Document:

<PAGE>

                                                                    Exhibit 10.1

                                 CARDIMA, INC.

                       1997 EMPLOYEE STOCK PURCHASE PLAN
                       (As Amended on February 16, 2001)

     The following constitute the provisions of the 1997 Employee Stock Purchase
Plan of Cardima, Inc., as amended on February 16, 2001 (subject to stockholder
approval).

     1.   Purpose.  The purpose of the Plan is to provide employees of the
          -------
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company. It is the intention of the Company to have the Plan
qualify as an "Employee Stock Purchase Plan" under Section 423 of the Internal
Revenue Code of 1986, as amended. The provisions of the Plan shall, accordingly,
be construed so as to extend and limit participation in a manner consistent with
the requirements of that section of the Code.

     2.   Definitions.
          -----------

          (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 Cardima, Inc., a Delaware corporation.
                  -------

          (e)    "Compensation" shall mean all regular straight time gross
                  ------------
earnings and shall not include overtime, shift premiums, payments for incentive
compensation, incentive payments, bonuses, commissions and other compensation.

          (f)    "Continuous Status as an Employee" shall mean the absence of
                  --------------------------------
any interruption or termination of service as an Employee. Continuous Status as
an Employee shall not be considered interrupted in the case of a leave of
absence agreed to in writing by the Company, 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.

          (g)    "Contributions" shall mean all amounts credited to the account
                  -------------
of a participant pursuant to the Plan.

          (h)    "Designated Subsidiaries" shall mean the Subsidiaries which
                  -----------------------
have been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.

          (i)    "Employee" shall mean any person, including an Officer, who is
                  --------
customarily employed for at least twenty (20) hours per week and more than five
(5) months in a calendar year by the Company or one of its Designated
Subsidiaries.

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

          (k)    "Purchase Date" shall mean the last day of each Purchase Period
                  -------------
of the Plan.

          (l)    "Offering Date" shall mean the first business day of each
                  -------------
Offering Period of the Plan.
<PAGE>

          (m)    "Offering Period" shall mean a period of twelve (12) months
                  ---------------
commencing on February 1 and August 1 of each year, except for the first
Offering Period as set forth in Section 4(a).

          (n)    "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.

          (o)    "Plan" shall mean this Employee Stock Purchase Plan.
                  ----

          (p)    "Purchase Period" shall mean a period of six (6) months within
                  ---------------
an Offering Period, except for the first Purchase Period as set forth in Section
4(b).

          (q)    "Subsidiary"  shall mean a corporation, domestic or foreign, of
                  ----------
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.

     3.   Eligibility.
          -----------

          (a) Any person who is an Employee as of the Offering Date of a given
Offering Period shall be eligible to participate in such Offering Period under
the Plan, subject to the requirements of Section 5(a) and the limitations
imposed by Section 423(b) of the Code.

     (b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately after the
grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code) would own stock and/or
hold outstanding options to purchase stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company or of any subsidiary of the Company, or (ii) if such option would permit
his or her rights to purchase stock under all employee stock purchase plans
(described in Section 423 of the Code) of the Company and its Subsidiaries to
accrue at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) of fair
market value of such stock (determined at the time such option is granted) for
each calendar year in which such option is outstanding at any time.

     4.   Offering Periods and Purchase Periods.
          -------------------------------------

          (a) Offering Periods.  The Plan shall be implemented by a series of
              ----------------
Offering Periods of twelve (12) months duration, with new Offering Periods
commencing on or about February 1 and August 1 of each year (or at such other
time or times as may be determined by the Board of Directors). The first
Offering Period shall commence on the beginning of the effective date of the
Registration Statement on Form S-1 for the initial public offering of the
Company's Common Stock (the "IPO Date") and continue until July 31, 1998. The
Plan shall continue until terminated in accordance with Section 19 hereof. The
Board of Directors of the Company shall have the power to change the duration
and/or the frequency of Offering Periods with respect to future offerings
without shareholder approval if such change is announced at least fifteen (15)
days prior to the scheduled beginning of the first Offering Period to be
affected. Eligible employees may not participate in more than one Offering
Period at a time.

          (b) Purchase Periods.  Each Offering Period shall consist of two (2)
              ----------------
consecutive purchase periods of six (6) months duration.  The last day of each
Purchase Period shall be the "Purchase Date" for such Purchase Period.  A
                              -------------
Purchase Period commencing on February 1 shall end on the next July 31.  A
Purchase Period commencing on August 1 shall end on the next January 31.  The
first Purchase Period shall commence on the IPO Date and shall end on January
31, 1998. The Board of Directors of the Company shall have the power to change
the duration and/or frequency of Purchase Periods with respect to future

                                       2
<PAGE>

purchases without shareholder approval if such change is announced at least
fifteen (15) days prior to the scheduled beginning of the first Purchase Period
to be affected.

     5.   Participation.
          -------------

          (a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement on the form provided by the Company and
filing it with the Company's payroll office prior to the applicable Offering
Date, unless a later time for filing the subscription agreement is set by the
Board for all eligible Employees with respect to a given offering.  The
subscription agreement shall set forth the percentage of the participant's
Compensation (which shall be not less than 1% and not more than 10%) to be paid
as Contributions pursuant to the Plan.

          (b) Payroll deductions shall commence on the first payroll following
the Offering Date and shall end on the last payroll paid on or prior to the last
Purchase Period of the Offering Period to which the subscription agreement is
applicable, unless sooner terminated by the participant as provided in Section
10.

     6.   Method of Payment of Contributions.
          ----------------------------------

          (a) The participant shall elect to have payroll deductions made on
each payday during the Offering Period in an amount not less than one percent
(1%) and not more than ten percent (10%) of such participant's Compensation on
each such payday.  All payroll deductions made by a participant shall be
credited to his or her account under the Plan.  A participant may not make any
additional payments into such account.

     (b) A participant may discontinue his or her participation in the Plan as
provided in Section 10, or, on one occasion only during the Offering Period, may
decrease the rate of his or her Contributions during the Offering Period by
completing and filing with the Company a new subscription agreement. The change
in rate shall be effective as of the beginning of the next calendar month
following the date of filing of the new subscription agreement, if the agreement
is filed at least ten (10) business days prior to such date and, if not, as of
the beginning of the next succeeding calendar month.

     (c) Notwithstanding the foregoing, to the extent necessary to comply with
Section 423(b)(8) of the Code and Section 3(b) herein, a participant's payroll
deductions may be decreased to 0% at such time during any Offering Period which
is scheduled to end during the current calendar year that the aggregate of all
payroll deductions accumulated with respect to such Offering Period and any
other Offering Period ending within the same calendar year equal $21,250.
Payroll deductions shall re-commence at the rate provided in such participant's
subscription Agreement at the beginning of the first Offering Period which is
scheduled to end in the following calendar year, unless terminated by the
participant as provided in Section 10.

     7.   Grant of Option.
          ---------------

          (a) On the Offering Date of each Offering Period, each eligible
Employee participating in such Offering Period shall be granted an option to
purchase on each Purchase Date a number of shares of the Company's Common Stock
determined by dividing such Employee's Contributions accumulated prior to such
Purchase Date and retained in the participant's account as of the Purchase Date
by the lower of (i) eighty-five percent (85%) of the fair market value of a
share of the Company's Common Stock on the Offering Date, or (ii) eighty-five
percent (85%) of the fair market value of a share of the Company's Common Stock
on the Purchase Date; provided however, that the maximum number of shares an
Employee may purchase during each Offering Period shall be determined at the
Offering Date by dividing $25,000 by the fair market value of a share of the
Company's Common Stock on the Offering Date, and provided further that such
purchase shall be subject to the limitations set forth in Sections 3(b) and 13.
The fair market value of a share of the Company's Common Stock shall be
determined as provided in Section 7(b).

                                       3
<PAGE>

     (b)  The option price per share of the shares offered in a given Offering
Period shall be the lower of:  (i) 85% of the fair market value of a share of
the Common Stock of the Company on the Offering Date; or (ii) 85% of the fair
market value of a share of the Common Stock of the Company on the Purchase Date.
The fair market value of the Company's Common Stock on a given date shall be
determined by the Board in its discretion based on the closing price of the
Common Stock for such date (or, in the event that the Common Stock is not traded
on such date, on the immediately preceding trading date), as reported by the
National Association of Securities Dealers Automated Quotation (Nasdaq) National
Market or, if such price is not reported, the mean of the bid and asked prices
per share of the Common Stock as reported by Nasdaq or, in the event the Common
Stock is listed on a stock exchange, the fair market value per share shall be
the closing price on such exchange on such date (or, in the event that the
Common Stock is not traded on such date, on the immediately preceding trading
date), as reported in The Wall Street Journal.  For purposes of the Offering
Date under the first Offering Period under the Plan, the fair market value of a
share of the Common Stock of the Company shall be the Price to Public as set
forth in the final prospectus filed with the Securities and Exchange Commission
pursuant to Rule 424 under the Securities Act of 1933, as amended.

     8.  Exercise of Option.  Unless a participant withdraws from the Plan as
         ------------------
provided in paragraph 10, his or her option for the purchase of shares will be
exercised automatically on each Purchase Date of an Offering Period, and the
maximum number of full shares subject to the option will be purchased at the
applicable option price with the accumulated Contributions in his or her
account. The shares purchased upon exercise of an option hereunder shall be
deemed to be transferred to the participant on the Purchase Date. During his or
her lifetime, a participant's option to purchase shares hereunder is exercisable
only by him or her.

     9.  Delivery.  As promptly as practicable after each Purchase Date of each
         --------
Offering Period, the Company shall arrange the delivery to each participant, as
appropriate, of a certificate representing the shares purchased upon exercise of
his or her option or the deposit of such number of shares with the broker
selected by the Company for administration of Plan stock purchases, as
determined by the Company. Any cash remaining to the credit of a participant's
account under the Plan after a purchase by him or her of shares at the
termination of the first Purchase Period of an Offering Period, or which is
insufficient to purchase a full share of Common Stock of the Company, shall be
carried over to the next Purchase Period of such Offering Period if the Employee
continues to participate in the Plan, or if the Employee does not continue to
participate, shall be returned to said participant.

     10. Voluntary Withdrawal; Termination of Employment.
         -----------------------------------------------

         (a)  A participant may withdraw all but not less than all the
Contributions credited to his or her account under the Plan at any time at least
ten (10) business days prior to each Purchase Date by giving written notice to
the Company.  All of the participant's Contributions credited to his or her
account will be paid to him or her promptly after receipt of his or her notice
of withdrawal and his or her option for the current period will be automatically
terminated, and no further Contributions for the purchase of shares will be made
during the Offering Period.

         (b)  Upon termination of the participant's Continuous Status as an
Employee prior to the Purchase Date of an Offering Period for any reason,
including retirement or death, the Contributions credited to his or her account
will be returned to him or her or, in the case of his or her death, to the
person or persons entitled thereto under Section 14, and his or her option will
be automatically terminated.

         (c)  In the event an Employee fails to remain in Continuous Status as
an Employee of the Company for at least twenty (20) hours per week during the
Offering Period in which the employee is a

                                       4
<PAGE>

participant, he or she will be deemed to have elected to withdraw from the Plan
and the Contributions credited to his or her account will be returned to him or
her and his or her option terminated.

          (d)  A participant's withdrawal from an offering will not have any
effect upon his or her eligibility to participate in a succeeding offering or in
any similar plan which may hereafter be adopted by the Company.

     11.  Automatic Withdrawal. If the fair market value of the shares on the
          --------------------
first Purchase Date of an Offering Period is less than the fair market value of
the shares on the Offering Date for such Offering Period, then every participant
shall automatically (i) be withdrawn from such Offering Period at the close of
such Purchase Date and after the acquisition of shares for such Purchase Period,
and (ii) be enrolled in the Offering Period commencing on the first business day
subsequent to such Purchase Period.

     12.  Interest. No interest shall accrue on the Contributions of a
          --------
participant in the Plan.

     13.  Stock.
          -----

          (a)  The maximum number of shares of the Company's Common Stock which
shall be made available for sale under the Plan shall be 1,750,000 shares (on a
post-split basis), subject to adjustment upon changes in capitalization of the
Company as provided in Section 18.  If the total number of shares which would
otherwise be subject to options granted pursuant to Section 7(a) on the Offering
Date of an Offering Period exceeds the number of shares then available under the
Plan (after deduction of all shares for which options have been exercised or are
then outstanding), the Company shall make a pro rata allocation of the shares
remaining available for option grant in as uniform a manner as shall be
practicable and as it shall determine to be equitable.  In such event, the
Company shall give written notice of such reduction of the number of shares
subject to the option to each Employee affected thereby and shall similarly
reduce the rate of Contributions, if necessary.

          (b)  The participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised.

          (c)  Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his or her spouse.

     14.  Administration.  The Board, or a committee named by the Board, shall
          --------------
supervise and administer the Plan and shall have full power to adopt, amend and
rescind any rules deemed desirable and appropriate for the administration of the
Plan and not inconsistent with the Plan, to construe and interpret the Plan, and
to make all other determinations necessary or advisable for the administration
of the Plan. The composition of the committee shall be in accordance with the
requirements to obtain or retain any available exemption from the operation of
Section 16(b) of the Exchange Act pursuant to Rule 16b-3 promulgated thereunder.

     15.  Designation of Beneficiary.
          --------------------------

          (a)  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 a
Purchase 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 Purchase 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.

                                       5
<PAGE>

     (b)  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
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.

     16.  Transferability. Neither Contributions credited to a participant's
          ---------------
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and
distribution, or as provided in Section 14) by the participant. Any such attempt
at assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds in
accordance with Section 10.

     17.  Use of Funds.  All Contributions received or held by the Company under
          ------------
the Plan may be used by the Company for any corporate purpose, and the Company
shall not be obligated to segregate such Contributions.

     18.  Reports.  Individual accounts will be maintained for each participant
          -------
in the Plan. Statements of account will be given to participating Employees
promptly following the Purchase Date, which statements will set forth the
amounts of Contributions, the per share purchase price, the number of shares
purchased and the remaining cash balance, if any.

     19.  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 option
under the Plan which has not yet been exercised and the number of shares of
Common Stock which have been authorized for issuance under the Plan but have not
yet been placed under option (collectively, the "Reserves"), as well as the
price per share of Common Stock covered by each option under the Plan which has
not yet been exercised, 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 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 issue
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 the proposed dissolution or
          ----------------------
liquidation of the Company, the Offering Period will terminate immediately prior
to the consummation of such proposed action, unless otherwise provided by the
Board.  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, each option under the Plan shall be assumed or an equivalent option
shall be substituted by such successor corporation or a parent or subsidiary of
such successor corporation, unless the Board determines, in the exercise of its
sole discretion and in lieu of such assumption or substitution, to shorten the
Offering Period then in progress by setting a new Purchase Date (the "New
                                                                      ---
Purchase Date").  If the Board shortens the Offering Period then in progress in
-------- ----
lieu of assumption or substitution in the event of a merger or sale of assets,
the Board shall notify each participant in writing, at least ten (10) days prior
to the New Purchase Date, that the Purchase Date for

                                       6
<PAGE>

his or her option has been changed to the New Purchase Date and that his or her
option will be exercised automatically on the New Purchase Date, unless prior to
such date he or she has withdrawn from the Offering Period as provided in
Section 10. For purposes of this paragraph, an option granted under the Plan
shall be deemed to be assumed if, following the sale of assets or merger, the
option confers the right to purchase, for each share of option stock subject to
the option immediately prior to the sale of assets or merger, the consideration
(whether stock, cash or other securities or property) received in the sale of
assets or merger by holders of Common Stock for each share of Common Stock held
on the effective date of the transaction (and if such holders were offered a
choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding shares of Common Stock); provided, however, that if
such consideration received in the sale of assets or merger was not solely
common stock of the successor corporation or its parent (as defined in Section
424(e) of the Code), the Board may, with the consent of the successor
corporation and the participant, provide for the consideration to be received
upon exercise of the option to be solely common stock of the successor
corporation or its parent equal in fair market value to the per share
consideration received by holders of Common Stock and the sale of assets or
merger.

     The Board may, if it so determines in the exercise of its sole discretion,
also make provision for adjusting the Reserves, as well as the price per share
of Common Stock covered by each outstanding option, in the event that the
Company effects one or more reorganizations, recapitalizations, rights offerings
or other increases or reductions of shares of its outstanding Common Stock, and
in the event of the Company being consolidated with or merged into any other
corporation.

     20.  Amendment or Termination.
          ------------------------

          (a)  The Board of Directors of the Company may at any time terminate
or amend the Plan. Except as provided in Section 19, no such termination may
affect options previously granted, nor may an amendment make any change in any
option theretofore granted which adversely affects the rights of any
participant. In addition, to the extent necessary to comply with Rule 16b-3
under the Exchange Act, or under Section 423 of the Code (or any successor rule
or provision or any applicable law or regulation), the Company shall obtain
shareholder approval in such a manner and to such a degree as so required.

          (b)  Without shareholder consent and without regard to whether any
participant rights may be considered to have been adversely affected, the Board
(or its committee) shall be entitled to change the Offering Periods and Purchase
Periods, limit the frequency and/or number of changes in the amount withheld
during an Offering Period, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit payroll withholding in
excess of the amount designated by a participant in order to adjust for delays
or mistakes in the Company's processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting
and crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each participant properly correspond with amounts withheld from
the participant's Compensation, and establish such other limitations or
procedures as the Board (or its committee) determines in its sole discretion
advisable which are consistent with the Plan.

     21.  Notices.  All notices or other communications by a participant to the
          -------
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

     22.  Conditions Upon Issuance of Shares.  Shares shall not be issued with
          ----------------------------------
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, 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.

                                       7
<PAGE>

     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 applicable provisions of law.

     23.  Term of Plan; Effective Date.  The Plan shall become effective upon
          ----------------------------
the earlier to occur of its adoption by the Board of Directors or its approval
by the shareholders of the Company. It shall continue in effect for a term of
twenty (20) years unless sooner terminated under Section 20.

     24.  Additional Restrictions of Rule 16b-3.  The terms and conditions of
          -------------------------------------
options granted hereunder to, and the purchase of shares by, persons subject to
Section 16 of the Exchange Act shall comply with the applicable provisions of
Rule 16b-3. This Plan shall be deemed to contain, and such options shall
contain, and the shares issued upon exercise thereof shall be subject to, such
additional conditions and restrictions as may be required by Rule 16b-3 to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.

                                       8
<PAGE>

                                 CARDIMA, INC.

                       1997 EMPLOYEE STOCK PURCHASE PLAN
                            SUBSCRIPTION AGREEMENT

                                                             New Election ______
                                                       Change of Election ______

     1. I, ________________________, hereby elect to participate in the CARDIMA,
INC. 1997 Employee Stock Purchase Plan (the "Plan") for the Offering Period
______________, ____ to _______________, ____, and subscribe to purchase shares
of the Company's Common Stock in accordance with this Subscription Agreement and
the Plan.

     2. I elect to have Contributions in the amount of ____% of my Compensation,
as those terms are defined in the Plan, applied to this purchase. I understand
that this amount must not be less than 1% and not more than 10% of my
Compensation during the Offering Period. (Please note that no fractional
percentages are permitted).

     3. I hereby authorize payroll deductions from each paycheck during the
Offering Period at the rate stated in Item 2 of this Subscription Agreement. I
understand that all payroll deductions made by me shall be credited to my
account under the Plan and that I may not make any additional payments into such
account. I understand that all payments made by me shall be accumulated for the
purchase of shares of Common Stock at the applicable purchase price determined
in accordance with the Plan. I further understand that, except as otherwise set
forth in the Plan, shares will be purchased for me automatically on the Purchase
Date of each Offering Period unless I otherwise withdraw from the Plan by giving
written notice to the Company for such purpose.

     4. I understand that I may discontinue at any time prior to the Purchase
Date my participation in the Plan as provided in Section 10 of the Plan.  I also
understand that I can decrease the rate of my Contributions to not less than 1%
of my Compensation on one occasion only during any Offering Period by completing
and filing a new Subscription Agreement with such decrease taking effect as of
the beginning of the calendar month following the date of filing of the new
Subscription Agreement, if filed at least ten (10) business days prior to the
beginning of such month. Further, I may change the rate of deductions for future
Offering Periods by filing a new Subscription Agreement, and any such change
will be effective as of the beginning of the next Offering Period. In addition,
I acknowledge that, unless I discontinue my participation in the Plan as
provided in Section 10 of the Plan, my election will continue to be effective
for each successive Offering Period.

     5. I have received a copy of the Company's most recent description of the
Plan and a copy of the complete "CARDIMA, INC. 1997 Employee Stock Purchase
Plan."  I understand that my participation in the Plan is in all respects
subject to the terms of the Plan.

     6. Shares purchased for me under the Plan should be issued in the name(s)
of (name of employee or employee and spouse only):
                              ____________________________________

                              ____________________________________

                                       9
<PAGE>

     7. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due to me under the Plan:

NAME:                      (Please print) ____________________________________
                                          (First)     (Middle)     (Last)

__________________________                ____________________________________
(Relationship)                            (Address)

                                          ____________________________________

     8. I understand that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Offering Date (the first day of the Offering
Period during which I purchased such shares) or within 1 year after the Purchase
Date, I will be treated for federal income tax purposes as having received
ordinary compensation income at the time of such disposition in an amount equal
to the excess of the fair market value of the shares on the Purchase Date over
the price which I paid for the shares, regardless of whether I disposed of the
shares at a price less than their fair market value at the Purchase Date. The
remainder of the gain or loss, if any, recognized on such disposition will be
treated as capital gain or loss.

     I hereby agree to notify the Company in writing within 30 days after the
     ------------------------------------------------------------------------
date of any such disposition, and I will make adequate provision for federal,
-----------------------------------------------------------------------------
state or other tax withholding obligations, if any, which arise upon the
------------------------------------------------------------------------
disposition of the Common Stock.  The Company may, but will not be obligated to,
-------------------------------
withhold from my compensation the amount necessary to meet any applicable
withholding obligation including any withholding necessary to make available to
the Company any tax deductions or benefits attributable to the sale or early
disposition of Common Stock by me.

     9. If I dispose of such shares at any time after expiration of the 2-year
and 1-year holding periods, I understand that I will be treated for federal
income tax purposes as having received compensation income only to the extent of
an amount equal to the lesser of (1) the excess of the fair market value of the
shares at the time of such disposition over the purchase price which I paid for
the shares under the option, or (2) 15% of the fair market value of the shares
on the Offering Date. The remainder of the gain or loss, if any, recognized on
such disposition will be treated as capital gain or loss.

     I understand that this tax summary is only a summary and is subject to
     ----------------------------------------------------------------------
change.  I further understand that I should consult a tax advisor concerning the
------
tax implications of the purchase and sale of stock under the Plan.

     10.  I hereby agree to be bound by the terms of the Plan.  The
effectiveness of this Subscription Agreement is dependent upon my eligibility to
participate in the Plan.

SIGNATURE: _________________________________

SOCIAL SECURITY #: _________________________

DATE: ______________________________________

SPOUSE'S SIGNATURE (necessary
if beneficiary is not spouse):

                                       10
<PAGE>

____________________________________________
(Signature)

____________________________________________
(Print name)

                                       11
<PAGE>

                                 CARDIMA, INC.

                       1997 EMPLOYEE STOCK PURCHASE PLAN

                             NOTICE OF WITHDRAWAL

     I, __________________________, hereby elect to withdraw my participation in
the CARDIMA, INC. 1997 Employee Stock Purchase Plan (the "Plan") for the
Offering Period _________. This withdrawal covers all Contributions credited to
my account and is effective on the date designated below.

     I understand that all Contributions credited to my account will be paid to
me within ten (10) business days of receipt by the Company of this Notice of
Withdrawal and that my option for the current period will automatically
terminate, and that no further Contributions for the purchase of shares can be
made by me during the Offering Period.

     The undersigned further understands and agrees that he or she shall be
eligible to participate in succeeding offering periods only by delivering to the
Company a new Subscription Agreement.

Dated:___________________               _________________________________
                                        Signature of Employee

                                        _________________________________
                                        Social Security Number

                                       12<PAGE>

                                                                    Exhibit 10.1

                                 CARDIMA, INC.

                            1993 STOCK OPTION PLAN

                            (AS AMENDED JUNE 2000)

     I.   PURPOSES OF THE PLAN

          This 1993 Stock Option Plan, as amended (the "Plan") is intended to
promote the interests of Cardima, Inc., a Delaware corporation (the
"Corporation"), by providing a method whereby eligible individuals who provide
valuable services to the Corporation (or its parent or subsidiary corporations)
may be offered incentives and rewards which will encourage them to acquire a
proprietary interest, or otherwise increase their proprietary interest, in the
Corporation and continue to render services to the Corporation (or its parent or
subsidiary corporations).

          For purposes of the Plan, the following provisions shall be applicable
in determining the parent and subsidiary corporations of the Corporation:

               (i)  Any corporation (other than the Corporation) in an unbroken
     chain of corporations ending with the Corporation shall be considered to be
     a Parent corporation of the Corporation, provided each such corporation in
     the unbroken chain (other than the Corporation) owns, at the time of the
     determination, stock possessing fifty percent (50%) or more of the total
     combined voting power of all classes of stock in one of the other
     corporations in such chain.

               (ii) Each corporation (other than the Corporation) in an unbroken
     chain of corporations beginning with the Corporation shall be considered to
     be a Subsidiary of the Corporation, provided each such corporation (other
     than the last corporation) in the unbroken chain owns, at the time of the
     determination, stock possessing fifty percent (50%) or more of the total
     combined voting power of all classes of stock in one of the other
     corporations in such chain.

     II.  ADMINISTRATION OF THE PLAN

          A.   A Committee comprised of non-employee members of the Board who
satisfy the requirements of Rule 16b-3 of the Securities Exchange Act of 1934
(the "1934 Act") as it is then in effect to exempt stock awards made hereunder
from the short-swing profit recovery rules of Section 16(b) of the 1934 Act (the
"Primary Committee") and who satisfy the requirements of Section 162(m) of the
Internal Revenue Code shall have sole and exclusive authority to administer the
Plan with respect to Section 16 Insiders.

          B.   Administration of the Plan with respect to all other persons
eligible to participate in the Plan may, at the Board's discretion, be vested in
the Primary Committee or a second committee comprised of one or more Board
members (the "Secondary Committee"), or the Board may retain the power to
administer the Plan with respect to all such persons. The members of the
Secondary Committee may be individuals who are Employees eligible to receive
option grants under the Plan or any stock option, stock appreciation, stock
bonus or other stock plan of the Corporation (or any Parent or Subsidiary) or
who have any other business relationship with the Company outside their roles as
members of the Board.

          C.   Members of the Primary Committee or any Secondary Committee shall
serve for such period of time as the Board may determine and may be removed by
the Board at any time.  The Board

                                       1
<PAGE>

may also at any time terminate the functions of any Secondary Committee and
reassume all powers and authority previously delegated to such committee.

          D.   Each Plan Administrator shall, within the scope of its
administrative functions under the Plan, have full power and authority (subject
to the provisions of the Plan) to establish such rules and regulations as it may
deem appropriate for proper administration of the Plan and to make such
determinations under, and issue such interpretations of, the provisions of the
Plan and any outstanding options thereunder as it may deem necessary or
advisable.  Decisions of the Plan Administrator within the scope of its
administrative functions under the Plan shall be final and binding on all
parties who have an interest in the Plan under its jurisdiction or any option
thereunder.

          E.   Service on the Primary Committee or the Secondary Committee shall
constitute service as a Board member, and members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee.  No member of the Primary Committee
or the Secondary Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any grants under the Plan.

     III. ELIGIBILITY FOR OPTION GRANTS

          The persons eligible to receive option grants under the Plan are as
follows:

               (i)   key employees (including officers and directors) of the
     Corporation (or its parent or subsidiary corporations);

               (ii)  the non-employee members of the Board or the non-employee
     members of the board of directors of any parent or subsidiary corporation;
     and

               (iii) those consultants who provide valuable services to the
     Corporation (or its parent or subsidiary corporations).

          The Plan Administrator shall have full authority to determine which
eligible individuals are to receive option grants under the Plan, the number of
shares to be covered by each such grant, whether the granted option is to be an
incentive stock option ("Incentive Option") which satisfies the requirements of
Section 422 of the Internal Revenue Code or a non-statutory option not intended
to meet such requirements, the time or times at which each such option is to
become exercisable, and the maximum term for which the option is to remain
outstanding.

     IV.  STOCK SUBJECT TO THE PLAN

          A.   The stock issuable under the Plan shall be shares of the
Corporation's authorized but unissued or reacquired Common Stock.  The aggregate
number of shares which may be issued over the term of the Plan shall not exceed
4,150,690 shares (on a post-split basis). The total number of shares issuable
under the Plan shall be subject to adjustment from time to time in accordance
with the provisions of this Section IV.

                                       2
<PAGE>

          B.   The number of shares of Common Stock available for issuance under
the Plan shall automatically increase on the first trading day of the 1998,
1999, 2000, 2001 and 2002 calendar years by an amount equal to three percent
(3%) of the shares of Common Stock outstanding, on December 31 of the
immediately preceding calendar year; but in no event shall any such annual
increase exceed 300,000 shares (on a post-split basis). For purposes of this
provision, the determination of the number of shares of Common Stock outstanding
shall include securities which are exercisable or convertible into shares of
Common Stock, including without limitation all outstanding stock options and
warrants.

          C.   No one person participating in the Plan may receive options for
more than 500,000 shares of Common Stock per calendar year, beginning with the
1996 calendar year.

          D.   Shares subject to outstanding options shall be available for
subsequent option grants under the Plan to the extent (i) options expire or
terminate for any reason prior to exercise in full and (ii) options are
cancelled in accordance with the cancellation-regrant provisions of Section VIII
of the Plan.  Shares subject to outstanding options shall not be available for
                                                          ---
subsequent option grants under the Plan to the extent options are surrendered in
accordance with the limited cash-out rights provisions of Section IX of the
Plan.  Shares repurchased by the Corporation pursuant to its repurchase rights
under the Plan shall not be available for subsequent option grants.
                     ---

          E.   In the event any change is made to the Common Stock issuable
under the Plan by reason of any stock split, stock dividend, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without receipt of consideration, appropriate adjustments shall
be made to (I) the aggregate number and/or class of shares issuable under the
Plan and (II) the aggregate number and/or class of shares and the option price
per share in effect under each outstanding option in order to prevent the
dilution or enlargement of benefits thereunder. The adjustments determined by
the Plan Administrator shall be final, binding and conclusive.

     V.   TERMS AND CONDITIONS OF OPTIONS

          A.   Options granted pursuant to the Plan shall be authorized by
action of the Plan Administrator and may, at the Plan Administrator's
discretion, be either Incentive Options or non-statutory options. Individuals
who are not Employees (as defined in subsection 3.C below) may only be granted
non-statutory options. Each granted option shall be evidenced by one or more
instruments in the form approved by the Plan Administrator; provided, however,
                                                            --------
that each such instrument shall comply with and incorporate the terms and
conditions specified below. Each instrument evidencing an Incentive Option
shall, in addition, be subject to the applicable provisions of Section VI.

          B.   Option Price.
               ------------

          1.   The option price per share shall be fixed by the Plan
Administrator.  In no event, however, shall the option price per share be less
than eighty-five percent (85%) of the fair market value of a share of Common
Stock on the date of the option grant.

          2.   The option price shall become immediately due upon exercise of
the option and shall, subject to the provisions of Section X and the instrument
evidencing the grant, be payable in one or more of the forms specified below:

               (i)  cash or check drawn to the Corporation's order

               (ii) in shares of Common Stock held by the optionee for the
     requisite period necessary to avoid a charge to the Corporation's earnings
     for financial reporting purposes and valued at fair market value on the
     Exercise Date; or

                                       3
<PAGE>

               (iii) to the extent the option is exercised for vested shares,
     through a special sale and remittance procedure pursuant to which the
     optionee is to provide irrevocable written instructions (I) to a
     Corporation-designated brokerage firm to effect the immediate sale of the
     purchased shares and remit to the Corporation, out of the sale proceeds
     available on the settlement date, an amount sufficient to cover the
     aggregate option price payable for the purchased shares plus all applicable
     Federal and State income and employment taxes required to be withheld by
     the Corporation by reason of such purchase and (II) concurrently to the
     Corporation to deliver the certificates for the purchased shares directly
     to such brokerage firm in order to effect the sale transaction.

          For purposes of this subparagraph B, the Exercise Date shall be the
first date on which there shall have been delivered to the Corporation both
written notice of the exercise of the option and, except to the extent such sale
and remittance procedure is utilized, payment of the option price for the
purchased shares.

          3.   The fair market value of a share of Common Stock on any relevant
date under subparagraph 1 above (and for all other valuation purposes under the
Plan) shall be determined in accordance with the following provisions:

               (i)   If the Common Stock is not at the time listed or admitted
     to trading on any stock exchange but is traded on the Nasdaq National
     Market System, the fair market value shall be the closing selling price of
     one share of Common Stock on the date in question, as such price is
     reported by the National Association of Securities Dealers through its
     Nasdaq system or any successor system. If there is no closing selling price
     for the Common Stock on the date in question, then the closing selling
     price on the last preceding date for which such quotation exists shall be
     determinative of fair market value.

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

               (iii) If the Common Stock at the time is neither listed nor
     admitted to trading on any stock exchange nor traded in the over-the-
     counter market, or if the Plan Administrator determines that the value
     determined pursuant to subparagraphs (i) and (ii) above does not accurately
     reflect the fair market value of the Common Stock, then such fair market
     value shall be determined by the Plan Administrator after taking into
     account such factors as the Plan Administrator shall deem appropriate,
     including one or more independent professional appraisals.

          C.   Term and Exercise of Options.
               ----------------------------

          Each option granted under the Plan shall be exercisable at such time
or times, during such period, and for such number of shares as shall be
determined by the Plan Administrator and set forth in the instrument evidencing
such option.  No such option, however, shall have a maximum term in excess of
ten (10) years from the grant date and no Incentive Option granted to a 10%
Stockholder shall have a maximum term in excess of five (5) years from the grant
date.  During the lifetime of the optionee, the option shall be exercisable only
by the optionee and shall not be assignable or transferable by the optionee
otherwise than by will or by the laws of descent and distribution.

                                       4
<PAGE>

          D.   Effect of Termination of Employment.
               -----------------------------------

          1.   Except to the extent otherwise provided pursuant to subparagraph
3.D below, the following provisions shall govern the exercise period applicable
to any options held by the optionee at the time of cessation of Service or
death.

               (i)   Should the optionee cease to remain in Service for any
     reason other than death or Disability, then the period during which each
     outstanding option held by such optionee is to remain exercisable shall be
     limited to the three (3)-month period following the date of such cessation
     of Service.

               (ii)  In the event such Service terminates by reason of
     Disability, then the period during which each outstanding option held by
     the optionee is to remain exercisable shall be limited to the six (6)-month
     period following the date of such cessation of Service.  However, should
     such Disability be deemed to constitute Permanent Disability, then the
     period during which each outstanding option held by the optionee is to
     remain exercisable shall be extended by an additional six (6) months so
     that the exercise period shall be limited to the twelve (12)-month period
     following the date of the optionee's cessation of Service by reason of such
     Permanent Disability.  For all purposes under the Plan, Disability shall
     mean the inability of an individual to engage in any substantial gainful
     activity by reason of any medically determinable physical or mental
     impairment and shall be determined by the Plan Administrator on the basis
     of such medical evidence as the Plan Administrator deems warranted under
     the circumstances.  Disability shall be deemed to constitute Permanent
     Disability in the event that such Disability is expected to result in death
     or has lasted or can be expected to last for a continuous period of not
     less than twelve (12) months.

               (iii) Should the optionee die while holding one or more
     outstanding options, then the period during which each such option is to
     remain exercisable shall be limited to the twelve (12)-month period
     following the date of the optionee's death.  During such limited period,
     the option may be exercised by the personal representative of the
     optionee's estate or by the person or persons to whom the option is
     transferred pursuant to the optionee's will or in accordance with the laws
     of descent and distribution.

               (iv)  Each such option shall, during such limited exercise
     period, be exercisable for any or all of the shares for which the option is
     exercisable on the date of the optionee's cessation of Service. Upon the
     expiration of such limited exercise period or (if earlier) upon the
     expiration of the option term, the option shall terminate and cease to be
     exercisable.

          2.   Under no circumstances shall any option be exercisable after the
specified expiration date of the option term.

          3.   For all purposes under the Plan, unless specifically provided
otherwise in the option agreement evidencing the option grant and/or the
purchase agreement evidencing the purchased shares, the optionee shall be deemed
to remain in Service for so long as such individual renders services on a
periodic basis to the Corporation or any parent or subsidiary corporation in the
capacity of an Employee, a non-employee member of the board of directors or a
consultant. The optionee shall be considered to be an Employee for so long as
such individual remains in the employ of the Corporation or one or more of its
parent or subsidiary corporations, subject to the control and direction of the
employer entity as to both the work to be performed and the manner and method of
performance.

          4.   The Board shall have full power and authority to extend the
period of time for which the option is to remain exercisable following the
optionee's termination of Service from the three (3)-

                                       5
<PAGE>

month (six (6) months in the case of Disability and twelve (12) months in the
case of death or Permanent Disability) or shorter period set forth in the option
agreement to such greater period of time as the Board shall deem appropriate;
provided, that in no event shall such option be exercisable after the specified
--------
expiration date of the option term.

          E.   Stockholder Rights.  An optionee shall have none of the rights of
               ------------------
a stockholder with respect to the shares subject to the option until such
individual shall have exercised the option and paid the option price.

          F.   Repurchase Rights.  The shares of Common Stock acquired upon the
               -----------------
exercise of options granted under the Plan may be subject to one or more
repurchase rights of the Corporation in accordance with the following
provisions:

          1.   The Plan Administrator may in its discretion determine that it
shall be a term and condition of one or more options exercised under the Plan
that the Corporation (or its assignees) shall have the right, exercisable upon
the optionee's cessation of Service, to repurchase at the option price all or
(at the discretion of the Corporation and with the consent of the optionee) part
of the unvested shares of Common Stock at the time held by the optionee.  Any
such repurchase right shall be exercisable by the Corporation (or its assignees)
upon such terms and conditions (including the establishment of the appropriate
vesting schedule and other provision for the expiration of such right in one or
more installments over the optionee's period of Service) as the Plan
Administrator may specify in the instrument evidencing such right.

          2.   All of the Corporation's outstanding repurchase rights shall
automatically terminate upon the occurrence of any Corporate Transaction under
Section VII.

     VI.  INCENTIVE OPTIONS

          The terms and conditions specified below shall be applicable to all
Incentive Options granted under the Plan.  Incentive Options may only be granted
to individuals who are Employees of the Corporation.  Options which are
specifically designated as "non-statutory" options when issued under the Plan
shall not be subject to such terms and conditions.

          A.   Option Price.  The option price per share of the Common Stock
               ------------
subject to an Incentive Option shall in no event be  less than one hundred
percent (100%) of the fair market value of a share of Common Stock on the date
of grant. If the individual to whom the option is granted is the owner of stock
(as determined under Section 424(d) of the Internal Revenue Code) possessing ten
percent (10%) or more of the total combined voting power of all classes of stock
of the Corporation or any one of its parent or subsidiary corporations (such
person to be herein referred to as a 10% Stockholder), then the option price per
share shall not be less than one hundred and ten percent (110%) of the Fair
Market Value of one share of Common Stock on the grant date.

          B.   Dollar Limitation. The aggregate fair market value (determined as
               -----------------
of the respective date or dates of grant) of the Common Stock for which one or
more options granted to any Employee under this Plan (or any other option plan
of the Corporation or its parent or subsidiary corporations) may for the first
time become exercisable as incentive stock options under the Federal tax laws
during any one calendar year shall not exceed the sum of One Hundred Thousand
Dollars ($100,000).  To the extent the Employee holds two or more such options
which become exercisable for the first time in the same calendar year, the
foregoing limitation on the exercisability thereof as incentive stock options
under the Federal tax laws shall be applied on the basis of the order in which
such options are granted.

          Except as modified by the preceding provisions of this Section VI, all
the provisions of the Plan shall be applicable to the Incentive Options granted
hereunder.

                                       6
<PAGE>

     VII.  CORPORATE TRANSACTIONS

           A.   In the event of one or more of the following transactions (a
"Corporate Transaction"):

               (i)   a merger or consolidation in which the Corporation is not
     the surviving entity, except for a transaction the principal purpose of
     which is to change the State of the Corporation's incorporation,

               (ii)  the sale, transfer or other disposition of all or
     substantially all of the assets of the Corporation in complete liquidation
     or dissolution of the Corporation, or

               (iii) any reverse merger in which the Corporation is the
     surviving entity but in which all of the Corporation's outstanding voting
     stock is transferred to the acquiring entity or its wholly-owned
     subsidiary,

           then each option outstanding under the Plan shall automatically
accelerate so that each such option shall, immediately prior to the Corporate
Transaction, become fully exercisable for all of the shares of Common Stock at
the time subject to such option and may be exercised for any or all of those
shares or fully vested shares of Common Stock.

           B.   Immediately following the consummation of the Corporate
Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor Corporation (or
parent thereof).

           C.   Each outstanding option which is assumed in connection with the
Corporate Transaction or is otherwise to continue in effect shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply
and pertain to the number and class of securities which would be issuable, in
consummation of such Corporate Transaction, to an actual holder of the same
number of shares of Common Stock as are subject to such option immediately prior
to such Corporate Transaction, and appropriate adjustments shall also be made to
the option price payable per share, provided the aggregate option price payable
for such securities shall remain the same.  Appropriate adjustments shall also
be made to the class and number of securities available for issuance under the
Plan following the consummation of such Corporate Transaction.

           D.   The portion of any Incentive Option accelerated in connection
with a Corporate Transaction shall remain exercisable as an Incentive Option
only to the extent the applicable One Hundred Thousand Dollar limitation is not
exceeded. To the extent such dollar limitation is exceeded, the accelerated
portion of such option shall be exercisable as a Non-Statutory Option under the
Federal tax laws.

           E.   The grant of options under this Plan shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.

     VIII. CANCELLATION AND REGRANT OF OPTIONS

           The Plan Administrator shall have the authority to effect, at any
time and from time to time, with the consent of the affected optionees, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution therefor new options under the Plan covering the same or different
numbers of shares of Common Stock but having an option price per share not less
than eighty-five percent (85%) of the fair market value of the Common Stock on
the new grant date (or one hundred percent (100%)) of such fair

                                       7
<PAGE>

market value in the case of an Incentive Option or, in the case of a 10%
Stockholder, not less than one hundred and ten percent (110%) of such fair
market value).

     IX.   CASH-OUT OF OPTIONS

           A.  Once the Corporation's outstanding Common Stock is registered
under Section 12(g) of the 1934 Act, one or more optionees subject to the short-
swing profit restrictions of the Federal securities laws may, in the Plan
Administrator's sole discretion, be granted limited cash-out rights to operate
in tandem with their outstanding options under the Plan.  Any option with such a
limited right in effect for at least six (6) months shall automatically be
cancelled upon the acquisition of fifty percent (50%) or more of the
Corporation's outstanding Common Stock (excluding the Common Stock holdings of
officers and directors of the Corporation who participate in this Plan) pursuant
to a tender or exchange offer made by a person or group of related persons
(other than the Corporation or a person that directly or indirectly controls, is
controlled by or is under common control with the Corporation) which the Board
does not recommend the Corporation's stockholders to accept.  In return for the
cancelled option, the optionee shall be entitled to a cash distribution from the
Corporation in an amount equal to the excess of (i) the Cash-Out Price of the
shares of Common Stock in which the optionee is vested under the cancelled
option over (ii) the aggregate exercise price payable for such vested shares.
The cash distribution payable upon such cancellation shall be made within five
(5) days following the completion of such tender or exchange offer, and neither
the approval of the Plan Administrator nor the consent of the Board shall be
required in connection with such cancellation and distribution.

          B.   For purposes of calculating the cash distribution, the Cash-Out
Price per share of the vested Common Stock subject to the cancelled option shall
be deemed to be equal to the greater of (i) the fair market value per share on
                             -------
the date of surrender, as determined in accordance with the valuation provisions
of subsection V.1.D, or (ii) the highest reported price per share paid in
effecting the tender or exchange offer.  However, if the cancelled option is an
Incentive Option, then the Cash-Out Price shall not exceed the value per share
determined under clause (i) above.

          C.   The shares of Common Stock subject to any option cancelled for an
appreciation distribution in accordance with this Section IX shall not be
                                                                   ---
available for subsequent option grants under the Plan.

     X.   TAX WITHHOLDING

          A.   The Corporation's obligation to deliver shares of Common Stock
upon the exercise of options or upon the vesting of such shares under the Plan
shall be subject to the satisfaction of all applicable Federal, state and local
income and employment tax withholding requirements.

          B.   The Plan Administrator may, in its discretion, provide any or all
holders of Non-Statutory Options or unvested shares of Common Stock under the
Plan with the right to use shares of Common Stock in satisfaction of all or part
of the Taxes incurred by such holders in connection with the exercise of their
options.  Such right may be provided to any such holder in either or both of the
following formats:

               (i)  Stock Withholding.  The election to have the Corporation
                    -----------------
     withhold, from the shares of Common Stock otherwise issuable upon the
     exercise of such Non-Statutory Option or the vesting of such shares, a
     portion of those shares with an aggregate Fair Market Value equal to the
     percentage of the taxes (not to exceed one hundred percent (100%))
     designated by the holder.

               (ii) Stock Delivery.  The election to deliver to the Corporation,
                    --------------
     at the time the Non-Statutory Option is exercised or the shares vest, one
     or more shares of Common Stock

                                       8
<PAGE>

     previously acquired by such holder (other than in connection with the
     option exercise or share vesting triggering the taxes) with an aggregate
     Fair Market Value equal to the percentage of the taxes (not to exceed one
     hundred percent (100%)) designated by the holder.

     XI.   LOANS

           A.   The Plan Administrator may assist any optionee (including an
optionee who is an officer or director of the Corporation) in the exercise of
one or more options granted to such optionee, including the satisfaction of any
Federal and State income and employment tax obligations arising therefrom, by
(i) authorizing the extension of a loan from the Corporation to such optionee,
or (ii) permitting the optionee to pay the option price for the purchased Common
Stock in installments over a period of years.

           B.   The terms of any loan or installment method of payment
(including the interest rate and terms of repayment) shall be established by the
Plan Administrator in its sole discretion. Loans or installment payments may be
granted with or without security or collateral. However, any loan made to a
consultant or other non-employee advisor must be secured by property other than
the purchased shares of Common Stock. In all events, the maximum credit
available to each optionee may not exceed the sum of (i) the aggregate option
                               ---
price payable for the purchased shares (less the par value) plus (ii) any
Federal and State income and employment tax liability incurred by the optionee
in connection with such exercise.

           C.   The Plan Administrator may, in its absolute discretion,
determine that one or more loans extended under the financial assistance program
shall be subject to forgiveness by the Corporation in whole or in part upon such
terms and conditions as the Board in its discretion deems appropriate.

     XII.  NO EMPLOYMENT OR SERVICE RIGHTS

           A.   Nothing in the Plan shall confer upon the optionee any right to
continue in the service or employ of the Corporation (or any parent or
subsidiary corporation of the Corporation employing or retaining such optionee)
for any period of specific duration or interfere with or otherwise restrict in
any way the rights of the Corporation (or any parent or subsidiary corporation
of the Corporation employing or retaining such optionee) or of the optionee,
which rights are hereby expressly reserved by each, to terminate the Service of
the optionee at any time for any reason, with or without cause.

     XIII. AMENDMENT OF THE PLAN

     A.    The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects whatsoever; provided, however,
                                                            --------
that no such amendment or modification shall, without the consent of the
stockholders, adversely affect the rights and obligations with respect to
options at the time outstanding under the Plan; and provided, further that the
                                                    --------
Board shall not, without the approval of the Corporation's stockholders, (i)
increase the maximum number of shares issuable under the Plan or the maximum
number of shares for which any person may be granted options per calendar year,
except for permissible adjustments under Section IV or (ii) materially modify
the eligibility requirements for the grant of options under the Plan.

     B.    Options may be granted under this Plan to purchase shares of Common
Stock in excess of the number of shares then available for issuance under the
Plan, provided (i) an amendment to increase the maximum number of shares
      --------
issuable under the Plan is adopted by the Board prior to the initial grant of
any such option and within one year thereafter such amendment is approved by the
Corporation's stockholders and (ii) each option granted is not to become
exercisable, in whole or in part, at any time prior to the obtaining of such
stockholder approval.

                                       9
<PAGE>

     XIV. EFFECTIVE DATE AND TERM OF PLAN

     A.   The Plan became effective when adopted by the Board on June 10, 1993
and was approved by the Corporation's stockholders on September 20, 1993. The
Board amended the Plan on November 22, 1994 to (i) increase the number of shares
authorized for issuance thereunder by an additional 975,080 shares of Common
Stock (132,298 shares of Common Stock on a post-split basis) and (ii) revise the
limited period of exercisability when an optionee ceases to render Services to
the Corporation as a result of such optionee's Disability. The Corporation's
Stockholders approved the 1994 Amendment on December 29, 1994. The Board amended
the Plan on June 1, 1996 to increase the number of shares authorized for
issuance thereunder by an additional 640,079 shares (on a post-split basis) of
Common Stock and on October 2, 1996, to revise certain provisions in connection
with the filing of a Registration Statement for the initial public offering of
the Company's Common Stock hereafter referred to collectively as (the "1996
Amendments") The Corporation's Stockholders approved the 1996 Amendments on
October 2, 1996. The Board amended the Plan in March 1999 to increase the number
of shares authorized for issuance thereunder by an additional 2,000,000 shares
(on a post-split basis) of Common Stock.  The Corporation's Stockholders
approved the 1999 Amendment on June 23, 1999.  In February 2000, the Board
decided to unreserve the remaining 2,742,996 shares which had not been granted
to utilize those shares in a private placement financing.  In June 2000, the
Corporation's Stockholder approved an amendment to increase the number of shares
of Common Stock reserved for issuance to replace the shares which were
unreserved and used for the private placement financing.

     B.   The provisions of the 1996 Amendments shall apply only to options
granted and shares issued under the Plan from and after the date the Amendments
were adopted by the Board.  Each option issued and outstanding under the Plan
immediately prior to such adoption of the Amendments shall continue to be
governed by the terms and conditions of the Plan (and the instrument evidencing
such grant) as in effect on the date each such option was previously granted,
and nothing in the Amendments shall be deemed to affect or otherwise modify the
rights or obligations of the stockholders of such prior options with respect to
the acquisition of shares of Common Stock thereunder.

     C.   Unless sooner terminated in accordance with Section VII, the Plan
shall terminate upon the earlier of (i) November 21, 2004 or (ii) the date on
                         -------
which all shares available for issuance under the Plan shall have been issued
pursuant to the exercise or surrender of options granted hereunder. If the date
of termination is determined under clause (i) above, then options outstanding on
such date shall thereafter continue to have force and effect in accordance with
the provisions of the instruments evidencing such options.

     XV.  USE OF PROCEEDS

          Any cash proceeds received by the Corporation from the sale of shares
pursuant to options granted under the Plan shall be used for general corporate
purposes.

     XVI. REGULATORY APPROVALS

          The implementation of the Plan, the granting of any option hereunder,
and the issuance of stock upon the exercise or surrender of any such option
shall be subject to the procurement by the Corporation of all approvals and
permits required by regulatory authorities having jurisdiction over the Plan,
the options granted under it and the stock issued pursuant to it.

                                       10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00027-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00027-of-00352.parquet"}]]