Document:

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                                                                     Exhibit 4.2

                             GENESIS MICROCHIP INC.

                        1997 EMPLOYEE STOCK PURCHASE PLAN
                        as amended on September 14, 2000

         The following constitute the provisions of the 1997 Employee Stock
Purchase Plan of Genesis Microchip Inc.

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

         2.  Definitions.
             -----------
             (a) "Board" shall mean the board of directors of the Company.

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

             (c) "Company" shall mean Genesis Microchip Inc, and any Designated
Subsidiary of the Company.

             (d) "Compensation" shall mean all base straight time gross earnings
and commissions, but exclusive of payments for overtime, shift premium,
incentive compensation, incentive payments, bonuses and other compensation.

             (e) "Designated Subsidiary" shall mean any Subsidiary which has
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.

             (f) "Employee" shall mean any individual who is an Employee of the
Company for tax purposes whose customary employment with the Company is at least
twenty (20) hours per week and more than five (5) months in any calendar year.
For purposes of the Plan, the employment relationship shall be treated as
continuing intact while the individual is on sick leave or other leave of
absence approved by the Company. Where the period of leave exceeds 90 days and
the individual's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship shall be deemed to have terminated on the
91st day of such leave.

             (g) "Enrollment Date" shall mean the first day of each Offering
Period.

             (h) "Exercise Date" shall mean the last day of each Purchase
Period.

             (i) "Fair Market Value" shall mean, as of any date, the value of
the Shares determined as follows:

                 (1) If the Shares are listed on any established stock exchange
or a national market system, including without limitation the Nasdaq National
Market or The Nasdaq SmallCap Market of

                                       -1-

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The Nasdaq Stock Market, the Fair Market Value of the Shares shall be the
closing sales price for the Shares (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 Board deems reliable, or;

                 (2) If the Shares are regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
the Shares shall be the mean between the high bid and low asked prices for the
Shares 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 Board deems
reliable, or;

                 (3) In the absence of an established market for the Shares, the
Fair Market Value thereof shall be determined in good faith by the Board, or;

                 (4) For purposes of the Enrollment Date of the first Offering
Period under the Plan, the Fair Market Value shall be the initial price to the
public as set forth in the final prospectus included within the registration
statement in Form F-1 filed with the Securities and Exchange Commission for the
initial public offering of the Company's Shares (the "Registration Statement").

             (j) "Offering Periods" shall mean the periods of approximately
twenty-four (24) months during which an option granted pursuant to the Plan may
be exercised, commencing on the first Trading Day on or after June 30 and
December 31 of each year and terminating on the last Trading Day in the periods
ending twenty-four months later; provided, however, that the first Offering
Period under the Plan shall commence with the first Trading Day on or after the
date on which the Securities and Exchange Commission declares the Company's
Registration Statement effective and ending on the last Trading Day on or before
December 31, 1999. The duration and timing of Offering Periods may be changed
pursuant to Section 4 of this Plan.

             (k) "Plan" shall mean this Employee Stock Purchase Plan.

             (l) "Purchase Price" shall mean an amount equal to 85% of the
Fair Market Value of a Share on the Enrollment Date or on the Exercise Date,
whichever is lower.

             (m) "Purchase Period" shall mean the approximately six month
period commencing after one Exercise Date and ending with the next Exercise
Date, except that the first Purchase Period of any Offering Period shall
commence on the Enrollment Date and end with the next Exercise Date.

             (n) "Reserves" shall mean the number of Shares covered by each
option under the Plan which have not yet been exercised and the number of Shares
which have been authorized for issuance under the Plan but not yet placed under
option-

             (o) "Shares" shall mean common shares of the Company.

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

             (q) "Trading Day" shall mean a day on which national stock
exchanges and The Nasdaq Stock Market are open for trading.

                                       -2-

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

             (a) Any Employee who shall be employed by the Company on a given
Enrollment Date shall be eligible to participate in the Plan.

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

         4.  Offering Periods. The Plan shall be implemented by consecutive,
             ----------------
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after June 30 and December 31 of each year, or on such other
date as the Board shall determine, and continuing thereafter until terminated in
accordance with Section 20 hereof; provided, however, that the first Offering
Period under the Plan shall commence with the first Trading Day on or after the
date on which the Securities and Exchange Commission declares the Company's
Registration Statement effective and shall end on the last Trading Day on or
before December 31, 1999. The Board shall have the power to change the duration
of Offering Periods (including the commencement dates thereof) with respect to
future offerings without shareholder approval if such change is announced at
least five (5) days prior to the scheduled beginning of the first Offering
Period to be affected thereafter.

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

             (a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing it with the Company's payroll office prior
to the applicable Enrollment Date.

             (b) Payroll deductions for a participant shall commence on the
first payroll following the Enrollment Date and shall end on the last payroll in
the Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.

         6.  Payroll Deductions.
             ------------------

             (a) At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not exceeding 15% of the Compensation
which he or she receives on each pay day during the Offering Period.

             (b) All payroll deductions made for a participant shall be
credited to his or her account under the Plan and shall be withheld in whole
percentages only. A participant may not make any additional payments into such
account.

             (c) A participant may discontinue his or her participation in
the Plan as provided in Section 10 hereof, or may increase or decrease the rate
of his or her payroll deductions during the Offering Period by completing or
filing with the Company a new subscription agreement authorizing a change in
payroll deduction rate. The Board may, in its discretion, limit the number of
participation rate changes during

                                       -3-

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any Offering Period. The change in rate shall be effective with the first full
payroll period following five (5) business days after the Company's receipt of
the new subscription agreement unless the Company elects to process a given
change in participation more quickly. A participant's subscription agreement
shall remain in effect for successive Offering Periods unless terminated as
provided in Section 10 hereof.

             (d) Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a
participant's payroll deductions may be decreased to zero percent (0%) at any
time during a Purchase Period. Payroll deductions shall recommence at the rate
provided in such participant's subscription agreement at the beginning of the
first Purchase Period which is scheduled to end in the following calendar year,
unless terminated by the participant as provided in Section 10 hereof.

             (e) At the time the option is exercised in whole or in part, or at
the time some or all of the Shares issued under the Plan are disposed of, the
participant must make adequate provision for the Company's federal, state, or
other tax withholding obligations, if any, which arise upon the exercise of the
option or the disposition of the Shares. At any time, the Company may, but shall
not be obligated to, withhold from the participant's compensation the amount
necessary for the Company to meet applicable withholding obligations, including
any withholding required to make available to the Company any tax deductions or
benefits attributable to sale or early disposition of Shares by the Employee.

         7.  Grant of Option. On the Enrollment Date of each Offering Period,
             ---------------
each eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of Shares determined by dividing such
Employee's payroll deductions accumulated prior to such Exercise Date and
retained in the Participant's account as of the Exercise Date by the applicable
Purchase Price; provided that in no event shall an Employee be permitted to
purchase during each Purchase Period more than 20,000 Shares (subject to any
adjustment pursuant to Section 19) on the Enrollment Date, and provided further
that such purchase shall be subject to the limitations set forth in Sections
3(b) and 12 hereof. Exercise of the option shall occur as provided in Section 8
hereof, unless the participant has withdrawn pursuant to Section 10 hereof. The
option shall expire on the last day of the Offering Period.

         8.  Exercise of Option. Unless a participant withdraws from the Plan as
             ------------------
provided in Section 10 hereof, his or her option for the purchase of Shares
shall be exercised automatically on the Exercise Date, and the maximum number of
full Shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional Shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full Share shall be retained in the participant's account for the subsequent
Purchase Period or Offering Period subject to earlier withdrawal by the
participant as provided in Section 10 hereof. Any other monies left over in a
participant's account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a participant's option to purchase
Shares hereunder is exercisable only by him or her.

         9.  Delivery.  As promptly as practicable after each Exercise Date on
             --------
which a purchase of Shares occurs, the Company shall arrange the delivery to
each participant as appropriate, of a certificate representing the Shares
purchased upon exercise of his or her option.

         10. Withdrawal.
             ----------

             (a) A participant may withdraw all but not less than all the
payroll deductions credited to his or her account and not yet used to exercise
his or her option under the Plan at any time by giving written notice to the
Company in the form of Exhibit B to this Plan. All of the participant's payroll
deductions

                                       -4-

<PAGE>

credited to his or her account shall be paid to such participant promptly after
receipt of notice of withdrawal and such participant's option for the Offering
Period shall be automatically terminated, and no further payroll deductions for
the purchase of Shares shall be made for such Offering Period. If a participant
withdraws from an Offering Period, payroll deductions shall not resume at the
beginning of the succeeding Offering Period unless the participant delivers to
the Company a new subscription agreement.

             (b) A participant's withdrawal from an Offering Period shall not
have any effect upon his or her eligibility to participate in any similar plan
which may hereafter be adopted by the Company or in succeeding Offering Periods
which commence after the termination of the Offering Period from which the
participant withdraws.

         11. Termination of Employment.
             -------------------------

         Upon a participant's ceasing to be an Employee, for any reason he or
she shall be deemed to have elected to withdraw from the Plan and the payroll
deductions credited to such participant's account during the Offering Period but
not yet used to exercise the option shall be returned to such participant or, in
the case of his or her death, to the person or persons entitled thereto under
Section 15 hereof, and such participant's option shall be automatically
terminated. The preceding sentence notwithstanding, a participant who receives
payment in lieu of notice of termination of employment shall be treated as
continuing to be an Employee for the participant's customary number of hours per
week of employment during the period in which the participant is subject to such
payment in lieu of notice.

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

         13. Shares.
             ------

             (a) Subject to adjustment upon changes in capitalization of the
Company as provided in Section 19 hereof, the maximum number of Shares which
shall be made available for sale under the Plan shall be 200,000, plus an annual
increase to be added on each anniversary date of the adoption of the Plan equal
to the lesser of (i) the number of Shares needed to restore the maximum
aggregate number of Shares available for sale under the Plan to 200,000, or (ii)
a lesser amount determined by the Board. If, on a given Exercise Date, the
number of Shares with respect to which options are to be exercised exceeds the
number of Shares then available under the Plan, the Company shall make a pro
rata allocation of the Shares remaining available for purchase in as uniform a
manner as practicable and as it shall determine to be equitable.

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

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

         14. Administration. The Plan shall be administered by the Board or a
             --------------
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.

                                       -5-

<PAGE>

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

             (a) A participant may file a written designation of a beneficiary
who is to receive any Shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to an
Exercise Date on which the option is exercised but prior to delivery to such
participant of such Shares and cash. In addition, a participant may file a
written designation of a beneficiary who is to receive any cash from the
participant's account under the Plan in the event of such participant's death
prior to exercise of the option. If a participant is married and the designated
beneficiary is not the spouse, spousal consent shall be required for such
designation to be effective.

             (b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such Shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such Shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.

         16. Transferability. Neither payroll deductions credited to a
             ---------------
participant's account nor any rights with regard to the exercise of an option or
to receive Shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.

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

         18. Reports. Individual accounts shall be maintained for each
             -------
participant in the Plan. Statements of account shall be given to participating
Employees at least annually, which statements shall set forth the amounts of
payroll deductions, the Purchase Price, the number of Shares purchased and the
remaining cash balance, if any.

         19. Adjustments Upon Changes in Capitalization, Dissolution,
             --------------------------------------------------------
             Liquidation, Merger or Asset Sale.
             ---------------------------------

             (a) Changes in Capitalization. Subject to any required action by
                 -------------------------
the shareholders of the Company, the Reserves, the maximum number of Shares each
participant may purchase each Purchase Period (pursuant to Section 7), as well
as the price per Share and the number of Shares covered by each option under the
Plan which has not yet been exercised shall be proportionately adjusted for any
increase or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Shares, or any other increase or decrease in the number of Shares 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 any class, or securities convertible into shares of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of Shares subject to an option.

                                       -6-

<PAGE>

             (b) Dissolution or Liquidation. In the event of the proposed
                 --------------------------
dissolution or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and
shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Board. The New
Exercise Date shall be before the date of the Company's proposed dissolution or
liquidation. The Board shall notify each participant in writing, at least ten
(10) business days prior to the New Exercise Date, that the Exercise Date for
the participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10 hereof.

             (c) Merger or Asset Sale. In the event of a proposed sale of all or
                 --------------------
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding option shall be assumed or an
equivalent option 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, any Purchase Periods
then in progress shall be shortened by setting a new Exercise Date (the "New
Exercise Date") and any Offering Periods then in progress shall end on the New
Exercise Date. The New Exercise Date shall be before the date of the Company's
proposed sale or merger. The Board shall notify each participant in writing, at
least ten (10) business days prior to the New Exercise Date, that the Exercise
Date for the participant's option has been changed to the New Exercise Date and
that the participant's option shall be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn from the
Offering Period as provided in Section 10 hereof.

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

             (a) The Board may at any time and for any reason terminate or amend
the Plan. Except as provided in Section 19 hereof, no such termination can
affect options previously granted, provided that an Offering Period may be
terminated by the Board on any Exercise Date if the Board determines that the
termination of the Plan is in the best interests of the Company and its
shareholders. Except as provided in Section 19 hereof, no amendment may make any
change in any option theretofore granted which adversely affects the rights of
any participant. To the extent necessary to comply with Section 423 of the Code
(or any successor rule or Provision or any other applicable law, regulation or
stock exchange rule), the Company shall obtain shareholder approval in such a
manner and to such a degree as required.

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

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

         22. Conditions Upon Issuance of Shares.  Shares shall not be issued
             ----------------------------------
with respect to an option unless the exercise of such option and the issuance
and delivery of such Shares pursuant thereto shall comply

                                       -7-

<PAGE>

with all applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the Securities Exchange Act
of 1934, as amended, the Securities Act (Ontario), the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the Shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

         As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.

         23. Term of Plan.  The Plan shall become effective upon the effective
             ------------
date of its adoption by the Board. It shall continue in effect for a term of ten
(10) years unless sooner terminated under Section 20 hereof.

         24. Automatic Transfer to Low Price Offering Period. To the extent
             -----------------------------------------------
permitted by any applicable laws, regulations, or stock exchange rules, if the
Fair Market Value of the Shares on any Exercise Date in an Offering Period is
lower than the Fait Market Value of the Shares on the Enrollment Date of such
Offering Period, then all participants in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the exercise
of their option on such Exercise Date and automatically re-enrolled in the
immediately following Offering Period as of the first day thereof.

                                       -8-

<PAGE>

                                    EXHIBIT A

                             GENESIS MICROCHIP INC.

                        1997 EMPLOYEE STOCK PURCHASE PLAN

                             SUBSCRIPTION AGREEMENT

_____ Original Application     Enrollment Date: ________________

_____ Change in Payroll Deduction Rate

_____ Change of Beneficiary(ies)

         1.  ____________________ hereby elects to participate in the 1997
Employee Stock Purchase Plan (the "Employee Stock Purchase Plan") of Genesis
Microchip Inc. (the "Company") and subscribes to purchase common shares of the
Company ("Shares") in accordance with this Subscription Agreement and the
Employee Stock Purchase Plan.

         2.  I hereby authorize payroll deductions from each paycheck in the
amount of _____% of my Compensation on each payday (from 0 to 15%) during the
Offering Period in accordance with the Employee Stock Purchase Plan. (Please
note that no fractional percentages are permitted.)

         3.  I understand that said payroll deductions shall be accumulated for
the purchase of Shares at the applicable Purchase Price determined in accordance
with the Employee Stock Purchase Plan. I understand that if I do not withdraw
from an Offering Period, any accumulated payroll deductions will be used to
automatically exercise my option.

         4.  I have received a copy of the complete Employee Stock Purchase
Plan. I understand that my participation in the Employee Stock Purchase Plan is
in all respects subject to the terms of the Employee Stock Purchase Plan. I
understand that my ability to exercise the option under this Subscription
Agreement is subject to shareholder approval of the Employee Stock Purchase
Plan.

         5.  Shares purchased for me under the Employee Stock Purchase Plan
should be issued in the name(s) of (Employee or Employee and Spouse only):
_____________________.

         6. I represent that I have consulted with any tax consultants I deem
advisable in connection with my participation in the Employee Stock Purchase
Plan and the purchase and disposition of Shares thereunder, and that I am not
relying on the Company for any tax advice. I hereby agree to notify the Company
in writing within 30 days after the date of any disposition of my shares and I
will make adequate provision for the tax withholding obligations of the Company,
if any, which arise upon the acquisition or disposition of the Shares.

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

                                       -1-

<PAGE>

         8.  In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and Shares due to me under the Employee
Stock Purchase Plan.

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

-----------------------------------------   ------------------------------------
Relationship
                                            ------------------------------------
                                            (Address)

Employee's Social Security Number:          ------------------------------------

Employee's Address:                         ------------------------------------

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

         I UNDERSTAND THAT THE SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT
THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:
      ------------------------           ---------------------------------------
                                         Signature of Employee

                                         ---------------------------------------
                                         Spouse's Signature (If beneficiary
                                                              other than spouse)

                                       -2-

<PAGE>

                                    EXHIBIT B

                             GENESIS MICROCHIP INC.

                        1997 EMPLOYEE STOCK PURCHASE PLAN

                              NOTICE OF WITHDRAWAL

         The undersigned participant in the Offering Period of the Genesis
Microchip Inc. 1997 Employee Stock Purchase Plan which began on _______________,
19__ (the "Enrollment Date") hereby notifies the Company that he or she hereby
withdraws from the Offering Period. He or she hereby directs the Company to pay
to the undersigned as promptly as practicable all the payroll deductions
credited to his or her account with respect to such Offering Period. The
undersigned understands and agrees that his or her option for such Offering
Period will be automatically terminated. The undersigned understands further
that no further payroll deductions will be made for the purchase of shares in
the current Offering Period and the undersigned shall be eligible to participate
in succeeding Offering Periods only by delivering to the Company a new
Subscription Agreement.

                                         Name and Address of Participant:

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

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

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

                                         ---------------------------------------
                                         Signature

                                         Date:
                                              ----------------------------------

                                       -1-<PAGE>

                                  EXHIBIT 4.1

                              Floor Nation, Inc.

                            2000 Stock Option Plan

                               FloorNation, Inc.
                            2000 Stock Option Plan
                                    Page i
<PAGE>

                               TABLE OF CONTENTS
                               -----------------
<TABLE>
<S>                                                                         <C>
 Purpose of the Plan.......................................................  1
 Definitions...............................................................  1
 Stock Subject to Option...................................................  2
  Total Number of Shares...................................................  2
  Expired Options..........................................................  2
 Administration of the Plan................................................  3
  Board....................................................................  3
  Stock Option Plan Committee..............................................  3
  Compliance with Internal Revenue Code....................................  3
 Selection of Optionees....................................................  3
  Discretion of the Board..................................................  3
  Limitation on Grant of Options...........................................  3
 Option Agreement..........................................................  3
 Option Prices.............................................................  3
  Determination of Option Price............................................  3
  Determination of Stock Ownership.........................................  4
 Term of Option............................................................  4
 Exercise of Option........................................................  4
  Limitation on Exercise of Option.........................................  4
  Exercise Prior to Cancellation...........................................  4
  Method of Exercising an Option...........................................  4
  Payment for Option Stock.................................................  4
  Cashless Exercise........................................................  5
  Delivery of Stock to Optionee............................................  5
 Nontransferability of Options.............................................  5
  General..................................................................  5
  Incentive Stock Options..................................................  5
 Tax Effects of Plan Participation.........................................  6
 Compliance with Securities Laws...........................................  6
  Restrictions on Transfer of Shares.......................................  6
  Optionee's Written Statement.............................................  6
  Registration Requirements................................................  6
  Restrictive Legend.......................................................  6
 Changes in Capital Structure of Company...................................  7
 Reorganization, Dissolution or Liquidation................................  7
 Option to Repurchase......................................................  7
  Company's Option.........................................................  7
  Procedure for Exercise...................................................  8
  Delivery of Stock Certificates...........................................  8
 Right of First Refusal....................................................  8
  Right of First Refusal for Offers........................................  8
  Procedure for Exercise...................................................  8
  Delivery of Stock Certificates...........................................  8
  Company's Option in Event of Involuntary Transfer........................  8
 Escrow....................................................................  9
 Application of Funds......................................................  9
</TABLE>

                               FloorNation, Inc.
                            2000 Stock Option Plan
                                    Page ii
<PAGE>

<TABLE>
<S>                                                              <C>
 Optionee's Rights as a Holder of Shares........................   9
  Prior to Exercise.............................................   9
  Dividends After Exercise......................................   9
  Voting Rights.................................................   9
 Amendment and Termination of the Plan..........................  10
  Discretion of the Board.......................................  10
  Automatic Termination.........................................  10
 Miscellaneous..................................................  10
  Notices.......................................................  10
  Effective Date of the Plan....................................  10
  Employment....................................................  10
  Plan Binding..................................................  10
  Gender........................................................  10
  Headings......................................................  10
  Applicable Law................................................  10
 Indemnification................................................  10
</TABLE>

                               FloorNation, Inc.
                            2000 Stock Option Plan
                                   Page iii
<PAGE>

                               FLOORNATION, INC.
                               -----------------
                            2000 STOCK OPTION PLAN
                            ----------------------

     FLOORNATION, INC., a Nevada corporation, hereby adopts a stock option plan
for its key employees, officers, directors and consultants, in accordance with
the following terms and conditions.

     1.   Purpose of the Plan. The purpose of the Plan is to advance the growth
          -------------------
and development of the Company by affording an opportunity to executives,
consultants and key employees of the Company as well as directors of the Company
and its affiliates to purchase shares of the Company's common stock and to
provide incentives for them to put forth maximum efforts for the success of the
Company's business.  The Plan is intended to permit certain designated stock
options granted under the Plan to qualify as incentive stock options under
Section 422A of the Code.

     2.   Definitions. For purposes of this Plan, the following capitalized
          -----------
terms shall have the meanings set forth below:

          "Board" means the board of directors of the Company.

          "Cause" means: (i) commission of a felony or a charge of theft,
dishonesty, fraud or embezzlement; (ii) failure to adhere to Company's
reasonable directives and policies, (iii) willful disobedience or
insubordination; (iv) disclosing to a competitor or other unauthorized person,
proprietary information, confidences or trade secrets of the Company or any
Subsidiary; (v) recruitment of personnel of the Company or any Subsidiary on
behalf of a competitor or potential competitor of the Company, any Subsidiary,
or any successor thereof; (vi) solicitation of business on behalf of a
competitor or potential competitor of the Company, any Subsidiary, or any
successor thereof; or (vii) material breach of any employment or consulting
agreement with the Company or any Subsidiary or any successor thereof.

          "Code" means the Internal Revenue Code of 1986 and the rules and
regulations promulgated thereunder and pursuant thereto, as currently in effect
or as hereafter amended.

          "Committee" shall have the meaning set forth in Section 4.2.

          "Common Stock" means the common stock of the Company, par value $.001
per share.

          "Company" means FloorNation, Inc., a Nevada corporation.

          "Continuous Employment" means the absence by any employee of any
interruption or termination of employment with the Company or any Subsidiary
which now exists or hereafter is organized or acquired by the Company.
Continuous Employment with the Company shall not be considered interrupted in
the case of sick leave, military leave, or any other leave of absence approved
by the Company or in the case of transfers between locations of the Company or
between any Subsidiary or successor thereof.

          "Eligible Employee" means any officer, or executive, managerial, or
other employee of the Company or any Subsidiary. In order to be eligible for an
Incentive Stock Option, a director or a consultant must also be a common law
employee of the Company as provided in Section 422A of the Code; however, in
order to be eligible for a Nonqualified Stock Option, a director or consultant
need not be a common law employee of the Company.

          "Fair Market Value" of a Share on any date of reference shall be the
average Closing Price of a share of Common Stock for the ten (10 trading days
immediately preceding such date, unless the Board, in its sole discretion, shall
determine otherwise in a fair and uniform manner.  For this purpose, the
"Closing Price" of the Common Stock on any business day shall be (i) if the
Common Stock is listed or admitted for trading on any United States national
securities exchange, or if actual transactions are otherwise reported on a
consolidated transaction reporting system, the last reported sale price of the
Common Stock on such exchange or reporting system, as reported in any newspaper
of general circulation for such ten-day period, or (ii) if the Common Stock is
quoted on the National Association of

                               FloorNation, Inc.
                            2000 Stock Option Plan
                                    Page 1
<PAGE>

Securities Dealers Automated Quotations System ("NASDAQ") or any similar system
of automated dissemination of quotations, the mean between high bid and low
asked quotations for the Common Stock if at least two securities dealers have
inserted both bid and asked quotations for the Common Stock on at least five (5)
of the twenty (20) preceding trading days. If the information set forth in
clauses (i) or (ii) above is unavailable or inapplicable to the Company (e.g.,
                                                                         ----
if the Company's Common Stock is not then publicly traded or quoted), then the
"Fair Market Value" of a Share shall be the fair market value (i.e., the price
                                                               ----
at which a willing seller would sell a Share to a willing buyer when neither is
acting under compulsion and when both have reasonable knowledge of all relevant
facts) of a share of the Common Stock on the business day immediately preceding
such date as the Board, in its sole and absolute discretion, shall determine in
a fair and uniform manner.

          "Incentive Stock Option" means a stock option granted to an Eligible
Employee to purchase shares of Stock which is intended to qualify as an
"incentive stock option," as defined in Section 422A of the Code.

          "Nonqualified Stock Option" means a stock option granted to an
Optionee to purchase shares of Stock which is not intended to qualify as an
Incentive Stock Option.

          "Option" means any unexercised and unexpired Incentive Stock Option or
Nonqualified Stock Option issued under this Plan, or any portion thereof
remaining unexercised and unexpired.

          "Option Grant" means a written agreement between the Company and an
Optionee setting forth the terms and conditions of the Option granted by the
Board to such Optionee.

          "Optionee" means any person who is granted an Option as provided in
the Plan.

          "Person" means shall mean any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, labor union or other entity
or governmental body.

          "Plan" means the Company's 2000 Stock Option Plan.

          "Shareholder" means a holder of record of the Company's Common Stock.

          "Stock" means the authorized and unissued shares of the Company's
Common Stock.

          "Subsidiary" means any present or future "subsidiary corporation" of
the Company, as such term is defined in Section 425(f) of the Code, which the
Board has elected to be covered by the Plan.

          Where applicable, the terms used in this Plan with reference to
Options have the same meanings as the terms used in the Code.

     3.   Stock Subject to Option.
          -----------------------

          3.1  Total Number of Shares. The total number of shares of Stock which
               ----------------------
may be issued by the Company to all Optionees under this Plan is two million
(2,000,000) shares. The total number of shares of Stock, which may be so issued,
may be increased only by a resolution adopted by the Board and approved by the
Shareholders.

          3.2  Expired Options. If any Option granted under this Plan is
               ---------------
terminated or expires for any reason whatsoever, in whole or in part, then the
shares (or remaining shares) of Stock subject to that particular Option shall
again be available for grant under this Plan.

                               FloorNation, Inc.
                            2000 Stock Option Plan
                                    Page 2
<PAGE>

     4.   Administration of the Plan.
          --------------------------

          4.1  Board. This Plan shall be administered by the Board, which may,
               -----
from time to time, issue orders or adopt resolutions, not inconsistent with the
provisions of the Plan, to interpret the provisions and supervise the
administration of the Plan. All determinations shall be by the affirmative vote
of a majority of the members of the Board at a meeting, or reduced to writing
and signed by all of the members of the Board. Subject to the Company's Bylaws,
all decisions made by the Board in selecting Optionees, establishing the number
of shares and terms applicable to each Option, and in construing the provisions
of this Plan shall be final, conclusive and binding on all persons, including
the Company, Shareholders, Optionees, and purchasers of shares pursuant to this
Plan. No member of the Board shall be liable for any action or determination
made in good faith with respect to the Plan or an Option granted hereunder.

          4.2  Stock Option Plan Committee. The Board from time to time, may,
               ---------------------------
appoint a Stock Option Plan Committee consisting of not less than two (2)
directors (the "Committee"). The Board may delegate to such Committee full power
and authority to take any action required or permitted to be taken by the Board
under this Plan, subject to restrictions on affiliate participation under the
Securities Exchange Act of 1934, pertaining, among other things, to Section
16(b). All determinations shall be by the affirmative vote of a majority of the
members of the Committee at a meeting, or reduced to writing and signed by all
members of the Committee. The Board, from time to time, may, in its sole
discretion, remove members from or add members to the Committee. Vacancies may
be filled by the Board only. Where the context requires, the Board shall mean
the Committee, if appointed, for matters dealing with administration of the
Plan.

          4.3  Compliance with Internal Revenue Code. The Board shall at all
               -------------------------------------
times administer this Plan and make interpretations hereunder in such a manner
that Options granted hereunder designated as Incentive Stock Options will meet
the requirements of Section 422A of the Code.

     5.   Selection of Optionees.
          ----------------------

          5.1  Discretion of the Board. In determining which Persons shall be
               -----------------------
offered Options as well as the terms thereof, the Board shall evaluate, among
other things, (i) the duties and responsibilities of Eligible Employees, (ii)
their past and prospective contributions to the success of the Company, (iii)
the extent to which they are performing and will continue to perform outstanding
services for the benefit of the Company, and (iv) such other factors as the
Board deems relevant. All grants must be approved by a disinterested majority of
the Board (or Committee, if appointed).

          5.2  Limitation on Grant of Incentive Stock Options. An Incentive
               ----------------------------------------------
Stock Option may not be granted to any Optionee if the grant of such Option to
such Optionee would otherwise cause the aggregate fair market value (determined
at the time the Option is granted) of the Stock for which Options are
exercisable for the first time by such Optionee under all incentive stock option
plans of the Company during any calendar year to exceed $100,000. Any options
granted in excess of this limitation shall be Nonqualified Stock Options. The
grant of Nonqualified Stock Options is not subject to limitations and may be
granted at the sole discretion of the Board.

     6.   Option Grant Agreement. Subject to the provisions of this Plan, each
          ----------------------
Option granted to an Optionee shall be set forth in an Option Grant upon such
terms and conditions as the Board determines, including a vesting schedule, if
desired. Each such Option Grant shall incorporate the provisions of this Plan by
reference. The date of the grant of an Option is the date specified in the
Option Grant. Any Option Grant shall clearly identify such Options as Incentive
Stock Options or Nonqualified Stock Options.

     7.   Option Prices.
          -------------

          7.1  Determination of Option Price. The option price for Stock shall
               -----------------------------
not be less than one hundred percent (100%) of the Fair Market Value of the
Stock on the date of the grant of such Option. The price for Stock under an
Incentive Stock Option granted to an Eligible Employee who possesses more than
ten percent (10%) of the total combined voting power of all classes of common
stock of the Company

                               FloorNation, Inc.
                            2000 Stock Option Plan
                                    Page 3
<PAGE>

shall not be less than one hundred ten percent (110%) of the Fair Market Value
of the Stock on the date of the grant of such Option.

          7.2  Determination of Stock Ownership. For purposes of Articles 7 and
               --------------------------------
8, an Optionee's Stock ownership shall be determined by taking into account the
rules of constructive ownership set forth in Section 424(d) of the Code.

     8.   Term of Option. The term of an Option may vary within the sole
          --------------
discretion of the Board; however, the term of an Incentive Stock Option granted
to an Eligible Employee shall not exceed ten (10) years from the date of grant
of such Incentive Stock Option; provided, however, that the term shall not
exceed five (5) years for any Optionee who possesses more than ten percent (10%)
of the total, combined voting power of all classes of Common Stock of the
Company. An Incentive Stock Option may be canceled only in connection with the
termination of employment or death of the Optionee (as more particularly
described in Article 9 hereof) or any unauthorized, attempted transfer or
assignment of the Option (as more particularly described in Article 10 hereof).
A Nonqualified Stock Option may be canceled only in connection with the
termination of employment or death of an Optionee, the removal for cause of an
Optionee who is a director, the breach or early termination by any consultant of
its consulting agreement with the Company, or any unauthorized, attempted
transfer or assignment of the Option.

     9.   Exercise of Option.
          ------------------

          9.1  Limitation on Exercise of Option. Except as otherwise provided
               --------------------------------
herein, the Board, in its sole discretion, may limit an Option by restricting
its exercise, in whole or in part, to specified vesting periods or until
specified conditions have occurred. The vesting periods and any restrictions
will be set forth in the Option Grant.

          9.2  Exercise Prior to Cancellation. An Option shall be exercisable
               ------------------------------
only during the term of the Option. Notwithstanding the preceding sentence, as
long as the Option's term has not expired or terminated early, an Option which
is otherwise exercisable in accordance with its provisions shall be exercisable:

               (a)  for a period ending ninety (90) days after the termination
of the Optionee's Continuous Employment with the Company, unless the Optionee
was terminated for Cause by the Company, in which case the Option will terminate
on the effective date of termination of employment; or

               (b)  for a period ending one hundred eighty (180) days after the
removal for Cause of the Optionee from the Board or from the board of directors
of any Subsidiary on which such Optionee has served; or

               (c)  by the estate of the Optionee, within one (1) year after the
date of the Optionee's death; or

               (d)  within six (6) months after the Optionee's employment with
the Company terminates if the Optionee becomes disabled during Continuous
Employment with the Company and such disability is the reason for termination.

          9.3  Method of Exercising an Option. Subject to the provisions of any
               ------------------------------
particular Option Grant, including any provisions relating to vesting of an
Option, an Optionee who desires to exercise an Option, in whole or in part, must
first provide written notice to the Company stating in such written notice the
number of shares of Stock such Optionee elects to purchase, and the time of the
delivery thereof, which time shall be at least fifteen (15) days after the
giving of such notice, unless an earlier date shall have been agreed upon by the
Board. Upon receipt of such written notice, the Company shall provide the
Optionee with that information required by applicable state and federal
securities laws. If, after receipt of such information, the Optionee desires to
withdraw such notice of exercise, then the Optionee may withdraw such notice of
exercise by notifying the Company, in writing, prior to the time set forth for
delivery of the shares of Stock. The date of exercise shall be the date a proper
notice of exercise is received by the designated Company authority. An Optionee
is under no obligation to exercise an Option or any part thereof.

                               FloorNation, Inc.
                            2000 Stock Option Plan
                                    Page 4
<PAGE>

          9.4  Payment for Stock. The exercise of any Option shall be contingent
               -----------------
upon prior or simultaneous receipt by the Company of cash or a certified bank
check to its order, transferable or redeemable shares of the Company's Stock, or
any combination of the foregoing in an amount equal to the full option price of
the shares of Stock being purchased. For purposes of this Section 9.4, shares of
the Company's Stock that are delivered in payment of the option price shall be
valued at their Fair Market Value as determined under the provisions of this
Plan. In the alternative, the Board may, but is not required to, accept a
promissory note, secured or unsecured, or other consideration in the amount of
the option price made by the Optionee and on terms and conditions satisfactory
to the Board.

          9.5  Cashless Exercise. Notwithstanding any provisions herein to the
               -----------------
contrary, if the fair market value of one share of Stock is greater than the
full option exercise price of such share of Stock (at the date of calculation as
set forth below), in lieu of exercising any Option for cash, the Optionee may
elect to receive Stock equal to the value (as determined below) of the Option
(or the portion thereof being exercised) by delivering to the designated Company
authority of the properly completed and endorsed Notice of Exercise of Option,
in which event the Company shall issue to the Optionee a number of shares of
Stock computed using the following formula:

          X=Y(A-B)
            ------
               A

     Where     X =  the number of shares of Stock to be issued to the Optionee

               Y =  the number of shares of Stock purchasable under the Option
                    or, if only a portion of the Option is being exercised, then
                    the portion of the Option being exercised (at the date of
                    such calculation)

               A =  the fair market value of one share of the Company's Stock
                    (at the date of such calculation)

               B =  the full Option price of one share of Stock being purchased
                    (as adjusted to the date of such calculation)

          9.6  Delivery of Stock to Optionee. Provided the Optionee has
               -----------------------------
delivered proper notice of exercise and full payment of the purchase price, the
Company shall undertake and follow all necessary procedures to make prompt
delivery of the number of shares of Stock which the Optionee elects to purchase
at the time specified in such notice. Such delivery, however, may be postponed,
without postponing the actual date of exercise, at the sole discretion of the
Company to enable the Company to comply with any applicable procedures,
regulations, or listing requirements of any governmental agency, stock exchange,
or regulatory authority. As a condition to the issuance of shares of Stock, the
Company may require such additional payments from the Optionee as may be
required to allow the Company to withhold any income taxes which the Company
deems necessary to insure the Company that it can comply with any federal or
state income tax withholding requirements.

     10.  Nontransferability of Options.
          -----------------------------

          10.1 General. Except as otherwise provided in section 9.2(c) above, an
               -------
Option granted to an Optionee may be exercised only during such Optionee's
lifetime by such Optionee. An Option may not be sold, exchanged, assigned,
pledged, gifted, encumbered, hypothecated or otherwise transferred except by
will or by the laws of descent and distribution. No Option or any right
thereunder shall be subject to transfer by operation of law, execution,
attachment, or similar process by any creditors of or claimants against the
Optionee. Upon any attempted sale, assignment, transfer, exchange, pledge, gift,
hypothecation or other encumbrance of any Option contrary to the provisions
hereof, such Option and all rights thereunder shall immediately terminate and
shall be null and void with respect to the transferee or assignee.

          10.2 Incentive Stock Options. With respect to Incentive Stock Options,
               -----------------------
notwithstanding anything else to the contrary in this Plan, no disposition or
transfer of any Stock purchased under an Incentive Stock Option may be made by
the Optionee within two (2) years from the

                               FloorNation, Inc.
                            2000 Stock Option Plan
                                    Page 5
<PAGE>

date the Option was granted nor within one (1) year after the date the shares
were transferred to the Optionee. Any Optionee who makes a transfer of Stock in
violation of this Section 10.2 shall promptly provide the Company written notice
of such transfer. Such transfer shall be deemed to disqualify the Option from
treatment as an Incentive Stock Option and shall cause the Option to be treated
as a Nonqualified Stock Option.

     11.  Tax Effects of Plan Participation. Incentive Stock Options granted
          ---------------------------------
under the Plan shall satisfy the requirements of Section 422A of the Code. The
Optionee recognizes no taxable income at the time of the Option grant, and,
generally, no taxable income is recognized at the time that the Option is
exercised. The Optionee will, however, recognize taxable income (generally in
the form of capital gain) in the year in which the purchased shares are sold or
otherwise made subject to disposition. For federal tax purposes, dispositions
are divided into two categories:

          (i)    The Optionee will make a qualifying disposition of the
purchased shares if the sale or other disposition of such shares is made after
the Optionee has held the shares for more than two (2) years after the grant
date of the Option and more than one (1) year after the exercise date. If the
Optionee fails to satisfy either of these two holding periods prior to the sale
or other disposition of the purchased shares, then a disqualifying disposition
will result. Upon a qualifying disposition of the shares, the Optionee will
recognize long-term capital gains in an amount equal to the excess of (a) the
amount realized upon the sale or other disposition of the purchased shares over
(b) the exercise price paid for such shares.

          (ii)   If there is a disqualifying disposition of the shares, or if
the option is granted as a Nonqualified Stock Option, then the excess of (a) the
fair market value of those shares on the date the Option was exercised over (b)
the exercise price paid for the shares will be taxable as ordinary income. Any
additional gain recognized upon the disposition will be a capital gain. If the
Optionee makes a disqualifying disposition of the purchased shares, then the
Company will be entitled to an income tax deduction for the taxable year in
which such disposition occurs in an amount equal to the excess of (a) the fair
market value of such shares on the date the Option was exercised over (b) the
exercise price paid for the shares.

     12.  Compliance with Securities Laws.
          -------------------------------

          12.1 Restrictions on Transfer of Shares. Subject to the Company's
               ----------------------------------
repurchase rights and rights of first refusal, as more particularly set forth in
Articles 15 and 16 below, the shares of Stock acquired by an Optionee pursuant
to the exercise of an Option hereunder shall be freely transferable; provided,
however, that such shares of Stock may not be sold, transferred, pledged or
hypothecated unless (i) a registration statement covering the securities is
effective under the Act and appropriate state securities laws, or (ii) an
opinion of counsel, satisfactory to the Company, that such sale, transfer,
pledge or hypothecation may legally be made without registration of such shares
under federal or state securities laws has been received by the Company.

          12.2 Optionee's Written Statement. The Board, in its sole discretion,
               ----------------------------
may require that, at the time an Optionee elects to exercise his option, the
Optionee shall furnish a written statement to the Company that he is acquiring
such shares of Stock for investment purposes only and that he has no intention
of reselling or otherwise disposing of such Stock, along with a written
acknowledgment that the Option and the shares of Stock pertaining to the Option
are not registered under the Securities Act of 1933, as amended (the "Act"), the
Florida or Nevada securities laws, or any other state securities laws.  In the
event that shares of Stock subject to the Option are registered with the
Securities and Exchange Commission, an Optionee shall no longer be required to
comply with this Section 12.2.

          12.3 Registration Requirements. If, at any time, the Board, in its
               -------------------------
sole discretion, determines that the listing, registration, or qualification of
the shares of Stock subject to an Option on any securities exchange or under any
state or federal securities laws, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or in connection
with, the issuance or purchase of shares thereunder, then the Option may not be
exercised, in whole or in part, unless such listing, registration,
qualification, consent, or approval shall have been effected or obtained (and
the same shall have been free of any conditions not acceptable to the Board).

                               FloorNation, Inc.
                            2000 Stock Option Plan
                                    Page 6
<PAGE>

          12.4 Restrictive Legend. In order to enforce the restrictions imposed
               ------------------
upon shares of Stock under this Plan, the Company shall make appropriate
notation in its stock records or, if applicable, shall issue an appropriate stop
transfer instruction to the Company's stock transfer agent. In addition, the
Company may cause a legend or legends to be placed on any certificates
representing shares of Stock issued pursuant to this Plan, which legend or
legends shall make appropriate reference to such restrictions in substantially
the following form:

     These shares have not been registered under the Securities Act of
     1933, as amended (the "Act"), the Florida Securities and Investor
     Protection Act, or any other state securities laws and, therefore,
     cannot be sold unless they are subsequently registered under the Act
     and any applicable state securities laws or an exemption from
     registration is available.

     The shares of Common Stock evidenced by this certificate have been
     issued under the FloorNation, Inc. 2000 Stock Option Plan (the "Plan")
     and are subject to the terms and provisions of such Plan.

     These shares are subject to a repurchase agreement and right of first
     refusal as set forth in the Plan and the Stock Option Grant by and
     between the shareholder and FloorNation, Inc. and any sale, transfer,
     gift, pledge, hypothecation or encumbrance of these shares is subject
     to this repurchase agreement and right of first refusal.

     13.  Changes in Capital Structure of Company. In the event of a capital
          ---------------------------------------
adjustment resulting from a stock dividend, stock split, reverse stock split,
reclassification, or recapitalization, or by reason of a merger, consolidation,
or other reorganization in which the Company is the surviving entity, the Board
shall make such adjustment, if any, as it may deem appropriate in the number and
kind of shares authorized by this Plan, or in the number, option price and kind
of shares covered by the Options granted. The Company shall give notice of any
adjustment to each Optionee, and such adjustment shall be deemed conclusive. The
foregoing adjustments and the manner of application of the foregoing provisions
shall be determined solely by the Board, and any such adjustment may provide for
the elimination of fractional shares.

     14.  Reorganization, Dissolution or Liquidation. In the event of the
          ------------------------------------------
dissolution or liquidation of the Company or any merger or combination involving
the Company in which the Company is not the surviving entity, or a transfer by
the Company of substantially all of its assets or property to another
corporation, or in the event any other corporation acquires control of the
Company in a reorganization within the meaning of Section 368(a) of the Code,
all outstanding Options shall thereupon terminate unless such Options are
assumed or substitutes therefor are issued (within the meaning of Section 425(a)
of the Code) by the surviving or acquiring corporation in any such merger,
combination or other reorganization. Notwithstanding the previous sentence, the
Company shall give at least fifteen (15) days written notice of such transaction
to holders of unexercised Options prior to the effective date of such merger,
combination, reorganization, dissolution or liquidation. The Board, in its sole
discretion, may, but is not obligated or required to, elect to accelerate the
vesting schedules of any of the Options previously issued upon such notice, and
the holders thereof may, in such event, exercise such Options prior to such
effective date, notwithstanding any time limitation previously placed on the
exercise of such Options. The Board also shall have the authority to condition
any such Option acceleration upon the subsequent termination of the Optionee's
employment within a specified period following the change in control. The
acceleration of Options in the event of such an acquisition of the Company or
other change in control may be seen as an anti-takeover provision and may have
the effect of discouraging a merger proposal, a take-over attempt, or other
effort to gain control of the Company.

     15.  Option to Repurchase.
          --------------------

          15.1 Company's Option. Stock purchased pursuant to this Plan shall be
               ----------------
subject to an option to repurchase by the Company only (i) in the event of the
Optionee's termination of employment for any reason, whether voluntary or
involuntary (except in the event of a sale or liquidation of the Company in an
acquisition), and including the event of the Optionee's death or termination due
to disability, or (ii) in the event of the removal for Cause of the Optionee
from the Board or from the board of directors of any Subsidiary or a successor
of any of them (each a "Terminating Event"). The Company must elect to exercise
the option to repurchase for a period within ninety (90) days after the
Terminating Event (the

                               FloorNation, Inc.
                            2000 Stock Option Plan
                                    Page 7
<PAGE>

exercise period as determined above is referred to as the "Exercise Period").
The Company's repurchase rights under this Section 15.1 shall apply to any Stock
acquired by the Optionee upon exercise of an Option granted under the Plan,
including any Stock acquired after termination of employment and any Stock or
other securities acquired by the Optionee pursuant to any capital adjustment
affecting the Stock acquired under this Plan. As used in this Article 15,
"Optionee" shall include the executor or administrator of the estate of the
Optionee or the person to whom the Stock shall pass by will or the laws of
descent and distribution.

          15.2 Procedure for Exercise. In order to exercise the option set forth
               ----------------------
in Section 15.1, the Company must notify the Optionee of its intent to exercise
its option by mailing a notice to the Optionee or the representative of the
Optionee's estate at the last address contained in the Company's records for
such Optionee. Such notice shall state that the Company intends to exercise its
option and shall state the purchase price per share which will be paid by the
Company and the date on which such option will be exercised, which date will not
be earlier than ten (10) days following the date of mailing said notice nor
later than six (6) months following the end of the Exercise Period (the
"Termination Date"). Such purchase price shall be the greater of (i) the fair
                                                      -------
market value of the Stock as of the Termination Date and (ii) the original
exercise price per share paid by the Optionee. The purchase price shall be
evidenced by a promissory note, bearing simple interest at the applicable
federal rate determined under Section 1274(d) of the Code, which note may be
paid in full at any time without penalty. Payments on the note shall be made in
three (3) equal annual installments of principal and interest commencing one (1)
year after the Termination Date.

          15.3 Delivery of Stock Certificates. Upon receipt of any notice
               ------------------------------
pursuant to Section 15.2 hereof from the Company, the Optionee shall deliver the
certificate(s) representing such shares of Stock to the Company within ten (10)
days from the date of such notice, along with a properly executed stock power
(with signature "medallion" guaranteed) authorizing transfer of these shares to
the Company, its successor or assignee.

     16.  Right of First Refusal.
          ----------------------

          16.1 Right of First Refusal for Offers. Until Stock held by an
               ---------------------------------
Optionee becomes eligible for sale on the NYSE, NASDAQ stock market, or other
stock exchange, the Company will have the irrevocable right, privilege, and
option to purchase any Stock purchased by the Optionee pursuant to an Option at
any time when the Optionee receives a bona fide, written offer ("Offer") to
purchase part or all of such Stock by any other Person ("Offeror"), which offer
is acceptable to Optionee, at the same price and upon the same terms as such
Offeror offers for the Stock or at fair market value of the Stock, whichever
price is lower. As used in this Article 16, "Optionee" shall include the
executor or administrator of the estate of the Optionee or the person to whom
the Stock shall pass by will or by the laws of descent and distribution.

          16.2 Procedure for Exercise. The Optionee, upon receipt of an Offer,
               ----------------------
will notify the Board of such Offer and provide the Company with a copy of the
Offer signed by the Offeror, and the Company will then be allowed thirty (30)
days from the date the Company receives such notice, not counting the day of
receiving the same, within which to notify the Optionee of the Company's
intention to exercise this option. The Company shall enter into an agreement in
writing with the Optionee within fifteen (15) days after giving notice to the
Optionee to effectuate the purchase. Payment shall be deemed to have been made
by the Company, its successor or assignee, upon the deposit of a check for the
full purchase price in the U.S. Mail, addressed to the Optionee at the
Optionee's last known address. No Optionee may sell Stock to any other party
until he has conformed to the requirements of this Article 16 and the Company
has failed or refused to exercise its option.

          16.3 Delivery of Stock Certificates. Upon Optionee's receipt of any
               ------------------------------
notice of intent to exercise from the Company pursuant to Section 16.2 hereof,
the Optionee shall deliver the certificate(s) representing such shares of Stock
to the Company within ten (10) days from the date of such notice, along with a
properly executed and guaranteed stock power authorizing the Company to transfer
such shares to the Company, its successor or assignee.

          16.4 Company's Option in Event of Involuntary Transfer. Until Stock
               -------------------------------------------------
held by an Optionee becomes eligible for sale on the NYSE, NASDAQ stock market,
or other stock exchange, if any

                               FloorNation, Inc.
                            2000 Stock Option Plan
                                    Page 8
<PAGE>

of the Optionee's Stock should become subject to an involuntary transfer, by
operation of law or otherwise, including, without limitation, divorce decree,
the event of Optionee's bankruptcy, levy or attachment, or the default of a bona
fide loan made to Optionee for which the Stock was pledged as collateral which
would otherwise be null and void pursuant to Section 10.1 above, then the
Company shall have the right, but not the obligation, to acquire any or all of
the Stock subject to such attempted involuntary transfer. The Company shall have
thirty (30) days after receipt of notice from the Optionee of the involuntary
transfer of the Company's intent to exercise its option to acquire any or all of
such Stock subject to the claim of involuntary transfer and shall specify the
number of shares of Stock to be acquired. If the Company exercises its option
under this Section 16.4, then the purchase price to be paid by the Company for
all of the Stock purchased by it upon exercise of the option shall be equal to
the lesser of (i) the fair market value of the Stock on the purchase date or
    ------
(ii) the original Option exercise price paid by Optionee. The price shall be
paid in full by cash or Company check on the purchase date.

     17.  Escrow. In order to enforce the restrictions imposed upon shares of
          ------
Stock under this Plan, the Board may require an Optionee to enter into an Escrow
Agreement with an escrow agent designated by the Company providing for the
certificate(s) representing shares of Stock issued pursuant to this Plan to
remain in the physical custody of the escrow agent until any or all of such
restrictions have terminated.

     18.  Application of Funds. All proceeds received by the Company from the
          --------------------
exercise of Options shall be paid into its treasury and shall be used for
general corporate purposes.

     19.  Optionee's Rights as a Holder of Shares.
          ---------------------------------------

          19.1 Prior to Exercise. No Optionee or his legal representatives,
               -----------------
legatees or distributees, as the case may be, will be, or will be deemed to be,
a holder of any share of Stock subject to an Option unless and until stock
certificates representing such shares of Stock are issued to such person or
persons pursuant to the terms of this Plan. Except as otherwise provided in
Article 13 of this Plan, no adjustment shall be made for dividends or other
rights for which the record date occurs prior to the date such stock certificate
is issued.

          19.2 Dividends After Exercise. Purchasers of Stock pursuant to this
               ------------------------
Plan will be entitled, after issuance of their stock certificates, to any
dividends that may be declared and paid on the shares of Stock registered in
their names. A stock certificate representing dividends declared and paid in
shares of Stock shall be issued and delivered to the purchaser after such shares
have been registered in the purchaser's name. Such stock certificate shall bear
the legends set forth above and shall be subject to the provisions of this Plan,
the Option Grant, and any escrow arrangement.

          19.3 Voting Rights. Purchasers of shares of the Stock shall be
               -------------
entitled to receive all notices of meetings and exercise all voting rights of a
Shareholder with respect to the shares of Stock purchased.

                               FloorNation, Inc.
                            2000 Stock Option Plan
                                    Page 9
<PAGE>

     20.  Amendment and Termination of the Plan.
          -------------------------------------

          20.1 Discretion of the Board. The Board may amend or terminate this
               -----------------------
Plan at any time; provided, however, that (i) any such amendment or termination
shall not adversely affect the rights of Optionees who were granted Options
prior thereto, (ii) any such amendment shall not result in a "modification" of
any Option within the meaning of Section 425(h) of the Code, and (iii) any
amendment which increases the total number of shares of Stock covered by this
Plan shall be subject to obtaining the approval of the Shareholders.

          20.2 Automatic Termination. This Plan shall terminate ten (10) years
               ---------------------
after its effective date unless the Board shall, in its discretion, elect to
terminate this Plan at an earlier date.  Options may be granted under this Plan
at any time and from time to time prior to termination of the Plan under this
Section 20.2. Any Option outstanding at the time the Plan is terminated under
this Section 20.2 shall remain in effect until the Option is exercised or
expires.

     21.  Miscellaneous.
          -------------

          21.1 Notices. All notices and elections by an Optionee shall be in
               -------
writing and delivered in person, by certified mail or nationally recognized
courier service to the President or Secretary of the Company at the principal
office of the Company.

          21.2 Effective Date of the Plan. The effective date of this Plan shall
               --------------------------
be the date on which the Board adopts the Plan.

          21.3 Employment. Nothing in the Plan or in any Option granted
               ----------
hereunder, or in any Option Grant relating thereto, shall confer upon any
employee of the Company or any Subsidiary or any successor thereof the right to
continue in the employ of the Company or any Subsidiary or any successor
thereof.

          21.4 Plan Binding. The Plan shall be binding upon the successors and
               ------------
assigns of the Company and the heirs, administrators, successors, and permitted
assigns of any Optionee.

          21.5 Gender. Whenever used herein, nouns in the singular shall include
               ------
the plural, and the masculine pronoun shall include the feminine gender.

          21.6 Headings. Captioned headings of paragraphs and subparagraphs
               --------
hereof are inserted for convenience and reference and constitute no part of the
Plan.

          21.7 Applicable Law. The validity, interpretation, and enforcement of
               --------------
this Plan are governed in all respects by the laws of the State of Florida and
the United States of America.

     22.  Indemnification. Each director of the Company ("Indemnified Party")
          ---------------
shall be indemnified by the Company against all costs and reasonable expenses,
including reasonable attorneys' fees, incurred by him in connection with any
action, suit, or proceeding, or in connection with any appeal therefrom, to
which he may be a party by reason of any action taken or failure to act under or
in connection with this Plan or any Option granted hereunder, and against all
amounts paid by such Indemnified Party in settlement thereof (provided such
settlement is approved in advance by legal counsel selected by the Company) or
paid by such Indemnified Party in satisfaction of a judgment in any such action,
suit, or proceeding; provided, however, that, within sixty (60) days after
institution of such action, suit, or proceeding, such Indemnified Party shall in
writing offer the Company the opportunity, at its own expense, to defend the
same; and provided, further, however, that anything contained in this Plan to
the contrary notwithstanding, there shall be no indemnification of an
Indemnified Party who is finally adjudged by a court of competent jurisdiction
to be guilty of, or liable for, willful misconduct, gross neglect of duty, or
criminal actions in connection with this Plan or an Option granted hereunder.
The foregoing rights of indemnification shall be in addition to any other rights
of indemnification that an Indemnified Party may have as a Director or officer
of the Company.

                         [Signature on Following Page]

                               FloorNation, Inc.
                            2000 Stock Option Plan
                                    Page 10
<PAGE>

                                        FLOORNATION, INC.

                                        By:  /s/ Mark Szporka
                                             -------------------------------
                                                  Mark Szporka, President

Effective Date of Plan: July 31, 2000.

                               FloorNation, Inc.
                            2000 Stock Option Plan
                                    Page 11

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