Document:

<PAGE>

                                                                     Exhibit 4.2

                                VOTING AGREEMENT

                  VOTING AGREEMENT (this "Voting Agreement"), dated as of May
15, 2000 by and among WIT CAPITAL GROUP, INC., a corporation organized under the
laws of the State of Delaware ("Parent"), and each other person set forth on the
signature pages hereof (each individually a "Securityholder," and collectively,
the "Securityholders").

                              W I T N E S S E T H:

                  WHEREAS, concurrently with the execution and delivery of this
Voting Agreement, an Agreement and Plan of Merger (the "Merger Agreement") is
being entered into by and among Parent, Wit SoundView Corporation, a corporation
organized under the laws of the State of Delaware ("Merger Sub"), and E*OFFERING
Corp., a California corporation (the "Company"), pursuant to which the Company
will be merged with and into Merger Sub (the "Merger") and the Securityholders
will receive shares of common stock of Parent; and

                  WHEREAS, as a condition to, and in consideration for Parent's
willingness to enter into the Merger Agreement and to consummate the
transactions contemplated thereby, Parent has required that the Securityholders
enter into this Voting Agreement.

                  NOW, THEREFORE, in consideration of the foregoing and the
mutual representations, warranties, covenants and agreements contained herein,
the parties hereto, intending to be legally bound, agree as follows:

                  1. DEFINITIONS. For purposes of this Voting Agreement:
<PAGE>

                           (1) "Beneficially Own" or "Beneficial ownership" with
respect to any securities shall mean having "beneficial ownership" of such
securities (as determined pursuant to Rule 13d-3 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), including pursuant to any
agreement, arrangement or understanding, whether or not in writing; provided
that such beneficial ownership shall be limited to securities (not including
those that the Person (as defined in the Exchange Act) has a right to acquire
within 60 days unless so acquired) over which such Person has sole or shared
voting power. Without duplicative counting of the same securities by the same
holder, securities Beneficially Owned by a Person shall include securities
Beneficially Owned by all other Persons with whom such Person would constitute a
"group" within the meaning of Section 13(d)(3) of the Exchange Act and over
which such Person has sole or shared voting power.

                           (2) "Acquisition Proposal" shall mean any proposal or
offer to acquire all or a substantial part of the business or properties of the
Company or any Company Subsidiary or any capital stock of the Company or any
Company Subsidiary whether by merger, tender offer, exchange offer, stock
purchase, purchase of assets or similar transactions involving the Company or
any Subsidiary, division or operating or principal business unit of the Company
(other than the proposal or offer in connection with the transactions
contemplated by the Merger Agreement).

                           (3) Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to them in the Merger Agreement.

                  2. AGREEMENTS

                           (1) VOTING AGREEMENT. Each Securityholder shall, at
any meeting of the Securityholders of the Company, however such meeting is
called and regardless of whether such meeting is a special or annual meeting of
the Securityholders of the Company, or in connection with any written consent of
the Securityholders of the Company, vote all shares of Company Capital Stock
Beneficially Owned by such Securityholder: (i) to approve the Merger, the Merger
Agreement and the transactions contemplated thereby and the taking of any
actions proposed by the Company's Board of Directors necessary or appropriate in
furtherance thereof; and; (ii) against any Acquisition Proposal; and (iii)
against any action, proposal or agreement that would delay, impede, frustrate,
prevent or nullify this Voting Agreement or the Merger Agreement, or result in a
breach in any material respect of any covenant, representation or warranty or
any other obligation or agreement of the Company under the Merger Agreement or
which would delay, impede, frustrate, prevent or nullify the fulfillment of any
of the conditions set forth in Article IX of the Merger Agreement or result in
any change in the composition of the Company Board of Directors without the
prior written consent of Parent; and (iv) in favor of the Company's Fifth
Amended and Restated Articles of Incorporation in substantially the form
attached as Exhibit A.

                                       2
<PAGE>

                           (2) NO INCONSISTENT ARRANGEMENTS. Each Securityholder
hereby covenants and agrees that it shall not (i) transfer (which term shall
include, without limitation, any sale, gift, pledge or other disposition), or
consent to any transfer of, any or all of such Securityholder's shares of
Company Capital Stock, or any interest therein in a manner inconsistent with the
continued validity of this Voting Agreement and the irrevocable proxy granted
pursuant hereto, unless each Person to which any such shares of Company Capital
Stock, or any interest therein, is or may be transferred shall have (A) executed
a counterpart of this Voting Agreement; and (B) agreed to hold such shares of
Capital Stock (or interest in such shares) subject to all terms and provisions
of this Voting Agreement; (ii) enter into any contract, option or other
agreement or understanding with respect to any transfer of any or all of such
shares of Company Capital Stock or any interest therein in a manner inconsistent
with the continued validity of this Voting Agreement and the irrevocable proxy
granted pursuant hereto, unless each Person to which any such shares of Company
Capital Stock, or any interest therein, is or may be transferred shall have (A)
executed a counterpart of this Voting Agreement; and (B) agreed to hold such
shares of company Capital Stock (or interest in such shares) subject to all
terms and provisions of this Voting Agreement, (iii) grant any proxy,
power-of-attorney or other authorization in or with respect to such shares of
Company Capital Stock in a manner inconsistent with the continued validity of
this Voting Agreement and the irrevocable proxy granted pursuant hereto, (iv)
deposit such shares of Company Capital Stock into a voting trust or enter into a
voting agreement or arrangement with respect to such shares of Company Capital
Stock in a manner inconsistent with the continued validity of this Voting
Agreement and the irrevocable proxy granted pursuant hereto, or (v) take any
other action that would in any way restrict, limit or interfere with the
performance of such Securityholders' obligations hereunder or the transactions
contemplated hereby or by the Merger Agreement; provided that this subsection
2(b)(v) does not apply to a Securityholder acting in his or her capacity as a
director of the Company.

                                       3
<PAGE>

                           (3) GRANT OF IRREVOCABLE PROXY; APPOINTMENT OF
PROXIES. (i) Each Securityholder hereby irrevocably grants to, and appoints,
Mark Loehr and Lloyd Feller, or either of them, in their respective capacities
as officers of Parent, and any individual who shall hereafter succeed to any
such office of Parent and each of them individually, such Securityholder's proxy
and attorney-in-fact (with full power of substitution), for and in the name,
place and stead of such Securityholder, to vote or give written consent with
respect to all of such Securityholder's shares of Company Capital Stock (A) in
favor of the Merger Agreement and the transactions contemplated by the Merger
Agreement, (B) against any Acquisition Proposal, and (C) in favor of the taking
by Company of all other actions proposed by the Company's Board of Directors
necessary or appropriate to give effect to the intent of this Section 2(e) (D)
against any action, proposal or agreement that would have the effect of
delaying, impeding, frustrating, preventing or nullifying this Voting Agreement
or the Merger Agreement, or result in a breach in any material respect of any
covenant, agreement, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which would delay,
impede, frustrate, prevent or nullify the fulfillment of any of the conditions
set forth in Article IX of the Merger Agreement or result in change in the
composition of the Company Board of Directors without the prior written consent
of Parent.

                                    (1) Each Securityholder represents that any
proxies heretofore given in respect of such Securityholder's shares of Company
Capital Stock are not irrevocable, and that any such proxies inconsistent with
paragraph (c) above are, to the extent of such inconsistency, hereby revoked.

                                    (2) Each Securityholder understands and
acknowledges that Parent is entering into the Merger Agreement in reliance upon
such Securityholder's execution and delivery of this Voting Agreement. Each
Securityholder hereby affirms that the irrevocable proxy set forth in this
Section 2(c) is given in connection with the execution of the Merger Agreement,
and that such irrevocable proxy is given to secure the performance of the duties
of such Securityholder under this Voting Agreement. Each Securityholder hereby
further affirms that the irrevocable proxy granted hereby is coupled with an
interest and may under no circumstances be revoked. Each Securityholder hereby
affirms that such irrevocable proxy shall survive such Securityholder's death,
incapacity or incompetence. Each Securityholder hereby ratifies and confirms all
that each such proxy may lawfully do or cause to be done by virtue hereof. Such
irrevocable proxy is executed and intended to be irrevocable in accordance with
Delaware Law and California Law.

                           (4) NO SOLICITATION. Each Securityholder hereby
agrees, in such Securityholder's capacity as a shareholder of the Company, that
neither such Securityholder nor any of such Securityholder's Affiliates shall
(and such Securityholder shall use such Securityholder's reasonable best efforts
to instruct its officers, directors and employees, if any, and its
representatives and agents not to, and to not permit any of them to), directly
or indirectly, knowingly encourage, solicit, participate in or initiate
discussions or negotiations with, or knowingly provide any non-public
information to, any Person (other than Parent, any of its Affiliates or
representatives) concerning any Acquisition Proposal.

                                       4
<PAGE>

                           (5) CONSENT TO LOCK-UP. E*TRADE Group, Inc., and
entities controlled by it, General Atlantic Partners, LLC, and entities
controlled by it, and Softbank Corp., and entities controlled by it, hereby
consent to the deposit of a portion of their shares of common stock of Parent to
be received in the Merger into the Special Escrow Fund pursuant to Section
4.2(d) of the Merger Agreement and the prohibition on transfer for a three-year
period from the Effective Time as set forth in the Merger Agreement.

                  3. REPRESENTATIONS AND WARRANTIES OF THE SECURITYHOLDER. Each
Securityholder, severally and not jointly, hereby represents and warrants to
Parent as follows, except as set forth in the Disclosure Schedule, if any,
prepared and signed by the such Securityholder and delivered to Parent prior to
the execution hereof:

                           (1) OWNERSHIP OF SECURITIES. Such Securityholder is
the record and Beneficial Owner of the number of shares of Company Common Stock,
Series A Preferred Stock, Series B Preferred Stock and or Series C Preferred
Stock set forth opposite such Securityholder's name on Schedule B attached (the
"Existing Securities"). On the date hereof, the Existing Securities (i) assuming
the accuracy of the representations and warranties made by the Company in
Section 6.3 of the Merger Agreement, constitute the percentage of the total
number of shares of Company Common Stock, Series A Preferred Stock, Series B
Preferred Stock and or Series C Preferred Stock issued and outstanding as of the
date hereof as set forth opposite such Securityholder's name on Schedule B
attached, and (ii) constitute all of the shares of Company Stock, Series A
Preferred Stock, Series B Preferred Stock and or Series C Preferred Stock held
of record or Beneficially Owned by such Securityholder. Each Securityholder has
sole voting power and sole power to issue instructions with respect to the
matters set forth in Section 2 hereof, sole power of disposition, sole power of
conversion, sole power (if any) to demand appraisal rights and sole power to
agree to all of the matters set forth in this Voting Agreement, in each case
with respect to all of the Existing Securities with no limitations,
qualifications or restrictions on such rights, subject to applicable securities
laws and the terms of this Voting Agreement.

                                       5
<PAGE>

                           (2) POWER; BINDING AGREEMENT. Such Securityholder has
the legal capacity, power and authority to enter into and perform all of such
Securityholder's obligations under this Voting Agreement. The execution,
delivery and performance of this Voting Agreement by such Securityholder will
not violate any other agreement to which such Securityholder is a party
including, without limitation, any voting agreement, proxy arrangement, pledge
agreement, shareholders agreement, transfer restriction agreement, sale
agreement or voting trust. This Voting Agreement has been duly and validly
executed and delivered by such Securityholder and constitutes a valid and
binding agreement of such Securityholder, enforceable against such
Securityholder in accordance with its terms. There is no beneficiary or holder
of a voting trust certificate or other interest of any trust of which such
Securityholder is a trustee whose consent is required for the execution and
delivery of this Voting Agreement or the consummation by such Securityholder of
the transactions contemplated hereby.

                  4. STOP TRANSFER. Each Securityholder shall not request that
the Company register the transfer (book-entry or otherwise) of any certificate
or uncertificated interest representing any of its, his or her Existing
Securities, unless such transfer is made in compliance with this Voting
Agreement. In the event of any conversion of any Series A Preferred Stock,
Series B Preferred Stock or Series C Preferred Stock included in any
Securityholder's Existing Securities into Company Common Stock, such Shares of
Company Common Stock shall also constitute Existing Securities of such
Securityholder. In the event any Securityholder exercises any options or other
rights to acquire Company Capital Stock, such Company Capital Stock shall be
added to such Securityholders' Existing Securities. In the event of any dividend
or distribution consisting of securities, or any change in the capital structure
of the Company by reason of any non-cash dividend, split-up, recapitalization,
combination, exchange of securities or the like, the term "Existing Securities"
shall refer to and include the Existing Securities as well as all such dividends
and distributions of securities and any securities into which or for which any
or all of the Existing Securities may be changed or exchanged.

                  5. TERMINATION. The representations, warranties, covenants,
agreements and proxy contained herein shall terminate upon the earlier to occur
of (i) the termination of the Merger Agreement in accordance with Article XI
thereof or (ii) the consummations of the transactions contemplated by the Merger
Agreement.

                                       6
<PAGE>

                  6. MISCELLANEOUS.

                           (1) SPECIFIC PERFORMANCE. Each Securityholder
recognizes and agrees that if for any reason any of the provisions of this
Voting Agreement are not performed by such Securityholder in accordance with
their specific terms or are otherwise breached, immediate and irreparable harm
or injury would be caused to Parent for which money damages would not be an
adequate remedy. Accordingly, the Securityholder agrees that, in addition to any
other available remedies, Parent shall be entitled to an injunction restraining
any violation or threatened violation of the provisions of this Voting Agreement
without the necessity of Parent posting a bond or other form of security. In the
event that any action should be brought in equity to enforce the provisions of
this Voting Agreement, such Securityholder will not allege, and the
Securityholder hereby waives the defense, that there is an adequate remedy at
law.

                           (2) SEVERABILITY. Any term or provision of this
Voting Agreement which is invalid or unenforceable in any jurisdiction shall, as
to that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Voting Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Voting Agreement in any
other jurisdiction. Without limiting the foregoing, with respect to any
provision of this Voting Agreement, if it is determined by a court of competent
jurisdiction to be excessive as to duration or scope, it is the parties
intention that such provision nevertheless be enforced to the fullest extent
which it may be enforced.

                           (3) ATTORNEYS' FEES. If any action at law or equity,
including an action for declaratory relief, is brought to enforce or interpret
any provision of this Voting Agreement, the prevailing party shall be entitled
to recover reasonable attorneys' fees and expenses from the other party, which
fees and expenses shall be in addition to any other relief which may be awarded.

                           (4) GOVERNING LAW. THIS VOTING AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

                           (5) ENTIRE AGREEMENT. This Voting Agreement
constitutes the entire agreement among the parties with respect to the subject
matter of this Voting Agreement and supersedes all other prior agreements and
understandings, both written and oral, among the parties or any of them with
respect to the subject matter hereof.

                                       7
<PAGE>

                           (6) CONSENT TO JURISDICTION, ETC. Each of the parties
hereto irrevocably and unconditionally submits to the non-exclusive jurisdiction
of the United States District Court for the Southern District of New York, the
Northern District of California or in any New York or California State Court
sitting in such district and having subject matter jurisdiction over such
matters, and each of the parties hereto consents and agrees to personal
jurisdiction and waives any objection as to the venue of such courts for
purposes of such action. The parties to this Voting Agreement agree to waive any
right to jury trial as to all disputes and any right to seek punitive or
consequential damages.

                           (7) NOTICES. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt by delivery in person, by
facsimile (which is confirmed), or by registered or certified mail (postage
prepaid, return receipt requested):

         If to a Securityholder, see Schedule A attached.

                           and

                           E*OFFERING Corp.
                           Steuart Street Tower, 4th Floor
                           One Market Street
                           San Francisco, California  94107
                           Facsimile:  (415) 618-6202
                           Attention:  Steven R. King, President

                           with copies to:

                           Wilson Sonsini Goodrich & Rosati
                           650 Page Mill Road
                           Palo Alto, CA  94304
                           Facsimile:  (650) 461-5380
                           Attention:  Alan K. Austin, Esq.

                           and

                           Brobeck, Phleger & Harrison LLP
                           Two Embarcadero Place
                           2200 Geng Road
                           Palo Alto, California  94303
                           Facsimile:  (650) 466-2885
                           Attention:  Curtis L. Mo, Esq.

                                       8
<PAGE>

                  If to Parent, to:

                           Wit Capital Group, Inc.
                           826 Broadway
                           New York, New York  10003
                           Facsimile: (212) 253-5289
                           Attention: Ronald Readmond
                                      Vice Chairman, Co-Chief Executive Officer
                                      and President

                           with copies to:

                           Wit Capital Group, Inc.
                           826 Broadway
                           New York, New York  10003
                           Facsimile: (212) 253-5289
                           Attention:  Lloyd H. Feller, Esq.
                                       Senior Vice-President, Co-General Counsel

                           and

                           Skadden, Arps, Slate, Meagher & Flom LLP
                           Four Times Square
                           New York, New York 10036
                           Facsimile:  (212) 735-2000
                           Attn:  Richard T. Prins, Esq.

                           and

                           Skadden, Arps, Slate, Meagher & Flom LLP
                           525 University Avenue, Suite 220
                           Palo Alto, California  94301
                           Facsimile:  (650) 470-4570
                           Attention:  Kenton J. King, Esq.

or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.

                                       9
<PAGE>

                           (8) DESCRIPTIVE HEADINGS; INTERPRETATION. The
descriptive headings herein are inserted for convenience of reference only and
are not intended to be part of or to affect the meaning or interpretation of
this Voting Agreement.

                           (9) ASSIGNMENT; BINDING AGREEMENT. This Voting
Agreement shall inure to the benefit of and be binding upon the parties hereto
and the respective heirs, legal representatives, estates, executors, successors
and permitted assigns of the parties and such persons. Nothing in this Voting
Agreement is intended or shall be construed to confer upon any entity or person
other than the parties hereto and their respective heirs, legal representatives,
estates, executors, successors and permitted assigns any right, remedy or claim
under or by reason of their Voting Agreement or any part hereof. Neither this
Voting Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any Securityholder without the prior written consent of Parent or
by Parent without the prior written consent of each Securityholder party hereto.

                           (10) AMENDMENT, MODIFICATION AND WAIVER. This Voting
Agreement may not be amended, modified or waived except by an instrument or
instruments in writing signed and delivered on behalf of the party hereto
against whom such amendment, modification or waiver is sought to be entered.

                           (11) COUNTERPARTS. This Voting Agreement may be
executed in two or more counterparts, each of which shall be deemed to be an
original, but all of which shall constitute one and the same agreement.

                                       10
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have hereunto executed
this Voting Agreement as of May 15, 2000.

                                          WIT CAPITAL GROUP, INC.

                                          By: /s/ RONALD READMOND
                                              ----------------------------------
                                          Name:  Ronald Readmond
                                          Title: Vice-Chairman, Co-Chief
                                                 Executive Officer and President

                                       11
<PAGE>

                                   SCHEDULE A

                            SECURITYHOLDER ADDRESSES

WALTER W. CRUTTENDEN
Cruttenden Partners LLC
4600 Campus Drive
Newport Beach, CA  92660
Facsimile:  949-399-9009

CRUTTENDEN PARTNERS LLC
4600 Campus Drive
Newport Beach, CA  92660
Facsimile:  949-399-9009
Attention:  Walter W. Cruttenden

FRANK CUTLER
4600 Campus Drive
Newport Beach, CA  92660
Facsimile:  949-399-5352

WILLIAM OWEN
4600 Campus Drive
Newport Beach, CA  92660
Facsimile:  949-399-5352

CHRISTOPHER CRUTTENDEN
4600 Campus Drive
Newport Beach, CA  92660
Facsimile:  949-399-5352

SANFORD ROBERTSON
One Maritime Plaza, Suite 2500
San Francisco, CA  94111
Facsimile:  415-986-1320
<PAGE>

GENERAL ATLANTIC PARTNERS, 61 LP
c/o General Atlantic Service Corporation
3 Pickwick Plaza
Greenwich, CT  06830
Facsimile:  203-622-8818

GAP COINVESTMENT PARTNERS II, LP
c/o General Atlantic Service Corporation
3 Pickwick Plaza
Greenwich, CT  06830
Facsimile:  203-622-8818
Attention:  Mr. William Ford

with a copy to:

Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY  10019-6064
Facsimile:  212-757-3990
Attention:  Douglas A. Cifu

SOFTBANK TECHNOLOGY VENTURES V LP
200 West Evelyn Street, Suite 200
Mountain View, CA  94304
Facsimile:  650-962-2020
Attention:  D. Rex Golding
            Helen Mackenzie

SOFTBANK TECHNOLOGY VENTURES ADVISORS FUND V LP
200 West Evelyn Street, Suite 200
Mountain View, CA  94304
Facsimile:  650-962-2020
Attention:  D. Rex Golding
            Helen Mackenzie

SOFTBANK TECHNOLOGY VENTURES ENTREPRENEURS FUND V LP
200 West Evelyn Street, Suite 200
Mountain View, CA  94304
Facsimile:  650-962-2020
<PAGE>

Attention:  D. Rex Golding
            Helen Mackenzie

with a copy to:

Cooley Godward LLP
3000 Sand Hill Road
Building 3, Suite 230
Menlo Park, CA 94025-7166
Facsimile:  650-854-2691
Attention:  Craig E. Dauchy, Esq.

E*TRADE GROUP, INC.
4500 Bohannon Drive
Menlo Park, CA 94025
Facsimile:  650-331-6803
Attention:  Thomas A. Bevilacqua
                   Rodi Guidero, Esq.

with a copy to:

Brobeck, Phleger & Harrison LLP
Two Embarcadero Place
2200 Geng Road
Palo Alto, CA 94303-0913
Facsimile:  650-496-2736
Attention:  Curtis L. Mo, Esq.
<PAGE>

                                   SCHEDULE B

                               EXISTING SECURITIES

<TABLE>
<CAPTION>
                                                        Series A       Series B       Series C       Percent of
              Holder                 Common Stock      Preferred       Preferred      Preferred      Outstanding
---------------------------------------------------- --------------- -------------- -------------- ----------------
<S>                                    <C>             <C>             <C>           <C>             <C>
Cruttenden, Walter W.                  1,001,000        200,000           --             --             5.27%
Cruttenden Partners LLC                 350,000            --             --             --             1.54%
Cutler, Frank                           320,000         600,000           --             --             4.04%
Owen, William                           214,000            --             --             --             0.94%
Cruttenden, Christopher                 123,500            --             --             --             0.54%
Robertson, Sanford                      250,000         200,000           --             --             1.97%
GAPCoinvestment Partners II LP            --               --             --          1,295,290         5.68%
General Atlantic Partners 61 LP           --               --             --          6,003,560        26.34%
Softbank Technology Ventures V LP         --               --             --          2,309,874        10.13%
Softbank Technology Ventures              --               --             --           61,529           0.27%
Advisors Fund V LP
Softbank Technology Ventures              --               --             --           41,502           0.18%
Entrepreneurs Fund V LP
E*TRADE Group, Inc.                       --               --          2,500,000      2,872,506        23.57%

         Total of above                2,258,500       1,000,000       2,500,000     12,584,261      18,342,761
</TABLE><PAGE>

                                                                 Exhibit 10.2(a)

                                 E*OFFERING CORP

                              1998 STOCK OPTION PLAN

     1.     PURPOSE OF THE PLAN. The purpose of this 1998 Stock Option Plan
("Plan") of E*Offering Corp., a California corporation ("Company"), is to
provide the Company with a means of attracting and retaining the services of
highly motivated and qualified directors and key personnel. The Plan is
intended to advance the interests of the Company by affording to directors
and key employees, upon whose skill, judgment initiative and efforts the
Company is largely dependent for the successful conduct of its business, an
opportunity for investment in the Company and the Incentives inherent in
stock ownership in the Company. In addition, the Plan contemplates the
Opportunity for investment in the Company by employees of companies that do
business with the Company. For purposes of this Plan, the term Company shall
include subsidiaries, if any, of the Company.

     2.     LEGAL COMPLIANCE. It is the intent of the Plan that all options
granted under it ("Options") shall be either "Incentive Stock Options"
("ISOs"), as such term is defined in Section 422 of the Internal Revenue Code
of 1986, as amended ("Code"), or non-qualified stock options ("NQO's);
provided, however, ISOs shall be granted only to employees of the Company. An
Option shall be identified as an ISO or an NQO in writing in the document or
documents evidencing the grant of the Option. All Options that are not so
identified as ISOs are intended to be NQOs. In addition, the Plan provides
for the grant of NQOs to employees of companies that do business with the
Company. It is the further intent of the Plan that it conform in all respects
with the requirements of Rule 16b-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended ("Rule
16b-3"). To the extent that any aspect of the Plan or its administration is
at any time viewed as inconsistent with the requirements of Rule 16b-3 or, in
connection with ISOs, the Code, that aspect shall be deemed to be modified,
deleted or otherwise changed as necessary to ensure continued compliance with
the Rule 16b-3 requirements.

    3.     ADMINISTRATION OF THE PLAN.

           3.1     PLAN COMMITTEE. The Plan shall be administered by a
committee ("Committee"). The members of the Committee shall be appointed form
time to time by the Board of Directors of the Company ("Board") and shall
consist of not less than two nor more than five persons, who shall be
directors of the Company.

           3.2     GRANTS OF OPTIONS BY THE COMMITTEE. In accordance with the
provisions of the Plan, the Committee, by resolution, shall select those
eligible persons to whom Options shall be granted ("Optionees") she determine
the time or times at which each Option shall be granted, whether as Option is
an ISO or an NQO and the number of shares to be subject to each Option; and
shall fix the time and manner in which the Option may be exercised, the
Option exercise price and the Option period. The committee shall determine
the form of option agreement to evidence the foregoing terms and conditions
of each Option, which need not be identical, in the form provided for in
Section 7. The option agreement may include such other

<PAGE>

provisions as the Committee may deem necessary or desirable consistent with
the Plan, the Code and Rule 16b-3.

           3.3     COMMITTEE PROCEDURES. The Committee from time to time may
adopt whatever rules and regulations for carrying out the purposes of the
Plan as it may deem proper and in the host interests of the Company. The
Committee shall keep minutes of its meetings and records of its actions. A
majority of the members of the Committee shall constitute a quorum for the
transaction of any business by the Committee. The Committee may act at any
time by an affirmative vote of a majority of those members voting. The vote
may be taken at a meeting (which may be conducted in person or by any
telecommunication medium) or by written consent of Committee members without
a meeting.

           3.4     FINALITY OF COMMITTEE ACTION. The Committee shall resolve
all questions arising under the Plan and option agreements entered into
pursuant to the Plan. Each determination, interpretation, or other action made
or taken by the Committee shall be final and conclusive and binding on all
persons, including, without limitation, the Company, its shareholders, the
Committee and each of the members of the Committee, and the directors,
officers and employees of the Company, including Optionees and their
respective successors in interest.

           3.5     NON-LIABILITY OF COMMITTEE MEMBERS. No Committee member
shall be liable for any action or determination made by him or her in good
faith with respect to the Plan or any Option granted under it.

     4.    BOARD POWER TO AMEND, SUSPEND, OR TERMINATE THE PLAN. The Board
may, from time to time, make whatever changes in or additions to the Plan as
it may deem proper and in the best interests of the Company and its
shareholders. The Board may also suspend or terminate the Plan at any time,
without notice, and in its sole discretion. Notwithstanding the foregoing, no
change, addition, suspension or termination by the Board shall (i) materially
impair any option previously granted under the Plan without the express
written consent of the optionee, or (ii) materially increase the number of
shares subject to the Plan, materially increase the benefits accruing to
optionees under the Plan, materially modify the requirements as to eligibility
to participate in the Plan or alter the method of determining the option
exercise price described in Section 8, without shareholder approval.

     5.     SHARES SUBJECT TO THE PLAN. For purposes of the Plan, the
Committee is authorized to grant Options for up to 5,000,000 shares of the
Company's common stock ("Common Stock"), or the number and kind of shares of
stock or other securities which, in accordance with Section 13, shall be
substituted for shares of Common Stock or to which shares of Common Stock
shall be adjusted. The Committee is authorized to grant Options under the
Plan with respect to those shares, any or all unsold shares subject to an
Option which for any reason expires or otherwise terminates (excluding
shares-returned to the Company in payment of the exercise price for
additional shares) may again be made subject to grant under the Plan.

      6.     OPTIONEES. Options shall be granted only to officers, directors
or key employees of the Company or employees of companies that do business
with the Company designated by the Committee from time to time as Optionees.
Any Optionee may hold more than one option to

                                     2
<PAGE>

purchase Common Stock, whether the option is an Option held pursuant to the
Plan or otherwise. An Optionee who is an employee of the Company ("Employee
Optionee") and who holds an Option must remain a continuous full or part-time
employee of the Company from the time of grant of the Option to him until the
time of its exercise, except as provided in Section 10.3.

      7.     GRANTS OF OPTIONS. The Committee shall have the sole discretion
to grant Options under the Plan and to determine whether any Option shall be
an ISO or NQO. The terms and Conditions of Options granted under the Plan may
differ from one another as the Committee, in its absolute discretion,
determines, as long as all Options granted under the Plan satisfy the
requirements of the Plan. Upon determination by the Committee that an Option
is to be granted to an Optionee, a written option agreement evidencing the
Option shall be given to the Optionee, specifying the number of shares
subject to the Option, the Option exercise price, whether the Option is an
ISO or an NQO and the other individual terms and conditions of the Option.
The option agreement may incorporate generally applicable provisions from the
Plan, a copy of which shall be provided to all Optionees at the time of their
initial grants under the Plan. The Option shall be deemed granted as of the
date specified in the grant resolution of the Committee, and the option
agreement shall be dated as of the date of the resolution. Notwithstanding
the foregoing, unless Committee consists solely of non-employee directors,
any Option granted to an executive officer, director of 10% beneficial owner
for purposes of Section 16 of the Securities Exchange Act of 1934, as amended
("Section 16 of the 1934 Act"), shall either be (a) conditioned upon the
Optionee's agreement not to sell the shares of Common Stock underlying the
Option for at least six months after the date of grant or (b) approved by the
entire Board or by the shareholders of the Company.

      8.      OPTION EXERCISE PRICE. The price per share to be paid by the
Optionee at the time an ISO is exercised shall not be less than 100% of the
Fair Market Value (as hereinafter defined) of one share of the Company's
Common Stock on the date on which the Option is granted. No ISO may be
granted under the Plan to any person who, at the time of grant, owns (within
the meaning of Section 424(d) of the Code) stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or of
any parent thereof, unless the exercise price of the ISO is at least equal to
110% of Fair Market Value on the date of grant. The price per share to be
paid by the Optionee at the time an NQO is exercised shall not be less than
85% of the Fair Market Value on the date on which the NQO is granted, as
determined by the Committee. For purposes of the Plan, the "Fair Market Value"
of a share of the Company's Common Stock as of a given date shall be: (i) the
closing price of a share of the Company's Common Stock on the principal
exchange on which shares of the Company's Common Stock are then trading, if
any, on the day immediately preceding that date, or, if shares were not
traded on that date, then on the next preceding trading day during which
sale occurred; or (ii) if the Company's Common Stock is not traded on an
exchange but is quoted on Nasdaq or a successor quotation system, the last
sale price for the Common Stock on the day immediately preceding that date
as reported by Nasdaq or the successor quotation system; or (iii) if the
Company's Common Stock is not publicly traded on an exchange and not quoted
on Nasdaq or a Successor quotation system the closing bid price for the
Common Stock on that date as determined in good faith by the Committee; or
(iv) if the Company's Common Stock is not publicly traded, the fair market
value established by the Committee acting in good faith. In addition, with
respect to any ISO, the Fair Market Value on any given date shall be
determined in a manner consistent with

                                      3

<PAGE>

any regulations issued by the Secretary of the Treasury for the purpose of
determining fair market value of securities subject to an ISO plan under the
Code.

      9.      CEILING OF ISO GRANTS. The aggregate Fair Market Value
(determined at the time of any ISO is granted) of the Common Stock with
respect to which an Optionee's ISOs, together With incentive stock options
granted under any other plan of the Company and any parent, are exercisable
for the first time by such Optionee during any calendar year shall not exceed
$100,000. If an Optionee holds incentive stock options that become first
exercisable (including as a result of acceleration of exercisability under the
Plan) in any one year for shares having a Fair Market Value at the date of
grant in excess of $100,000, then the most recently granted of the ISOs, to
the extent that they are exercisable for shares having an aggregate Fair
Market Value in excess of the limit, shall be deemed to be NQOs.

     10.      DURATION, EXERCISABILITY, AND TERMINATION OF OPTIONS.

              10.1     OPTION PERIOD. The option period shall be determined
by the Committee with respect to each Option granted. In no event, however,
-may the option period exceed ten years from the date on which the Option is
granted, or five years in the case of a grant of an ISO to an Optionee who is
a 10% shareholder at the date on which the Option is granted as described in
Section 8.

              10.2     EXERCISABILITY OF OPTIONS. Each Option shall be
exercisable in whole or in consecutive installments, cumulative or otherwise,
during its term as determined in the discretion of the Committee.

              10.3     TERMINATION OF OPTIONS DUE TO TERMINATION OF
EMPLOYMENT, DISABILITY, OR DEATH OF OPTIONEES; TERMINATION FOR "CAUSE", OR
RESIGNATION IN VIOLATION OF AN EMPLOYMENT AGREEMENT. All Options granted
under the Plan to any Employee Optionee shall terminate and may no longer be
exercised if the Employee Optionee ceases, at any time during the period
between the grant of the Option and its exercise to be an employee of the
Company, provided, however, that the Committee may alter the termination date
of the Option if the Optionee transfers to an affiliate of the Company.
Notwithstanding the foregoing, (i) if the Employee Optionee's employment with
the Company terminates for any reason (other than involuntary dismissal for
"cause" or voluntary resignation in violation of any agreement to remain in
the employ of the Company, including, without Limitation, any such agreement
pursuant to Section 15), he or she may, at any time before the expiration of
three months after termination or before expiration of the Option, whichever
first occurs, exercise the Option (to the extent that the Option was
exercisable by him or her on the date of the termination of his or her
employment); (ii) if the Employee Optionee's employment terminates due to
disability (as defined in Section 22(c)(3) of the Code and subject to such
proof of disability as the Committee may require), the Option may be
exercised by the Employee Optionee (or by his guardian(s), or conservator(s),
or other legal representative(s)) before the expiration of 12 months after
termination or before expiration of the Option, whichever first occurs ( to
the extent that the Option was exercisable by him or her on the date of the
termination of his or her employment) (iii) in the event of the death of the
Employee Optionee, an Option exercisable by him or her at the date of his or
her death shall be exercisable by his or her legal representative(s),
legatee(s), or heir(s), or by his or her beneficiary or beneficiaries so
designated by him or her, as the case may

                                      4

<PAGE>

be, within 12 months after his or her death or before the expiration of the
Option, whichever first occurs (to the extent that the Option was exercisable
by him or her on the date of his or her death); and (iv) if the Employee
Optionee's employment is terminated for "cause" or in violation of any
agreement to remain in the employ of the Company, including, without
limitation, any such agreement pursuant to Section 14, his or her Option shall
terminate immediately upon termination of employment (and the Option shall be
deemed to have been forfeited by the Optionee. For purposes of the Plan,
cause" may include, without limitation, any illegal or improper conduct which
(1) injures or impairs the reputation, goodwill, or business of the Company,
(2) involves the misappropriation of funds of the Company, or misuse of data,
information or documents acquired in connection with employment by the
Company; or (3) violates any other directive or policy promulgated by the
Company. A termination for "cause" may also include any resignation in
anticipation of discharge for "cause" or resignation accepted by the Company
in lieu of a formal discharge for "cause."

      11.     MANNER OF OPTION EXERCISE: RIGHTS AND OBLIGATIONS OF OPTIONEES.

             11.1     WRITTEN NOTICE OF EXERCISE. An Option may elect to
exercise an Option in whole or in part, from time to time, subject to the
terms and conditions contained in the Plan and in the agreement evidencing
the Option, by giving written notice of exercise to the Company at its
principal executive office.

             11.2     CASH PAYMENT FOR OPTIONED SHARES. If an Option is
exercised for cash, the exercise notice shall be accompanied by a cashier's
or personal check, or money order, made payable to the Company for the full
exercise price of the shares purchased.

             11.3     STOCK SWAP FEATURE. At the time of the Option exercise,
and subject to the Discretion of the Committee to accept payment in cash
only, the Optionee may determine whether the total purchase price of the
shares to be purchased shall be paid solely in cash or by transfer from the
Optionee to the Company of previously acquired shares of Common Stock or by a
combination thereof If the Optionee elects to pay the total purchase price in
whole or in part with previously acquired shares of Common Stock, the value
of the shares shall be equal to their Fair Market Value on the date of
exercise, determine by the Committee in the same manner used for determining
Fair Market Value at the time of grant for purposes of Section 8.

             11.4     INVESTMENT REPRESENTATION FOR NON-REGISTERED SHARES AND
LEGALITY OF ISSUANCE. The receipt of shares of Common Stock upon the exercise
of an Option shall be conditioned upon the Optionee (or any other person who
exercises the Option on his or her behalf a i permitted by Section 10.3)
providing to the Committee a written representation that, at the time of such
exercise, it is the intent of that person(s) to acquire the shares for
investment only and not with a view toward distribution. The certificate for
unregistered shares issued for investment shall be restricted by the Company
as to transfer unless the Company receives an opinion of counsel satisfactory
to the Company to the effect that the restriction is not necessary under then
pertaining law. The providing of the representation and the restrictions on
transfer shall not, however, be required upon any person's receipt of shares
of Common Stock under the Plan if, at the time of grant of the Option
relating to receipt or upon receipt, whichever is the appropriate measure
under applicable federal or state accurities laws, the shares subject to the
Option shall be (i) covered by an effective and current registration
statement under the Securities

                                      5

<PAGE>

Act of 1933, as amended, and (ii) either qualified or exempt from
qualification under applicable state securities laws. The Company shall,
however, under no circumstances be required to sell or issue any shares under
the Plan it in the opinion of the Committee, (i) the issuance of the shares
would constitute a violation by the Optionee or the Company of any applicable
law or regulation of any governmental authority or (ii) the consent of
approval of any governmental body is necessary or desirable as a condition
of, or in connection with, the issuance of the shares.

           11.5     SHAREHOLDER RIGHTS OF OPTIONEE. Upon exercise, the
Optionee (or any other person who exercises the Option on his or her behalf
as permitted by Section 10.3) shall be recorded on the books of the Company
as the owner of the shares, and the Company shall deliver to the record owner
one or more duly issued stock certificates evidencing ownership. No person
shall have any rights as a shareholder with respect to any shares of Common
Stock covered by an Option granted pursuant to the Plan until that person has
become the holder of record of the shares. Except as provided in Section 13,
no adjustments shall be made for cash dividends or other distributions or
other rights as to which there is a record date preceding the date that
person becomes the holder of record of the shares.

           11.6      HOLDING PERIODS FOR TAX PURPOSES. The Plan does not
provide that an Optionee must hold shares of Common Stock acquired under the
Plan for any minimum period of time. Optionees are urged to consult with
their own tax advisors with respect to the tax consequences o them of their
individual participation in the Plan.

     12.  SUCCESSIVE GRANTS. Successive grants of Options maybe to any
Optionee under the Plan.

     13.  ADJUSTMENTS.

               (a)     If the outstanding Common Stock is hereafter increased
or decreased, or changed into or exchanged for a different number or kind of
shares or other securities of the Company or of another corporation, by
reason of a recapitalization, reclassification, reorganization, merger,
consolidation, share exchange or other business combination in which the
Company is the surviving parent corporation, stock split-up, combination of
shares or dividend or other distribution payable in capital stock or rights
to acquire capital stock, appropriate adjustment shall be made by the
Committee in the number and kind of shares for which options may be granted
under the Plan. In addition, the Committee shall make appropriate adjustment
in the number and kind of shares as to which outstanding and unexercised
options shall be exercisable, to the end that the proportionate interest of
the holder of the option shall, to the extent practicable, be maintained as
before the occurrence of the event. The adjustment in outstanding options
shall be made without change in the total price applicable to the unexercised
portion of the option but with a corresponding adjustment iii the exercise
price per share.

               (b)     In the event of the dissolution of liquidation of the
Company, any outstanding and unexercised options shall terminate as of a
future date to be fixed by the Committee.

               (c)     In the event of a Reorganization (as hereinafter
defined) then

                                  6

<PAGE>

                    (i)     If there is no plan or agreement with respect to
the Reorganization ("Reorganization Agreement"), or if the Reorganization
Agreement does not specifically provide for the adjustment, change,
conversion or exchange of the outstanding and unexercised options shall
terminate as of a future date to be fixed by the Committee; or

                    (ii)    If there is a Reorganization Agreement, and the
Reorganization Agreement specifically provides for the adjustment, change,
conversion or exchange of the outstanding and unexercised options for cash or
other property or securities of another corporation then the Committee shall
adjust the shares under the outstanding and unexercised options, and shall
adjust the shares remaining under the Plan which are then available for the
issuance of options under the Plan if the Reorganization Agreement makes
specific provisions therefor, in a manner not inconsistent with the
provisions of the Reorganization Agreement for the adjustment, change,
conversion or exchange if the options and shares.

               (d)   The term "Reorganization" as used in this Section 13
means any reorganization, merger, consolidation, share exchange or other
business combination pursuant to which the Company is not the surviving
parent corporation after the effective date of the Reorganization, or any
sale or lease of all or substantially all of the assets of the Company.
Nothing herein shall require the Company to adopt a Reorganization Agreement
or to make provision for the adjustment, change, Conversion, or exchange of
any options or the shares subject thereto, in any Reorganization Agreement
which it does adopt.

               (e)    The Committee shall provide to each optionee then
holding an  outstanding and unexercised option not less than 30 calendar
days' advanced written notice of any date fixed by the Committee pursuant to
this Section 13 and of the terms of any Reorganization Agreement providing
for the adjustment, change, conversion, or exchange of outstanding and
unexercised options. Except as the Committee may otherwise provide, each
optionee shall have the right during that period to exercise his or her
option only to the extent subject that the option was exercisable on the date
the notice was provided to the optionee.

            Any adjustments to any outstanding ISO pursuant to this Section
13, if made by reason of a transaction described in Section 424(a) of the
Code, shall be made so as to conform to the requirements of that Section and
the regulations thereunder. If any other transaction described in Section
424(a) of the Code affects the Common Stock subject to any unexercised ISO
theretofore granted under the Plan ("old option"), the Board of directors of
the Company or of any surviving or acquiring corporation may take such action
as it deems appropriate, in conformity with the requirements of that Code
Section and the regulations thereunder, to substitute a new option for the
old option, in order to make the new option, as nearly as may be practicable,
equivalent to the old option,or to assume the old option.

                (f)     No modification, extension, renewal, or other change
in any option granted under the Plan may be made, after the grant of the
option, without the optionee's consent, unless it is permitted by the
provisions of the Plan and the option agreement. In the case of an ISO,
optionees are hereby advised that certain changes may disqualify the ISO from
being

                                    7

<PAGE>

considered as such under Section 422 of the Code, or constitute a
modification, extension, or renewal of the ISO under Section 424(h) of the
Code.

                (g)      All adjustments and determinations under this
Section 13 shall be made by the Committee in good faith in its sole
discretion.

     14.     CONTINUED EMPLOYMENT. As determined in the sole discretion of
the Committee at the time of grant and if so stated in a writing signed by
the Company, each Option may have as a condition the requirement of an
Employee Optionee to remain in the employ of the Company, or of its
affiliates, and to render to it We or her exclusive service, at such
compensation as may be Determined from time to time by it, for a period not
to exceed the term of the Option except for earlier termination of employment
by or with the express written consent of the Company or on account of
disability or death. The failure of any Employee Optionee to abide by this
agreement as to any Option under the Plan may result in the termination of
all of his or her then outstanding Options granted pursuant to the Plan.
Neither the creation of the Plan nor the granting of Option(s) under it shall
be deemed to create a right in an Employee Optionee to continued employment
with the Company, and each Employee Optionee shall be and shall remain
subject to discharge by the Company as though the Plan had never come into in
existence. Except as specifically provided by the Committee in any
particular case, the loss of existing or potential profit in options granted
under this Plan shall not constitute an element of damages in the event of
termination of the employment of an employee even if the termination is in
violation of an obligation of the Company to the employee by contract or
otherwise.

     15.     TAX WITHHOLDING. The exercise of any Option granted under the
Plan is subject to the condition that if at any time the Company determines,
in its discretion, that the satisfaction of withholding tax or other
withholding liabilities under any federal, state or local law is necessary or
desirable as a condition of, or in connection with, the exercise or a later
lapsing of time or restrictions on or disposition of the shares of Common
Stock received upon the exercise, then in that event, the exercise of the
Option shall not be effective unless the withholding has been effected or
obtained in a manner acceptable to the Company. When an Optionee is required
to pay to the Company an amount required to be withheld under applicable
income tax laws in connection with the exercise of any Option, the Optionee
may, subject to the approval of the Committee, which approval shall not have
been disapproved at any time after the election is made, satisfy the
obligation, in whole or in part, by electing to have the Company withhold
shares of Common Stock having a value equal to the amount required to be
withheld. The value of the Common Stock withheld pursuant to the election
shall be determined by the Committee, in accordance with the criteria set
forth in Section 9, with reference to the date the amount of tax to be
withheld is determined. The Optionee shall pay to the Company in cash any
amount required to be withheld that would otherwise result in the withholding
of a fractional share. The election by an Optionee who is an officer of the
Company within the meaning of Section 16 of the 1934 Act, to be effective,
must meet all of the requirements of Section 16 of the 1934 Act.

     16.      TERM OF PLAN.

              16.1     EFFECTIVE DATE. Subject to shareholder approval, the
Plan shall become effective as of November 13, 1998.

                                  8
<PAGE>

              16.2     TERMINATION DATE. Except as to options granted and
outstanding under the Plan prior to that time, the Plan shall terminate at
midnight on November 13, 2008, and no Option shall be granted after that
time. Options then outstanding may continue to be exercised in accordance
with their terms. The Plan may be suspended or terminated at any earlier time
by the Board within the limitations set forth in Section 4.

     17.     NON-EXCLUSIVITY OF THE PLAN.   Nothing contained in the Plan is
intended to amend, modify, or rescind any previously approved compensation
plans, programs or options entered into by the Company. This Plan shall be
constructed to be in addition to and independent of any and all other
arrangements. Neither the adoption of the Plan by the Board nor the
submission of the Plan to the shareholders of the Company for approval shall
be construed as creating any limitations on the power or authority of the
Board to adopt, with or without shareholder approval, such additional or
other compensation arrangements as the Board may from time to time deem
desirable.

     18.     GOVERNING LAW. The Plan and all rights and obligations under it
shall be construed and enforced in accordance with the laws of the State of
California.

     19.     INFORMATION TO OPTIONEES. Optionees under the Plan who do not
otherwise have access to financial statements of the Company will receive the
Company's financial statements at least annually.

                                        9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00012-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00012-of-00352.parquet"}]]