Document:

<PAGE>

                                   EXHIBIT 4.2

            MACROVISION CORPORATION 1996 DIRECTORS STOCK OPTION PLAN

<PAGE>

                             MACROVISION CORPORATION
                        1996 DIRECTORS STOCK OPTION PLAN
                        --------------------------------

       As Amended and Restated by the Board of Directors on June 16, 2000,
                 Approved by the Stockholders on August 24, 2000
            As Amended by the Board of Directors on February 16, 2001
             As Amended by the Board of Directors on April 16, 2002
                  Approved by the Stockholders on June 6, 2002

     1.   PURPOSE. The purpose of the Macrovision Corporation 1996 Directors
Stock Option Plan (the "Plan") is to grant to non-employee members of the
Company's Board of Directors ("Outside Directors") of Macrovision Corporation, a
Delaware corporation (the "Company") the opportunity to acquire Common Stock of
the Company, thereby encouraging such persons to accept or continue their
service on the Company's Board of Directors; to align the interests of such
persons with those of the Company's stockholders through stock ownership; and to
furnish such persons an additional incentive to improve operations and increase
profits of the Company.

          To accomplish the foregoing objectives, this Plan provides a means
whereby Outside Directors may receive options to purchase Common Stock. Options
granted under this Plan will be nonstatutory (nonqualified) stock options.

     2.   ADMINISTRATION. The Plan shall be administered by the Company's Board
of Directors (the "Administrator"), which shall have the power and authority to
grant stock options consistent with the terms of the Plan, including the power
and authority:

          (a)    to determine the terms and conditions of the stock option
agreements entered into between the Company and any Outside Director;

          (b)    to interpret the Plan;

          (c)    to modify or amend any such option; and

          (d)    to make all determinations necessary or advisable for the
administration of the Plan.

     3.   ELIGIBILITY; NUMBER.

          (a)    Each Outside Director who first becomes a member of the
Company's Board of Directors after the effective date of the Registration
Statement on Form SB-2 for the initial public offering of the Company's Common
Stock (the "IPO Date") shall be granted options to purchase shares of the
Company's Common Stock effective as of the date he or she first becomes a member
of the Company's Board of Directors (the "Initial Grant Date"). On and after
April 23, 2000, the number of shares of the Company's Common Stock subject to
options granted to each such Outside Director on his or her Initial Grant Date
shall be forty thousand (40,000) shares.

<PAGE>

          (b)    Each Outside Director who first becomes a member of the
Company's Board of Directors after the IPO Date shall be granted options to
purchase additional shares of the Company's Common Stock annually on each
successive anniversary of the Initial Grant Date commencing on the one (1) year
anniversary of the Initial Grant Date, provided that such Outside Director
continues to serve on the Company's Board of Directors on such dates. Each
Outside Director who is serving as a member of the Company's Board of Directors
on the IPO Date will be granted an option to purchase shares of the Company's
Common Stock annually on each successive anniversary of the IPO Date commencing
on the one (1) year anniversary of the IPO Date, provided that such Outside
Director continues to serve on the Company's Board of Directors on such dates.
Each employee member of the Company's Board of Directors who becomes an Outside
Director as a result of ceasing to be an employee of the Company will be granted
an option to purchase shares of the Company's Common Stock annually on each
successive anniversary of the IPO Date commencing on the first anniversary of
the IPO Date on which such individual serves as an Outside Director, provided
that such individual continues to serve as an Outside Director on the Company's
Board of Directors on such dates, but such an individual will not receive any
initial grant of an option to purchase shares of the Company's Common Stock
under Subsection 3(a) above. On and after February 16, 2001, the number of
shares of the Company's Common Stock subject to options granted to each Outside
Director annually under this Subsection 3(b) shall be fifteen thousand (15,000)
shares.

     4.   EXERCISE PRICE. The exercise price of each option to purchase a share
of the Company's Common Stock shall be the fair market value of a share of the
Company's Common Stock on the date on which such option is granted. For all
purposes of this Plan, the fair market value of the Company's Common Stock on
any particular date shall be determined as follows:

          (a)    If the Stock is at the time listed or admitted to trading on
any national stock exchange, then the fair market value shall be the closing
selling price per share of the Stock on the date of determination on the stock
exchange determined by the Administrator to be the primary market for the Common
Stock, as such price is officially quoted in the composite tape transactions on
such exchange. If there is no reported sale of the Stock on such exchange on the
date of determination, then the fair market value shall be the closing price on
the exchange on the last preceding date for which such quotation exists.

          (b)    If the Stock is not at the time listed or admitted to trading
on any national exchange but is traded on the NASDAQ National Market System, the
fair market value shall be the closing selling price per share of the Stock on
the date of determination, as such price is reported by the National Association
of Securities Dealers, Inc. through the NASDAQ National Market System or through
any successor system. If there is no reported closing selling price for the
Stock on the date of determination, then the fair market value shall be the
closing selling price on the last preceding date for which such quotation
exists.

          (c)    If the Stock is at the time neither listed nor admitted to
trading on any stock exchange nor traded in the over-the-counter market, then
the fair market value shall be determined by the Administrator after taking into
account such factors as the Administrator shall deem appropriate.

                                       2
<PAGE>

     5.   COMMON STOCK SUBJECT TO PLAN.

          (a)    As of April 16, 2002, there shall be reserved for issue upon
the exercise of options granted under the Plan, four hundred seventy-seven
thousand and thirty-six (477,036) shares of Common Stock. If an option granted
under the Plan shall expire or terminate for any reason without having been
exercised in full, the unpurchased shares subject thereto shall again be
available for the purposes of the Plan.

          (b)    Notwithstanding any other provisions of this Plan, the
aggregate number of shares of Common Stock subject to outstanding options
granted under this Plan, plus the aggregate number of shares issued upon the
exercise of all options granted under this Plan, shall never be permitted to
exceed the number of shares specified in the first sentence of Subsection 5(a)
above.

     6.   TERMS OF OPTIONS. Each option granted under the Plan shall be
evidenced by a nonstatutory stock option agreement between the individual to
whom the option is granted (the "optionee") and the Company. Each such agreement
shall designate the option thereby granted as a nonstatutory stock option. Each
such agreement shall be subject to the terms and conditions set forth in this
Section 6, and to such other terms and conditions not inconsistent herewith as
the Administrator may deem appropriate in each case. All options granted under
this Plan shall be subject to the following terms and conditions:

          (a)    TERM OF OPTIONS. The period or periods within which an option
may be exercised shall be determined by the Administrator at the time the option
is granted, but in no event shall such period extend beyond ten (10) years from
the date the option is granted.

          (b)    METHOD OF PAYMENT FOR COMMON STOCK. Payment for stock purchased
upon any exercise of an option granted under this Plan shall be made in full
concurrently with such exercise by any one of the following methods: (i) in
cash; (ii) if and to the extent the instrument evidencing the option so provides
and if the Company is not then prohibited from purchasing or acquiring shares of
such stock, with shares of the same class of stock as are subject to the option
that have been held by the optionee for the requisite period necessary to avoid
a charge to the Company's earnings for financial reporting purposes, delivered
in lieu of cash, with the shares so delivered to be valued on the basis of the
fair market value of the stock (determined in a manner specified in the
instrument evidencing the option) on the date of exercise; (iii) through a "same
day sale" commitment from the optionee and a broker-dealer that is a member of
the National Association of Securities Dealers (the "NASD Dealer") whereby the
optionee irrevocably elects to exercise the option and to sell a portion of the
shares so purchased to pay for the exercise price, and whereby the NASD Dealer
irrevocably commits upon receipt of such shares to forward the exercise price
directly to the Company; (iv) through a "margin" commitment from the optionee
and a NASD Dealer whereby the optionee irrevocably elects to exercise the option
and to pledge the shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the exercise price ,
and whereby the NASD Dealer irrevocably commits upon receipt of such shares to
forward the exercise price directly to the Company; or (v) any combination of
the foregoing.

                                       3
<PAGE>

          (c)    VESTING. Options granted under this Plan on or before April 22,
1999, shall become first exercisable ratably over a four (4) year period such
that each option shall become first exercisable as to one forty-eighth (1/48) of
the option shares on the last day of each month, beginning with the first full
month following the date of grant, provided that the optionee continues to serve
on the Company's Board of Directors on such dates. Initial options granted under
Subsection 3(a) of this Plan on or after April 23, 1999, and annual options
granted under Subsection 3(b) of this Plan on or after April 23, 1999, but prior
to April 23, 2000, shall become first exercisable ratably over a three (3) year
period such that each option shall become first exercisable as to one
thirty-sixth (1/36) of the option shares on the last day of each month,
beginning with the first full month following the date of grant, provided that
the optionee continues to serve on the Company's Board of Directors on such
dates. Annual options granted under Subsection 3(b) of this Plan on or after
April 23, 2000, shall become first exercisable ratably over a one (1) year
period such that each option shall become first exercisable as to one twelfth
(1/12) of the option shares on the last day of each month, beginning with the
first full month following the date of grant, provided that the optionee
continues to serve on the Company's Board of Directors on such dates.
Notwithstanding the foregoing, all options granted to an optionee under this
Plan will become exercisable immediately upon the optionee's death or disability
while serving on the Company's Board of Directors.

          (d)    DEATH; DISABILITY; RESIGNATION. In the event of an optionee's
death or disability while serving on the Company's Board of Directors, all
options granted to that optionee under this Plan may be exercised by the
optionee or the optionee's estate for a period of one (1) year after the date on
which the optionee ceases to serve on the Company's Board and will terminate if
not exercised during such period, subject to termination on the expiration of
the stated term of the option, if earlier. If an optionee resigns from the
Company's Board of Directors or declines to stand for reelection, options that
have become exercisable through the last date on which the optionee serves on
the Company's Board may be exercised for a period of three (3) months thereafter
and will terminate if not exercised during such period, subject to termination
on the expiration of the stated term of the option, if earlier. If an optionee
is removed from the Board by action of the Company's Stockholders or Board of
Directors, options that have become exercisable through the date of such removal
may be exercised for a period of one (1) week thereafter and will terminate if
not exercised during such period, subject to termination on the expiration of
the stated term of the option, if earlier. The "optionee's estate" shall mean
the duly authorized conservator or guardian of the estate of the optionee or the
executor of the optionee's last will or the duly authorized administrator or
special administrator of the optionee's probate estate or any other legal
representative of the optionee's estate duly appointed as a result of the
optionee's death or incapacity or any person who acquires the right to exercise
this option by reason of the optionee's death under the optionee's will or the
laws of intestate succession.

         (e)     WITHHOLDING AND EMPLOYMENT TAXES. At the time of exercise of an
option, the optionee shall remit to the Company in cash the amount of any and
all applicable federal and state withholding and employment taxes.

     7.   STOCK ISSUANCE AND RIGHTS AS STOCKHOLDER. Notwithstanding any other
provisions of the Plan, no optionee shall have any of the rights of a
stockholder (including the right to vote and receive dividends) of the Company,
by reason of the provisions of this Plan or any action

                                       4
<PAGE>

taken hereunder, until the date such optionee shall both have paid the exercise
price for the Common Stock and shall have been issued (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) the stock certificate evidencing such shares.

     8.   NON-TRANSFERABILITY OF OPTIONS. No option shall be transferable by the
optionee otherwise than by will or by the laws of descent and distribution and
all options shall be exercisable, during the optionee's lifetime, only by the
optionee. Notwithstanding the foregoing, the Administrator may provide in any
option agreement that the optionee may transfer, without consideration for the
transfer, such option to members of his immediate family, to trusts for the
benefit of such family members, to partnerships in which such family members are
the only partners, or to charitable organizations, provided that the transferee
agrees in writing with the Company to be bound by all of the terms and
conditions of the Plan and the applicable option agreement.

     9.   ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.

          (a)    Subject to any required action by the Company's stockholders,
the number of shares of Common Stock covered by this Plan as provided in Section
5, the number of shares covered by each outstanding option granted hereunder and
the exercise price thereof shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a split,
reverse split, subdivision or consolidation of such shares or the payment of a
stock dividend (but only on the Common Stock) or any other increase or decrease
in the number of such outstanding shares of Common Stock effected without the
receipt of consideration by the Company; provided, however, that the conversion
of any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." The number of shares of Common
Stock, as provided in Section 3, covered by options to be granted after the date
of any event described in this Subsection 9(a) shall not be adjusted as a result
of such event, unless the Board determines that it is appropriate to make such
an adjustment and amends the Plan accordingly.

          (b)    In the event of (i) a dissolution or liquidation of the
Company; (ii) a merger or consolidation in which the Company is the not the
surviving corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the stockholders of
the Company or their relative stock holdings and the options granted under this
Plan are assumed, converted or replaced by the successor corporation, which
assumption will be binding on all optionees); (iii) a merger in which the
Company is the surviving corporation but after which the stockholders of the
Company (other than any stockholder which merges (or which owns or controls
another corporation which merges) with the Company in such merger) cease to own
their shares or other equity interests in the Company; (iv) the sale of
substantially all of the assets of the Company; or (v) any other transaction
which qualifies as a "corporate transaction" under Section 424(a) of the
Internal Revenue Code of 1986, as amended, wherein the stockholders of the
Company give up all of their equity interest in the Company (except for the
acquisition, sale or transfer of all or substantially all of the outstanding
shares of the Company from or by the stockholders of the Company), any and all
outstanding options under this Plan shall become fully exercisable,
notwithstanding any other provision of this Plan and

                                       5
<PAGE>

without regard to any vesting provisions contained in the options, for a
reasonable period of time prior to the consummation of such event. Upon any such
event, the successor corporation (if any) may assume, convert or replace any
outstanding options that are not exercised prior to the consummation of the
event or may substitute equivalent options or provide substantially similar
consideration to the optionees as was provided to the stockholders (after taking
into account the existing provisions of the option grants). In the event such
successor corporation (if any) does not assume or substitute options, as
provided above, upon an event described in this Subsection 9(b), such options
will terminate on the consummation of such event at such time and on such
conditions as the Company's Board of Directors shall determine.

          (c)    To the extent that any adjustments described in this Section 9
relate to stock or securities of the Company, such adjustments shall be made by
the Company's Board of Directors, whose determination in that respect shall be
final, binding and conclusive.

          (d)    Except as expressly provided in this Section 9, no optionee
shall have any rights by reason of any subdivision or consolidation of shares of
the capital stock of any class or the payment of any stock dividend or any other
increase or decrease in the number of shares of any class or by reason of any
dissolution, liquidation, merger or consolidation or spin-off of assets or stock
of another corporation, and any issue by the Company of shares of stock of any
class or of securities convertible into shares of stock of any class shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares subject to any option granted hereunder.

          (e)    The grant of an option pursuant to this Plan shall not affect
in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.

     10.  SECURITIES LAW REQUIREMENTS.

          (a)    The Administrator may require an individual as a condition of
the grant and of the exercise of an option, to represent and establish to the
satisfaction of the Administrator that all shares of Common Stock to be acquired
upon the exercise of such option will be acquired for investment and not for
resale. The Administrator shall cause such legends to be placed on certificates
evidencing shares of Common Stock issued upon exercise of an option as, in the
opinion of the Company's counsel, may be required by federal and applicable
state securities laws.

          (b)    No shares of Common Stock shall be issued upon the exercise of
any option unless and until counsel for the Company determines that: (i) the
Company and the optionee have satisfied all applicable requirements under the
Securities Act of 1933, as amended (the "Securities Act") and the Exchange Act;
(ii) any applicable listing requirement of any stock exchange on which the
Company's Common Stock is listed has been satisfied; and (iii) all other
applicable provisions of state and federal law have been satisfied.

     11.  FINANCIAL ASSISTANCE. The Company shall have the authority under this
Plan to assist any Outside Director to whom an option is granted hereunder in
the payment of the

                                       6
<PAGE>

purchase price payable on exercise of that option, by lending the amount of such
purchase price to such Outside Director on such terms and at such rates of
interest and upon such security as shall have been authorized by or under
authority of the Company's Board of Directors.

     12.  AMENDMENT. The Company's Board of Directors may terminate the Plan or
amend the Plan from time to time in such respects as the Board may deem
advisable.

     13.  TERMINATION. The Plan shall terminate automatically on December 1,
2006, and may be terminated at any earlier date by the Company's Board of
Directors. No option shall be granted hereunder after termination of the Plan,
but such termination shall not affect the validity of any option then
outstanding.

     14.  TIME OF GRANTING OPTIONS. The date of grant of an option hereunder
shall, for all purposes, be the date on which the Administrator makes the
determination granting such option.

     15.  RESERVATION OF SHARES. The Company, during the term of this Plan, will
at all times reserve and keep available such number of shares of its Common
Stock as shall be sufficient to satisfy the requirements of the Plan.

     16.  EFFECTIVE DATE. This Plan was adopted by the Company's Board of
Directors on December 3, 1996, and was approved by the stockholders of the
Company on February 25, 1997. The Plan was most recently restated by the
Company's Board of Directors on June 16, 2000, which restatement was approved by
the stockholders of the Company on August 24, 2000, and subsequently amended by
the Company's Board of Directors on February 16, 2001. However, no options shall
be granted under the Plan prior to the IPO Date.

                                       7<PAGE>

                                   EXHIBIT 4.3

            MACROVISION CORPORATION 1996 EMPLOYEE STOCK PURCHASE PLAN

<PAGE>

                             MACROVISION CORPORATION
                        1996 EMPLOYEE STOCK PURCHASE PLAN
                        ---------------------------------

                      As Adopted Effective December 3, 1996
                 Restated for Merger effective February 14, 1997
          Restated for Reverse Stock Split effective February 26, 1997
              Restated for Stock Dividend effective August 6, 1999
              Restated for Stock Dividend effective March 17, 2000
Restated for Amendment Approved by Board of Directors effective February 1, 2001
             As Amended by the Board of Directors on April 16, 2002
                  Approved by the Stockholders on June 6, 2002

     1.   PURPOSE. The purpose of the Macrovision Corporation 1996 Employee
Stock Purchase Plan (the "Plan") is to grant to all employees of Macrovision
Corporation, a Delaware corporation (the "Company") and its subsidiaries and
affiliates, a favorable opportunity to acquire Common Stock of the Company,
thereby encouraging all employees to accept, or to continue in, employment with
the Company; increasing the interest of all employees in the Company's welfare
through participation in the growth and value of the Common Stock; and
furnishing employees with an incentive to improve operations and increase
profits of the Company.

     To accomplish the foregoing objectives, this Plan provides a means whereby
all employees may accrue rights to purchase shares of Common Stock of the
Company.

     2.   ADMINISTRATION. The Plan shall be administered by the Board of
Directors (the "Board") of the Company or by a committee of two or more
directors appointed by the Board (the "Administrator").

     The Administrator may delegate nondiscretionary administrative duties to
such employees of the Company as it deems proper. Subject to the terms and
conditions of this Plan, the Administrator shall have the sole authority, in its
discretion to interpret the Plan and to make all determinations deemed necessary
or advisable for the administration of the Plan.

     3.   ELIGIBILITY.

          3.1    EMPLOYMENT REQUIREMENT. Except as otherwise set forth herein,
every individual who, on the date of commencement of any offering period
pursuant to this Plan, is an employee of the Company or of any parent or
subsidiary of the Company, as defined below, is eligible to receive purchase
rights to acquire shares of Common Stock of the Company pursuant to this Plan.
The term "employee" includes an officer or director who is an employee of the
Company or a parent or subsidiary of it, as well as a non-officer, non-director
employee of the Company or a parent or subsidiary of it and excludes an
individual who provides services to the Company as an independent contractor
whether or not such individual is reclassified as a common law employee, unless
the Company withholds or is required to withhold U.S. Federal employment taxes
for such individual pursuant to Section 3402 of the Internal Revenue Code of
1986, as amended (the "IRC"). As used in this Plan, the terms "parent
corporation" and

                                       1
<PAGE>

"subsidiary corporation" shall have the meanings set forth in Sections 424(e)
and (f), respectively, of the IRC.

          3.2    PERMISSIBLE EMPLOYEES. In no event shall a purchase right be
granted to any individual who, immediately after the grant of such purchase
right, would own five percent (5%) or more of the total combined voting power or
value of all classes of outstanding capital stock of the Company, its parent or
any subsidiary. For purposes of this Section 3.2, in determining stock
ownership, an individual shall be considered as owning the voting capital stock
owned, directly or indirectly, by or for his brothers and sisters, spouse,
ancestors and lineal descendants. Voting capital stock owned, directly or
indirectly, by or for a corporation, partnership, estate or trust shall be
considered as being owned proportionately by or for its stockholders, partners
or beneficiaries, as applicable. An individual shall be considered as owning the
shares of Common Stock issuable upon exercise of any option or purchase right
which such individual holds. Additionally, for purposes of this Section 3.2,
outstanding capital stock shall include all capital stock actually issued and
outstanding immediately after the grant of the option or the purchase right.
Outstanding capital stock shall not include capital stock authorized for issue
under outstanding options or purchase rights held by any person.

          3.3    EXCLUDED EMPLOYEES. The following categories of employees shall
be excluded from participating in this Plan: (i) employees whose customary
employment is twenty (20) hours or less per week; and (ii) employees whose
customary employment is not more than five months in any calendar year.

          3.4    TRANSFER TO RELATED CORPORATION. In the event that an employee
leaves the employ of the Company to become an employee of any parent or
subsidiary corporation of the Company, or if the employee leaves the employ of
any such parent or subsidiary corporation to become an employee of the Company
or of another parent or subsidiary corporation, such employee shall be deemed to
continue as an employee of the Company for all purposes of this Plan.

     4.   COMMON STOCK SUBJECT TO PLAN.

          4.1    SHARES RESERVED FOR ISSUE. As of April 16, 2002, there shall be
reserved for issue upon the exercise of options granted under this Plan three
hundred sixty-one thousand eight hundred twenty-seven (361,827) shares of Common
Stock ("Plan Shares"), subject to adjustment as provided in Section 12 hereof.
If any purchase rights granted under this Plan shall expire or terminate for any
reason without having been exercised in full, the unpurchased shares subject
thereto shall again be available for the purposes of the Plan.

          4.2    AGGREGATE SHARES. Notwithstanding any other provisions of this
Plan, the aggregate number of shares of Common Stock subject to outstanding
purchase rights granted under this Plan, plus the aggregate number of shares
issued upon the exercise of all purchase rights granted under this Plan, shall
never be permitted to exceed the number of shares specified in the first
sentence of Section 4.1 above.

                                       2
<PAGE>

     5.   NONTRANSFERABILITY. All purchase rights acquired pursuant to this Plan
shall be nontransferable, except by will or the laws of descent and
distribution, and shall be exercisable during the lifetime of the participant
only by the participant.

     6.   TERMS AND CONDITIONS OF EACH OFFERING. All offerings under this Plan
shall be subject to the following terms and conditions:

          6.1    TERM AND FREQUENCY OF OFFERINGS. Each offering under the
Purchase Plan will be for a period of twenty-four (24) months (the "Offering
Period") commencing on February 1 and August 1 of each year and ending
twenty-four (24) months thereafter on January 31 and July 31, respectively;
provided, however, that, notwithstanding the foregoing, the first Offering
Period will begin on the effective date of the Registration Statement on Form
SB-2 for the initial public offering of the Company's Common Stock and will end
on January 31, 1999. Except for the first Offering Period, each Offering Period
will consist of four (4) six-month purchase periods (each a "Purchase Period")
commencing on the first business day of February and August of each year. The
first Offering Period shall consist of no fewer than three (3) Purchase Periods,
the first of which may be greater or less than six months as determined by the
Administrator. The Board has the power to change the duration of Offering
Periods or Purchase Periods without stockholder approval, provided that the
change is announced at least fifteen (15) days prior to the scheduled beginning
of the first Offering Period or Purchase Period to be affected.

          6.2    OTHER TERMS AND CONDITIONS. Purchase rights granted under this
Plan shall be subject to the terms and conditions set forth herein, and to such
other terms and conditions not inconsistent herewith as the Administrator may
deem appropriate, provided that, except as otherwise permitted herein, such
terms and conditions shall be identical for each participant granted purchase
rights pursuant to any particular offering.

          6.3    ELECTION TO PARTICIPATE. An individual who is an eligible
employee and desires to participate in an offering, should deliver to the
Administrator no later than the 5th day before the start of the particular
Offering Period a written enrollment form evidencing his or her election to
participate. Once an employee becomes a participant in an Offering Period, such
employee will automatically participate in the Offering Period commencing
immediately following the last day of the prior Offering Period unless the
employee withdraws or is deemed to withdraw from this Plan or terminates further
participation in the Offering Period as set forth in Sections 6.8 and 6.9. If
the purchase price on the first day of any current Offering Period in which a
participant is enrolled is higher than the purchase price on the first day of
any subsequent Offering Period, the Company automatically will enroll such
participant in the subsequent Offering Period (the participant does not need to
file any forms with the Company to be so enrolled), and any funds accumulated in
such participant's account, and not withdrawn, prior to the first day of such
subsequent Offering Period will be applied to purchase shares on the Purchase
Date immediately prior to the first day of such subsequent Offering Period.

          6.4    PURCHASE RIGHTS. Enrollment by an eligible employee in this
Plan with respect to an Offering Period will constitute the grant, as of the
first day of such Offering Period, by the Company to such employee of purchase
rights to acquire that number of Plan Shares

                                       3
<PAGE>

(rounded to the nearest whole share) equal to the quotient obtained by dividing
(i) the amount accumulated in such employee's payroll deduction account during
each Purchase Period in the Offering Period, by (ii) eighty-five percent (85%)
of the lesser of the fair market value of the Company's Common Stock on the
first day of the applicable Offering Period or on the last day of the respective
Purchase Period, subject to the limitations set forth below (the "Maximum
Shares"). No participant may accrue purchase rights, pursuant to this Plan
(and/or any other stock purchase plan qualifying under IRC Section 423 of this
Company or of any parent or subsidiary of this Company), to acquire more than
twenty-five thousand dollars ($25,000) worth of Common Stock (based on the fair
market value of the Common Stock on the grant date of the purchase rights) in
any one calendar year. No participant may accrue purchase rights pursuant to
this Plan to acquire more than the maximum number of shares that may be
established for a particular Purchase Period or Offering Period by the Board or
the Administrator.

          6.5    PAYMENT FOR COMMON STOCK. The purchase price will be paid with
funds accumulated through periodic payroll deductions from the participant's
compensation during the Offering Period. The participant should provide written
authorization for payroll deductions to the Company department designated by the
Administrator, on or before the 5th day of the month preceding any Offering
Period, specifying the percentage, which shall be not less than one percent
(1%), nor more than twenty percent (20%), of his or her gross compensation
earned during each payroll period during the Offering Period, which he or she
desires to be deducted and set aside for purchases of Plan Shares for the
duration of the Offering Period, up to an aggregate payroll deduction not to
exceed twenty-one thousand two hundred fifty dollars ($21,250) in any calendar
year. A participant may reduce (but not increase) the rate of payroll deductions
during an Offering Period by filing with the Company department designated by
the Administrator a new written authorization for payroll deductions, in which
case the new rate shall become effective for the next payroll period commencing
more than fifteen (15) days after receipt of the authorization and shall
continue for the remainder of the Offering Period. Such a change in the rate of
payroll deductions may be made at any time during an Offering Period, but not
more than one (1) change may be made effective during any Offering Period. A
participant may increase or decrease the rate of payroll deductions for any
subsequent Offering Period by filing a new authorization for payroll deductions
not later than five (5) days before the beginning of such Offering Period.
Payroll deductions made for each participant shall be credited to a special book
account on the Company's books, but no funds will be actually set aside in any
special fund or account.

          6.6    PURCHASE DATES. The semi-annual purchase dates will occur on
the last business day of each Purchase Period (the "Purchase Dates"). All
payroll deductions collected from the participant and not theretofore applied to
the purchase of Plan Shares, will automatically be applied to the purchase of
that number of Plan Shares for which the participant was granted purchase rights
for that Purchase Period pursuant to the formula set forth in Section 6.4
hereof. Any funds deducted from the participant's compensation pursuant to this
Plan during a particular Purchase Period in excess of the purchase price of the
shares purchased for the Purchase Period shall be carried over to subsequent
Purchase Periods within the same Offering Period. Any funds deducted from the
participant's compensation pursuant to this Plan for a particular Offering
Period in excess of the purchase price of the shares purchased during the

                                       4
<PAGE>

Offering Period shall be promptly refunded to the participant following the
expiration of the Offering Period.

          6.7    PURCHASE PRICE. The purchase price for the Company's Common
Stock purchased under the Purchase Plan is 85% of the lesser of the fair market
value of the Company's Common Stock on the first day of the applicable Offering
Period or the last day of the respective Purchase Period. For all purposes of
this Plan, the fair market value of the Common Stock on any particular date
shall be the closing price on such date on the principal securities exchange on
which the Company's Common Stock is listed, or, if such Common Stock is not then
listed on any securities exchange, then the fair market value of the Common
Stock on such date shall be the closing bid price as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") on
the trading day. In the event that the Company's Common Stock is neither listed
on a securities exchange nor quoted by NASDAQ, then the Administrator shall
determine the fair market value of the Company's Common Stock on such date,
which in the case of the first day of the first Offering Period will be the
price per share at which shares of the Company's Common Stock are initially
offered for sale to the public by the Company's underwriters in the initial
public offering of the Company's Common Stock pursuant to the Registration
Statement on Form SB-2.

          6.8    WITHDRAWAL. Each participant may withdraw from an Offering
Period under this Plan by notifying the Administrator in writing of his or her
election to withdraw at any time at least fifteen (15) days prior to the end of
an Offering Period. Upon receipt of such notice by the Administrator, all future
payroll deductions will cease, and any payroll deductions previously collected
during such Offering Period pursuant to Section 6.5 (to the extent not already
applied to the purchase of Plan Shares) will be refunded, without interest. In
the event a participant voluntarily elects to withdraw from this Plan, he or she
may not resume his or her participation in this Plan during the same Offering
Period, but he or she may participate in any Offering Period under this Plan
which commences on a date subsequent to such withdrawal in the same manner as
set forth above for initial participation in this Plan.

          6.9    TERMINATION OF PARTICIPATION IN AN OFFERING. Payroll deductions
with respect to any participant in an offering will automatically terminate upon
the participant's cessation of employment, retirement, permanent or total
disability, as defined in Section 105(d)(4) of the IRC or death (a "terminating
event").

          6.10   REGISTRATION OF PLAN AND DUE AUTHORIZATION. Notwithstanding
anything to the contrary, express or implied herein, no rights granted under the
Plan may be exercised to any extent unless the Plan (including the purchase
rights and the shares covered thereby) is covered by an effective registration
statement pursuant to the Securities Act of 1933, as amended (the "Securities
Act"). If on any Purchase Date, the Plan is not so registered, no rights granted
under the Plan or any offering shall be exercised, and the Purchase Date shall
be delayed until the Plan is subject to an effective registration statement,
except that the Purchase Date shall not be delayed more than six (6) months, and
in no event shall the Purchase Date be more than twenty-seven (27) months from
the commencement of the particular Offering Period. If on the Purchase Date of
any offering hereunder, as delayed to the maximum extent permissible, the Plan
is still not registered, no purchase rights shall be exercised and all payroll
deductions accumulated (to

                                       5
<PAGE>

the extent not already applied to the purchase of Plan Shares) shall be refunded
to the participants, without interest. If after reasonable efforts, the Company
is unable to obtain from each regulatory commission or agency having
jurisdiction over the Plan such authority as counsel for the Company deems
necessary or appropriate, the Company shall be relieved from any liability for
failure to issue and sell Plan Shares upon exercise of such purchase rights
unless and until such authority is obtained.

     7.   WITHHOLDING AND EMPLOYMENT TAXES. The Company shall be entitled to
withhold and/or pay from any payroll deductions made pursuant to this Plan, the
amount of any and all applicable federal and state withholding and employment
taxes.

     8.   EQUAL RIGHTS AND PRIVILEGES. Except as set forth in Sections 3.2 and
3.3, all employees eligible to participate in this Plan shall have the same
rights and privileges hereunder, except in any particular offering, the amount
of stock which may be purchased by any employee may bear a uniform relationship
to the employee's total compensation, or his or her basic or regular rate of
compensation.

     9.   DISQUALIFYING DISPOSITIONS. If any Plan Shares are disposed of within
two (2) years from the date the purchase rights were acquired or within one (1)
year after the acquisition of the Plan Shares by the participant, immediately
prior to the disposition, the participant shall promptly notify the Company in
writing of the date and terms of the disposition and shall provide such other
information regarding the disposition as the Company may reasonably require.

     10.  STOCK ISSUANCE AND RIGHTS AS STOCKHOLDER. Notwithstanding any other
provisions of the Plan, no participant shall have any of the rights of a
stockholder (including the right to vote and receive dividends) of the Company,
by reason of the provisions of this Plan or any action taken hereunder, until
the date such participant shall both have paid the purchase price for the Plan
Shares and shall have been issued (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company) the
stock certificate evidencing such shares.

     11.  DESIGNATION OF BENEFICIARY. A participant may file a written
designation of a beneficiary who is to receive any shares and cash, if any, from
the participant's account under the Plan in the event of such participant's
death subsequent to the end of an Offering Period but prior to delivery to him
or her of such shares and cash. In addition, a participant may file a written
designation of a beneficiary who is to receive any cash from the participant's
account under the Plan in the event of such participant's death prior to the
Exercise Date of an Offering Period. If a participant is married and the
designated beneficiary is not the spouse, spousal consent shall be required for
such designation to be effective. Such designation of beneficiary may be changed
by the participant (and his or her spouse, if any) at any time by written
notice. In the event of the death of a participant and in the absence of a
beneficiary validly designated under the Plan who is living at the time of such
participant's death, the Company shall deliver such shares and/or cash to the
executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such shares and/or cash to the
spouse or to any one or

                                       6
<PAGE>

more dependents or relatives of the participant, or if no spouse, dependent or
relative is known to the Company, then to such other person as the Company may
designate.

     12.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.

          12.1   APPROPRIATE ADJUSTMENT IN NUMBER OF SHARES. Subject to any
required action by the Company's stockholders, the number of shares of Common
Stock covered by this Plan as provided in Section 4, the number of shares
covered by each outstanding purchase right granted hereunder and the purchase
price thereof shall be proportionately adjusted for any increase or decrease in
the number of issued shares of Common Stock resulting from a subdivision or
consolidation of such shares or the payment of a stock dividend (but only on the
Common Stock) or any other increase or decrease in the number of such
outstanding shares of Common Stock effected without the receipt of consideration
by the Company; provided, however, that the conversion of any convertible
securities of the Company shall not be deemed to have been "effected without
receipt of consideration."

          12.2   MERGERS AND/OR ACQUISITIONS. Subject to any required action by
the Company's stockholders, if the Company shall be the surviving corporation in
any merger or consolidation (other than one described in (iii) below), each
outstanding purchase right shall pertain and apply to the securities to which a
holder of the number of shares subject to the purchase right would have been
entitled. In the event of (i) a dissolution or liquidation of the Company; (ii)
a merger or consolidation in which the Company is the not the surviving
corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the stockholders of
the Company or their relative stock holdings and the purchase rights granted
under this Plan are assumed, converted or replaced by the successor corporation,
which assumption will be binding on all participants); (iii) a merger in which
the Company is the surviving corporation but after which the stockholders of the
Company (other than any stockholder which merges (or which owns or controls
another corporation which merges) with the Company in such merger) cease to own
their shares or other equity interests in the Company; (iv) the sale of
substantially all of the assets of the Company; or (v) any other transaction
which qualifies as a "corporate transaction" under Section 424(a) of the
Internal Revenue Code of 1986, as amended, wherein the stockholders of the
Company give up all of their equity interest in the Company (except for the
acquisition, sale or transfer of all or substantially all of the outstanding
shares of the Company from or by the stockholders of the Company), each
outstanding purchase right shall terminate, unless the surviving corporation in
the case of a merger or consolidation assumes outstanding purchase rights or
replaces them with substitute purchase rights having substantially similar terms
and conditions; provided, however, that if an outstanding purchase right is to
terminate upon any such event, the Administrator on such terms and conditions as
it deems appropriate, shall provide either by the terms of the agreement or by a
resolution adopted prior to the occurrence of any such event, that, for some
period of time prior to such event, such purchase right shall be exercisable as
to all of the shares covered by the portion of the purchase right that
previously has not lapsed, terminated, or been exercised.

                                       7
<PAGE>

          12.3   BOARD'S DETERMINATION CONCLUSIVE. To the extent that the
foregoing adjustments relate to stock or securities of the Company, such
adjustments shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive.

          12.4   LIMITATION ON RIGHTS. Except as hereinabove expressly provided
in this Section 12, no participant shall have any rights by reason of any
subdivision or consolidation of shares of the capital stock of any class or the
payment of any stock dividend or any other increase or decrease in the number of
shares of any class or by reason of any dissolution, liquidation, merger or
consolidation or spin-off of assets or stock of another corporation, and any
issue by the Company of shares of stock of any class or of securities
convertible into shares of stock of any class shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares subject to any purchase right granted hereunder.

          12.5   RESERVATION OF RIGHTS. The grant of a purchase right pursuant
to this Plan shall not affect in any way the right or power of the Company to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure or to merge or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.

     13.  SECURITIES LAW REQUIREMENTS.

          13.1   INVESTMENT REPRESENTATIONS. The Administrator may require an
individual as a condition of the grant and of the exercise of a purchase right,
to represent and establish to the satisfaction of the Administrator that all
Plan Shares to be acquired will be acquired for investment and not for resale.
The Administrator shall cause such legends to be placed on certificates
evidencing Plan Shares as, in the opinion of the Company's counsel, may be
required by federal and applicable state securities laws.

          13.2   COMPLIANCE WITH APPLICABLE SECURITIES LAWS. No Plan Shares
shall be issued unless and until counsel for the Company determines that: (i)
the Company and the participant have satisfied all applicable requirements under
the Securities Act of 1933, as amended, and the Exchange Act; (ii) any
applicable requirement of any stock exchange or quotation system on which the
Company's Common Stock is listed or quoted has been satisfied; and (iii) all
other applicable provisions of state and federal law have been satisfied.

     14.  AMENDMENT. The Board may terminate the Plan or amend the Plan from
time to time, immediately after the close of any offering, in such respects as
the Board may deem advisable, provided that, without the approval of the
Company's stockholders in compliance with the requirements of applicable law, no
such revision or amendment shall:

          (a)    increase the number of shares of Common Stock reserved under
Section 4 hereof for issue under the Plan, except as provided in Section 12
hereof;

          (b)    change the class of persons eligible to participate in the Plan
under Section 3 hereof;

          (c)    extend the term of the Plan under Section 15 hereof; or

                                       8
<PAGE>

          (d)    amend this Section 14 to defeat its purpose.

     15.  TERMINATION. The Plan will terminate automatically on the earlier of
termination by the Board, issuance of all the shares reserved under the Purchase
Plan or ten years from the date the Purchase Plan was adopted by the Board. No
offering shall be initiated hereunder after termination of the Plan, but such
termination shall not affect the validity of any purchase rights then
outstanding.

     16.  TIME OF GRANTING OPTIONS. The date of grant of a purchase right
hereunder shall, for all purposes, be the date on which the particular Offering
Period commences.

     17.  RESERVATION OF SHARES. The Company, during the term of this Plan, will
at all times reserve and keep available such number of shares of its Common
Stock as shall be sufficient to satisfy the requirements of the Plan.

     18.  EFFECTIVE DATE. This Plan was adopted by the Board of Directors of the
Company on December 3, 1996, and shall be effective on said date. The Plan was
approved by the stockholders of the Company on February 25, 1997.

                                       9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}]]