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                                                                     EXHIBIT 4.1

                             MEADE INSTRUMENTS CORP.

                       NONQUALIFIED STOCK OPTION AGREEMENT

            THIS NONQUALIFIED STOCK OPTION AGREEMENT (this "AGREEMENT") dated as
of the 12th day of April, 2000 by and between Meade Instruments Corp., a
Delaware corporation (the "COMPANY"), and Rolf Bresser (the "OPTIONEE").

                                 R E C I T A L S

            WHEREAS, the Company has granted to the Optionee, effective as of
the 12th day of April, 2000 (the "GRANT DATE"), a nonqualified stock option to
purchase all or any part of 130,000 shares of the Company's common stock, par
value $0.01 per share (the "COMMON STOCK"), subject to and upon the terms and
conditions set forth herein;

            NOW, THEREFORE, in consideration of the mutual promises and
covenants made herein and the mutual benefits to be derived herefrom and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:

1.      GRANT OF OPTION. This Agreement evidences the Company's grant to the
        Optionee of the right and option to purchase, subject to and on the
        terms and conditions set forth herein, all or any part of 130,000 shares
        of the Company's Common Stock (the "SHARES") at the price of $56.50 per
        Share (the "OPTION"), exercisable from time to time, subject to the
        provisions of this Agreement, prior to the close of business on the day
        before the tenth anniversary of the Grant Date (the "EXPIRATION DATE"),
        unless earlier terminated pursuant to Section 9. Such price equals the
        fair market value of the Common Stock as of the Grant Date.

2.      EXERCISABILITY OF OPTION. The Option shall first become and remain
        exercisable as to 1/4 of the shares on the first anniversary of the
        Grant Date and as to an additional 1/36 of the shares on and after the
        last day of each succeeding calendar month until all remaining Options
        have become exercisable. If the Optionee does not in any year purchase
        all or any part of the Shares to which the Optionee is entitled, the
        Optionee has the right cumulatively thereafter to purchase any Shares
        not so purchased and such right shall continue until the Option
        terminates or expires. The Option shall only be exercisable in respect
        of whole Shares, and fractional Share interests shall be disregarded.
        The Option may only be exercised as to at least one-hundred (100) Shares
        unless the number purchased is the total number at the time available
        for purchase under the Option.

3.      METHOD OF EXERCISE OF OPTION. The Option shall be exercisable by the
        delivery to the Secretary of the Company of a written notice stating the
        number of Shares to be purchased pursuant to the Option and accompanied
        by (i) delivery of an executed EXERCISE AGREEMENT in the form attached
        hereto as EXHIBIT A, (ii) payment of the full purchase price of the
        Shares to be purchased, and (iii) payment in full of any tax withholding
        obligation under federal, state or local law. Payment shall be made in
        one or a combination of the following methods: (i) in cash or by
        electronic funds transfer; (ii) by check payable to the order of the
        Company; (iii) if authorized by the Board of Directors (the "BOARD"), by
        a promissory note of the Optionee upon the terms and conditions approved
        by the Board; (iv) by notice and third party payment in such manner as
        may be authorized by the Board; or (v) by the delivery of shares of
        Common Stock of the Company already owned by the Optionee, provided,
        however, that the Board may in its absolute discretion limit the
        Optionee's ability to exercise the Option by delivering such shares, and
        provided further that any shares delivered which were initially acquired
        upon exercise of a stock option must have been owned by

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        the Optionee at least six months as of the date of delivery. Shares of
        Common Stock used to satisfy the exercise price of the Option shall be
        valued at their fair market value on the date of exercise.

4.      TAX WITHHOLDING.

        4.1. CASH OR SHARES. Upon any exercise of the Option, the Company shall
        have the right at its option to (i) require the Optionee (or personal
        representative or beneficiary, as the case may be) to pay or provide for
        payment of the amount of any taxes which the Company may be required to
        withhold with respect to the Option or (ii) deduct from any amount
        payable in cash the amount of any taxes which the Company may be
        required to withhold with respect to such cash payment. In any case
        where a tax is required to be withheld in connection with the delivery
        of shares of Common Stock, the Board may in its sole discretion grant to
        the Optionee the right to elect, pursuant to such rules and subject to
        such conditions as the Board may establish, to have the Company reduce
        the number of shares to be delivered by (or otherwise reacquire) the
        appropriate number of shares valued at their then fair market value to
        satisfy such withholding obligation.

        4.2. TAX LOANS. The Company may, in its discretion and to the extent
        permitted by law, authorize a loan to the Optionee in the amount of any
        taxes which the Company may be required to withhold with respect to
        shares of Common Stock received (or disposed of, as the case may be)
        pursuant to a transaction described in Section 4.1. Such a loan shall be
        for a term, at a rate of interest and pursuant to such other terms and
        conditions as the Company, under applicable law may establish.

5.      OPTION REPRICING/CANCELLATION AND REGRANT/WAIVER OF RESTRICTIONS. The
        Board from time to time may authorize, generally or in specific cases
        only, for the benefit of the Optionee any adjustment in the number of
        shares subject to, the restrictions upon or the term, exercise or
        purchase price or vesting schedule of the Option by cancellation of the
        Option and a subsequent regranting of the Option, by amendment, by
        substitution of the Option, by waiver or by other legally valid means.
        Such amendment or other action may result among other changes in an
        exercise or purchase price which is higher or lower than the exercise or
        purchase price of the original or prior Option, provide for a greater or
        lesser number of shares subject to the Option, or provide for a longer
        or shorter vesting or exercise period.

6.      RESTRICTIONS ON SHARES. The Certificate of Incorporation and Bylaws of
        the Company, as either of them may be amended from time to time, may
        provide for restrictions with respect to the Common Stock. To the extent
        that these restrictions and limitations are greater than those set forth
        in this Agreement, such restrictions and limitations shall apply to any
        securities acquired upon exercise of the Option and are incorporated
        herein by this reference.

7.      NO TRANSFERABILITY; LIMITED EXCEPTION TO TRANSFER RESTRICTIONS.

        7.1. LIMIT ON EXERCISE AND TRANSFER. Unless otherwise expressly provided
        in (or pursuant to) this Section 7 or by applicable law (i) the Option
        is non-transferable and shall not be subject in any manner to sale,
        transfer, anticipation, alienation, assignment, pledge, encumbrance or
        charge; the Option shall be exercised only by the Optionee; and (ii)
        amounts payable or shares issuable pursuant to the Option shall be
        delivered only to (or for the account of) the Optionee.

        7.2. EXCEPTIONS. The Board may permit the Option to be exercised by and
        paid only to certain persons or entities related to the Optionee,
        including but not limited to members of the Optionee's family,
        charitable institutions, or trusts or other entities whose beneficiaries
        or beneficial owners are members of the Optionee's family and/or
        charitable institutions, or to such other persons or entities as may be
        approved by the Board, pursuant to such conditions and procedures as the
        Board may establish. Any permitted transfer shall be subject to the
        condition that the Board receive evidence satisfactory to it that the
        transfer is being made for estate and/or tax planning purposes on a
        gratuitous or donative basis and without consideration (other than
        nominal consideration).

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        7.3. FURTHER EXCEPTIONS TO LIMITS ON TRANSFER. The exercise and transfer
        restrictions in this Section 7 shall not apply to:

            (i)   transfers to the Company,

            (ii)  the designation of a beneficiary to receive benefits in the
                  event of the Optionee's death or, if the Optionee has died,
                  transfers to or exercise by the Optionee's beneficiary, or, in
                  the absence of a validly designated beneficiary, transfers by
                  will or the laws of descent and distribution,

            (iii) transfers pursuant to a qualified domestic relations order if
                  approved or ratified by the Board,

            (iv)  if the Optionee has suffered a disability, permitted transfers
                  or exercises on behalf of the Optionee by his or her legal
                  representative, or

            (v)   the authorization by the Board of "cashless exercise"
                  procedures with third parties who provide financing for the
                  purpose of (or who otherwise facilitate) the exercise of the
                  Option consistent with applicable laws and the express
                  authorization of the Board.

8.      NO EMPLOYMENT CONTRACT. Nothing contained in this Agreement shall confer
        upon the Optionee any right to continue in the employ or other service
        of the Company or any of its subsidiaries, nor constitute any contract
        or agreement of employment or other service, nor shall interfere in any
        way with the right of the Company to change the Optionee's compensation
        or other benefits or to terminate the employment of the Optionee, with
        or without cause; provided, however, that nothing contained in this
        Agreement shall adversely affect any independent contractual right of
        the Optionee without his or her consent thereto.

9.      ADJUSTMENT AND TERMINATION UPON CERTAIN EVENTS.

        9.1. ADJUSTMENTS. If there shall occur any extraordinary dividend or
        other extraordinary distribution in respect of the Common Stock (whether
        in the form of cash, Common Stock, other securities, or other property),
        or any reclassification, recapitalization, stock split (including a
        stock split in the form of a stock dividend), reverse stock split,
        reorganization, merger, combination, consolidation, split-up, spin-off,
        combination, repurchase, or exchange of Common Stock or other securities
        of the Company, or there shall occur any similar, unusual or
        extraordinary corporate transaction or event in respect of the Common
        Stock or a sale of substantially all the assets of the Company as an
        entirety, then the Board shall, in such manner and to such extent (if
        any) as it deems appropriate and equitable (1) proportionately adjust
        any or all of (a) the number and type of shares of Common Stock (or
        other securities) which thereafter may be made the subject of the
        Option, (b) the number, amount and type of shares of Common Stock (or
        other securities or property) subject to the Option, (c) the grant,
        purchase, or exercise price of the Option, (d) the securities, cash or
        other property deliverable upon exercise of the Option, or (e) the
        performance standards appropriate to the Option, or (2) in the case of
        an extraordinary dividend or other distribution, recapitalization,
        reclassification, merger, reorganization, consolidation, combination,
        sale of assets, split up, exchange, or spin off, make provision for a
        cash payment or for the substitution or exchange of the Option or the
        cash, securities or property deliverable to the Optionee based upon the
        distribution or consideration payable to holders of the Common Stock of
        the Company upon or in respect of such event. In any of such events, the
        Board may take such action sufficiently prior to such event if necessary
        to permit the Optionee to realize the benefits intended to be conveyed
        with respect to the underlying shares in the same manner as is available
        to stockholders generally.

        9.2. ACCELERATION OF AWARDS UPON CHANGE IN CONTROL. Unless the Board
        determines, prior to the occurrence of any of the following (each of
        which shall be hereafter referred to as a "Change in Control Event"):

            (i)   Approval by the stockholders of the Company of the dissolution
                  or liquidation of the Company;

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            (ii)  Approval by the stockholders of the Company of an agreement to
                  merge or consolidate, or otherwise reorganize, with or into
                  one or more entities that are not subsidiaries or other
                  affiliates, as a result of which less than 50% of the
                  outstanding voting securities of the surviving or resulting
                  entity immediately after the reorganization are, or will be,
                  owned, directly or indirectly, by stockholders of the Company
                  immediately before such reorganization (assuming for purposes
                  of such determination that there is no change in the record
                  ownership of the Company's securities from the record date for
                  such approval until such reorganization and that such record
                  owners hold no securities of the other parties to such
                  reorganization, but including in such determination any
                  securities of the other parties to such reorganization held by
                  affiliates of the Company);

            (iii) Approval by the stockholders of the Company of the sale of
                  substantially all of the Company's business and/or assets to a
                  person or entity which is not a subsidiary or other affiliate;

            (iv)  Any `person' (as such term is used in Sections 13(d) and 14(d)
                  of the Securities Exchange Act of 1934, as amended from time
                  to time (the "EXCHANGE ACT") but excluding any person
                  described in and satisfying the conditions of Rule 13d-1(b)(1)
                  thereunder) becomes the beneficial owner (as defined in Rule
                  13d-3 under the Exchange Act), directly or indirectly, of
                  securities of the Company representing 30% or more of the
                  combined voting power of the Company's then outstanding
                  securities entitled to then vote generally in the election of
                  directors of the Company; or

            (v)   During any period not longer than two consecutive years,
                  individuals who at the beginning of such period constituted
                  the Board cease to constitute at least a majority thereof,
                  unless the election, or the nomination for election by the
                  Company's stockholders, of each new Board member was approved
                  by a vote of at least three-fourths of the Board members then
                  still in office who were Board members at the beginning of
                  such period (including for these purposes, new members whose
                  election or nomination was so approved),

that, upon the occurrence of a Change in Control Event, there shall be no
acceleration of benefits under the Option or determines that only certain or
limited benefits under the Option shall be accelerated and the extent to which
they shall be accelerated, and/or establishes a different time in respect of
such Change in Control Event for such acceleration, then upon the occurrence of
a Change in Control Event the Option shall become immediately exercisable. The
Board may override the limitations on acceleration in this Section 9.2 and may
accord the Optionee a right to refuse any acceleration, in such circumstances as
the Board may approve. Any acceleration of the Option shall comply with
applicable regulatory requirements, including, without limitation, Section 422
of the Internal Revenue Code of 1986, as amended from time to time (the "CODE").

        9.3. POSSIBLE EARLY TERMINATION OF ACCELERATED AWARDS. If the Option has
        been fully accelerated as permitted by Section 9.2 but is not exercised
        prior to (i) a dissolution of the Company, or (ii) an event described in
        Section 9.2 that the Company does not survive, or (iii) the consummation
        of an event described in Section 9.2 that results in a change of control
        approved by the Board, the Option shall thereupon terminate, subject to
        any provision that has been expressly made by the Board for the
        survival, substitution, exchange or other settlement of the Option.

        9.4. EFFECT OF TERMINATION OF EMPLOYMENT.

               (a) Resignation or Dismissal. If the Optionee's employment by the
        Company or any of its subsidiaries terminates for any reason (the date
        of such termination being referred to as the "SEVERANCE DATE") other
        than retirement, a "permanent and total disability" within the meaning
        of Section 22(e)(3) of the Code and such other disabilities,
        infirmities, afflictions or conditions as the Board by rule may include
        ("TOTAL DISABILITY") or death, or "for cause" (as determined in the
        discretion of the Board), the Optionee shall have, subject to earlier
        termination pursuant to or as contemplated by Section 1 or 9.2 hereof,
        three

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        months after the Severance Date to exercise the Option to the extent it
        shall have become exercisable on the Severance Date. In the case of a
        termination "for cause", the Option shall terminate on the Severance
        Date. In other cases, the Option, to the extent not exercisable on the
        Severance Date, shall terminate.

               (b) Death or Disability. If the Optionee's employment by the
        Company or any of its subsidiaries terminates as a result of Total
        Disability or death, the Optionee, the Optionee's personal
        representative or his or her beneficiary, as the case may be, shall
        have, subject to earlier termination pursuant to or as contemplated by
        Section 1 or 9.2 hereof, until 12 months after the Severance Date to
        exercise the Option to the extent it shall have become exercisable by
        the Severance Date. The Option to the extent not exercisable on the
        Severance Date shall terminate.

               (c) Retirement. If the Optionee's employment by the Company or
        any of its subsidiaries terminates as a result of retirement with the
        consent of the Company or from active service as an employee or officer
        of the Company on or after attaining age 55 with 10 or more years of
        service or after age 65, the Optionee, the Optionee's personal
        representative or his or her beneficiary, as the case may be, shall
        have, subject to earlier termination pursuant to or as contemplated by
        Section 1 or 9.2 hereof, until 12 months after the Severance Date to
        exercise the Option to the extent it shall have become exercisable by
        the Severance Date. The Option, to the extent not exercisable on the
        Severance Date, shall terminate.

               (d) Board Discretion. Notwithstanding the foregoing provisions of
        this Section 9.4, in the event, or in anticipation, of a termination of
        employment with the Company or any of its subsidiaries for any reason,
        other than discharge for cause, the Board may, in its discretion,
        increase the portion of the Option available to the Optionee, or the
        Optionee's beneficiary or personal representative, as the case may be,
        or, subject to the provisions of Section 1 hereof, extend the
        exercisability period upon such terms as the Board shall determine and
        expressly set forth in or by amendment to this Agreement.

        9.5. EFFECT OF CHANGE OF SUBSIDIARY STATUS. If an entity ceases to be a
        subsidiary of the Company a termination of employment and service shall
        be deemed to have occurred with respect to each employee of such
        subsidiary who does not continue as an employee of another entity within
        the Company.

10.     SHARES TO BE RESERVED. The Company shall at all times during the term of
        the Option reserve and keep available such number of shares of Common
        Stock as will be sufficient to satisfy the requirements of this
        Agreement.

11.     ASSIGNMENT. This Agreement cannot be directly or indirectly assigned or
        transferred by the Optionee in whole or in part without the prior
        written consent of the Company.

12.     NOTICES. Any notices, demands or requests of any kind whatsoever
        hereunder shall be given in writing and sent to the addresses set forth
        below or to such other address as either party may from time to time in
        writing designate. Each such notice or other communication shall be
        effective (i) if given by telecommunication, when transmitted to the
        applicable number so specified in (or pursuant to) this Section 12 and a
        verification of receipt is received, (ii) if given by mail, three days
        after such communication is deposited in the mail with first class
        postage prepaid, addressed as aforesaid or (iii) if given by any other
        means, when actually delivered at such address.

13.     WAIVER. The parties reserve the right to waive by mutual written consent
        for a specific period and under specific conditions any provision of
        this Agreement, provided that such waiver shall be limited to the period
        and conditions specified by mutual written consent and shall in no way
        constitute a general waiver, or be considered as evidence of any given
        interpretation of any provision so waived.

14.     GOVERNING LAW. This Agreement, and the legal relations between the
        parties, shall be governed by and construed in accordance with the laws
        of the State of California, without regard to conflicts of law
        doctrines. All actions or proceedings under or relating to this
        Agreement will be resolved in a state or federal court located in Orange
        County, California; provided, however, that in the Company's discretion,
        such an action may be heard in some other place designated by it if
        necessary to acquire jurisdiction over third persons so that the dispute
        can be resolved in one action. Each party hereby (i) agrees to submit to
        the jurisdiction of

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        the federal and state courts located in Orange County, California, (ii)
        agrees to appear in any such action, (iii) consents to the jurisdiction
        of such courts and (iv) waives any objections it might have as to venue
        in any such court. Service of process may be made in any action, suit or
        proceeding by mailing or delivering a copy of such process to a party at
        its address and in the manner set forth in Section 12 hereof.

15.     TITLES. Titles and paragraph headings are for reference purposes only
        and are not to be considered a part of this Agreement.

16.     SEVERABILITY. If any provision of this Agreement is held to be
        unenforceable for any reason, it shall be adjusted rather than voided,
        if possible, to achieve the intent of the parties to the extent
        possible. In any event, all other provisions of this Agreement shall be
        deemed valid and enforceable to the extent possible.

17.     ENTIRE AGREEMENT. The parties hereto acknowledge that each has read this
        Agreement, understands it, and agrees to be bound by its terms. The
        parties further agree that this Agreement and any modifications made
        pursuant to it constitute the complete and exclusive written expression
        of the terms of the agreement between the parties, and supercede all
        prior or contemporaneous proposals, oral or written, understandings,
        representations, conditions, warranties, covenants, and all other
        communications between the parties relating to the subject matter of
        this Agreement. The parties further agree that this Agreement may not in
        any way be explained or supplemented by a prior or existing course of
        dealings between the parties, by any usage of trade or custom, or by any
        prior performance between the parties pursuant to this Agreement or
        otherwise.

18.     COUNTERPARTS. This Agreement may be executed in several counterparts,
        each of which shall be deemed to be an original, but all of which shall
        constitute one and the same instrument.

19.     ATTORNEY'S FEES. In the event that any action or proceeding is brought
        in connection with this Agreement the prevailing party therein shall be
        entitled to recover its costs and reasonable attorney's fees.

20.     COMPLIANCE WITH LAWS. Notwithstanding anything else contained herein to
        the contrary, this Agreement, the granting and vesting of the Option and
        the offer, issuance and delivery of Shares under this Agreement are
        subject to compliance with all applicable federal and state laws, rules
        and regulations (including but not limited to state and federal
        securities laws and federal margin requirements) and to such approvals
        by any listing, regulatory or governmental authority as may, in the
        opinion of counsel for the Company, be necessary or advisable in
        connection therewith. Any securities delivered in respect of this
        Agreement will be subject to such restrictions, and to any restrictions
        the Company may require to preserve a pooling of interests under
        generally accepted accounting principles, and the person acquiring such
        securities will, if requested by the Company, provide such assurances
        and representations to the Company as the Company may deem necessary or
        desirable to assure compliance with all applicable legal requirements.

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            IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by a duly authorized officer and the Optionee has
hereunto set his or her hand.

                                    MEADE INSTRUMENTS CORP.,
                                    a Delaware corporation

                                    By:  /s/ Mark Peterson
                                         ---------------------------------------
                                    Name: Mark Peterson
                                          --------------------------------------
                                    Its: Vice President and General Counsel
                                         ---------------------------------------
                                    6001 Oak Canyon
                                    Irvine, CA 92618
                                    Telephone: 949-451-1450
                                    Facsimile: 949-451-1460

                                    OPTIONEE

                                    /s/ Rudolf Bresser
                                    --------------------------------------------
                                    Signature

                                      Rudolf Bresser
                                    --------------------------------------------
                                    Print Name

                                    --------------------------------------------
                                    Address

                                    --------------------------------------------

                                    --------------------------------------------
                                    Telephone

                                    --------------------------------------------
                                    Facsimile

                                      S-1
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                                CONSENT OF SPOUSE

            In consideration of the execution of the foregoing Nonqualified
Stock Option Agreement by Meade Instruments Corp., I, Gabriele Bresser, the
spouse of the Optionee herein named, do hereby agree to be bound by all of the
terms and provisions thereof.

DATED:    30.6.2000                   /s/ Gabriele Bresser
                                      ------------------------------------------
                                      Signature of Spouse<PAGE>   1

                                                                     Exhibit 4.1

                             DATAPATH SYSTEMS, INC.
                         AMENDED 1994 STOCK OPTION PLAN

        1. PURPOSE OF THE PLAN

        The DataPath Systems, Inc. Amended 1994 Stock Option Plan (the "Plan")
is intended to promote the interests of DataPath Systems, Inc. (the
"Corporation") by providing incentives to (i) certain employees of the
Corporation who are responsible for the management, growth, or financial success
of the Corporation, (ii) certain non-employee members of the Corporation's Board
of Directors (the "Board"), and (iii) certain non-employee consultants who
perform valuable services for the Corporation ("Optionees"), in order to
encourage them to acquire a proprietary interest, or increase their proprietary
interest, in the Corporation and to continue to perform services for the
Corporation.

        2. ADMINISTRATION OF THE PLAN

               (a) The Plan shall be administered by the Board. The Board may at
any time appoint a committee ("Committee") of two (2) or more individuals and
delegate to such Committee one or more of the administrative powers allocated to
the Board pursuant to the provisions of the Plan. Members of the Committee shall
serve for such period of time as the Board may determine and shall be subject to
removal by the Board at any time. The Board may also at any time terminate the
functions of the Committee and reassume all powers and authority previously
delegated to the Committee.

               (b) The Plan Administrator, either the Board or the Committee to
the extent the Committee is at the time responsible for the administration of
the Plan, shall have full power and authority to determine (i) which employees
shall receive option grants, (ii) the number of shares to be covered by each
such option grant, (iii) whether each granted option is to be an incentive stock
option ("Incentive Option")which satisfies the requirements of Section 422 of
the Internal Revenue Code (the "Code") or a non-statutory option not intended to
meet such requirements, (iv) the time or times at which each such option is to
become exercisable, (v) the option price for each such option, (vi) the maximum
term for which such option is to be outstanding, and (vii) all other terms and
conditions upon which such option may be exercised. The Plan Administrator shall
have the full power and authority, subject to the provisions of the Plan, to
establish such rules and regulations it may deem appropriate for the proper
administration of the Plan and to make such determinations under, and issue such
interpretations of, the Plan and any outstanding option as it may deem necessary
or advisable. Decisions of the Plan Administrator shall be final and binding on
all parties who have an interest in the Plan or any outstanding option. No
person acting under this subsection shall be held liable for any action or
determination made in good faith with respect to the Plan or any option granted
under the Plan.

        3. DEFINITIONS

               (a) Change in Control. means the acquisition of twenty-five
percent (25%) or more of the Company's outstanding voting securities pursuant to
a tender or exchange offer (i) which is 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 and
(ii) which the Board does not recommend the Corporation's shareholders accept.

               (b) Corporate Transaction. means (i) a consolidation or merger of
the Corporation in which the Corporation is not the continuing or surviving
entity, except for a transaction, the principal purpose of which is to change
the state of the Corporation's incorporation, (ii) a merger, consolidation, or
reorganization of the Corporation pursuant to which more than fifty percent
(50%) of its outstanding voting securities are converted into cash or other
securities, (iii) the sale, transfer, or other disposition of all or
substantially all of the assets of the Corporation, or (iv) a reverse merger in
which the Corporation is the surviving entity but in which fifty percent (50%)
or more of the Corporation's outstanding voting securities are transferred to
holders different from those who held them immediately prior to such merger.

                                      -2-
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               (c) Fair Market Value. of one (1) share of Common Stock shall be
determined in accordance with subsections (i) through (iv) below. No Shareholder
shall have the right to contest the determination of Fair Market Value pursuant
to subsections (i) through (iii) below.

                      (i) If the Common Stock is not at the time listed or
admitted to trading on any stock exchange or the NASDAQ National Market System,
but is traded in the over-the-counter market, the Fair Market Value shall be the
mean between the highest bid price and the lowest asked price per share of
Common Stock on the date in question in the over-the-counter market, as such
prices are reported by the National Association of Securities Dealers through
its NASDAQ system or any successor system (the "NASDAQ NMS System"). If there
are no reported bid and asked prices for the Common Stock on the date in
question, then the mean between the highest bid price and lowest asked price on
the last preceding date for which such quotations exist shall be determinative
of Fair Market Value.

                      (ii) If the Common Stock is at the time traded
over-the-counter on the NASDAQ NMS System, the Fair Market Value shall be the
closing selling price per share of Common Stock on the date in question as such
price is reported by the NASDAQ NMS System. If there is no reported closing
selling price for 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.

                      (iii) 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.

                      (iv) If the Common Stock is at the time not listed or
admitted to trading on any stock exchange, the NASDAQ NMS System, or traded in
the over-the-counter market, then the Plan Administrator shall determine Fair
Market Value after taking into account such factors as it deems appropriate and
as are reasonable pursuant to the Code, including one (1) or more independent
professional appraisals. If the Plan Administrator is unable to agree upon the
Fair Market Value within ninety (90) days after the close of the Corporation's
fiscal year or within sixty (60) days after a request for determination by an
Optionee or the Board, then within five (5) days after the end of such period,
the Board, in good faith, shall appoint a qualified appraiser, and the
Corporation shall pay the fees and expenses of such appraiser. Each Optionee
shall be entitled to provide to the qualified appraiser such information as the
Optionee deems relevant. The qualified appraiser shall be instructed to
determine the Fair Market Value and give written notice to the Board and/or the
Optionee within thirty (30) days following his appointment. If he fails,
refuses, or is unable to make a determination of Fair Market Value, then a new
qualified appraiser shall be appointed by the Board and the provisions with
regard to the initial appraiser shall apply.

        If an Optionee contests such Fair Market Value, he shall be entitled, at
his expense, to appoint a second (2nd) qualified appraiser. If the lower of the
two (2) appraisals is greater than or equal to ninety percent (90%) of the
higher appraisal, the Fair Market Value shall be equal to the arithmetic mean of
the two (2) appraisals. If the lower of the two (2) appraisals is less than
ninety percent (90%) of the higher appraisal, then the two (2) appraisers shall
select a third (3rd) appraiser within fifteen (15) days from completion of the
two (2) appraisals, or if they cannot agree upon a third (3rd) appraiser, shall
apply to the Superior Court of California located in Santa Clara County to
select a third (3rd) qualified appraiser. Within forty-five (45) days of his
appointment, the third (3rd) appraiser shall independently determine the Fair
Market Value and it shall be equal to the arithmetic mean of the two (2) closest
appraisals. The Optionee shall pay the fees and expenses of the second (2nd)
appraiser and the Optionee and the Corporation shall split payment of the fees
and expenses of the third (3rd) appraiser, if appointed.

               (d) Service Provider means an individual for so long as he/she
renders periodic services to the Corporation or one or more of its parent or
subsidiary corporations, whether as an employee, non-employee member of the
Board, or an independent, non-employee consultant.

                                      -3-
<PAGE>   3

        4. ELIGIBILITY FOR OPTION GRANTS

        Employees of the Corporation, whether or not they are officers and/or
members of the Board, members of the Board who are not employees of the
Corporation, and non-employee consultants to the Corporation shall be eligible
for selection to receive option grants under the Plan.

        5. STOCK SUBJECT TO THE PLAN

               (a) The stock issuable under the Plan shall consist of shares of
the Corporation's authorized but unissued or reacquired common stock ("Common
Stock"). The aggregate number of shares issuable over the term of the Plan shall
be seven million five hundred thousand (7,500,000), subject to adjustment as
provided in subsection (b) or subject to adjustment by a vote of the majority of
the Board. If an option expires or terminates for any reason prior to exercise
or surrender in full, including options canceled in accordance with the
cancellation-regrant provisions of Section 10, the shares subject to the portion
of the option not so exercised or surrendered shall be available for subsequent
option grants under the Plan. Shares subject to an option, or portion of an
option, surrendered in accordance with Section 8 and shares repurchased by the
Corporation pursuant to its repurchase rights under the Plan shall not be
available for subsequent option grants under the Plan.

               (b) In the event any change is made to the Common Stock issuable
under the Plan by reason of (i) any Corporate Transaction or (ii) 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, then unless such change results in the termination of all
outstanding options under the Plan as a result of the Corporate Transaction,
appropriate adjustments shall be made to (i) the aggregate class and/or number
of shares issuable under the Plan and (ii) the class and/or number of shares and
price per share of the Common Stock subject to each outstanding option in order
to prevent the dilution or enlargement of benefits thereunder.

        6. TERMS AND CONDITIONS OF OPTIONS

               (a) General Requirements. Each option granted under the Plan (i)
shall be authorized by action of the Plan Administrator and (ii) shall be
evidenced by a Stock Option Agreement ("Stock Option Agreement") that complies
with each of the terms and conditions of this Section and identifies such option
as either an Incentive Option or as a non-statutory option. Individuals who are
not employees of the Corporation may only be granted non-statutory options.

               (b) Option Price.

                      (i) The option price per share shall be fixed by the Plan
Administrator, but in no event shall the option price per share be less than
eighty-five percent (85%) of the Fair Market Value of one (1) share of Common
Stock on the date of the option grant.

                      (ii) If the Optionee is, on the date of grant, an owner of
stock, as determined under Section 424(d) of the Code, who possesses more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Corporation (a "10% Shareholder"), then the option price per share shall not
be less than one hundred ten percent (110%) of the Fair Market Value of one (1)
share of Common Stock on the date of the option grant.

                      (iii) The option price shall be paid upon exercise of the
option and shall, subject to the provisions of Section 11 and the Stock Option
Agreement, be payable in one of the following alternative forms (as determined
by the Plan Administrator):

                             (A) Full payment in cash or check; or

                             (B) Full payment in shares of Common Stock held by
the Optionee for at least six (6) months and having a Fair Market Value on the
date of exercise equal to the option price; or

                                      -4-
<PAGE>   4

                             (C) Full payment through a combination of shares of
Common Stock held by the Optionee for at least six (6) months and having a Fair
Market Value on the date of exercise and cash or check, equal in the aggregate
to the option price.

        For purposes of this subsection (iii), the date of exercise shall be the
first date on which the Corporation shall have received both written notice of
the exercise of the option and payment of the option price for the purchased
shares.

               (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 Stock Option Agreement evidencing such option; however, no option granted
under the Plan shall have a term in excess of ten (10) years from its date of
grant, or, in the case of an option granted to a 10% Shareholder, a term in
excess of five (5) years from the date of grant. An option by its terms shall
not be assignable or transferable by Optionee other than by will or by the laws
of descent and distribution; during the lifetime of Optionee, such option shall
be exercisable only by Optionee. Options shall be exercised by written notice to
the Corporation (in such terms as the Plan Administrator may specify), together
with payment of the option price.

               (d) Effect of Termination of Employment.

                      (i) If Optionee cease to be a Service Provider for any
reason ("Termination Date"), including death or permanent disability as defined
in Section 22(e)(3) of the Code, while the holder of one (1) or more outstanding
options under the Plan, then such option(s) shall not (except to the extent
otherwise provided pursuant to Section 12 below) remain exercisable for more
than a ninety (90) day period (or such shorter period determined by the Plan
Administrator and specified in the Stock Option Agreement evidencing the grant)
following the Termination Date. In no event shall such option be exercisable
after the Expiration Date. Each such option shall, during such ninety (90) day
or shorter period, be exercisable only to the extent of the number of shares, if
any, for which the option was exercisable on the Termination Date. Upon the
expiration of such ninety (90) day or shorter period or, if earlier, upon the
Expiration Date, the option shall terminate and cease to be exercisable.

                      (ii) Any option granted to an Optionee under the Plan and
exercisable in whole or in part on the date of the Optionee's death may be
subsequently exercised, but only to the extent of the number of shares, if any,
for which the option was exercisable on the date of Optionee's death, by the
personal representative of Optionee's estate or by the person(s) to whom the
option was transferred pursuant to Optionee's will or in accordance with the
laws of descent and distribution but such exercise must occur prior to the
earlier of (i) ninety (90) days from the date of the Termination Date or (ii)
the Expiration Date. Upon the occurrence of the earlier event, the option shall
terminate and cease to be exercisable.

                      (iii) Notwithstanding subsections (i) and (ii) above, the
Plan Administrator shall have complete discretion, exercisable either at the
time the option is granted or at the time the Termination Date, to establish as
a provision applicable to the exercise of one or more options granted under the
Plan that during the limited period of exercisability following the Termination
Date as provided in Section 6(d)(i) above, the option may be exercised not only
with respect to the number of shares for which it is exercisable at the time of
the Termination Date but also with respect to one or more subsequent
installments of purchasable shares for which the option would otherwise have
become exercisable had the Termination Date not occurred.

               (e) Restrictions Applicable to Common Stock Issued on Exercise.

                      (i) Common Stock issuable upon exercise of any option
granted under the Plan may be subject to such restrictions on transfer,
repurchase rights, or other restrictions as may be determined by the Plan
Administrator, including the right of the Corporation, exercisable upon the
Termination Date, to repurchase at the then existing Fair Market Value all or
any portion of the shares of Common Stock previously acquired by the Optionee
upon the exercise of such option. Any such repurchase right shall be exercisable
by the Corporation upon such terms and conditions as the Plan Administrator may
specify in the instrument evidencing such right. The Plan Administrator shall
also have full power and authority to accelerate the termination of the
Corporation's outstanding repurchase rights, in

                                      -5-
<PAGE>   5

whole or in part, and thereby vest Optionees in one or more purchased shares,
upon the occurrence of any Corporate Transaction.

                      (ii) The Plan Administrator may assign the Corporation's
repurchase rights specified under subsection (i) above to any person or entity
selected by the Plan Administrator, including one or more shareholders of the
Corporation. If the selected assignee is other than a parent or subsidiary
corporation of the Corporation then the assignee must make a cash payment to the
Corporation, upon the assignment of the repurchase rights, in an amount equal to
the excess (if any) of the Fair Market Value of the unvested shares at the time
subject to the repurchase rights and the aggregate repurchase price payable for
such unvested shares thereunder.

                      (iii) The Plan Administrator may also in its discretion
establish as a term and condition of one or more options granted under the Plan
that the Corporation shall have a right of first refusal with respect to any
proposed sale or other disposition by Optionee (or any successor in interest by
reason of purchase, gift, or other mode of transfer) of any shares of Common
Stock issued upon the exercise of such options. Any such right of first refusal
shall be exercisable by the Corporation (or its assignees) in accordance with
the terms and conditions set forth in the instrument evidencing such right.

               (f) Investment Purpose. If necessary or advisable to comply with
applicable Federal or state securities laws, any option granted under the Plan
may be granted on the condition that Optionee agrees that the purchase of shares
of Common Stock thereunder is for investment and not with a view to the resale
or distribution of such stock and that such shares shall be disposed of only in
accordance with such laws. As a condition to issuance of any shares purchased
upon the exercise of any option granted pursuant to the Plan, Optionee, his
executor, administrator, heir or legatee (as the case may be) receiving such
shares may be required to deliver to the Corporation an instrument, in form and
substance satisfactory to the Plan Administrator and its counsel, implementing
such agreement. Any such condition may be eliminated by the Plan Administrator
if the Plan Administrator determines it is no longer necessary or advisable.

               (g) Shareholder Rights. No Optionee shall have any of the rights
of a shareholder with respect to any shares covered by an option until such
Optionee has exercised the option.

               (h) Withholding on Non-Statutory Options.

                      (i) In the event that an Optionee is required to pay to
the Corporation an amount with respect to income and employment tax withholding
obligations in connection with the exercise of a non-statutory option, the Plan
Administrator may, in its discretion and subject to such rules as it may adopt,
permit the Optionee to satisfy the obligation, in whole or in part, by making an
irrevocable election that a portion of the total value of the shares of Common
Stock subject to the non-statutory option be paid in the form of cash in lieu of
the issuance of Common Stock and that such cash payment be applied to the
satisfaction of the withholding obligations.

                      (ii) If Optionee is subject to the trading restrictions of
Section 16(b) of the Securities Exchange Act of 1934 (the "1934 Act") at the
time of exercise of an option, an election under this subsection (h) by such
individual shall be made either (i) at least six (6) months prior to the date
the amount of withholding tax due with respect to the exercise is calculated
(the "Tax Date") or (ii) on or prior to the Tax Date, within the period as
defined in Rule 16b-3(e)(3) under the 1934 Act; and shall apply only to options
exercised six (6) months or more after the date of grant (unless the Optionee
dies or becomes disabled prior to the expiration of such six (6) month period).
Should the Tax Date be deferred for six (6) months following the exercise date,
the full amount of shares purchased under the exercised option shall be issued
to Optionee upon exercise, but such individual shall be obligated
unconditionally, upon arrival of his withholding election to tender back to the
Corporation on the Tax Date the requisite number of shares of Common Stock (plus
cash for any fractional amount) needed to satisfy the designated percentage of
his Federal and state income and employment tax withholding liability.

        7. INCENTIVE OPTIONS

                                      -6-
<PAGE>   6

               (a) General Conditions. The terms and conditions set forth in
this Section shall apply to all Incentive Options granted under the Plan.
Incentive Options may only be granted to individuals who are employees of the
Corporation or any of its parent or subsidiary corporations. Options that are
specifically designated as "non-statutory" options when issued under the Plan
shall not be subject to such terms and conditions.

               (b) Option Price. The option price per share of the Common Stock
subject to an Incentive Option shall not be less than one hundred (100%) of the
Fair Market Value of a share of Common Stock on the date of grant. If Optionee
is a 10% Shareholder however, then the option price per share of the Common
Stock shall not be less than one hundred ten percent (110%) of the Fair Market
Value of a share of Common Stock on the date of grant.

               (c) 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 may become
exercisable as Incentive Options during any one calendar year shall not exceed
the sum of One Hundred Thousand Dollars ($100,000). To the extent the Employee
holds two (2) 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 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 7, all
the provisions of the Plan shall be applicable to the Incentive Options granted
hereunder.

        8. LIMITED SURRENDER RIGHTS

               (a) In the event of a Change in Control at a time when one or
more classes of the Corporation's equity securities are registered under Section
12(g) of the 1934 Act, then each Optionee who is an officer or director at the
time subject to the short-swing profit restrictions of the Federal securities
laws shall have the right to surrender any or all options held by such
individual under this Plan, to the extent such options are at the time
exercisable for vested shares, and receive in exchange therefore an appreciation
distribution from the Corporation. The appreciation distribution shall be equal
in amount to the excess of (i) the Change in Control Price (on the date of
surrender) of the number of shares in which the Optionee is at the time vested
under the surrendered option or portion thereof over (ii) the aggregate option
price payable for such vested shares. The limited surrender right provided by
this Section 8 shall be exercisable for a period not to exceed thirty (30) days
from the occurrence of the Change in Control. The approval of the Board shall
not be required for such surrender and the distribution to which such individual
shall become entitled upon such surrender shall be made entirely in cash.

               (b) For purposes of subparagraph (a) above, the Change in Control
Price per share of the vested Common Stock subject to the surrendered option
shall be deemed to be equal to the Fair Market Value.

        9. SALE, MERGER, REORGANIZATION, ETC.

               (a) In the event of a Corporate Transaction, each outstanding
option to the extent not otherwise fully exercisable, shall immediately prior to
the effective date of the Corporate Transaction, become fully exercisable for up
to the total number of shares of Common Stock purchasable under such option and
may be exercised for all or any portion of such shares. Upon consummation of a
Corporate Transaction, this option shall, to the extent not previously
exercised, paid in full, or assumed by the successor corporation or an affiliate
thereof, terminate.

               (b) In no event shall any such acceleration in connection with a
Corporate Transaction occur if: (i) the terms of the agreement of the Corporate
Transaction require as a condition to consummation that the option shall either
to be assumed by the successor corporation or affiliate thereof or be replaced
with a comparable option to purchase shares of the capital stock of the
successor corporation or affiliate thereof, (ii) such option is to be replaced
by a comparable cash incentive program of the successor corporation based on the
value of the option at the time of the Corporate Transaction, or (iii) the
acceleration of such option is subject to other applicable limitations imposed
by the Plan Administrator in the relevant stock option agreement. The
determination of comparability under clause (i) or (ii) above shall be made by
the Plan Administrator, and its determination shall be final, binding, and
conclusive.

                                      -7-
<PAGE>   7

               (c) In no event shall any such acceleration occur in connection
with a Corporate Transaction unless the Plan Administrator, in its discretion,
determines that such acceleration is appropriate. Notwithstanding the above, in
the event of any Corporate Transaction the Plan Administrator shall have the
discretion to cancel any options, in whole or in part, subject to such
conditions as the Plan Administrator may determine, upon payment to Optionee
with respect to each option then exercisable an amount in cash equal to the
excess of (a) the Fair Market Value, at the effective date of such Corporate
Transaction, of the consideration Optionee would have received if the option had
been exercised immediately prior to the effective date of such Corporate
Transaction over (b) the option price.

               (d) In connection with any such Corporate Transaction, the
exercisability as an Incentive Option of any accelerated options under the Plan
shall remain subject to the applicable dollar limitation of Section 7(c).

               (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, sell, or transfer all or any part of its business or assets.

        10. CANCELLATION AND NEW GRANT 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 therefore 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 Fair Market Value (one hundred percent (100%)
of Fair Market Value in the case of an Incentive Option or, in the case of a 10%
Shareholder, not less than one hundred ten (110%) of Fair Market Value) on the
new grant date.

        11. LOANS OR GUARANTEE OF LOANS

        The Plan Administrator may, in its discretion, assist any Optionee
(including an Optionee who is an officer or member of the Board) in the exercise
of one or more options under the Plan, 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, (ii)
permitting the Optionee to pay the option price in installments over a period of
years, or (iii) authorizing a guarantee by the Corporation of a third party loan
to the Optionee. Any such assistance shall be upon such terms (including the
interest rate and terms of repayment) as the Plan Administrator specifies in the
Stock Option Agreement. Loans, installment payments, and guarantees may be
granted with or without security or collateral (other than to Optionees who are
consultants or independent contractors, in which event the loan must be
adequately secured by collateral other than the purchased shares), but the
maximum credit available to the Optionee shall not exceed the sum of (i) the
aggregate option price payable for the purchased shares plus (ii) any Federal
and state income and employment tax liability incurred by the Optionee in
connection with the exercise of the option.

        12. EXTENSION OF EXERCISE PERIOD

        The Plan Administrator shall have full power and authority to extend the
period of time for which the option is to remain exercisable following the
Termination Date from the ninety (90) day or shorter period set forth in the
Stock Option Agreement to such greater period of time as the Plan Administrator
shall deem appropriate. In no event shall such option be exercisable after the
specified expiration date of the option term.

        13. AMENDMENT OF THE PLAN AND OPTIONS

               (a) The Board shall have complete and exclusive power and
authority to amend the Plan and the Plan Administrator may amend or modify
outstanding options issued under the Plan in any or all respects whatsoever not
inconsistent with the terms of the Plan; however, except to the extent necessary
to qualify options under the Plan as Incentive Options, no such amendment shall
adversely affect the rights and obligations of an Optionee with respect to
options at the time outstanding under the Plan unless the Optionee consents to
such amendment and the Board shall not without the approval of the Corporation's
shareholders, amend the Plan to (i) alter the number of shares issuable under

                                      -8-
<PAGE>   8

the Plan, except for permissible adjustments under Section 5(b) or subsection
(b), (ii) materially increase the benefits accruing to individuals who
participate in the Plan, or (iii) modify the eligibility requirements for the
grant of options under the Plan.

               (b) Options may be granted under the 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 is thereafter submitted to the Corporation's shareholders
for approval and (ii) each option so granted is not to become exercisable, in
whole or in part, at any time prior to obtaining such shareholder approval.

        14. EFFECTIVE DATE AND TERM OF PLAN

        Unless the Plan is sooner terminated in accordance with Section 9, no
option may be granted under the Plan after the earlier of (i) March 25, 2004 or
(ii) the date on which all shares available for issuance under the Plan have
been issued or canceled pursuant to the exercise or surrender of options granted
hereunder.

        15. 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.

        16. INFORMATION TO OPTIONEES

        The Corporation shall deliver financial and other information regarding
the Corporation, on an annual or more frequent basis, to each individual holding
an outstanding option under the Plan, to the extent the Corporation is required
to provide such information pursuant to Section 260.140.41.2 of the Rules of the
California Corporations Commissioner.

        17. WITHHOLDING

        The Corporation's obligation to (a) deliver stock certificates upon the
exercise of any option or (b) pay cash upon the surrender of any option granted
under the Plan shall be subject to the Optionee's satisfaction of all applicable
Federal, state, and local income and employment tax withholding requirements.

        18. REGULATORY APPROVALS

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

                                      -9-

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