Document:

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                                                                     EXHIBIT 4.1

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                                     WARNING
     Granting options to directors and officers under this plan may violate
     NASD or stock exchange rules if the plan does not meet the broad based
                    plan exemption from shareholder approval
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                            NETWORKS ASSOCIATES, INC.
                       2000 NONSTATUTORY STOCK OPTION PLAN

        1.     Purposes of the Plan. The purposes of this Nonstatutory Stock
               Option Plan are:

               -  to attract and retain the best available personnel for
                  positions of substantial responsibility,

               -  to provide additional incentive to Employees, Directors and
                  Consultants, and

               -  to promote the success of the Company's business.

               Options granted under the Plan will be Nonstatutory Stock
               Options.

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

                (a) "Administrator" means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 of the Plan.

                (b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options are, or will be, granted under
the Plan.

                (c) "Board" means the Board of Directors of the Company.

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

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

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

                (g) "Company" means Networks Associates, Inc., a Delaware
corporation.

                (h) "Consultant" means any person, including an advisor, engaged
by the Company or a Parent or Subsidiary to render services to such entity.

                (i) "Director" means a member of the Board.

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                (j) "Disability" means total and permanent disability as defined
in Section 22(e)(3) of the Code.

                (k) "Employee" means any person, including Officers, employed by
the Company or any Parent or Subsidiary of the Company. A Service Provider shall
not cease to be an Employee in the case of (i) any leave of absence approved by
the Company or (ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.

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

                (m) "Fair Market Value" means, 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 Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;

                    (ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;

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

                (n) "Notice of Grant" means a written or electronic notice
evidencing certain terms and conditions of an individual Option grant. The
Notice of Grant is part of the Option Agreement.

                (o) "Officer" means 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.

                (p) "Option" means a nonstatutory stock option granted pursuant
to the Plan, that is not intended to qualify as an incentive stock option within
the meaning of Section 422 of the Code and the regulations promulgated
thereunder.

                (q) "Option Agreement" means an agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.

                (r) "Option Exchange Program" means a program whereby
outstanding options are surrendered in exchange for options with a lower
exercise price.

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

                (t) "Optionee" means the holder of an outstanding Option granted
under the Plan.

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

                (v) "Plan" means this 2000 Nonstatutory Stock Option Plan.

                (w) "Service Provider" means an Employee including an Officer,
Consultant or Director.

                (x) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.

                (y) "Subsidiary" means 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 12 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is Three Million (3,000,000) Shares. The Shares may be
authorized, but unissued, or reacquired Common Stock.

            If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated).

        4. Administration of the Plan.

            (a) Administration. The Plan shall be administered by (i) the Board
or (ii) a Committee, which committee shall be constituted to satisfy Applicable
Laws.

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

                (i) to determine the Fair Market Value of the Common Stock;

                (ii) to select the Service Providers to whom Options may be
granted hereunder;

                (iii) to determine whether and to what extent Options are
granted hereunder;

                (iv) to determine the number of shares of Common Stock to be
covered by each Option granted hereunder;

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

                (vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

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                (vii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted;

                (viii) to institute an Option Exchange Program;

                (ix) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;

                (x) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

                (xi) to modify or amend each Option (subject to Section 14(b) of
the Plan), including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in the
Plan;

                (xii) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option previously
granted by the Administrator;

                (xiii) to determine the terms and restrictions applicable to
Options;

                (xiv) to allow Optionees to satisfy withholding tax obligations
by electing to have the Company withhold from the Shares to be issued upon
exercise of an Option that number of Shares having a Fair Market Value equal to
the amount required to be withheld. 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. All elections by an Optionee to have Shares withheld for
this purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable; and

                (xv) to make all other determinations deemed necessary or
advisable for administering the Plan.

            (c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options.

        5. Eligibility. Options may be granted to Service Providers; provided,
however, that notwithstanding anything to the contrary contained in the Plan,
Options may not be granted to Officers and Directors.

        6. Limitation. Neither the Plan nor any Option shall confer upon an
Optionee any right with respect to continuing the Optionee's relationship as a
Service Provider with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such relationship at any
time, with or without cause.

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

        8. Term of Option. The term of each Option shall be stated in the Option
Agreement.

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        9. Option 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 determined by the
Administrator.

            (b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised.

            (c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. Such consideration may consist entirely of:

                (i) cash;

                (ii) check;

                (iii) promissory note;

                (iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and (B) 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;

                (v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;

                (vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;

                (vii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws; or

                (viii) any combination of the foregoing methods of payment.

        10. Exercise of Option.

            (a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. An Option may not be exercised for a fraction of
a Share.

                An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized

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transfer agent of the Company), 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. The Company shall issue (or cause to
be issued) such Shares promptly after the Option is exercised. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Shares are issued, except as provided in Section 12 of the Plan.

                Exercising an Option in any manner shall decrease the number of
Shares thereafter 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 Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability, the Optionee may exercise his or her Option, but only within such
period of time as is specified in the Option Agreement, and only to the extent
that the Option is vested on the date of termination (but in no event later than
the expiration of the term of such Option as set forth in the Option Agreement).
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for three (3) months following the Optionee's termination.
If, on the date of termination, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise his or
her Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

            (c) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option
Agreement, to the extent the Option is vested on the date of termination (but in
no event later than the expiration of the term of such Option as set forth in
the Option Agreement). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.

            (d) Death of Optionee. If an Optionee dies while a Service Provider,
the Option may be exercised within such period of time as is specified in the
Option Agreement (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested on the date of death. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. If, at
the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately
revert to the Plan. The Option may be exercised by the executor or administrator
of the Optionee's estate or, if none, by the person(s) entitled to exercise the
Option under the Optionee's will or the laws of descent or distribution. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

            (e) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

        11. Non-Transferability of Options. Unless determined otherwise by the
Administrator, an 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 and may be exercised, during the lifetime of the
Optionee,

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only by the Optionee. If the Administrator makes an Option transferable, such
Option shall contain such additional terms and conditions as the Administrator
deems appropriate.

        12. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.

            (a) Changes in Capitalization. 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 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) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent it has not been previously exercised, an
Option will terminate immediately prior to the consummation of such proposed
action.

            (c) Merger or Asset Sale. In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option shall be assumed or an equivalent option
or right substituted by the successor corporation or a Parent or Subsidiary of
the successor corporation. In the event that the successor corporation refuses
to assume or substitute for the Option, the Optionee shall fully vest in and
have the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If an Option
becomes fully vested and exercisable in lieu of assumption or substitution in
the event of a merger or sale of assets, the Administrator shall notify the
Optionee in writing or electronically that the Option shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period. For the purposes
of this paragraph, the Option shall be considered assumed if, following the
merger or sale of assets, the option or right confers the right to purchase or
receive, for each Share of Optioned Stock, immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option, for each Share of Optioned Stock to be
solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the merger or sale of assets.

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        13. Date of Grant. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.

        14. Amendment and Termination of the Plan.

            (a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.

            (b) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to options granted under the
Plan prior to the date of such termination.

        15. Conditions Upon Issuance of Shares.

            (a) Legal Compliance. 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 shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

            (b) Investment Representations. 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.

        16. Inability to Obtain Authority. 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. 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.

                                      II-8<PAGE>   1
                                                                     EXHIBIT 4.2

                            NETWORK ASSOCIATES, INC.

                            1997 STOCK INCENTIVE PLAN

                     (AS ADOPTED EFFECTIVE DECEMBER 1, 1997

                        AND AMENDED THROUGH MAY 25, 2000)

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                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                            PAGE
<S>     <C>                                                                  <C>
ARTICLE 1. INTRODUCTION.......................................................1

ARTICLE 2. ADMINISTRATION.....................................................1

        2.1    Committee Composition..........................................1
        2.2    Committee Responsibilities.....................................1

ARTICLE 3. SHARES AVAILABLE FOR GRANTS........................................2

        3.1    Basic Limitation...............................................2
        3.2    Additional Shares..............................................2
        3.3    Dividend Equivalents...........................................2

ARTICLE 4. ELIGIBILITY........................................................2

        4.1    Incentive Stock Options........................................2
        4.2    Other Grants...................................................2
        4.3    Prospective Employees and Consultants..........................2

ARTICLE 5. OPTIONS............................................................3

        5.1    Stock Option Agreement.........................................3
        5.2    Number of Shares...............................................3
        5.3    Exercise Price.................................................3
        5.4    Exercisability and Term........................................3
        5.5    Effect of Transfer of Control..................................3
        5.6    Substitution of Options........................................4
        5.7    Buyout Provisions..............................................4

ARTICLE 6. PAYMENT FOR OPTION SHARES..........................................4

        6.1    General Rule...................................................4
        6.2    Surrender of Stock.............................................4
        6.3    Exercise/Sale..................................................4
        6.4    Exercise/Pledge................................................4
        6.5    Promissory Note................................................5
        6.6    Other Forms of Payment.........................................5

ARTICLE 7. STOCK APPRECIATION RIGHTS..........................................5

        7.1    SAR Agreement..................................................5
        7.2    Number of Shares...............................................5
        7.3    Exercise Price.................................................5
        7.4    Exercisability and Term........................................5
        7.5    Effect of Transfer of Control..................................6
        7.6    Exercise of SARs...............................................6
</TABLE>

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                                TABLE OF CONTENTS
                                   (continued)
<TABLE>
<CAPTION>
                                                                            PAGE
<S>     <C>                                                                  <C>
        7.7    Modification or Assumption of SARs.............................6

ARTICLE 8. RESTRICTED SHARES..................................................6

        8.1    Restricted Stock Agreement.....................................6
        8.2    Payment for Awards.............................................6
        8.3    Vesting Conditions.............................................6
        8.4    Effect of Transfer of Control..................................7
        8.5    Voting and Dividend Rights.....................................7

ARTICLE 9. STOCK UNITS........................................................7

        9.1    Stock Unit Agreement...........................................7
        9.2    Payment for Awards.............................................7
        9.3    Vesting Conditions.............................................7
        9.4    Effect of Transfer of Control..................................8
        9.5    Voting and Dividend Rights.....................................8
        9.6    Form and Time of Settlement of Stock Units.....................8
        9.7    Death of Recipient.............................................8
        9.8    Creditors' Rights..............................................8

ARTICLE 10. PROTECTION AGAINST DILUTION.......................................9

        10.1   Adjustments....................................................9
        10.2   Dissolution or Liquidation.....................................9
        10.3   Reorganizations................................................9

ARTICLE 11. DEFERRAL OF AWARDS................................................9

ARTICLE 12. AWARDS UNDER OTHER PLANS.........................................10

ARTICLE 13. LIMITATION ON RIGHTS.............................................10

        13.1   Retention Rights..............................................10
        13.2   Stockholders' Rights..........................................10
        13.3   Regulatory Requirements.......................................11

ARTICLE 14. WITHHOLDING TAXES................................................11

        14.1   General.......................................................11
        14.2   Share Withholding.............................................11

ARTICLE 15. FUTURE OF THE PLAN...............................................11

        15.1   Term of the Plan..............................................11
        15.2   Amendment or Termination......................................11
</TABLE>

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                                TABLE OF CONTENTS
                                   (continued)
<TABLE>
<CAPTION>
                                                                            PAGE
<S>     <C>                                                                  <C>
ARTICLE 16. DEFINITIONS.......................................................11

ARTICLE 17. EXECUTION.........................................................11
</TABLE>

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<PAGE>   5

                            Network Associates, Inc.

                            1997 Stock Incentive Plan
                        (as amended through May 25, 2000)

ARTICLE 1. INTRODUCTION

        The Plan was adopted by the Board effective December 1, 1997. The
purpose of the Plan is to promote the long-term success of the Company and the
creation of stockholder value by (a) encouraging Employees, Outside Directors
and Consultants to focus on critical long-range objectives, (b) encouraging the
attraction and retention of Employees, Outside Directors and Consultants with
exceptional qualifications and (c) linking Employees, Outside Directors and
Consultants directly to stockholder interests through increased stock ownership.
The Plan seeks to achieve this purpose by providing for Awards in the form of
Restricted Shares, Stock Units, Options (which may constitute incentive stock
options or nonstatutory stock options) or stock appreciation rights.

        The Plan shall be governed by, and construed in accordance with, the
laws of the State of Delaware (except their choice-of-law provisions).

ARTICLE 2. ADMINISTRATION

        2.1 COMMITTEE COMPOSITION. The Plan shall be administered by the
Committee. The Committee shall consist exclusively of two or more directors of
the Company, who shall be appointed by the Board. In addition, the composition
of the Committee shall satisfy:

            (a) Such requirements as the Securities and Exchange Commission may
        establish for administrators acting under plans intended to qualify for
        exemption under Rule 16b-3 (or its successor) under the Exchange Act;
        and

            (b) Such requirements as the Internal Revenue Service may establish
        for outside directors acting under plans intended to qualify for
        exemption under section 162(m)(4)(C) of the Code.

The Board may also appoint one or more separate committees of the Board, each
composed of one or more directors of the Company who need not satisfy the
foregoing requirements, who may administer the Plan with respect to Employees
and Consultants who are not considered officers or directors of the Company
under section 16 of the Exchange Act, may grant Awards under the Plan to such
Employees and Consultants and may determine all terms of such Awards.

        2.2 COMMITTEE RESPONSIBILITIES. The Committee shall (a) select the
Employees, Outside Directors and Consultants who are to receive Awards under the
Plan, (b) determine the type,

<PAGE>   6

number, vesting requirements and other features and conditions of such Awards,
(c) interpret the Plan and (d) make all other decisions relating to the
operation of the Plan. The Committee may adopt such rules or guidelines as it
deems appropriate to implement the Plan. The Committee's determinations under
the Plan shall be final and binding on all persons.

ARTICLE 3. SHARES AVAILABLE FOR GRANTS

        3.1 BASIC LIMITATION. Common Shares issued pursuant to the Plan may be
authorized but unissued shares or treasury shares. The aggregate number of
Options, SARs, Stock Units and Restricted Shares awarded under the Plan shall
not exceed (a) 22,480,000 plus (b) the additional Common Shares described in
Section 3.2. The limitation of this Section 3.1 shall be subject to adjustment
pursuant to Article 10.

        3.2 ADDITIONAL SHARES. If Restricted Shares, Stock Units, Options or
SARs granted under this Plan or the Predecessor Plan are forfeited or if Options
or SARs granted under this Plan or the Predecessor Plan terminate for any other
reason before being exercised, then the corresponding Common Shares shall become
available for Awards under this Plan. If Stock Units are settled, then only the
number of Common Shares (if any) actually issued in settlement of such Stock
Units shall reduce the number available under Section 3.1 and the balance shall
again become available for Awards under the Plan. If SARs are exercised, then
only the number of Common Shares (if any) actually issued in settlement of such
SARs shall reduce the number available under Section 3.1 and the balance shall
again become available for Awards under the Plan. The foregoing notwithstanding,
the aggregate number of Common Shares that may be issued under the Plan upon the
exercise of ISOs shall not be increased when Restricted Shares are forfeited.

        3.3 DIVIDEND EQUIVALENTS. Any dividend equivalents paid or credited
under the Plan shall not be applied against the number of Restricted Shares,
Stock Units, Options or SARs available for Awards, whether or not such dividend
equivalents are converted into Stock Units.

ARTICLE 4. ELIGIBILITY

        4.1 INCENTIVE STOCK OPTIONS. Only Employees who are common-law employees
of the Company, a Parent or a Subsidiary on the date of grant shall be eligible
for the grant of ISOs. In addition, an Employee who owns more than 10% of the
total combined voting power of all classes of outstanding stock of the Company
or any of its Parents or Subsidiaries shall not be eligible for the grant of an
ISO unless the requirements set forth in section 422(c)(6) of the Code are
satisfied.

        4.2 OTHER GRANTS. Only Employees, Outside Directors and Consultants
shall be eligible for the grant of Restricted Shares, Stock Units, NSOs or SARs.

        4.3 PROSPECTIVE EMPLOYEES AND CONSULTANTS. For purposes of this Article
4, (a) "Employees" shall include prospective Employees to whom Awards are
granted in connection with written offers of employment from the Company, a
Parent or a Subsidiary and (b) "Consultants" shall include prospective
Consultants to whom Awards are granted in connection with written offers of
engagement from the Company, a Parent or a Subsidiary. If an ISO is granted

                                      -2-
<PAGE>   7

to a prospective Employee, the date when his or her service as an Employee
commences shall be deemed to be the date of grant of such ISO for all purposes
under the Plan (including, without limitation, Section 5.3). No Award granted to
a prospective Employee or prospective Consultant shall become exercisable or
vested unless and until his or her service as an Employee or Consultant
commences.

ARTICLE 5. OPTIONS

        5.1 STOCK OPTION AGREEMENT. Each grant of an Option under the Plan shall
be evidenced by a Stock Option Agreement between the Optionee and the Company.
Such Option shall be subject to all applicable terms of the Plan and may be
subject to any other terms that are not inconsistent with the Plan. The Stock
Option Agreement shall specify whether the Option is an ISO or an NSO. The
provisions of the various Stock Option Agreements entered into under the Plan
need not be identical. Options may be granted in consideration of a reduction in
the Optionee's other compensation. A Stock Option Agreement may provide that a
new Option will be granted automatically to the Optionee when he or she
exercises a prior Option and pays the Exercise Price in the form described in
Section 6.2.

        5.2 NUMBER OF SHARES. Each Stock Option Agreement shall specify the
number of Common Shares subject to the Option and shall provide for the
adjustment of such number in accordance with Article 10. Options granted to any
Optionee in a single fiscal year of the Company shall not cover more than
1,000,000 Common Shares, except that Options granted to a new Employee in the
fiscal year of the Company in which his or her service as an Employee first
commences shall not cover more than 1,500,000 Common Shares. The limitations set
forth in the preceding sentence shall be subject to adjustment in accordance
with Article 10.

        5.3 EXERCISE PRICE. Each Stock Option Agreement shall specify the
Exercise Price; provided that the Exercise Price under an ISO shall in no event
be less than 100% of the Fair Market Value of a Common Share on the date of
grant and the Exercise Price under an NSO shall in no event be less than 85% of
the Fair Market Value of a Common Share on the date of grant. In the case of an
NSO, a Stock Option Agreement may specify an Exercise Price that varies in
accordance with a predetermined formula while the NSO is outstanding.

        5.4 EXERCISABILITY AND TERM. Each Stock Option Agreement shall specify
the date or event when all or any installment of the Option is to become
exercisable. The Stock Option Agreement shall also specify the term of the
Option; provided that the term of an ISO shall in no event exceed 10 years from
the date of grant. A Stock Option Agreement may provide for accelerated
exercisability in the event of the Optionee's death, disability or retirement or
other events and may provide for expiration prior to the end of its term in the
event of the termination of the Optionee's service. Options may be awarded in
combination with SARs, and such an Award may provide that the Options will not
be exercisable unless the related SARs are forfeited.

        5.5 EFFECT OF TRANSFER OF CONTROL. The Committee may determine, at the
time of granting an Option or thereafter, that such Option shall become
exercisable as to all or part of the Common Shares subject to such Option in the
event that a Transfer of Control occurs with respect to

                                      -3-
<PAGE>   8

the Company, except that the exercisability of an ISO shall not be accelerated
without the Optionee's written consent. In addition, a separate agreement
between the Optionee and the Company may provide that such Optionee's Options
shall become exercisable as to all or part of the Common Shares subject to such
Options in the event that a Transfer of Control occurs with respect to the
Company.

        5.6 SUBSTITUTION OF OPTIONS. The Committee may accept the cancellation
of outstanding options granted by another issuer in return for the grant of new
Options under the Plan for the same or a different number of Common Shares and
at the same or a different Exercise Price.

        5.7 BUYOUT PROVISIONS. The Committee may at any time (a) offer to buy
out for a payment in cash or cash equivalents an Option previously granted or
(b) authorize an Optionee to elect to cash out an Option previously granted, in
either case at such time and based upon such terms and conditions as the
Committee shall establish.

ARTICLE 6. PAYMENT FOR OPTION SHARES

        6.1 GENERAL RULE. The entire Exercise Price of Common Shares issued upon
exercise of Options shall be payable in cash or cash equivalents at the time
when such Common Shares are purchased, except as follows:

            (a) In the case of an ISO granted under the Plan, payment shall be
        made only pursuant to the express provisions of the applicable Stock
        Option Agreement. The Stock Option Agreement may specify that payment
        may be made in any form(s) described in this Article 6.

            (b) In the case of an NSO, the Committee may at any time accept
        payment in any form(s) described in this Article 6.

        6.2 SURRENDER OF STOCK. To the extent that this Section 6.2 is
applicable, all or any part of the Exercise Price may be paid by surrendering,
or attesting to the ownership of, Common Shares that are already owned by the
Optionee. Such Common Shares shall be valued at their Fair Market Value on the
date when the new Common Shares are purchased under the Plan. The Optionee shall
not surrender, or attest to the ownership of, Common Shares in payment of the
Exercise Price if such action would cause the Company to recognize compensation
expense (or additional compensation expense) with respect to the Option for
financial reporting purposes.

        6.3 EXERCISE/SALE. To the extent that this Section 6.3 is applicable,
all or any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) an irrevocable direction to a
securities broker approved by the Company to sell all or part of the Common
Shares being purchased under the Plan and to deliver all or part of the sales
proceeds to the Company.

        6.4 EXERCISE/PLEDGE. To the extent that this Section 6.4 is applicable,
all or any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the

                                      -4-
<PAGE>   9

Company) an irrevocable direction to pledge all or part of the Common Shares
being purchased under the Plan to a securities broker or lender approved by the
Company, as security for a loan, and to deliver all or part of the loan proceeds
to the Company.

        6.5 PROMISSORY NOTE. To the extent that this Section 6.5 is applicable,
all or any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) a full-recourse promissory
note; provided that the par value of the Common Shares being purchased under the
Plan shall be paid in cash or cash equivalents.

        6.6 OTHER FORMS OF PAYMENT. To the extent that this Section 6.6 is
applicable, all or any part of the Exercise Price and any withholding taxes may
be paid in any other form that is consistent with applicable laws, regulations
and rules.

ARTICLE 7. STOCK APPRECIATION RIGHTS

        7.1 SAR AGREEMENT. Each grant of an SAR under the Plan shall be
evidenced by an SAR Agreement between the Optionee and the Company. Such SAR
shall be subject to all applicable terms of the Plan and may be subject to any
other terms that are not inconsistent with the Plan. The provisions of the
various SAR Agreements entered into under the Plan need not be identical. SARs
may be granted in consideration of a reduction in the Optionee's other
compensation.

        7.2 NUMBER OF SHARES. Each SAR Agreement shall specify the number of
Common Shares to which the SAR pertains and shall provide for the adjustment of
such number in accordance with Article 10. SARs granted to any Optionee in a
single calendar year shall in no event pertain to more than 1,000,000 Common
Shares, except that SARs granted to a new Employee in the fiscal year of the
Company in which his or her service as an Employee first commences shall not
pertain to more than 1,500,000 Common Shares. The limitations set forth in the
preceding sentence shall be subject to adjustment in accordance with Article 10.

        7.3 EXERCISE PRICE. Each SAR Agreement shall specify the Exercise Price.
An SAR Agreement may specify an Exercise Price that varies in accordance with a
predetermined formula while the SAR is outstanding.

        7.4 EXERCISABILITY AND TERM. Each SAR Agreement shall specify the date
when all or any installment of the SAR is to become exercisable. The SAR
Agreement shall also specify the term of the SAR. An SAR Agreement may provide
for accelerated exercisability in the event of the Optionee's death, disability
or retirement or other events and may provide for expiration prior to the end of
its term in the event of the termination of the Optionee's service. SARs may be
awarded in combination with Options, and such an Award may provide that the SARs
will not be exercisable unless the related Options are forfeited. An SAR may be
included in an ISO only at the time of grant but may be included in an NSO at
the time of grant or thereafter. An SAR granted under the Plan may provide that
it will be exercisable only in the event of a Transfer of Control.

                                      -5-
<PAGE>   10
        7.5 EFFECT OF TRANSFER OF CONTROL. The Committee may determine, at the
time of granting an SAR or thereafter, that such SAR shall become exercisable as
to all or part of the Common Shares subject to such SAR in the event that a
Transfer of Control occurs with respect to the Company. In addition, a separate
agreement between the Optionee and the Company may provide that such Optionee's
SARs shall become exercisable as to all or part of the Common Shares subject to
such SARs in the event that a Transfer of Control occurs with respect to the
Company.

        7.6 EXERCISE OF SARS. Upon exercise of an SAR, the Optionee (or any
person having the right to exercise the SAR after his or her death) shall
receive from the Company (a) Common Shares, (b) cash or (c) a combination of
Common Shares and cash, as the Committee shall determine. The amount of cash
and/or the Fair Market Value of Common Shares received upon exercise of SARs
shall, in the aggregate, be equal to the amount by which the Fair Market Value
(on the date of surrender) of the Common Shares subject to the SARs exceeds the
Exercise Price. If, on the date when an SAR expires, the Exercise Price under
such SAR is less than the Fair Market Value on such date but any portion of such
SAR has not been exercised or surrendered, then such SAR shall automatically be
deemed to be exercised as of such date with respect to such portion.

        7.7 MODIFICATION OR ASSUMPTION OF SARS. Within the limitations of the
Plan, the Committee may modify, extend or assume outstanding SARs or may accept
the cancellation of outstanding SARs (whether granted by the Company or by
another issuer) in return for the grant of new SARs for the same or a different
number of shares and at the same or a different exercise price. The foregoing
notwithstanding, no modification of an SAR shall, without the consent of the
Optionee, alter or impair his or her rights or obligations under such SAR.

ARTICLE 8. RESTRICTED SHARES

        8.1 RESTRICTED STOCK AGREEMENT. Each grant of Restricted Shares under
the Plan shall be evidenced by a Restricted Stock Agreement between the
recipient and the Company. Such Restricted Shares shall be subject to all
applicable terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Restricted Stock
Agreements entered into under the Plan need not be identical. Restricted Shares
may be granted in consideration of a reduction in the recipient's other
compensation.

        8.2 PAYMENT FOR AWARDS. To the extent that an Award is granted in the
form of newly issued Restricted Shares, the Award recipient, as a condition to
the grant of such Award, shall be required to pay the Company in cash or cash
equivalents an amount equal to the par value of such Restricted Shares. To the
extent that an Award is granted in the form of Restricted Shares from the
Company's treasury, no cash consideration shall be required of the Award
recipients. Any amount not paid in cash may be paid with a full-recourse
promissory note.

        8.3 VESTING CONDITIONS. Each Award of Restricted Shares may or may not
be subject to vesting. Vesting shall occur, in full or in installments, upon
satisfaction of the conditions specified in the Restricted Stock Agreement. The
Committee may include among such conditions the requirement that the performance
of the Company or a business unit of the Company for a specified period of one
or more years equal or exceed a target determined in advance by the Committee.
Such

                                      -6-
<PAGE>   11

performance shall be determined by the Company's independent auditors. Such
target shall be based on one or more of the criteria set forth in Appendix A.
The Committee shall determine such target not later than the 90th day of such
period. In no event shall the number of Restricted Shares which are subject to
performance-based vesting conditions and which are granted to any Participant in
a single calendar year exceed 300,000, subject to adjustment in accordance with
Article 10. A Restricted Stock Agreement may provide for accelerated vesting in
the event of the Participant's death, disability or retirement or other events.

        8.4 EFFECT OF TRANSFER OF CONTROL. The Committee may determine, at the
time of granting Restricted Shares or thereafter, that all or part of such
Restricted Shares shall become vested in the event that a Transfer of Control
occurs with respect to the Company. In addition, a separate agreement between
the Participant and the Company may provide that all or part of such
Participant's Restricted Shares shall become vested in the event that a Transfer
of Control occurs with respect to the Company.

        8.5 VOTING AND DIVIDEND RIGHTS. The holders of Restricted Shares awarded
under the Plan shall have the same voting, dividend and other rights as the
Company's other stockholders. A Restricted Stock Agreement, however, may require
that the holders of Restricted Shares invest any cash dividends received in
additional Restricted Shares. Such additional Restricted Shares shall be subject
to the same conditions and restrictions as the Award with respect to which the
dividends were paid.

ARTICLE 9. STOCK UNITS

        9.1 STOCK UNIT AGREEMENT. Each grant of Stock Units under the Plan shall
be evidenced by a Stock Unit Agreement between the recipient and the Company.
Such Stock Units shall be subject to all applicable terms of the Plan and may be
subject to any other terms that are not inconsistent with the Plan. The
provisions of the various Stock Unit Agreements entered into under the Plan need
not be identical. Stock Units may be granted in consideration of a reduction in
the recipient's other compensation.

        9.2 PAYMENT FOR AWARDS To the extent that an Award is granted in the
form of Stock Units, no cash consideration shall be required of the Award
recipients.

        9.3 VESTING CONDITIONS. Each Award of Stock Units may or may not be
subject to vesting. Vesting shall occur, in full or in installments, upon
satisfaction of the conditions specified in the Stock Unit Agreement. The
Committee may include among such conditions the requirement that the performance
of the Company or a business unit of the Company for a specified period of one
or more years equal or exceed a target determined in advance by the Committee.
Such performance shall be determined by the Company's independent auditors. Such
target shall be based on one or more of the criteria set forth in Appendix A.
The Committee shall determine such target not later than the 90th day of such
period. In no event shall the number of Stock Units which are subject to
performance-based vesting conditions and which are granted to any Participant in
a single calendar year exceed 300,000, subject to adjustment in accordance with
Article 10. A Stock Unit Agreement

                                      -7-
<PAGE>   12

may provide for accelerated vesting in the event of the Participant's death,
disability or retirement or other events.

        9.4 EFFECT OF TRANSFER OF CONTROL. The Committee may determine, at the
time of granting Stock Units or thereafter, that all or part of such Stock Units
shall become vested in the event that a Transfer of Control occurs with respect
to the Company. In addition, a separate agreement between the Participant and
the Company may provide that all or part of such Participant's Stock Units shall
become vested in the event that a Transfer of Control occurs with respect to the
Company.

        9.5 VOTING AND DIVIDEND RIGHTS. The holders of Stock Units shall have no
voting rights. Prior to settlement or forfeiture, any Stock Unit awarded under
the Plan may, at the Committee's discretion, carry with it a right to dividend
equivalents. Such right entitles the holder to be credited with an amount equal
to all cash dividends paid on one Common Share while the Stock Unit is
outstanding. Dividend equivalents may be converted into additional Stock Units.
Settlement of dividend equivalents may be made in the form of cash, in the form
of Common Shares, or in a combination of both. Prior to distribution, any
dividend equivalents which are not paid shall be subject to the same conditions
and restrictions as the Stock Units to which they attach.

        9.6 FORM AND TIME OF SETTLEMENT OF STOCK UNITS. Settlement of vested
Stock Units may be made in the form of (a) cash, (b) Common Shares or (c) any
combination of both, as determined by the Committee. The actual number of Stock
Units eligible for settlement may be larger or smaller than the number included
in the original Award, based on predetermined performance factors. Methods of
converting Stock Units into cash may include (without limitation) a method based
on the average Fair Market Value of Common Shares over a series of trading days.
Vested Stock Units may be settled in a lump sum or in installments. The
distribution may occur or commence when all vesting conditions applicable to the
Stock Units have been satisfied or have lapsed, or it may be deferred to any
later date. The amount of a deferred distribution may be increased by an
interest factor or by dividend equivalents. Until an Award of Stock Units is
settled, the number of such Stock Units shall be subject to adjustment pursuant
to Article 10.

        9.7 DEATH OF RECIPIENT. Any Stock Units Award that becomes payable after
the recipient's death shall be distributed to the recipient's beneficiary or
beneficiaries. Each recipient of a Stock Units Award under the Plan shall
designate one or more beneficiaries for this purpose by filing the prescribed
form with the Company. A beneficiary designation may be changed by filing the
prescribed form with the Company at any time before the Award recipient's death.
If no beneficiary was designated or if no designated beneficiary survives the
Award recipient, then any Stock Units that become payable after the recipient's
death shall be distributed to the recipient's estate.

        9.8 CREDITORS' RIGHTS. A holder of Stock Units shall have no rights
other than those of a general creditor of the Company. Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the terms and
conditions of the applicable Stock Unit Agreement.

                                      -8-
<PAGE>   13

ARTICLE 10. PROTECTION AGAINST DILUTION

        10.1 ADJUSTMENTS. In the event of a subdivision of the outstanding
Common Shares, a declaration of a dividend payable in Common Shares, a
declaration of a dividend payable in a form other than Common Shares in an
amount that has a material effect on the price of Common Shares, a combination
or consolidation of the outstanding Common Shares (by reclassification or
otherwise) into a lesser number of Common Shares, a recapitalization, a spin-off
or a similar occurrence, the Committee shall make such adjustments as it, in its
sole discretion, deems appropriate in one or more of:

            (a) The number of Options, SARs, Restricted Shares and Stock Units
        available for future Awards under Article 3;

            (b) The limitations set forth in Sections 5.2, 7.2, 8.3 and 9.3;

            (c) The number of Common Shares covered by each outstanding Option
        and SAR;

            (d) The Exercise Price under each outstanding Option and SAR; or

            (e) The number of Stock Units included in any prior Award which has
        not yet been settled.

Except as provided in this Article 10, a Participant shall have no rights by
reason of any issue by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class.

        10.2 DISSOLUTION OR LIQUIDATION. To the extent not previously exercised
or settled, Options, SARs and Stock Units shall terminate immediately prior to
the dissolution or liquidation of the Company.

        10.3 REORGANIZATIONS. In the event that the Company is a party to a
merger or other reorganization, outstanding Awards shall be subject to the
agreement of merger or reorganization. Such agreement shall provide for (a) the
continuation of the outstanding Awards by the Company, if the Company is a
surviving corporation, (b) the assumption of the outstanding Awards by the
surviving corporation or its parent or subsidiary, (c) the substitution by the
surviving corporation or its parent or subsidiary of its own awards for the
outstanding Awards, (d) full exercisability or vesting and accelerated
expiration of the outstanding Awards or (e) settlement of the full value of the
outstanding Awards in cash or cash equivalents followed by cancellation of such
Awards.

ARTICLE 11. DEFERRAL OF AWARDS

        The Committee (in its sole discretion) may permit or require a
Participant to:

                                      -9-
<PAGE>   14

               (a) Have cash that otherwise would be paid to such Participant as
        a result of the exercise of an SAR or the settlement of Stock Units
        credited to a deferred compensation account established for such
        Participant by the Committee as an entry on the Company's books;

               (b) Have Common Shares that otherwise would be delivered to such
        Participant as a result of the exercise of an Option or SAR converted
        into an equal number of Stock Units; or

               (c) Have Common Shares that otherwise would be delivered to such
        Participant as a result of the exercise of an Option or SAR, or the
        settlement of Stock Units, converted into amounts credited to a deferred
        compensation account established for such Participant by the Committee
        as an entry on the Company's books. Such amounts shall be determined by
        reference to the Fair Market Value of such Common Shares as of the date
        when they otherwise would have been delivered to such Participant.

A deferred compensation account established under this Article 11 may be
credited with interest or other forms of investment return, as determined by the
Committee. A Participant for whom such an account is established shall have no
rights other than those of a general creditor of the Company. Such an account
shall represent an unfunded and unsecured obligation of the Company and shall be
subject to the terms and conditions of the applicable agreement between such
Participant and the Company. If the deferral or conversion of Awards is
permitted or required, the Committee (in its sole discretion) may establish
rules, procedures and forms pertaining to such Awards, including (without
limitation) the settlement of deferred compensation accounts established under
this Article 11.

ARTICLE 12. AWARDS UNDER OTHER PLANS

        The Company may grant awards under other plans or programs. Such awards
may be settled in the form of Common Shares issued under this Plan. Such Common
Shares shall be treated for all purposes under the Plan like Common Shares
issued in settlement of Stock Units and shall, when issued, reduce the number of
Common Shares available under Article 3.

ARTICLE 13. LIMITATION ON RIGHTS

        13.1 RETENTION RIGHTS. Neither the Plan nor any Award granted under the
Plan shall be deemed to give any individual a right to remain an Employee,
Outside Director or Consultant. The Company and its Parents, Subsidiaries and
Affiliates reserve the right to terminate the service of any Employee or
Consultant at any time, with or without cause, subject to applicable laws and a
written employment agreement (if any).

        13.2 STOCKHOLDERS' RIGHTS. A Participant shall have no dividend rights,
voting rights or other rights as a stockholder with respect to any Common Shares
covered by his or her Award prior to the time when a stock certificate for such
Common Shares is issued or, if applicable, the time when he or she becomes
entitled to receive such Common Shares by filing any required notice of

                                      -10-
<PAGE>   15

exercise and paying any required Exercise Price. No adjustment shall be made for
cash dividends or other rights for which the record date is prior to such time,
except as expressly provided in the Plan.

        13.3 REGULATORY REQUIREMENTS. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Common Shares under the
Plan shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required. The Company reserves the
right to restrict, in whole or in part, the delivery of Common Shares pursuant
to any Award prior to the satisfaction of all legal requirements relating to the
issuance of such Common Shares, to their registration, qualification or listing
or to an exemption from registration, qualification or listing.

ARTICLE 14. WITHHOLDING TAXES

        14.1 GENERAL. To the extent required by applicable federal, state, local
or foreign law, a Participant or his or her successor shall make arrangements
satisfactory to the Company for the satisfaction of any withholding tax
obligations that arise in connection with the Plan. The Company shall not be
required to issue any Common Shares or make any cash payment under the Plan
until such obligations are satisfied.

        14.2 SHARE WITHHOLDING. The Committee may permit a Participant to
satisfy all or part of his or her withholding or income tax obligations by
having the Company withhold all or a portion of any Common Shares that otherwise
would be issued to him or her or by surrendering all or a portion of any Common
Shares that he or she previously acquired. Such Common Shares shall be valued at
their Fair Market Value on the date when taxes otherwise would be withheld in
cash.

ARTICLE 15. FUTURE OF THE PLAN

        15.1 TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on June 5, 1997. The Plan shall remain in effect until it is
terminated under Section 15.2, except that no ISOs shall be granted on or after
the 10th anniversary of the later of (a) the date when the Board adopted the
Plan or (b) the date when the Board adopted the most recent increase in the
number of Common Shares available under Article 3 which was approved by the
Company's stockholders.

        15.2 AMENDMENT OR TERMINATION. The Board or the Committee may, at any
time and for any reason, amend or terminate the Plan. An amendment of the Plan
shall be subject to the approval of the Company's stockholders only to the
extent required by applicable laws, regulations or rules. No Awards shall be
granted under the Plan after the termination thereof. The termination of the
Plan, or any amendment thereof, shall not affect any Award previously granted
under the Plan.

ARTICLE 16. DEFINITIONS

        16.1 "AFFILIATE" means any entity other than a Subsidiary, if the
Company and/or one or more Subsidiaries own not less than 50% of such entity.

                                      -11-
<PAGE>   16

        16.2 "AWARD" means any award of an Option, an SAR, a Restricted Share or
a Stock Unit under the Plan.

        16.3 "BOARD" means the Company's Board of Directors, as constituted from
time to time

        16.4 "CODE" means the Internal Revenue Code of 1986, as amended.

        16.5 "COMMITTEE" means a committee of the Board, as described in Article
2.

        16.6 "COMMON SHARE" means one share of the Common Stock of the Company.

        16.7 "COMPANY" means Network Associates, Inc. , a Delaware corporation.

        16.8 "CONSULTANT" means a consultant or adviser who provides bona fide
services to the Company, a Parent, a Subsidiary or an Affiliate as an
independent contractor. Service as a Consultant shall be considered employment
for all purposes of the Plan, except as provided in Section 4.1.

        16.9 "EMPLOYEE" means a common-law employee of the Company, a Parent, a
Subsidiary or an Affiliate.

        16.10 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

        16.11 "EXERCISE PRICE," in the case of an Option, means the amount for
which one Common Share may be purchased upon exercise of such Option, as
specified in the applicable Stock Option Agreement. "Exercise Price," in the
case of an SAR, means an amount, as specified in the applicable SAR Agreement,
which is subtracted from the Fair Market Value of one Common Share in
determining the amount payable upon exercise of such SAR.

        16.12 "FAIR MARKET VALUE" means the market price of Common Shares,
determined by the Committee in good faith on such basis as it deems appropriate
Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in The Wall Street Journal. Such determination
shall be conclusive and binding on all persons.

        16.13 "ISO" means an incentive stock option described in section 422(b)
of the Code.

        16.14 "NSO" means a stock option not described in sections 422 or 423 of
the Code.

        16.15 "OPTION" means an ISO or NSO granted under the Plan and entitling
the holder to purchase Common Shares.

        16.16 "OPTIONEE" means an individual or estate who holds an Option or
SAR.

        16.17 "OUTSIDE DIRECTOR" shall mean a member of the Board who is not an
Employee. Service as an Outside Director shall be considered employment for all
purposes of the Plan, except as provided in Section 4.1.

                                      -12-
<PAGE>   17

        16.18 "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a Parent on
a date after the adoption of the Plan shall be considered a Parent commencing as
of such date.

        16.19 "PARTICIPANT" means an individual or estate who holds an Award.

        16.20 "PLAN" means this Network Associates, Inc. 1997 Stock Incentive
Plan, as amended from time to time.

        16.21 "PREDECESSOR PLAN" means the Network Associates, Inc. 1995 Stock
Incentive Plan, as amended.

        16.22 "RESTRICTED SHARE" means a Common Share awarded under the Plan.

        16.23 "RESTRICTED STOCK AGREEMENT" means the agreement between the
Company and the recipient of a Restricted Share which contains the terms,
conditions and restrictions pertaining to such Restricted Share.

        16.24 "SAR" means a stock appreciation right granted under the Plan.

        16.25 "SAR AGREEMENT" means the agreement between the Company and an
Optionee which contains the terms, conditions and restrictions pertaining to his
or her SAR.

        16.26 "STOCK OPTION AGREEMENT" means the agreement between the Company
and an Optionee that contains the terms, conditions and restrictions pertaining
to his or her Option.

        16.27 "STOCK UNIT" means a bookkeeping entry representing the equivalent
of one Common Share, as awarded under the Plan.

        16.28 "STOCK UNIT AGREEMENT" means the agreement between the Company and
the recipient of a Stock Unit which contains the terms, conditions and
restrictions pertaining to such Stock Unit.

        16.29 "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.

        16.30 "TRANSFER OF CONTROL" shall mean:

               (a) The direct or indirect sale or exchange by the stockholders
        of the Company of all or substantially all of the voting stock of the
        Company wherein the stockholders of the

                                      -13-
<PAGE>   18

        Company immediately before such sale or exchange do not retain in
        substantially the same proportions as their ownership of shares of the
        Company's voting stock immediately before such event, directly or
        indirectly (including, without limitation, through their ownership of
        shares of the voting stock of a corporation which, as a result of such
        sale or exchange, owns the Company either directly or through one or
        more subsidiaries), at least a majority of the beneficial interest in
        the voting stock of the Company immediately after such sale or exchange;

               (b) A merger or consolidation wherein the stockholders of the
        Company immediately before such merger or consolidation do not retain in
        substantially the same proportions as their ownership of shares of the
        Company's voting stock immediately before such event, directly or
        indirectly (including, without limitation, through their ownership of
        shares of the voting stock of a corporation which, as a result of such
        merger or consolidation, owns the Company either directly or through one
        or more subsidiaries), at least a majority of the beneficial interest in
        the voting stock of the Company immediately after such merger or
        consolidation;

               (c) The sale, exchange, or transfer of all or substantially all
        of the assets of the Company (other than a sale, exchange, or transfer
        to one or more corporations (the "Transferee Corporation(s)") wherein
        the stockholders of the Company immediately before such sale, exchange,
        or transfer retain in substantially the same proportions as their
        ownership of shares of the Company's voting stock immediately before
        such event, directly or indirectly (including, without limitation,
        through their ownership of shares of the voting stock of a corporation
        which owns the Transferee Corporation(s) either directly or through one
        or more subsidiaries), at least a majority of the beneficial interest in
        the voting stock of the Transferee Corporation(s) immediately after such
        event; or

               (d) A liquidation or dissolution of the Company.

                                      -14-
<PAGE>   19

ARTICLE 17. EXECUTION

        To record the adoption of the Plan by the Board, the Company has caused
its duly authorized officer to execute this document in the name of the Company.

                                                   Network Associates, Inc.

                                                   By: _________________________

<PAGE>   20

               NETWORK ASSOCIATES, INC. 1997 STOCK INCENTIVE PLAN

                                   APPENDIX A

                              PERFORMANCE CRITERIA

                 Cash Flow                                 Expense Reduction
                 Earnings per Share                        Growth in Bookings
                 Gross Margin                              Growth in Revenue
                 Net Income                                Stock Price Increase
                 Operating Income
                 Operating Margin
                 Pre-Tax Profit
                 Return on Assets
                 Return on Capital
                 Return on Stockholder Equity
                 Growth in any of the above measures

<PAGE>   21

               NETWORK ASSOCIATES, INC. 1997 STOCK INCENTIVE PLAN

                                   APPENDIX B

                        OPTION GRANTS IN THE NETHERLANDS

        This Appendix B to the Network Associates, Inc. 1997 Stock Incentive
Plan (the "Plan") sets forth special rules under which Options may be granted to
Employees and Consultants in The Netherlands who are subject to Dutch tax laws
on the date of option grant, as specified in the applicable Stock Option
Agreement (the "Date of Option Grant"). Such Employees and Consultants are
referred to herein as the "Dutch Residents." To the extent that the rules in
this Appendix B are not consistent with the provisions of the Plan, this
Appendix B shall govern. In all other respects, the provisions of the Plan
(including its definitions) shall apply to this Appendix B.

        1. EXERCISE PRICE. The Exercise Price of an Option granted to a Dutch
Resident, as specified in the applicable Stock Option Agreement (the "Exercise
Price"), shall not be less than the Fair Market Value of a Common Share on the
Date of Option Grant.

        2. EXERCISABILITY. Options granted to a Dutch Resident shall be
exercisable immediately upon grant.

        3. RIGHT OF REPURCHASE. If a Dutch Resident ceases to be an Employee or
Consultant for any reason before the fourth anniversary of the Date of Option
Grant, the Company shall have the right to repurchase all or a portion of the
Common Shares (if any) that such Dutch Resident acquired by exercising such
Option. The repurchase price per share shall be equal to the Exercise Price per
share. Prior to the first anniversary of the Date of Option Grant, the right of
repurchase shall apply to all of the Common Shares that the Dutch Resident
acquired by exercising the Option. After 12 months of continuous service as an
Employee or Consultant following the Date of Option Grant, the right of
repurchase shall lapse with respect to 25% of the Common Shares subject to the
Option. Thereafter, the right of repurchase shall lapse with respect to an
additional 2.08333% of the Common Shares subject to the Option for each
additional month of continuous service as an Employee or Consultant. A Dutch
Resident shall not sell, pledge or otherwise transfer the Common Shares that he
or she acquired by exercising an Option as long as such Common Shares remain
subject to the Company's right of repurchase.

        4. EXPIRATION DATE. All Options granted to Dutch Residents shall expire
on the fifth anniversary of the Date of Option Grant.

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