granting of
Options or Stock Purchase Rights to said Board or Committee member.

            (b) Administration After Registration. Notwithstanding the foregoing
subparagraph (i), if and in any event the Company registers any class of any
equity security pursuant to Section 12 of the Exchange Act, from the effective
date of such registration until six months after the termination of such
registration, the Plan shall be administered as follows:

                  (i) Administration With Respect to Directors and Officers.
With respect to grants of Options or Stock Purchase Rights to Employees who are
also officers and directors of

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the Company, the Plan shall be administered by (A) the Board, if the Board may
administer the Plan in compliance with Rule 16b-3 promulgated under the Exchange
Act, or any successor rule thereto ("Rule 16b-3"), with respect to a plan
intended to qualify under Rule 16b-3 as a discretionary plan, or (B) a Committee
designated by the Board to administer the Plan, which Committee shall be
constituted in such a manner as to permit the Plan to comply with Rule 16b-3
with respect to a plan intended to qualify thereunder as a discretionary plan.
Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From time to time the Board may
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by Rule 16b-3 with respect to a plan intended to qualify thereunder as
a discretionary plan.

                     (ii) Multiple Administrative Bodies.  If permitted by
Rule 16b-3, the Plan may be administered by different bodies with respect to
directors, non-director officers and Employees who are neither directors nor
officers.

                     (iii) Administration With Respect to Other Employees.
With respect to grants of Options or Stock Purchase Rights to Employees who are
neither directors nor officers of the Company, the Plan shall be administered by
(A) the Board or (B) a Committee designated by the Board, which Committee shall
be constituted in such a manner as to satisfy the legal requirements relating to
the administration of incentive stock option plans, if any, of California
corporate and securities laws and of the Code (the "Applicable Laws"). Once
appointed, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. From time to time The Board may increase
the size of the Committee and appoint additional members thereof, remove members
(with or without cause) and appoint new members in substitution therefor, fill
vacancies, however caused, and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by the
Applicable Laws.

            (c) Powers of the Board. Subject to the provisions of the Plan and,
in the case of a Committee, the specific duties delegated by the Board to such
Committee, the Administrator shall have the authority, in its discretion: (i) to
grant Incentive Stock Options, Nonstatutory Stock Options or Stock Purchase
Rights; (ii) to determine, in accordance with Section 1(j) of the Plan, the Fair
Market Value of the Stock; (iii) to determine the exercise price per Share of
Options, or Stock Purchase Rights, to be granted, which exercise pro shall be
determined in accordance with Section 7 of the Plan; (iv) to determine the
Employees and Consultants to whom, and the time or times at which, Options or
Stock Purchase Rights shall be granted and the number of Shares to be
represented by each Option or Stock Purchase Right; (v) to interpret the Plan;
(vi) to prescribe, amend and rescind rules and regulations relating to the Plan;
(vii) to determine the terms and provisions of each Option or Stock Purchase
Right granted (which need not be identical) and, with the consent of the holder
thereof, modify or amend each Option or Stock Purchase Right; (viii) to
accelerate or defer (with the consent of the Optionee) the exercise date of any
Option, consistent with the provisions of Section 5 of the Plan; (ix) to reduce
the exercise price of any Option to the then current Fair Market Value if the
Fair Market Value of the Common Stock covered by such Option shall have declined
since the date the Option was granted; (x) to authorize any person to execute on
behalf of the Company any instrument required to effectuate the grant of an
Option or

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Stock Purchase Right previously granted by the Administrator; and (xi) to make
all other determinations deemed necessary or advisable for the administration of
the Plan.

            (d) Effect of Decisions by the Administrator. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees, Purchasers and any other holders of any Options or
Stock Purchase Rights granted under the Plan.

      5.  Eligibility.

            (a) Options and Stock Purchase Rights may be granted to Employees
and Consultants, provided that Incentive Stock options may only be granted to
Employees. An Employee or Consultant who has been granted an Option or Stock
Purchase Right may, if he is otherwise eligible, be granted additional option(s)
or Stock Purchase Right(s).

            (b) Each Option or Stock Purchase Right shall be evidenced by a
written agreement, which, in the case of an Option, shall expressly identify the
Option as an incentive stock option or as a nonstatutory stock option, and which
shall be in such form and contain such provisions as the Administrator shall
from time to time deem appropriate. However, notwithstanding such designation,
to the extent that the aggregate Fair Market Value of (i) the Shares with
respect to which Options designated as incentive stock options plus (ii) the
shares of stock of the Company, Parent and any Subsidiary with respect to which
other incentive stock options are exercisable for the first time by an Optionee
during any calendar year under all plans of the Company and any Parent and
Subsidiary exceed $100,000, such excess options shall be treated as nonstatutory
stock options. For purposes of the preceding sentence, (i) Options shall be
taken into account in the order in which they were granted, and (ii) the Fair
Market Value of the Shares shall be determined as of the time the Option or
other incentive stock option is granted. Without limiting the foregoing, the
Administrator may, at any time, or from time to time, authorize the Company,
with the consent of the respective recipients, to issue options in exchange for
the surrender and cancellation of any or all outstanding options.

            (c) The Plan shall not confer upon any Optionee or holder of a Stock
Purchase Right any right with respect to continuation of employment by or the
rendition of consulting services to the Company or any Parent, nor shall it
interfere in any way with his or her right or the Company's or, where
applicable, a Parent's right to terminate his or her employment or services at
any time, which right is hereby reserved.

      6. Term of Plan. The Plan shall become effective upon the adoption by the
Board of Directors or its approval by vote of the holders of a majority of the
outstanding shares of the Company entitled to vote on the adoption of the Plan
(if obtained by written consent) or of a majority of the Shares present in
person or by proxy at a meeting of the shareholders (if obtained at a meeting),
whichever is earlier. It shall continue in effect for a term of ten (10) years
unless sooner terminated under Section 13 of the Plan.

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      7.  Exercise Price of and Consideration for Shares.

            (a) The per Share exercise price for the Shares to be issued
pursuant to exercise of an Option or Stock Purchase Right shall be such price as
is determined by the Administrator, but in no event shall it be less than 100%
of the Fair Market Value of Common Stock determined as of the date of grant of
the Option. In the case of an Option granted to an Employee or Consultant who,
at the time of grant of such Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110% of
the Fair Market Value of Common Stock determined as of the date of grant of the
Option.

            (b) The consideration to be paid for the Shares to be issued upon
exercise of an Option or Stock Purchase Right, including the method of payment,
shall be determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant), and may consist entirely of
(i) cash, (ii) check, (iii) promissory note, (iv) other Shares of Stock of the
Company which (x) in the case of Shares required upon exercise of an option
either have been owed by the Optionee for more than six (6) months on the date
of surrender or were not acquired, directly or indirectly, frog she Company, and
(y) have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option or Stock Purchase Right
shall be exercised, or any combination of such methods of payment, (v) delivery
of a properly executed exercise notice together with irrevocable instructions to
a broker to promptly deliver to the Company the amount of sale or loan proceeds
required to pay the exercise price, or (vi) such other consideration and method
of payment for the issuance of Shares to the extent permitted under applicable
corporate law.

      8. Options.

            (a) Term of Option. The term of each Option shall be ten (10) years
from the date of grant thereof or such shorter term as may be provided in the
Incentive Stock Option Agreement or the Nonstatutory Stock Option Agreement.

            (b) Exercise of Option.

                     (i) Procedure for Exercise; Rights as a Shareholder.
Any Option granted hereunder shall be exercisable at such times and under such
conditions as determined by the Administrator, including (i) execution of a
restricted stock purchase agreement with the Company in the form approved by the
Administrator and containing such provisions as described in Sections 9(c) and
(d) below, and (ii) performance criteria with respect to the Company and/or the
Optionee, and as shall be permissible under the terms of the Plan; provided,
however, that any Option granted to any person who is subject to Section 16 of
the Exchange Act ("Insider") shall not be exercisable within the first six (6)
months of its term, except that such limitation shall not apply in the event of
the Optionee's death or disability prior to the expiration of the six (6) month
period.

                  An Option may not be exercised for a fraction of a Share.

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                  An Option shall be deemed to be exercised when written notice
of such exercise has been given to the Company in accordance with the terms of
the Option by the person entitled to exercise the Option payment for the Shares
with respect to which the Option is exercised has been received by the Company.
Full payment may, as authorized by the Administrator (and, in the case of an
Incentive Stock Option, determined at the time of grant) and permitted by the
Option Agreement, consist of any consideration and method of payment allowable
under Section 7 of the Plan. The Company shall issue a stock certificate
evidencing such shares as soon as practicable. Until the issuance (as evidenced
by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a shareholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. No adjustment will be made for a dividend or other right for which the
record date is prior to the date the stock certificate is issued, except as
provided in Section 11 of the Plan.

                  Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

                  (ii) Termination of Status as an Employee or Consultant.
Unless otherwise set forth in the Option Agreement, if an Employee or a
Consultant ceases to serve as an Employee or Consultant, as applicable
(including termination by reason of retirement), he or she may, but only within
thirty (30) days after the date he or she ceases to be an Employee or Consultant
of the Company, exercise his or her Option to the extent the Option was
exercisable at the date of such termination. To the extent the Option was not
exercisable at the date of such termination, or if he or she does not exercise
such Option (which he or she was entitled to exercise) within the time specified
herein, the Option shall terminate.

                  (iii) Disability of Optionee. Notwithstanding the provisions
of Section 8 (b) (ii) above, and unless otherwise set forth in the Option
agreement, in the event an Employee or Consultant is unable to continue his or
her employment with or to perform services for the benefit of the Company as a
result of a disability, he or she may, but only within twelve (12) months from
the date of disability, exercise his or her Option to the extent the Option was
exercisable at the date of such disability. To the extent that the Option was
not exercisable at the date of disability, or if he or she does not exercise
such Option (which he or she was entitled to exercise) within the time specified
herein, the Option shall terminate.

                  (iv) Death of Optionee. Unless otherwise set forth in the
Option Agreement:

                        (A) if Optionee dies during the term of the Option and
is at the time of his death an Employee or Consultant of the Company who shall
have been in Continuous Status as an Employee or Consultant since the date of
grant of the Option, then the Option may be exercised, at any time within twelve
(12) months following the date of death (or such other period of time as is
determined by the Board) provided that it is at least six (6) months following
the date of death, by the Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the extent
of the right to exercise that would have accrued had the

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Optionee continued living and remained in Continuous Status as an Employee or
Consultant three (3) months after the date of death (or such other period of
time as is determined by the Board); or

                        (B) if Optionee dies within thirty (30) days (or such
other period of time not exceeding three (3) months as is determined by the
Board) after the termination of Continuous Status as an Employee, then the
Option may be exercised, at any time within one (1) year following the date of
death (or such other period of time as is determined by the Board), by the
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent of the right to exercise that
had accrued at the date of termination.

      9. Stock Purchase Rights.

            (a) Rights to Purchase. After the Administrator determines that it
will offer an Employee or Consultant a Stock Purchase Right, it shall advise the
offeree of the terms, conditions and restrictions relating to the offer,
including the number of Shares which such person shall be entitled to purchase,
and the time within which such person must accept such offer, which shall in no
event exceed ninety (90) days from the date upon which the Board or its
Committee made the determination to grant the Stock Purchase Right. The offer
shall be accepted by execution of a Stock Purchase Agreement in the form
determined by the Board of Directors.

            (b) Issuance of Shares. Forthwith after payment therefor, the Shares
purchased shall be duly issued; provided, however, that the Administrator may
require that the Purchaser make adequate provision for any federal and state
withholding obligations of the Company as a condition to the Purchaser
purchasing such Shares.

            Exercise of a Stock Purchase Right in any manner shall result in a
decrease in the number of Shares which thereafter may be available for purposes
of the Plan by the number of Shares as to which the Stock Purchase Right is
exercised.

            (c) Repurchase Option. Unless the Administrator determines
otherwise, the restricted stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
Purchaser's Continuous Status as an Employee with the Company or Parent for any
reason (including death or disability). If the Administrator so determines, the
purchase price for shares repurchased may be paid by cancellation of any
indebtedness of Purchaser to the Company. The repurchase option shall lapse at
such rate as the Administrator may determine, but at a minimum rate of 20% per
year.

            (d) Other Provisions.  The restricted stock purchase agreement
shall contain such other terms, provisions and conditions not inconsistent
with the Plan as may be determined by the Board.

      10. Non-Transferability of Options and Stock Purchase Rights. The Options
and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee or Purchaser, only by the Optionee or Purchaser.

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      11. Adjustments Upon Changes in Capitalization or Merger.

            (a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of Shares covered by each outstanding
Option and Stock Purchase Right, and the number of Shares which have been
authorized for issuance under the Plan but as to which no Options or Stock
Purchase Right have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option or Stock Purchase Right, as well as
the price per Share covered by each such outstanding Option or Stock Purchase
Right, shall be proportionately adjusted for any increase or decrease in the
number of issued Shares resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the aggregate number of issued Shares effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of Shares subject to an Option or Stock Purchase
Right.

            (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, all outstanding Options and Stock
Purchase Rights will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board.

            (c) Merger. In the event of a merger of the Company with or into
another corporation, the Option may be assumed or an equivalent option may be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation. If, in such event, the Option is not assumed or
substituted, the Option shall terminate as of the date of the closing of the
merger. For the purposes of this paragraph, the Option shall be considered
assumed if, following the merger, the option confers the right to purchase, for
each Share of Optioned Stock subject to the Option immediately prior to the
merger, the consideration (whether stock, cash, or other securities or property)
received in the merger by holders of Common Stock for each Share held on the
effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger was not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option for
each Share of Optioned Stock subject to the Option to be solely common stock of
the successor corporation or its Parent equal in fair market value to the per
share consideration received by holders of Common Stock in the merger.

      12. Time of Granting Options and Stock Purchase Rights. The date of grant
of an Option or Stock Purchase Right shall, for all purposes, be the date on
which the Board makes the determination granting such Option or Stock Purchase
Right. Notice of the determination shall be given to each Employee or Consultant
to whom an Option or Stock Purchase Right is so granted within a reasonable time
after the date of such grant.

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      13. Amendment and Termination of the Plan.

            (a) Amendment and Termination. The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any Optionee
or purchaser under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3 under
the Exchange Act or with Section 422A of the Code (or any other applicable law
or regulation), the Company shall obtain shareholder approval of any Plan
amendment requiring shareholder approval thereunder in such a manner and to such
a degree as is required.

            (b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options or Stock Purchase Rights
already granted and such Options or Stock Purchase Rights shall remain in full
force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee or Purchaser and the
Administrator, which agreement must be in writing and signed by the Optionee or
Purchaser and the Company.

      14. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the issuance and delivery of
Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act of 1934 (the "Exchange Act"), the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

            As a condition to the exercise of an Option or Stock Purchase Right,
the Company may require the person exercising such Option or Stock Purchase
Right to represent and warrant at the time of any such exercise that the Shares
are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required by any of the aforementioned relevant
provisions of law.

      15. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

            The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, 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.

      16. Option and Stock Purchase Agreements. Options shall be evidenced by
written option agreements in such form as the Administrator shall approve. Upon
the exercise of Options or Stock Purchase Rights, the Optionee or Purchaser, as
the case may be, shall sign a restricted stock purchase agreement in such form
as the Board shall approve.

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      17. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Shareholder approval must be obtained as
described in Section 6.

      18. Financial Information. During the period when any Option or Stock
Purchase Right granted under this Plan is outstanding, the Company shall make
available to all holders of outstanding Options or Stock Purchase Rights annual
financial statements prepared in accordance with generally accepted accounting
principles.

                                   **********

                                      -11-<PAGE>   1
                                                                     EXHIBIT 4.5

                                 NEW FOCUS, INC.

                                 1998 STOCK PLAN

        1. Purposes of the Plan. The purposes of this Stock Plan are to attract
and retain the best available personnel, to provide additional incentive to the
Employees of New Focus, Inc. (the "Company") and to promote the success of the
Company's business.

            Options granted hereunder may be either Incentive Stock Options or
Nonstatutory Stock Options, at the discretion of the Board and as reflected in
the terms of the written option agreement. The Board also has the discretion to
grant Stock Purchase Rights.

        2. Definitions. As used herein, the following definitions shall apply:

            (a) "Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.

            (b) "Board" means any Committees if one has been appointed by the
Board in accordance with paragraph (a) of Section 4 of the Plan, or the Board of
Directors of the Company, if no Committee is appointed.

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

            (d) "Company" means New Focus, Inc., a California corporation.

            (e) "Committee" means the Committee appointed by the Board of
Directors in accordance with Section 4(a) of the Plan, if one is appointed.

            (f) "Consultant" means any person performing services for the
benefit of the Company or any Parent or Subsidiary as a director, an independent
consultant or advisor; provided that if and in the event the Company registers
any class of any equity security pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the term Consultant shall
thereafter not include directors who are not compensated for their services or
are paid only a director's fee by the Company.

            (g) "Continuous Status as an Employee or Consultant" means the
absence of any interruption or termination of the employment or consulting
relationship, as applicable. Continuous Status as an Employee or Consultant
shall not be considered interrupted in the case of: (i) sick leave; (ii)
military leave; (iii) any other for a period of not more than 90 days or
reemployment upon the expiration of such leave is guaranteed by contract or
statute or unless otherwise provided pursuant to formal policy adopted from time
to time by the Company and issued and promulgated to Employees in writing; or
(iv) in the case of transfers between locations of the Company or between the
Company, its Parent or its Subsidiaries.

<PAGE>   2

            (h) "Employee" means any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment", by the Company.

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

            (j) "Fair Market Value" means the value of Common Stock determined
as follows:

                (i) The Common Stock is listed on any established stock exchange
or a national market system, included without limitation, the National Market
System of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, its Fair Market Value shall be the closing sales
price for such stock where the closing bid, if no sales were reported, as quoted
on such system or exchange (or the exchange with the greatest volume of trading
in common stock) for the last trading day prior to the time of determination, as
reported in the Wall Street Journal or such other source as the Administrator
deems reliable.

                (ii) If the Common Stock is quoted on the NASDAQ System (but not
on the National Market System thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high and low asked prices for the Common Stock for
the last day on which there are quoted prices prior to the time of
determination, or;

                (iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

            (k) "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422A of the Code.

            (l) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.

            (m) "Option" means a stock option granted pursuant to the Plan.

            (n) "Optioned Stock" means the Stock subject to an Option.

            (o) "Optionee" means an Employee or Consultant who receives an
Option.

            (p) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 425(e) of the Code.

            (q) "Plan" means this 1998 Stock Plan.

            (r) "Purchaser" means an Employee or Consultant who exercises a
Stock Purchase Right.

                                      -2-
<PAGE>   3

            (s) "Share" means a share of the Stock, as adjusted in accordance
with Section II of the Plan.

            (t) "Stock" means the Common Stock of the Company.

            (u) "Stock Purchase Right" means a right to purchase Stock pursuant
to the Plan or the right to receive a bonus of stock for past services rendered.

            (v) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 425(f) of the Code.

        In addition, the term "Rule 16b-3" and the term "Insiders" shall have
the meaning set forth, respectively, in Sections 4 and 8 below.

        3. Stock Subject to the Plan. Subject to the provisions of Section II of
the Plan, the maximum aggregate number of shares under the Plan is TWO HUNDRED
THOUSAND (200,000) shares of Stock. The Shares may be authorized, but unissued,
or reacquired Stock.

            If an Option or Stock Purchase Right should expire or become
unexercisable for any reason without having been exercised in full, the
unpurchased Shares which were subject thereto shall, unless the Plan shall have
been terminated, become available for future grant or sale under the Plan.
Shares issued under the Plan and later repurchased by the Company in connection
with the Company's right to repurchase unvested shares shall become available
for future grant or sale under the Plan.

        4. Administration of the Plan. The Plan shall be administered by the
Board.

            (a) Administration Prior to Registration. Subject to subsection (b),
the Board may appoint a Committee consisting of not less than two members of the
Board, to administer the Plan on behalf of the Board, subject to such terms and
conditions as the Board may prescribe. Once appointed, the Committee shall
continue to serve until otherwise directed by the Board. Members of the Board
who are either eligible for Options or Stock Purchase Rights or who have been
granted Options or Stock Purchase Rights may vote on any matters affecting the
administration of the Plan or the grant of any Options or Stock Purchase Rights
pursuant to the Plan, except that no such member shall act upon the granting of
an Option or Stock Purchase Right to himself or herself, but any such member may
be counted in determining the existence of a quorum at any meeting of the Board
or Committee during which action is taken with respect to the granting of
Options or Stock Purchase Rights to said Board or Committee member.

            (b) Administration After Registration. Notwithstanding the foregoing
subparagraph (i), if and in any event the Company registers any class of any
equity security pursuant to Section 12 of the Exchange Act, from the effective
date of such registration until six months after the termination of such
registration, the Plan shall be administered as follows:

                (i) Administration With Respect to Directors and Officers. With
respect to grants of Options or Stock Purchase Rights to Employees who are also
officers and directors of the Company, the Plan shall be administered by (A) the
Board, if the Board may administer the Plan

                                      -3-
<PAGE>   4

in compliance with Rule 16b-3 promulgated under the Exchange Act, or any
successor rule thereto ("Rule 16b-3"), with respect to a plan intended to
qualify under Rule 16b-3 as a discretionary plan, or (B) a Committee designated
by the Board to administer the Plan, which Committee shall be constituted in
such a manner as to permit the Plan to comply with Rule 16b-3 with respect to a
plan intended to qualify thereunder as a discretionary plan. Once appointed,
such Committee shall continue to serve in its designated capacity until
otherwise directed by the Board. From time to time the Board may increase the
size of the Committee and appoint additional members thereof, remove members
(with or without cause) and appoint new members in substitution therefor, fill
vacancies, however caused, and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by Rule
16b-3 with respect to a plan intended to qualify thereunder as a discretionary
plan.

                (ii) Multiple Administrative Bodies. If permitted by Rule 16b-3,
the Plan may be administered by different bodies with respect to directors,
non-director officers and Employees who are neither directors nor officers.

                (iii) Administration With Respect to Other Employees. With
respect to grants of Options or Stock Purchase Rights to Employees who are
neither directors nor officers of the Company, the Plan shall be administered by
(A) the Board or (B) a Committee designated by the Board, which Committee shall
be constituted in such a manner as to satisfy the legal requirements relating to
the administration of incentive stock option plans, if any, of California
corporate and securities laws and of the Code (the "Applicable Laws"). Once
appointed, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. From time to time The Board may increase
the size of the Committee and appoint additional members thereof, remove members
(with or without cause) and appoint new members in substitution therefor, fill
vacancies, however caused, and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by the
Applicable Laws.

            (c) Powers of the Board. Subject to the provisions of the Plan and,
in the case of a Committee, the specific duties delegated by the Board to such
Committee, the Administrator shall have the authority, in its discretion: (i) to
grant Incentive Stock Options, Nonstatutory Stock Options or Stock Purchase
Rights; (ii) to determine, in accordance with Section 1(j) of the Plan, the Fair
Market Value of the Stock; (iii) to determine the exercise price per Share of
Options, or Stock Purchase Rights, to be granted, which exercise pro shall be
determined in accordance with Section 7 of the Plan; (iv) to determine the
Employees and Consultants to whom, and the time or times at which, Options or
Stock Purchase Rights shall be granted and the number of Shares to be
represented by each Option or Stock Purchase Right; (v) to interpret the Plan;
(vi) to prescribe, amend and rescind rules and regulations relating to the Plan;
(vii) to determine the terms and provisions of each Option or Stock Purchase
Right granted (which need not be identical) and, with the consent of the holder
thereof, modify or amend each Option or Stock Purchase Right; (viii) to
accelerate or defer (with the consent of the Optionee) the exercise date of any
Option, consistent with the provisions of Section 5 of the Plan; (ix) to reduce
the exercise price of any Option to the then current Fair Market Value if the
Fair Market Value of the Common Stock covered by such Option shall have declined
since the date the Option was granted; (x) to authorize any person to execute on
behalf of the Company any instrument required to effectuate the grant of an
Option or

                                      -4-
<PAGE>   5

Stock Purchase Right previously granted by the Administrator; and (xi) to make
all other determinations deemed necessary or advisable for the administration of
the Plan.

            (d) Effect of Decisions by the Administrator. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees, Purchasers and any other holders of any Options or
Stock Purchase Rights granted under the Plan.

        5. Eligibility.

            (a) Options and Stock Purchase Rights may be granted to Employees
and Consultants, provided that Incentive Stock options may only be granted to
Employees. An Employee or Consultant who has been granted an Option or Stock
Purchase Right may, if he is otherwise eligible, be granted additional option(s)
or Stock Purchase Right(s).

            (b) Each Option or Stock Purchase Right shall be evidenced by a
written agreement, which, in the case of an Option, shall expressly identify the
Option as an incentive stock option or as a nonstatutory stock option, and which
shall be in such form and contain such provisions as the Administrator shall
from time to time deem appropriate. However, notwithstanding such designation,
to the extent that the aggregate Fair Market Value of (i) the Shares with
respect to which Options designated as incentive stock options plus (ii) the
shares of stock of the Company, Parent and any Subsidiary with respect to which
other incentive stock options are exercisable for the first time by an Optionee
during any calendar year under all plans of the Company and any Parent and
Subsidiary exceed $100,000, such excess options shall be treated as nonstatutory
stock options. For purposes of the preceding sentence, (i) Options shall be
taken into account in the order in which they were granted, and (ii) the Fair
Market Value of the Shares shall be determined as of the time the Option or
other incentive stock option is granted. Without limiting the foregoing, the
Administrator may, at any time, or from time to time, authorize the Company,
with the consent of the respective recipients, to issue options in exchange for
the surrender and cancellation of any or all outstanding options.

            (c) The Plan shall not confer upon any Optionee or holder of a Stock
Purchase Right any right with respect to continuation of employment by or the
rendition of consulting services to the Company or any Parent, nor shall it
interfere in any way with his or her right or the Company's or, where
applicable, a Parent's right to terminate his or her employment or services at
any time, which right is hereby reserved.

        6. Term of Plan. The Plan shall become effective upon the adoption by
the Board of Directors or its approval by vote of the holders of a majority of
the outstanding shares of the Company entitled to vote on the adoption of the
Plan (if obtained by written consent) or of a majority of the Shares present in
person or by proxy at a meeting of the shareholders (if obtained at a meeting),
whichever is earlier. It shall continue in effect for a term of ten (10) years
unless sooner terminated under Section 13 of the Plan.

                                      -5-
<PAGE>   6

        7. Exercise Price of and Consideration for Shares.

            (a) The per Share exercise price for the Shares to be issued
pursuant to exercise of an Option or Stock Purchase Right shall be such price as
is determined by the Administrator, but in no event shall it be less than 100%
of the Fair Market Value of Common Stock determined as of the date of grant of
the Option. In the case of an Option granted to an Employee or Consultant who,
at the time of grant of such Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110% of
the Fair Market Value of Common Stock determined as of the date of grant of the
Option.

            (b) The consideration to be paid for the Shares to be issued upon
exercise of an Option or Stock Purchase Right, including the method of payment,
shall be determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant), and may consist entirely of
(i) cash, (ii) check, (iii) promissory note, (iv) other Shares of Stock of the
Company which (x) in the case of Shares required upon exercise of an option
either have been owed by the Optionee for more than six (6) months on the date
of surrender or were not acquired, directly or indirectly, frog she Company, and
(y) have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option or Stock Purchase Right
shall be exercised, or any combination of such methods of payment, (v) delivery
of a properly executed exercise notice together with irrevocable instructions to
a broker to promptly deliver to the Company the amount of sale or loan proceeds
required to pay the exercise price, or (vi) such other consideration and method
of payment for the issuance of Shares to the extent permitted under applicable
corporate law.

        8. Options.

            (a) Term of Option. The term of each Option shall be ten (10) years
from the date of grant thereof or such shorter term as may be provided in the
Incentive Stock Option Agreement or the Nonstatutory Stock Option Agreement.

            (b) Exercise of Option.

                (i) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, including (i) execution of a restricted
stock purchase agreement with the Company in the form approved by the
Administrator and containing such provisions as described in Sections 9(c) and
(d) below, and (ii) performance criteria with respect to the Company and/or the
Optionee, and as shall be permissible under the terms of the Plan; provided,
however, that any Option granted to any person who is subject to Section 16 of
the Exchange Act ("Insider") shall not be exercisable within the first six (6)
months of its term, except that such limitation shall not apply in the event of
the Optionee's death or disability prior to the expiration of the six (6) month
period.

            An Option may not be exercised for a fraction of a Share.

                                      -6-
<PAGE>   7

                An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option payment for the Shares with
respect to which the Option is exercised has been received by the Company. Full
payment may, as authorized by the Administrator (and, in the case of an
Incentive Stock Option, determined at the time of grant) and permitted by the
Option Agreement, consist of any consideration and method of payment allowable
under Section 7 of the Plan. The Company shall issue a stock certificate
evidencing such shares as soon as practicable. Until the issuance (as evidenced
by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a shareholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. No adjustment will be made for a dividend or other right for which the
record date is prior to the date the stock certificate is issued, except as
provided in Section 11 of the Plan.

                Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

                (ii) Termination of Status as an Employee or Consultant. Unless
otherwise set forth in the Option Agreement, if an Employee or a Consultant
ceases to serve as an Employee or Consultant, as applicable (including
termination by reason of retirement), he or she may, but only within thirty (30)
days after the date he or she ceases to be an Employee or Consultant of the
Company, exercise his or her Option to the extent the Option was exercisable at
the date of such termination. To the extent the Option was not exercisable at
the date of such termination, or if he or she does not exercise such Option
(which he or she was entitled to exercise) within the time specified herein, the
Option shall terminate.

                (iii) Disability of Optionee. Notwithstanding the provisions of
Section 8 (b) (ii) above, and unless otherwise set forth in the Option
agreement, in the event an Employee or Consultant is unable to continue his or
her employment with or to perform services for the benefit of the Company as a
result of a disability, he or she may, but only within twelve (12) months from
the date of disability, exercise his or her Option to the extent the Option was
exercisable at the date of such disability. To the extent that the Option was
not exercisable at the date of disability, or if he or she does not exercise
such Option (which he or she was entitled to exercise) within the time specified
herein, the Option shall terminate.

                (iv) Death of Optionee. Unless otherwise set forth in the Option
Agreement:

                    (A) if Optionee dies during the term of the Option and is at
the time of his death an Employee or Consultant of the Company who shall have
been in Continuous Status as an Employee or Consultant since the date of grant
of the Option, then the Option may be exercised, at any time within twelve (12)
months following the date of death (or such other period of time as is
determined by the Board) provided that it is at least six (6) months following
the date of death, by the Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the extent
of the right to exercise that would have accrued had the

                                      -7-
<PAGE>   8

Optionee continued living and remained in Continuous Status as an Employee or
Consultant three (3) months after the date of death (or such other period of
time as is determined by the Board); or

                    (B) if Optionee dies within thirty (30) days (or such other
period of time not exceeding three (3) months as is determined by the Board)
after the termination of Continuous Status as an Employee, then the Option may
be exercised, at any time within one (1) year following the date of death (or
such other period of time as is determined by the Board), by the Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent of the right to exercise that had accrued
at the date of termination.

        9. Stock Purchase Rights.

            (a) Rights to Purchase. After the Administrator determines that it
will offer an Employee or Consultant a Stock Purchase Right, it shall advise the
offeree of the terms, conditions and restrictions relating to the offer,
including the number of Shares which such person shall be entitled to purchase,
and the time within which such person must accept such offer, which shall in no
event exceed ninety (90) days from the date upon which the Board or its
Committee made the determination to grant the Stock Purchase Right. The offer
shall be accepted by execution of a Stock Purchase Agreement in the form
determined by the Board of Directors.

            (b) Issuance of Shares. Forthwith after payment therefor, the Shares
purchased shall be duly issued; provided, however, that the Administrator may
require that the Purchaser make adequate provision for any federal and state
withholding obligations of the Company as a condition to the Purchaser
purchasing such Shares.

            Exercise of a Stock Purchase Right in any manner shall result in a
decrease in the number of Shares which thereafter may be available for purposes
of the Plan by the number of Shares as to which the Stock Purchase Right is
exercised.

            (c) Repurchase Option. Unless the Administrator determines
otherwise, the restricted stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
Purchaser's Continuous Status as an Employee with the Company or Parent for any
reason (including death or disability). If the Administrator so determines, the
purchase price for shares repurchased may be paid by cancellation of any
indebtedness of Purchaser to the Company. The repurchase option shall lapse at
such rate as the Administrator may determine, but at a minimum rate of 20% per
year.

            (d) Other Provisions. The restricted stock purchase agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Board.

        10. Non-Transferability of Options and Stock Purchase Rights. The
Options and Stock Purchase Rights may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by
the laws of descent or distribution and may be exercised, during the lifetime of
the Optionee or Purchaser, only by the Optionee or Purchaser.

                                      -8-
<PAGE>   9

        11. Adjustments Upon Changes in Capitalization or Merger.

            (a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of Shares covered by each outstanding
Option and Stock Purchase Right, and the number of Shares which have been
authorized for issuance under the Plan but as to which no Options or Stock
Purchase Right have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option or Stock Purchase Right, as well as
the price per Share covered by each such outstanding Option or Stock Purchase
Right, shall be proportionately adjusted for any increase or decrease in the
number of issued Shares resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the aggregate number of issued Shares effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of Shares subject to an Option or Stock Purchase
Right.

            (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, all outstanding Options and Stock
Purchase Rights will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board.

            (c) Merger. In the event of a merger of the Company with or into
another corporation, the Option may be assumed or an equivalent option may be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation. If, in such event, the Option is not assumed or
substituted, the Option shall terminate as of the date of the closing of the
merger. For the purposes of this paragraph, the Option shall be considered
assumed if, following the merger, the option confers the right to purchase, for
each Share of Optioned Stock subject to the Option immediately prior to the
merger, the consideration (whether stock, cash, or other securities or property)
received in the merger by holders of Common Stock for each Share held on the
effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger was not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option for
each Share of Optioned Stock subject to the Option to be solely common stock of
the successor corporation or its Parent equal in fair market value to the per
share consideration received by holders of Common Stock in the merger.

        12. Time of Granting Options and Stock Purchase Rights. The date of
grant of an Option or Stock Purchase Right shall, for all purposes, be the date
on which the Board makes the determination granting such Option or Stock
Purchase Right. Notice of the determination shall be given to each Employee or
Consultant to whom an Option or Stock Purchase Right is so granted within a
reasonable time after the date of such grant.

                                      -9-
<PAGE>   10

        13. Amendment and Termination of the Plan.

            (a) Amendment and Termination. The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any Optionee
or purchaser under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3 under
the Exchange Act or with Section 422A of the Code (or any other applicable law
or regulation), the Company shall obtain shareholder approval of any Plan
amendment requiring shareholder approval thereunder in such a manner and to such
a degree as is required.

            (b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options or Stock Purchase Rights
already granted and such Options or Stock Purchase Rights shall remain in full
force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee or Purchaser and the
Administrator, which agreement must be in writing and signed by the Optionee or
Purchaser and the Company.

        14. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the issuance and delivery of
Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act of 1934 (the "Exchange Act"), the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

            As a condition to the exercise of an Option or Stock Purchase Right,
the Company may require the person exercising such Option or Stock Purchase
Right to represent and warrant at the time of any such exercise that the Shares
are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required by any of the aforementioned relevant
provisions of law.

        15. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

            The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, 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.

        16. Option and Stock Purchase Agreements. Options shall be evidenced by
written option agreements in such form as the Administrator shall approve. Upon
the exercise of Options or Stock Purchase Rights, the Optionee or Purchaser, as
the case may be, shall sign a restricted stock purchase agreement in such form
as the Board shall approve.

                                      -10-
<PAGE>   11

        17. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Shareholder approval must be obtained as
described in Section 6.

        18. Financial Information. During the period when any Option or Stock
Purchase Right granted under this Plan is outstanding, the Company shall make
available to all holders of outstanding Options or Stock Purchase Rights annual
financial statements prepared in accordance with generally accepted accounting
principles.

                                   **********

                                      -11-

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