Document:

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                                                                     EXHIBIT 4.5

                        ASPECT COMMUNICATIONS CORPORATION

                        1998 DIRECTORS' STOCK OPTION PLAN

                   Amended and Restated as of August 31, 2000

     1.   Purposes of the Plan. The purposes of this Directors' Stock Option
Plan are to attract and retain the best available individuals for service as
Directors of the Company, to provide additional incentive to the Outside
Directors of the Company to serve as Directors, and to encourage their continued
service on the Board.

     All options granted hereunder shall be nonstatutory stock options.

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

          (a)  "Board" shall mean the Board of Directors of the Company.

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

          (c)  "Common Stock" shall mean the Common Stock of the Company.

          (d)  "Company" shall mean Aspect Communications Corporation, a
California corporation.

          (e)  "Continuous Status as a Director" shall mean the absence of any
interruption or termination of service as a Director.

          (f)  "Director" shall mean a member of the Board.

          (g)  "Employee" shall mean any person, including any officer or
director, 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 in and of
itself to constitute "employment" by the Company.

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

          (i)  "Option" shall mean a stock option granted pursuant to the Plan.
All options shall be nonstatutory stock options (i.e., options that are not
intended to qualify as incentive stock options under Section 422 of the Code).

          (j)  "Optioned Stock" shall mean the Common Stock subject to an
Option.

          (k)  "Optionee" shall mean an Outside Director who receives an Option.

          (l)  "Outside Director" shall mean a Director who is not an Employee.

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          (m)  "Parent" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

          (n)  "Plan" shall mean this 1998 Directors' Stock Option Plan.

          (o)  "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.

          (p)  "Subsidiary" shall mean a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.

     3.   Stock Subject to the Plan. Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 450,000 Shares (the "Pool") of Common Stock. The Shares may be
authorized, but unissued, or reacquired Common Stock.

     If an Option 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 under the Plan. If Shares which were acquired upon exercise of an Option
are subsequently repurchased by the Company, such Shares shall not in any event
be returned to the Plan and shall not become available for future grant under
the Plan.

     4.   Administration of and Grants of Options under the Plan.

          (a)  Administrator. Except as otherwise required herein, the Plan
shall be administered by the Board.

          (b)  Procedure for Grants. All grants of Options hereunder shall be
automatic and nondiscretionary and shall be made strictly in accordance with the
following provisions:

               (i)   No person shall have any discretion to select which Outside
Directors shall be granted Options or to determine the number of Shares to be
covered by Options granted to Outside Directors.

               (ii)  Each person who becomes an Outside Director after the
effective date of this Plan, as determined in accordance with Section 6 hereof,
shall be automatically granted an Option to purchase 24,000 Shares (the "First
Option"), on the date on which such person first becomes an Outside Director,
whether through election by the shareholders of the Company or appointment by
the Board of Directors to fill a vacancy.

               (iii) Each Outside Director shall be automatically granted an
Option to purchase 6,000 Shares (a "Subsequent Option") on August 31 of each
year (if August 31 falls on a Saturday, Sunday or holiday, then the Option shall
be automatically granted on the immediately preceding business day), provided
that, on such date, he or she shall have served on the Board for at least six
(6) months.

               (iv)  Notwithstanding the provisions of subsections (ii) and
(iii) hereof, in the event that a grant would cause the number of Shares subject
to outstanding Options plus the

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number of Shares previously purchased upon exercise of Options to exceed the
Pool, then each such automatic grant shall be for that number of Shares
determined by dividing the total number of Shares remaining available for grant
by the number of Outside Directors receiving an Option on such date on the
automatic grant date. Any further grants shall then be deferred until such time,
if any, as additional Shares become available for grant under the Plan through
action of the shareholders to increase the number of Shares which may be issued
under the Plan or through cancellation or expiration of Options previously
granted hereunder.

               (v)    Notwithstanding the provisions of subsections (ii) and
(iii) hereof, any grant of an Option made before the Company has obtained
shareholder approval of the Plan in accordance with Section 17 hereof shall be
conditioned upon obtaining such shareholder approval of the Plan in accordance
with Section 17 hereof.

               (vi)   The terms of each First Option granted hereunder shall be
as follows:

                      (1)  the First Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Sections 4(e) and 9 hereof;

                      (2)  the exercise price per Share shall be 100% of the
fair market value per Share on the date of grant of the First Option, determined
in accordance with Section 8 hereof; and

                      (3)  the First Option shall become vested and exercisable
in installments cumulatively as to 25% of the Shares subject to the First Option
on each of the first, second, third and fourth anniversaries of the date of
grant of the Option.

               (vii)  The terms of each Subsequent Option granted hereunder
shall be as follows:

                      (1)  the Subsequent Option shall be vested and exercisable
only while the Outside Director remains a Director of the Company, except as set
forth in Sections 4(e) and 9 hereof;

                      (2)  the exercise price per Share shall be 100% of the
fair market value per Share on the date of grant of the Subsequent Option,
determined in accordance with Section 8 hereof; and

                      (3)  the Subsequent Option shall become vested and
exercisable in installments cumulatively as to 25% of the Shares subject to the
Subsequent Option on each of the first, second, third and fourth anniversaries
of the date of grant of the Option

          (c)  Powers of the Board. Subject to the provisions and restrictions
of the Plan, the Board shall have the authority, in its discretion: (i) to
determine, upon review of relevant information and in accordance with Section
8(b) of the Plan, the fair market value of the Common Stock; (ii) to determine
the exercise price per share of Options to be granted, which exercise price
shall be determined in accordance with Section 8(a) of the Plan; (iii) to
interpret the Plan; (iv) to prescribe, amend and rescind rules and regulations
relating to the Plan; (v) to authorize any person

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to execute on behalf of the Company any instrument required to effectuate the
grant of an Option previously granted hereunder; and (vi) to make all other
determinations deemed necessary or advisable for the administration of the Plan.

          (d)  Effect of Board's Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.

          (e)  Suspension or Termination of Option. If the Chief Executive
Officer or his or her designee reasonably believes that an Optionee has
committed an act of misconduct, the Chief Executive Officer may suspend the
Optionee's right to exercise any option pending a determination by the Board of
Directors (excluding the Outside Director accused of such misconduct). If the
Board of Directors (excluding the Outside Director accused of such misconduct)
determines an Optionee has committed an act of embezzlement, fraud, dishonesty,
nonpayment of an obligation owed to the Company, breach of fiduciary duty or
deliberate disregard of the Company rules resulting in loss, damage or injury to
the Company, or if an Optionee makes an unauthorized disclosure of any Company
trade secret or confidential information, engages in any conduct constituting
unfair competition, induces any Company customer to breach a contract with the
Company or induces any principal for whom the Company acts as agent to terminate
such agency relationship, neither the Optionee nor his or her estate shall be
entitled to exercise any option whatsoever. In making such determination, the
Board of Directors (excluding the Outside Director accused of such misconduct)
shall act fairly and shall give the Optionee an opportunity to appear and
present evidence on Optionee's behalf at a hearing before the Board or a
committee of the Board.

     5.   Eligibility. Options may be granted only to Outside Directors. All
Options shall be automatically granted in accordance with the terms set forth in
Section 4(b) hereof. An Outside Director who has been granted an Option may, if
he or she is otherwise eligible, be granted an additional Option or Options in
accordance with such provisions.

     The Plan shall not confer upon any Optionee any right with respect to
continuation of service as a Director or nomination to serve as a Director, nor
shall it interfere in any way with any rights which the Director or the Company
may have to terminate his or her directorship at any time.

     6.   Term of Plan; Effective Date. The Plan shall become effective upon its
approval by the shareholders of the Company as described in Section 17 of the
Plan. It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 13 of the Plan.

     7.   Term of Options. The term of each Option shall be ten (10) years from
the date of grant thereof.

     8.   Exercise Price and Consideration.

          (a)  Exercise Price. The per Share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be 100% of the fair market value
per Share on the date of grant of the Option.

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          (b)  Fair Market Value. The fair market value shall be determined by
the Board; provided, however, that in the event the Common Stock is traded on
the Nasdaq National Market or listed on a stock exchange, the fair market value
per Share shall be the closing sale price on such system or exchange on the date
of grant of the Option (or, in the event that the Common Stock is not traded on
such date, on the immediately preceding trading date), as reported by Nasdaq or
the stock exchange.

          (c)  Form of Consideration. The consideration to be paid for the
Shares to be issued upon exercise of an Option shall consist entirely of cash,
check, other Shares of Common Stock having a fair market value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised (which, if acquired from the Company, shall have been
held for at least six months), delivery of a properly executed exercise together
with irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds required to pay the exercise price, or any
combination of such methods of payment and/or any other consideration or method
of payment as shall be permitted under applicable corporate law.

     9.   Exercise of Option.

          (a)  Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times as are set forth in Section
4(b) hereof; provided, however, that no Options shall be exercisable prior to
shareholder approval of the Plan in accordance with Section 17 hereof has been
obtained.

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

               (ii)  An Option shall be deemed to be exercised when properly
executed 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 and
full payment for the Shares with respect to which the Option is exercised has
been received by the Company. Full payment may consist of any consideration and
method of payment allowable under Section 8(c) of the Plan. 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. A share certificate (or appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company) for the
number of Shares so acquired shall be issued (or made) to (or for) the Optionee
as soon as practicable after 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.

               (iii)  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.

          (b)  Termination of Status as a Director. If an Outside Director
ceases to serve as a Director, he or she may, but only within thirty (30) days
after the date he or she ceases to be a Director of the Company, exercise his or
her Option to the extent that he or she was

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entitled to exercise it at the date of such termination. Notwithstanding the
foregoing, in no event may the Option be exercised after its term set forth in
Section 7 has expired. To the extent that such Outside Director was not entitled
to exercise an Option at the date of such termination, or does not exercise such
Option (which he or she was entitled to exercise) within the time specified
herein, the Option shall terminate.

          (c)  Disability of Optionee. Notwithstanding Section 9(b) above, in
the event a Director is unable to continue his or her service as a Director with
the Company as a result of his or her total and permanent disability (as defined
in Section 22(e)(3) of the Code), he or she (or his or her authorized
representative) may, but only within six (6) months from the date of such
termination, exercise his or her Option to the extent he or she was entitled to
exercise it at the date of such termination. Notwithstanding the foregoing, in
no event may the Option be exercised after its term set forth in Section 7 has
expired. To the extent that he or she was not entitled to exercise the Option at
the date of 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.

          (d)  Death of Optionee. In the event of the death of an Optionee:

               (i)   During the term of the Option, if the Optionee is, at the
time of his or her death, a Director of the Company and has been in Continuous
Status as a Director since the date of grant of the Option, the Option may be
exercised, at any time within six (6) months following the date of death, by the
Optionee's estate or by a person or entity 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 Optionee continued living and remained
in Continuous Status as Director for six (6) months after the date of death.
Notwithstanding the foregoing, in no event may the Option be exercised after its
term set forth in Section 7 has expired.

               (ii)  Within thirty (30) days after the termination of Continuous
Status as a Director, the Option may be exercised, at any time within 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 had accrued at the date of termination.
Notwithstanding the foregoing, in no event may the option be exercised after its
term set forth in Section 7 has expired.

     10.  Limited Transferability of Options. Except as set forth below, the
Option 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 or pursuant to a qualified domestic relations order (as defined by
the Code or the rules thereunder). An Option shall be transferable by an
Optionee to a living trust or a family trust established by the Optionee, under
such terms and conditions as are established by the Administrator. Any such
transfer shall also be subject to the Applicable Laws. The designation of a
beneficiary by an Optionee does not constitute a transfer. An Option may be
exercised during the lifetime of an Optionee only by the Optionee or a
transferee permitted by this Section.

     11.  Adjustments Upon Changes in Capitalization; Corporate Transactions.

          (a)  Adjustment. Subject to any required action by the shareholders of
the Company, the number of shares of Common Stock covered by each outstanding
Option, and the

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number of shares of Common Stock which have been authorized for issuance under
the Plan but as to which no Options have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option, as well as
the price per share of Common Stock covered by each such outstanding Option,
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock 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 number of issued shares of Common Stock
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 of Common Stock subject
to an Option.

          (b)  Corporate Transactions. In the event of (i) a dissolution or
liquidation of the Company, (ii) a sale of all or substantially all of the
Company's assets, (iii) a merger or consolidation in which the Company is not
the surviving corporation, or (iv) any other capital reorganization in which
more than fifty percent (50%) of the shares of the Company entitled to vote are
exchanged, the Company shall give to the Eligible Director, at the time of
adoption of the plan for liquidation, dissolution, sale, merger, consolidation
or reorganization, either a reasonable time thereafter within which to exercise
the Option, including Shares as to which the Option would not be otherwise
vested and exercisable, prior to the effectiveness of such liquidation,
dissolution, sale, merger, consolidation or reorganization, at the end of which
time the Option shall terminate, or the right to exercise the Option, including
Shares as to which the Option would not be otherwise exercisable (or receive a
substitute option with comparable terms), as to an equivalent number of shares
of stock of the corporation succeeding the Company or acquiring its business by
reason of such liquidation, dissolution, sale, merger, consolidation or
reorganization.

     12.  Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date determined in accordance with Section 4(b) hereof.
Notice of the determination shall be given to each Outside Director to whom an
Option is so granted within a reasonable time after the date of such grant.

     13.  Amendment and Termination of the Plan.

          (a)  Amendment and Termination. The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable;
provided that, to the extent necessary and desirable to comply with Rule 16b-3
under the Exchange Act (or any other applicable law or regulation), the Company
shall obtain approval of the shareholders of the Company to Plan amendments to
the extent and in the manner required by such law or regulation.

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

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     14.  Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws, 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, the Company may require the person
exercising such Option 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. 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 Agreement. Options shall be evidenced by written option
agreements in such form as the Board shall approve.

     17.  Shareholder Approval. The effectiveness of the Plan shall be
contingent upon approval by the shareholders of the Company at or prior to the
first annual meeting of shareholders held subsequent to the date on which the
Plan is adopted by the Board. If such shareholder approval is obtained at a duly
held shareholders' meeting, it may be obtained by the affirmative vote of the
holders of a majority of the outstanding shares of the Company present or
represented and entitled to vote thereon. If such shareholder approval is
obtained by written consent, it may be obtained by the written consent of the
holders of a majority of the outstanding shares of the Company.

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                                                                     EXHIBIT 4.6

                        ASPECT COMMUNICATIONS CORPORATION

                         1996 EMPLOYEE STOCK OPTION PLAN

                              AMENDED AND RESTATED

     1.   Purposes of the Plan. The purposes of this 1996 Employee Stock Option
Plan are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to the Employees and
Consultants of the Company and to promote the success of the Company's business.
Awards granted hereunder shall be Nonstatutory Stock Options or Restricted
Stock.

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

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

          (b)  "Award" shall mean the grant of a Nonstatutory Stock Option or
Restricted Stock.

          (c)  "Award Agreement" shall mean the written agreement evidencing the
grant of an Award executed by the Company and the Grantee, including any
amendments thereto.

          (d)  "Board" shall mean the Board of Directors of the Company.

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

          (f)  "Committee" shall mean the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan, if one is
appointed. The Committee members shall not be required to be Board members.

          (g)  "Common Stock" shall mean the Common Stock of the Company.

          (h)  "Company" shall mean Aspect Communications Corporation, a
California corporation.

          (i) "Consultant" shall mean any person who is engaged by the Company
or any Parent or Subsidiary to render consulting services and is compensated for
such consulting services, excluding any Officers, Named Executives and
Directors.

          (j)  "Continuous Status as an Employee or Consultant" shall mean the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of sick leave, military leave, or any other
leave of absence approved by the Board; provided that such leave is for a period
of not more than 90 days or reemployment upon the expiration of such leave is
guaranteed by contract or statute.

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          (k)  "Director" shall mean a member of the Board.

          (l)  "Employee" shall mean any person who is employed by the Company
or any Parent or Subsidiary of the Company.

          (m)  "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

          (n)  "Fair Market Value" shall mean, as of any date, the value of
Common Stock determined as follows:

               (i)   If the Common Stock is listed on any established stock
exchange or a national market system including without limitation the National
Market 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 as quoted on such system on the date of determination (if
for a given day no sales were reported, the closing bid on that day shall be
used), as such price is 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 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 bid and asked prices for the Common Stock or;

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

          (o)  "Grantee" shall mean an Employee or Consultant who receives an
Award.

          (p)  "Named Executive" shall mean any individual who, on the last day
of the Company's fiscal year, is the chief executive officer of the Company (or
is acting in such capacity) or among the four highest compensated officers of
the Company (other than the chief executive officer). Such officer status shall
be determined pursuant to the executive compensation disclosure rules under the
Exchange Act.

          (q)  "Nonstatutory Stock Option" shall mean an Option not intended to
qualify as an Incentive Stock Option, as designated in the applicable option
agreement. "Incentive Stock Option" shall mean an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable option agreement.

          (r)  "Officer" shall mean a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

          (s)  "Option" shall mean a stock option granted pursuant to the Plan.

          (t)  "Optioned Stock" shall mean the Common Stock subject to an
Option.

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          (u)  "Optionee" shall mean an Employee or Consultant who receives an
Option.

          (v)  "Parent" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

          (w)  "Plan" shall mean this 1996 Employee Stock Option Plan.

          (x)  "Restricted Stock" shall mean Shares issued under the Plan to the
Grantee for such consideration, if any, and subject to such restrictions on
transfer, rights of first refusal, repurchase provisions, forfeiture provisions,
and other terms and conditions as established by the Administrator.

          (y)  "Rule 16b-3" shall mean Rule 16b-3 promulgated under the Exchange
Act as the same may be amended from time to time, or any successor provision.

          (z)  "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.

          (aa) "Subsidiary" shall mean a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.

     3.   Stock Subject to the Plan. Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of shares which may be issued pursuant to
all Awards under the Plan is 13,150,000* shares of Common Stock. The Shares may
be authorized, but unissued, or reacquired Common Stock.

     Any Shares covered by an Award (or portion of an Award) which is forfeited
or canceled, expires or is settled in cash, shall be deemed not to have been
issued for purposes of determining the maximum aggregate number of Shares which
may be issued under the Plan. Shares that actually have been issued under the
Plan pursuant to an Award shall not be returned to the Plan and shall not become
available for future issuance under the Plan, except that if unvested Shares are
forfeited, or repurchased by the Company at their original purchase price, such
Shares shall become available for future grant under the Plan.

     4.   Administration of the Plan.

          (a)  Composition of Administrator. 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 nonstatutory stock option plans, if any, of applicable
securities laws and the Code (collectively, the "Applicable Laws"). If a
Committee has been appointed pursuant to this Section 4(a), 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 any Committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members

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* As adjusted to reflect the 2:1 stock split in January 1997.

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in substitution therefor, fill vacancies (however caused) and remove all members
of a Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws.

          (b)  Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, the specific duties delegated by, or
limitations of authority imposed by, the Board to or on such Committee, the
Administrator shall have the authority, in its discretion:

          (i)    to grant Awards under the Plan;

          (ii)   to determine, upon review of relevant information and in
accordance with Section 2(l) of the Plan, the fair market value of the Common
Stock;

          (iii)  to determine the Employees or Consultants to whom, and the time
or times at which, Awards shall be granted and the number of shares to be
represented by each Award;

          (iv)   to interpret the Plan;

          (v)    to approve forms of agreement for use under the Plan;

          (vi)   to determine the terms and provisions of each Award granted
(which need not be identical) and, with the consent of the holder thereof,
modify or amend each Award;

          (vii)  to accelerate or defer (with the consent of the Grantee) the
exercise date of any Award;

          (viii) to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Award previously granted by
the Administrator; and

          (ix)   to make all other determinations deemed necessary or advisable
for the administration of the Plan.

          (c)  Effect of Administrator's Decision. All decisions, determinations
and interpretations of the Administrator shall be final and binding on all
Grantees and any other holders of any Awards granted under the Plan.

          (d)  Administration with respect to Directors, Officers and Named
Executrices. With respect to grants of Awards to Directors or Employees who are
also either Directors, Officers or Named Executives 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
Applicable Laws and to permit such grants and related transactions under the
Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule
16b-3. Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board.

     5.   Eligibility.

          (a)  Awards may be granted to Employees, Directors and Consultants. An
Employee, Director or Consultant who has been granted an Award may, if he is
otherwise

<PAGE>

eligible, be granted an additional Award or Awards. However, during the term of
the Plan at least 50% of the Shares granted under the Plan shall be granted to
Employees who are not Officers, Directors or Named Executives

          (b)  Each Option shall be designated in the written option agreement
as a Nonstatutory Stock Option.

          (c)  The Plan shall not confer upon any Grantee any right with respect
to continuation of employment or consulting relationship with the Company, nor
shall it interfere in any way with his right or the Company's right to terminate
his employment or consulting relationship at any time, with or without cause.

     6.   Term of Plan. The Plan shall become effective upon its adoption by the
Board of Directors. It shall continue in effect for a term of ten (10) years
unless sooner terminated under Section 14 of the Plan.

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

     8.   Limitation on Grants to Employees. Subject to adjustment as provided
in this Plan, the maximum number of Shares which may be subject to Awards
granted to any employee under this Plan for any fiscal year of the Company shall
be 500,000*.

     9.   Exercise Price and Consideration.

          (a)  The exercise or purchase price, if any, for an Award shall be
determined by the Administrator.

          (b)  The consideration to be paid for the Shares to be issued upon
exercise of an Award, including the method of payment, shall be determined by
the Administrator and may consist entirely of (1) cash, (2) check, (3)
promissory note, (4) other Shares of Common Stock which (i) either have been
owned by the Grantee for more than six (6) months on the date of surrender or
were not acquired, directly or indirectly, from the Company, and (ii) have a
fair market value on the date of surrender equal to the aggregate exercise price
of the Shares as to which said Option shall be exercised, (5) delivery of a
properly executed exercise notice together with irrevocable instructions to a
broker to deliver promptly to the Company the amount of sale or loan proceeds
required to pay the exercise price, (6) any combination of such methods of
payment, or (7) such other consideration and method of payment for the issuance
of Shares to the extent permitted under Sections 408 and 409 of the California
General Corporation Law. In making its determination as to the type of
consideration to accept, the Administrator shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company (Section 315(b)
of the California General Corporation Law).

     10.  Exercise of Award.

--------------------
* Reflects stock splits. See December 1996 board minutes.

<PAGE>

          (a)  Procedure for Exercise; Rights as a Shareholder. Any Award
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, including performance criteria with respect
to the Company and/or the Grantee, and as shall be permissible under the terms
of the Plan.

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

          An Award 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 Award
by the person entitled to exercise the Award and full payment for the Shares
with respect to which the Award is exercised has been received by the Company.
Full payment may, as authorized by the Administrator, consist of any
consideration and method of payment allowable under Section 9(b) of the Plan.
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 Shares subject to
the Award, notwithstanding the exercise of the Award. The Company shall issue
(or cause to be issued) such stock certificate promptly upon exercise of the
Award. 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 12 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 for sale under the Option,
by the number of Shares as to which the Option is exercised.

          (b)  Termination of Status as an Employee or Consultant. In the event
of termination of an Optionee's Continuous Status as an Employee or Consultant,
such Optionee may, but only within thirty (30) days (or such other period of
time, not exceeding six (6) months, as is determined by the Administrator) after
the date of such termination (but in no event later than the date of expiration
of the term of such Option as set forth in the Option Agreement), exercise his
Option to the extent that he was entitled to exercise it at the date of such
termination. To the extent that he was not entitled to exercise the Option at
the date of such termination, or if he does not exercise such Option (which he
was entitled to exercise) within the time specified herein, the Option shall
terminate.

          (c)  Disability of Optionee. Notwithstanding the provisions of Section
10(b) above, in the event of termination of an Optionee's Continuous Status as
an Employee or Consultant as a result of his total and permanent disability (as
defined in Section 22(e)(3) of the Code), he may, but only within six (6) months
(or such other period of time not exceeding twelve (12) months as is determined
by the Administrator) from the date of such termination (but in no event later
than the date of expiration of the term of such Option as set forth in the
Option Agreement), exercise his Option to the extent he was entitled to exercise
it at the date of such termination. To the extent that he was not entitled to
exercise the Option at the date of termination, or if he does not exercise such
Option (which he was entitled to exercise) within the time specified herein, the
Option shall terminate.

          (d)  Death of Optionee. In the event of the death of an Optionee:

<PAGE>

               (i)   during the term of the Option who is at the time of his
death an Employee or Consultant of the Company and who shall have been in
Continuous Status as an Employee or Consultant since the date of grant of the
Option, the Option may be exercised, at any time within six (6) months following
the date of death (but in no event later than the date of expiration of the term
of such Option as set forth in the Option Agreement), 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 Optionee continued living and remained in Continuous Status as
an Employee or Consultant six (6) months after the date of death; or

               (ii)  within thirty (30) days (or such other period of time not
exceeding three (3) months as is determined by the Administrator) after the
termination of Continuous Status as an Employee or Consultant, the Option may be
exercised, at any time within six (6) months following the date of death (but in
no event later than the date of expiration of the term of such Option as set
forth in the Option Agreement), 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.

     11.  Non-Transferability of Awards. The Option 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; provided, that the Administrator
may in its discretion grant transferable Nonstatutory Stock Options pursuant to
option agreements specifying (i) the manner in which such Nonstatutory Stock
Options are transferable and (ii) that any such transfer shall be subject to the
Applicable Laws. The designation of a beneficiary by an Optionee will not
constitute a transfer. An Option may be exercised, during the lifetime of the
Optionee, only by the Optionee or a transferee permitted by this Section 11.
Other Awards may be transferred by gift or through a domestic relations order to
members of the Grantee's Immediate Family to the extent provided in the Award
Agreement or in the manner and to the extent determined by the Administrator.
"Immediate Family" shall mean any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the
Grantee's household (other than a tenant or employee), a trust in which these
persons have more than fifty percent (50%) of the beneficial interest, a
foundation in which these persons (or the Grantee) control the management of
assets, and any other entity in which these persons (or the Grantee) own more
than fifty percent (50%) of the voting interests.

     12.  Adjustments Upon Changes in Capitalization or Merger.

          (a)  Adjustments. Subject to any required action by the shareholders
of the Company, the number of shares of Common Stock covered by each outstanding
Award, and the number of shares of Common Stock which have been authorized for
issuance under the Plan but as to which no Awards have yet been granted or which
have been returned to the Plan in accordance with Section 3 of the Plan, the
maximum number of shares of Common Stock for which Awards may be granted to any
Employee under Section 8 of the Plan, and the price per share of Common Stock
covered by each outstanding Award, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common

<PAGE>

Stock, or any other increase or decrease in the number of issued shares of
Common Stock 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 Administrator, 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 of Common Stock subject to an Award.

          (b)  Corporate Transactions. In the event of the proposed dissolution
or liquidation of the Company, the Award will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Administrator. The Administrator may, in the exercise of its sole discretion in
such instances, declare that any Award shall terminate as of a date fixed by the
Administrator and give each Grantee the right to exercise his Award as to all or
any part of the Shares subject to the Award, including Shares as to which the
Award would not otherwise be exercisable. In the event of a proposed sale of all
or substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, the Award shall be assumed or an equivalent
award shall be substituted by such successor corporation or a parent or
subsidiary of such successor corporation, unless such successor corporation does
not agree to assume the Award or to substitute an equivalent award, in which
case the Administrator shall, in lieu of such assumption or substitution,
provide for the Grantee to have the right to exercise the Award as to all of the
Shares subject to the Award, including Shares as to which the Award would not
otherwise be exercisable. If the Administrator makes an Award fully exercisable
in lieu of assumption or substitution in the event of a merger or sale of
assets, the Administrator shall notify the Grantee that the Award shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, and
the Award will terminate upon the expiration of such period.

     13.  Time of Granting Awards. The date of grant of an Award shall, for all
purposes, be the date on which the Administrator makes the determination
granting such Award. Notice of the determination shall be given to each Employee
or Consultant to whom an Award is so granted within a reasonable time after the
date of such grant.

     14.  Amendment and Termination of the Plan.

          (a)  Amendment and Termination. The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable

          (b)  Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not adversely affect Awards already granted
(except to the extent contemplated by such Awards) and such Awards shall remain
in full force and effect, unless mutually agreed otherwise between the Grantee
and the Board (or other body then administering the Plan), which agreement must
be in writing and signed by the Grantee and the Company.

     15.  Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Award unless the exercise of such Award and the
issuance and delivery of such

<PAGE>

Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, 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 Award, the Company may require the
person exercising such Award 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.

     16.  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.

     17.  Award Agreement. Awards shall be evidenced by written award agreements
in such form as the Administrator shall approve.

     18.  Information to Grantees. The Company shall provide to each Grantee
upon request, during the period for which such Grantee has one or more Awards
outstanding, copies of all annual reports and other information which are
provided to all shareholders of the Company.

     19.  Withholding Taxes. As a condition to the exercise of Awards granted
hereunder, the Grantee shall make such arrangements as the Administrator may
require for the satisfaction of any federal, state, local or foreign withholding
tax obligations that may arise in connection with the exercise, receipt or
vesting of such Award. The Company shall not be required to issue any Shares
under the Plan until such obligations are satisfied.

     20.  Stock Withholding to Satisfy Withholding Tax Obligations. At the
discretion of the Administrator, Grantees may satisfy withholding obligations as
provided in this paragraph. When a Grantee incurs tax liability in connection
with an Award which tax liability is subject to tax withholding under applicable
tax laws, and the Grantee is obligated to pay the Company an amount required to
be withheld under applicable tax laws, the Grantee may satisfy the withholding
tax obligation by one or some combination of the following methods: (a) by cash
payment, or (b) out of Grantee's current compensation, or (c) if permitted by
the Administrator, in its discretion, by surrendering to the Company Shares that
(i) in the case of Shares previously acquired from the Company, have been owned
by the Grantee for more than six months on the date of surrender, and (ii) have
a fair market value on the date of surrender equal to or less than the minimum
statutory withholding rates for federal and state tax purposes, including
payroll taxes, applicable to exercise, or (d) by electing to have the Company
withhold from the Shares to be issued upon exercise of the Award that number of
Shares having a fair market value equal to the minimum statutory withholding
rates for federal and state tax purposes, including payroll

<PAGE>

taxes, applicable to the exercise. For this purpose, the fair market value of
the Shares to be withheld shall be determined on the date that the amount of tax
to be withheld is to be determined (the "Tax Date").

          All elections by a Grantee to have Shares withheld to satisfy tax
withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:

          (a)  the election must be made on or prior to the applicable Tax Date;

          (b)  once made, the election shall be irrevocable as to the particular
Shares of the Award as to which the election is made; and

          (c)  all elections shall be subject to the consent or disapproval of
the Administrator.

          In the event the election to have Shares withheld is made by a Grantee
and the Tax Date is deferred under Section 83 of the Code because no election is
filed under Section 83(b) of the Code, the Grantee shall receive the full number
of Shares with respect to which the Award is exercised but such Grantee shall be
unconditionally obligated to tender back to the Company the proper number of
Shares on the Tax Date.

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