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                                                                     EXHIBIT 4.1

                                   EXHIBIT 4.1

                          PICTUREWORKS TECHNOLOGY, INC.

                             1994 STOCK OPTION PLAN

         1. Purpose. This 1994 Stock Option Plan (the "Plan") is intended to
provide incentives (a) to the employees of PictureWorks Technology, Inc. (the
"Company"), its parent (if any), and any present or future subsidiaries of the
Company (collectively, "Related Corporations") by providing them with
opportunities to purchase stock in the Company pursuant to options which qualify
as "incentive stock options" under Section 422A(b) of the Internal Revenue Code
of 1986, as amended (the "Code"), granted hereunder ("ISO" or "ISOs"); and (b)
to directors, employees and consultants of the Company and Related Corporations
by providing them with opportunities to purchase stock in the Company pursuant
to options granted hereunder which do not qualify as ISOs ("Non-Qualified
Option") or "Non-Qualified Options"). Both ISOs and Non-Qualified Options are
referred to hereafter individually as an "Option" and collectively as "Options."
As used herein, the terms "parent" and "subsidiary" mean "parent corporation"
and "subsidiary corporation" as those terms are defined in Section 425 of the
Code.

         2. Administration of the Plan.

                  (a) The Plan shall be administered by the Board of Directors
of the Company (the "Board"). The Board may appoint a Stock Option Plan
Committee (the "Committee") of three (3) or more of its members to administer
this Plan. No member of the Committee, while a member, shall be eligible to
participate in this Plan. Subject to ratification of the grant of each Option by
the Board (if so required by applicable state law), and subject to the terms of
the Plan, the Committee, if so appointed, shall have the authority to (i)
determine the employees of the Company and Related Corporations (from among the
class of employees eligible under paragraph 3 to receive ISOs) to whom ISOs may
be granted, and to determine (from among the class of individuals and entities
eligible under paragraph 3 to received Non-Qualified Options) to whom
Non-Options may be granted; (ii) determine the time or times at which Options
may be granted; (iii) determine the option price of shares subject to each
Option, which price with respect to ISOs shall not be less than the minimum
specified in paragraph 6; (iv) determine whether each Option granted shall be an
ISO or a Non-Qualified Option; (v) determine (subject to paragraph 7) the time
or times when each Option shall become exercisable and the duration of the
exercise period; (vi) determine whether restrictions such as repurchase options
are to be imposed on shares subject to Options, and the nature of such
restrictions if any, and (vii) interpret the Plan and prescribe and rescind
rules and regulations relating to it. If the Committee determines to issue a
Non-Qualified Option, it shall take whatever actions it deems necessary, under
Section 422A of the Code and the regulations promulgated thereunder, to ensure
that such Option is not treated as an ISO. The interpretation and construction
by the Committee of any provisions of the Plan or of any Option granted under it
shall be final unless otherwise determined by the Board. The Committee may from
time to time adopt such rules and regulations for carrying out the Plan as it
may deem best. No member of the Board or the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any
Option granted under it.

                  (b) The Committee may select one of its members as its
chairman, and shall hold meetings at such time and place as it may determine.
Acts by a majority of the Committee, or acts reduced to or approved in writing
by a majority of the members of the Committee, shall be the valid acts of the
Committee. All references in this Plan to the Committee shall mean the Board if
no Committee has been appointed. From time to time the Board may increase the
size of the Committee and appoint additional members thereof, remove members
(with or without cause) and appoint new members in substitution therefor, fill
vacancies however caused, or remove all members of the Committee and thereafter
directly administer the Plan.

                  (c) Notwithstanding the provisions of paragraph 2(a), no
Option shall be granted to any person who is, at the time of the proposed grant,
a member of the Board, unless such grant has been approved by a majority vote of
the disinterested members of the Board. All grants of Options to members of the
Board, shall in all other respects be made in accordance with the provisions of
this Plan applicable to other eligible persons. Members of the Board who are
either (i)

                                 Exhibit 4.1.1
<PAGE>   2

eligible for Options pursuant to the Plan or (ii) have been granted Options, may
vote on any matters affecting the administration of the Plan or the grant of any
Options pursuant to the Plan, except that no such member shall act upon the
granting to himself of Options, but any such member may be counted in
determining the existence of a quorum at any meeting of the Board during which
action is taken with respect to the granting to him of Options.

                  (d) Notwithstanding any other provision of this paragraph 2,
in the event the Company registers any class of any equity security pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), any registration until six (6) months after the termination of such
registration shall be made only by the Board; provided, however, that if a
majority of the Board is eligible to participate in the Plan or in any other
stock option or other stock plan of the Company or any of its affiliates, or has
been so eligible at any time within the preceding year, any grant to directors,
of Options must be made by, or only in accordance with recommendation of, a
Committee consisting of three (3), or more persons, who may but need not be
directors or employees of the Company , appointed by the Board but having full
authority to act in the matter, none of whom is eligible to participate in this
Plan or any other stock option or other stock plan of the Company, or any of its
affiliates, or has been eligible at any time within the preceding year. The
requirements imposed by the preceding sentence shall also apply with respect to
grants to officers who are not also directors. Once appointed, the Committee
shall continue to serve until otherwise directed by the Board.

         3. Eligible Employees and Others. ISOs may be granted to any employee
of the Company or any Related Corporation. Those directors of the Company who
are not employees may not be granted ISOs under the Plan. Non-Qualified Options
may be granted to any director (whether or not an employee), employee or
consultant of the Company or any Related Corporation. In determining the persons
to whom ISOs shall be granted, the Committee shall take into consideration the
duties of the respective person, their present and potential contributions to
the success of the Company and such other factors as the Committee shall deem
relevant in determining whether to grant an ISO or a Non-Qualified Option
Granting of any Option to any individual or entity shall neither entitle that
individual or entity to, nor disqualify him from, participation in any other
grant or Options.

         4. Stock. The stock subject to Options shall be authorized but unissued
shares of Common Stock of the Company, no par value (the "Common Stock"), or
shares of Common Stock reacquired by the Company in any manner. The aggregate
number of shares which may be issued pursuant to the Plan is two thousand
(2,000), subject to adjustment as provided in paragraph 13. Any such shares may
be issued as ISOs or Non-Qualified Options so long as the number of shares so
issued does not exceed such number, as adjusted. If any Option granted under the
Plan shall expire or terminate for any reason without having been exercised in
full or shall cease for any reason to be exercisable in whole or in part, the
unpurchased shares subject thereto shall again be available for grants of
Options under the Plan.

         5. Granting of Options. Options may be granted under the Plan at any
time after September 1, 1994 and prior to August 31, 2004. Any grants of Options
shall be subject to the receipt, within twelve (12) months of August 1, 1995, of
the approval of Stockholders as provided in paragraph 15. The date of grant of
an Option under the Plan will be the date specified by the Committee at the time
it grants the Option. The Committee shall have the right, with the consent of
the optionee, to convert an ISO granted under the Plan to a Non-Qualified Option
pursuant to paragraph 16.

         6. Minimum Option Price; ISO Limitations.

                  (a) The price per share specified in the Agreement relating to
each Non-Qualified Option granted under the Plan shall in no event be less than
the lesser of (i) the book value per share of Common Stock as of the end of the
fiscal year of the Company immediately preceding the date of such grant, or (ii)
fifty (50%) percent of the Fair Market Value per share of Common Stock on the
date of such grant.

                  (b) The price per share specified in the Agreement relating to
each ISO granted under the Plan shall not be less than the Fair Market Value per
share of Common Stock on the date of such grant. In the case of an ISO to be
granted to any employee owning stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or any
Related Corporation, the price per share specified in the agreement relating to
such ISO shall not be less than one hundred and ten percent (110%) of the Fair
Market Value of Common Stock on the date of grant.

                                 Exhibit 4.1.2
<PAGE>   3

                  (c) The aggregate Fair Market Value of the shares of Common
Stock with respect to which Options granted under this Plan and all other option
plans of the Company and any Subsidiary become exercisable for the first time by
an Optionee during any calendar year shall not exceed one hundred thousand
($100,000) dollars.

         7. Option Duration. Subject to earlier termination as provided in
paragraphs 9 and 10, an Option shall expire on the date specified by the
Committee, but not more than (i) ten (10) years and one (1) day from the date of
grant in the case of Non-Qualified Options, (ii) ten (10) years from the date of
grant in the case of ISOs generally, and (iii) five (5) years from the date of
grant in the case of ISOs granted to employee owning stock possessing more than
ten (10) percent of the total combined voting power of all classes of stock of
the Company or any Related Corporation. Subject to earlier termination as
provided in paragraphs 9 and 10, the Term of each ISO shall be the Term set
forth in the original instrument granting such ISO, except with respect to any
part of such ISO that is converted into a Non-Qualified Option pursuant to
paragraph 16.

         8. Exercise of Option. Subject to the provisions of paragraphs 9
through 12, each Option granted under the Plan shall be exercisable as follows:

                  (a) The Option shall either be fully exercisable on the date
of grant or shall become exercisable thereafter in such installments as the
Committee may specify.

                  (b) Once an installment becomes exercisable it shall remain
until expiration or termination of the Option, unless otherwise specified by the
Committee.

                  (c) Each Option or installment may be exercised at any time,
or from time to time, in whole or in part, and upon the terms and conditions
that the Committee may determine as reflected in the Stock Option Agreement, for
up to the total number of shares with respect to which it is then exercisable.
An option may be exercised as to any, or all full shares, of Common Stock as to
which the option has become exercisable, by giving written notice of such
exercise to the Committee.

                  (d) The Committee shall have the right to accelerate the date
of exercise of any installment of any Option; provided that the Committee shall
not accelerate the exercise date of any installment of any Option granted to any
employee as an ISO (and not previously converted into a Non-Qualified Option
pursuant to paragraph 16) if such acceleration would violate the annual vesting
limitation contained in Section 442A(b)(7) of the Code, as amended, which
provides generally that the aggregate Fair Market Value (determined at the time
the option is granted) of the stock with respect to which ISOs granted to any
employee are exercisable for the first time by such employee during any calendar
year (under all plans of the Company and any Related Corporation) shall not
exceed $100,000.00.

         9. Termination of Employment. If an ISO optionee ceases to be employed
by the Company and all Related Corporations other than by reason of death or
disability as defined in paragraph 10, no further installments of his ISOs shall
become exercisable, and his ISOs shall terminate after the passage of sixty (60)
days from the date of said termination, but in no event later than on their
specified expiration dates, except to the extent that such ISOs (or unexercised
installments thereof) have been converted into Non-Qualified Options pursuant to
paragraph 16. A leave of absence with the written approval of the Committee
shall not be considered an interruption of employment under the Plan, provided
that such written approval contractually obligates the Company, or any Related
Corporation to continue the employment of the employee after the approved period
of absence. Employment shall also be considered as continuing uninterrupted
during any other bona fide leave of absence (such as those attributable to
illness, military obligations or governmental service) provided that the period
of such leave does not exceed ninety (90) days or, if longer, any period during
which such employee's right to reemployment is guaranteed by statutes. ISOs
granted under the Plan shall not be affected by any change of employment within
or among the Company and Related Corporations, so long as the employee continues
to be an employee of the Company or any Related Corporation. Nothing in the Plan
shall be deemed to give any grantee of any Option the right to be retained in
employment or other services by the Company or any Related Corporation for any
period of time. In granting any Non-Qualified Option, the Committee may specify
that such Non-Qualified Option shall be subject to the restrictions set forth
herein with respect to ISOs or to such other termination or cancellation
provisions as the Committee may determine.

                                 Exhibit 4.1.3
<PAGE>   4

         10. Death; Disability; Dissolution. If an ISO optionee shall die while
employed by the Company, or any Related Corporation, any ISO of his may be
exercised, to the extent of the number of shares with respect to which he could
have exercised it on the date of his death, by his estate, personal
representative or beneficiary who has acquired the ISO by will or by the laws of
the descent and distribution, at any time prior to the earlier of the ISO's
specified expiration date or one hundred, eighty (180) days from the date of the
optionee's death.

         If an ISO optionee ceases to be employed by the Company, or any Related
Corporation, by reason of his disability, he shall have the right to exercise
any ISO held by him on the date of termination of employment, to the extent of
the number of shares with respect to which he could have exercised it on that
date, at any time prior to the earlier of the ISO's specified expiration date or
one hundred, eighty (180) days from the date of the termination of the
optionee's employment. For the purposes of the Plan, the term "disability" shall
mean permanent and total disability as defined in Section 22(e)(3) of the Code
or any successor statute.

         In granting any Non-Qualified Option, the Committee may specify that
such Non-Qualified Option shall be subject to the restrictions set forth herein
with respect to ISOs, or to such other termination or cancellation provisions as
the Committee may determine.

         11. Non-Transferability of Options. No Option shall be assignable or
transferable by the optionee except by will or by the laws of descent and
distribution, and during the lifetime of the optionee shall be exercisable only
by him.

         12. Terms and Conditions of Options. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraph 6 through 11 hereof and may contain such other
provisions as the Committee deems advisable which are not inconsistent with the
Plan, including restrictions applicable to shares of Common Stock issuable upon
exercise of Options. The Committee may from time to time confer authority and
responsibility on one or more of its own members and/or one or more officers of
the Company to execute and deliver such instruments. The proper officers of the
Company are authorized and directed to take any and all action necessary or
advisable from time to time to carry out the terms of such instruments.

         13. Adjustments. Upon the happening of any of the following described
events, an optionee's rights with respect to Options granted to him hereunder
shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the recipient and the Company relating
to such Option.

                  (a) If there is any change in the number of Shares of Common
Stock through the declaration of stock dividends, or through recapitalization
resulting in stock splits, or combinations or exchanges of such shares, the
number of shares of Common Stock available for Options, the number of such
shares covered by outstanding Options and the price per share of such Options
shall be proportionately adjusted by the Committee to reflect any increase or
decrease in the number of issued shares of Common Stock; provided, however, that
any fractional shares resulting from such adjustment shall be eliminated.

                  (b) In the event of the proposed dissolution or liquidation of
the Company, in the event of any corporate separation or division, including,
but not limited to, split-up, split-off or spin-off, or in the event of a merger
or consolidation of the Company with another corporation, the Committee may
provide that the holder of each Option then exercisable shall have the right to
exercise such Option (at its then Option Price) solely for the kind and amount
of shares of stock and other securities, property, cash or any combination
thereof receivable upon such dissolution, liquidation, or corporate separation
or common stock for which such Option might have been exercised immediately
prior to such dissolution, liquidation, or corporate separation or division, or
merger or consolidation by a holder of the number of shares of Common Stock for
which such Option might have been exercised immediately prior to such
dissolution, liquidation or corporate separation or division, or merger or
consolidation; or the Committee may provide, in the alternative, that each
Option granted under the Plan shall terminate as of a date to be fixed by the
Committee; provided, however, that not less than thirty (30) days' written
notice of the date so fixed shall be given to each Optionee, who shall have the
right, during the period of thirty (30) days preceding such termination, to
exercise the Options as to all or any part of the shares of Common Stock covered
thereby, including shares as to which such Options would not otherwise be
exercisable; provided, further, that failure to provide such notice

                                 Exhibit 4.1.4
<PAGE>   5

shall not invalidate or affect the action with respect to which such notice was
required.

                  (c) If while unexercised Options remain outstanding under the
Plan, the stockholders of the Company approve a definitive agreement to merge
or consolidate the Company with or into another corporation, or to sell or
otherwise dispose of all or substantially all of its assets, or adopt a plan of
liquidation (each, a "Disposition Transaction"), then the Committee may (a) make
an appropriate adjustment to the number and class of shares available for
options, and to the amount and kind of shares or other securities or property
(including cash) receivable upon exercise of any outstanding options after the
effective date of such transaction, and the price thereof, or, in lieu of such
adjustment, provide for the cancellation of all options outstanding at our prior
to the effective date of such transaction; (b) provide that exercisability of
all Options shall be accelerated, whether or not otherwise exercisable; or (c)
in its discretion, permit Optionees to surrender outstanding options for
cancellation; provided, however, that if the stockholders approve such
Disposition Transaction within five (5) years of the date of adoption of this
Plan and before the Company is taken public, the Committee shall provide for the
alternative in (b) above. Upon any cancellation of an outstanding Option
pursuant to this Section, the Optionee shall be entitled to receive, in exchange
therefor, a cash payment under any such Option in an amount per share determined
by the Committee in its sole discretion, but not less than the difference
between the per share exercise price of such Option and the Fair Market Value of
a share of the Company Common Stock on such date as the Committee shall
determine.

                  (d) Paragraphs (b) and (c) of this Section 13 shall not apply
to a merger or consolidation in which the Company is the surviving corporation
and shares of Common Stock are not converted into or exchanged for stock,
securities of any other corporation, cash or any other thing of value.
Notwithstanding the preceding sentence, in case of any consolidation or merger
of another corporation into the Company in which the Company is the surviving
corporation and in which there is a reclassification or change (including a
change to the right to receive cash or other property) of the shares of Common
Stock (other than a change in par value, or from par value to no par value, or
as a result of a subdivision or combination, but including any change in such
shares into two or more classes or series of shares), the Committee may provide
that the holder of each Option then exercisable shall have the right to exercise
such Option solely for the kind and amount of shares of stock and other
securities (including those of any new direct or indirect parent of the
Corporation), property, cash, or any combination thereof receivable upon such
reclassification, change, consolidation or merger by the holder of the number of
share of Common Stock for which such Option might have been exercised.

                  (e) In the event of a change in the Common Stock of the
Company as presently constituted which is limited to a change of all of its
authorized shares with par value into the same number of shares with a different
par value or without par value, the shares resulting from any such change shall
be deemed to be the Common Stock within the meaning of the Plan.

                  (f) To the extent that the foregoing adjustments relate to
stock or securities of the Company, such adjustments shall be made by the
Committee, whose determination in that respect shall be final, binding and
conclusive, provided that each Incentive Stock Option granted pursuant to this
Plan shall not be adjusted in a manner that causes such option to fail to
continue to qualify as an Incentive Stock Option within the meaning of IRC
section 442A.

                  (g) Except as hereinabove expressly provided in this
paragraph, the Optionee shall have no rights by reason of any subdivision or
consolidation of shares of stock or any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock or
any class or by reason of any dissolution, liquidation, merger, or consolidation
or spin-off of assets or stock of another corporation; and any issue by the
Company of shares of stock of any class shall not affect, and no adjustment by
reason thereof shall be made with respect to the number or price.

         14. Means of Exercising Options. An Option (or any part or installment
thereof) shall be exercised by giving written notice ("Notice") to the Company
at its principal office address. Such Notice shall identify the Option being
exercised and specify the number of shares as to which such Option is being
exercised, accompanied by full payment of the purchase price therefor either (a)
in United States dollars in case or by check, or (b) at the discretion of the
Committee, through delivery of shares of Common Stock having Fair Market Value
equal as of the date of the exercise to the cash exercise price of the Option,
or (c) at the discretion of the Committee, by delivery of the optionee's
personal recourse note bearing interest payable not less than annually at no
less than 100% of the lowest applicable Federal rate, as defined in

                                 Exhibit 4.1.5
<PAGE>   6

1274(d) of the Code or (d) at the discretion of the Committee, by any
combination of (a), (b) and (c) above. If the Committee exercises its discretion
to permit payment of the exercise price of an ISO by means of the methods set
forth in clauses (b) or (c) of the preceding sentence, such discretion shall be
exercised in writing at the time of the grant of the ISO in question. The holder
of an Option shall not have the rights of a shareholder with respect to the
shares covered by his Option until the date of issuance of a stock certificate
to him for such shares. Except as expressly provided above in paragraph 13 with
respect to changes in capitalization and stock dividends, no adjustment shall be
made for dividends or similar rights for which the record date is before the
date such stock certificate is issued.

         15. Term and Amendment of Plan. This Plan was adopted by the Board
effective September 1, 1994, subject to approval of the Plan by the holders of a
majority of the outstanding shares of Common Stock of the Company at the next
Meeting of Stockholders. The Plan shall expire on August 31, 2004 (except as to
Options outstanding on that date). Subject to the provisions of paragraph 5
above, Options may be granted under the Plan prior to the date of stockholder
approval of the Plan. If the approval of Stockholders is not obtained by August
31, 1995, any grants of Options under the Plan made prior to that date will be
rescinded. The Board may terminate or amend the Plan in any respect at any time,
except that, without the approval of such stockholders obtained within twelve
(12) months before or after the Board adopts a resolution authorizing any of the
following actions: (a) the total number of shares that may be issued under the
Plan may not be increased (except by adjustment pursuant to paragraph 13); (b)
the provisions of paragraph 3 regarding eligibility for grants of ISOs may not
be modified; (c) the provisions of paragraph 6(B) regarding the exercise price
at which shares may be offered pursuant to ISOs may not be modified (except by
adjustment pursuant to paragraph 13); and (d) the expiration date of the Plan
may not be extended. Except as provided in the fourth sentence of this paragraph
15, in no event may action of the Board or stockholders alter or impair the
rights of an optionee without his consent, under any Option previously granted
to or made by him.

         16. Conversion of ISOs into Non-Qualified Options; Termination of ISOs.
The Committee, at the written request of any optionee, may, in its discretion,
take such actions as may be necessary to convert such optionee's ISOs (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the optionee is an employee of
the Company, or a Related Corporation, at the time of such conversion. Such
actions may include, but are not limited to, extending the exercise period or
reducing the exercise price of the appropriate installments of such Options. At
the time of such conversion, the Committee (with the consent of the Optionee)
may impose such conditions on the exercise of the resulting Non-Qualified
Options as the Committee in its discretion may determine, provided that such
conditions shall not be inconsistent with this Plan. Nothing in the Plan shall
be deemed to give any optionee the right to have such optionee's ISOs converted
into Non-Qualified Options, and no such conversation shall occur until and
unless the Board take appropriate action. The Committee, with the consent of the
optionee, may also terminate any portion of any ISO that has not been exercised
at the time of such termination.

         17. Application of Funds. The proceeds received by the Company from the
sale of shares pursuant to Options granted under the Plan shall be used for
general corporate purposes.

         18. Governmental Regulation. The Company's obligation to sell and
deliver shares of the Common Stock under this Plan is subject to the approval of
any governmental authority required in connection with the authorization,
issuance or sale of such shares.

         19. Withholding of Additional Income Taxes. Upon the exercise of a
Non-Qualified Option, the making of a Disqualifying Disposition (as defined in
paragraph 20) or the vesting of restricted Common Stock acquired on the exercise
of an Option, the Company, in accordance with Section 3402(a) of the Code, may
require the optionee to pay additional withholding taxes in respect of the
amount that is considered compensation includable in such person's gross income.
The Committee in its discretion may condition (i) the exercise of an Option or
(ii) the vesting of restricted Common Stock acquired by exercising an Option, on
the optionee's payment of such additional withholding taxes.

         20. Notice to Company of Disqualifying Disposition. Each employee who
receives ISOs shall agree to notify the Company in writing immediately after the
employee makes a disqualifying disposition of any Common Stock received pursuant
to the exercise of an ISO (a "Disqualifying Disposition"). Disqualifying
Disposition means any disposition

                                 Exhibit 4.1.6
<PAGE>   7

(including any sale) of such stock before the later of (a) two years after the
employee was granted the ISO under which he acquired such stock, or (b) one year
after the employee acquired such stock is sold, these holding period
requirements do not apply and no Disqualifying Disposition will thereafter
occur.

         21. Governing Laws; Construction. The validity and construction of the
Plan and the instruments evidencing Options, Awards and Purchases shall be
governed by the laws of The State of New York. In construing this Plan, the
singular shall include the plural and the masculine gender shall include the
feminine and neuter, unless the context otherwise requires.

                                 Exhibit 4.1.7<PAGE>   1

                                                                     EXHIBIT 4.2

                          PICTUREWORKS TECHNOLOGY, INC.

                                 1996 STOCK PLAN

         1.       Purposes of the Plan. The purposes of this Stock Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business. Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant of an Option and subject to the applicable provisions of Section 422 of
the Code and the regulations promulgated thereunder. Stock Purchase Rights may
also be granted under the Plan.

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

                 (a)       "Administrator" means the Board or any of its
Committees appointed pursuant to Section 4 of the Plan.

                 (b)       "Applicable Laws" means the legal requirements
relating to the administration of stock option plans under U.S. state corporate
laws, U.S. federal and state securities laws, the Code and the applicable laws
of any foreign country or jurisdiction where Options or Stock Purchase Rights
are, or will be, granted under the Plan.

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

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

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

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

                 (g)       "Company" means PictureWorks Technology, Inc., a
Delaware corporation.

                 (h)       "Consultant" means any person who is engaged by the
Company or any Parent or Subsidiary to render consulting or advisory services
and is compensated for such services, and any Director of the Company whether
compensated for such services or not. If the Company registers any class of any
equity security pursuant to the Exchange Act, the term Consultant shall
thereafter not include Directors who are not compensated for their services or
are paid only a Director's fee by the Company.

                 (i)       "Continuous Status as an Employee or Consultant"
means that the employment or consulting relationship with the Company, any
Parent or Subsidiary is not interrupted or terminated. Continuous Status as an
Employee or Consultant shall not be considered interrupted in the case of (i)
any leave of absence approved by the Company or (ii) transfers between locations
of the Company or between the Company, its Parent, any Subsidiary, or any
successor. A leave of absence approved by the Company shall include sick leave,
military leave, or any other personal leave approved by an authorized
representative of the Company. For purposes of Incentive Stock Options, no such
leave may exceed 90 days, unless reemployment upon expiration of such leave is
guaranteed by statute or contract, including Company policies. If reemployment
upon expiration of a leave of absence approved by the Company is not so
guaranteed, on the 91st day of such leave any Incentive Stock Option held by the
Optionee shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonstatutory Stock Option.

                 (j)       "Director" means a member of the Board of Directors
of the Company.

                                 Exhibit 4.2.1
<PAGE>   2

                 (k)       "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a Director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.

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

                 (m)       "Fair Market Value" means, as of any date, the value
of Common Stock determined as follows:

                           (i)      If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The
Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system for the last market trading day prior to the time of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;

                           (ii)       If the Common Stock is regularly quoted by
a recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices for the
Common Stock on the last market trading day prior to the day of determination;
or

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

                  (n)       "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.

                  (o)       "Nonstatutory Stock Option" means an Option not
intended to qualify as an Incentive Stock Option.

                  (p)       "Officer" means a person who is an officer of the
Company within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

                  (q)       "Option" means a stock option granted pursuant to
the Plan.

                  (r)       "Optioned Stock" means the Common Stock subject to
an Option or a Stock Purchase Right.

                  (s)       "Optionee" means an Employee or Consultant who
receives an Option or Stock Purchase Right.

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

                  (u)       "Plan" means this 1997 Stock Plan.

                  (v)       "Restricted Stock" means shares of Common Stock
acquired pursuant to a grant of a Stock Purchase Right under Section 11 below.

                  (w)       "Section 16(b)" means Section 16(b) of the
Securities Exchange Act of 1934, as amended.

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

                  (y)       "Stock Purchase Right" means a right to purchase
Common Stock pursuant to Section 11 below.

                                 Exhibit 4.2.2
<PAGE>   3

                  (z)       "Subsidiary" means a "subsidiary corporation,"
whether now or hereafter existing, as defined in Section 424(f) of the Code.

         3.       Stock Subject to the Plan. Subject to the provisions of
Section 12 of the Plan, the maximum aggregate number of Shares which may be
subject to option and sold under the Plan is Two Million Five Hundred Fifty-Six
Thousand (2,556,000) Shares. The Shares may be authorized but unissued, or
reacquired Common Stock.

                  If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full, or is surrendered pursuant
to an option exchange program, the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan (unless the Plan
has terminated). However, Shares that have actually been issued under the Plan,
upon exercise of either an Option or Stock Purchase Right, shall not be returned
to the Plan and shall not become available for future distribution under the
Plan, except that if Shares of Restricted Stock are repurchased by the Company
at their original purchase price, and the original purchaser of such Shares did
not receive any benefits of ownership of such Shares, such Shares shall become
available for future grant under the Plan. For purposes of the preceding
sentence, voting rights shall not be considered a benefit of Share ownership.

         4.       Administration of the Plan.

                  (a)      Initial Plan Procedure. Prior to the date, if any,
upon which the Company becomes subject to the Exchange Act, the Plan shall be
administered by the Board or a Committee appointed by the Board.

                  (b)      Plan Procedure After the Date, if any, upon Which the
Company becomes Subject to the Exchange Act.

                           (i)      Multiple Administrative Bodies. If permitted
by Rule 16b-3, the Plan may be administered by different bodies with respect to
Directors, Officers and Employees who are neither Directors nor Officers.

                           (ii)     Administration With Respect to Directors and
Officers. With respect to grants of Options and Stock Purchase Rights to
Employees who are also Officers or Directors of the Company, the Plan shall be
administered by (A) the Board if the Board may administer the Plan in compliance
with the rules under Rule 16b-3 promulgated under the Exchange Act or any
successor thereto ("Rule 16b-3") relating to the disinterested administration of
employee benefit plans under which Section 16(b) exempt discretionary grants and
awards of equity securities are to be made, or (B) a Committee designated by the
Board to administer the Plan, which Committee shall be constituted to comply
with the rules under Rule 16b-3 relating to the disinterested administration of
employee benefit plans under which Section 16(b) exempt discretionary grants and
awards of equity securities are to be made. Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board. From time to time the Board may increase the size of the Committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however caused,
and remove all members of the Committee and thereafter directly administer the
Plan, all to the extent permitted by the rules under Rule 16b-3 relating to the
disinterested administration of employee benefit plans under which Section 16(b)
exempt discretionary grants and awards of equity securities are to be made.

                           (iii)    Administration With Respect to Other
Employees and Consultants. With respect to grants of Options and Stock Purchase
Rights to Employees or Consultants who are neither Directors nor Officers of the
Company, the Plan shall be administered by (A) the Board or (B) a Committee
designated by the Board, which committee shall be constituted in such a manner
as to satisfy Applicable Laws. Once appointed, such Committee shall continue to
serve in its designated capacity until otherwise directed by the Board. From
time to time the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies, however caused, and remove
all members of the Committee and thereafter directly administer the Plan, all to
the extent permitted by the Applicable Laws.

                                 Exhibit 4.2.3
<PAGE>   4

                 (c)       Powers of the Administrator. Subject to the
provisions of the Plan and, in the case of a Committee, the specific duties
delegated by the Board to such Committee, and subject to the approval of any
relevant authorities, including the approval, if required, of any stock exchange
upon which the Common Stock is listed, the Administrator shall have the
authority in its discretion:

                           (i)      to determine the Fair Market Value of the
Common Stock, in accordance with Section 2(m) of the Plan;

                           (ii)     to select the Consultants and Employees to
whom Options and Stock Purchase Rights may from time to time be granted
hereunder;

                           (iii)    to determine whether and to what extent
Options and Stock Purchase Rights or any combination thereof are granted
hereunder;

                           (iv)     to determine the number of Shares to be
covered by each such award granted hereunder;

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

                           (vi)     to determine the terms and conditions of any
award granted hereunder;

                           (vii)    to determine whether and under what
circumstances an Option may be settled in cash under subsection 9(f) instead of
Common Stock;

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

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

                  (d)      Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of any Options or Stock Purchase
Rights.

         5.       Eligibility.

                  (a)      Nonstatutory Stock Options and Stock Purchase Rights
may be granted to Employees and Consultants. Incentive Stock Options may be
granted only to Employees. An Employee or Consultant who has been granted an
Option or Stock Purchase Right may, if otherwise eligible, be granted additional
Options or Stock Purchase Rights.

                  (b)      Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 5(b), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

                  (c)      Neither the Plan nor any Option or Stock Purchase
Right shall confer upon any Optionee any right with respect to continuation of
his or her employment or consulting relationship with the Company, nor shall it
interfere in any way with his or her right or the Company's right to terminate
his or her employment or consulting relationship at any time, with or without
cause.

                  (d)      Upon the Company or a successor corporation issuing
any class of common equity securities required to be registered under Section 12
of the Exchange Act or upon the Plan being assumed by a corporation having a

                                 Exhibit 4.2.4
<PAGE>   5

class of common equity securities required to be registered under Section 12 of
the Exchange Act, the following limitations shall apply to grants of Options and
Stock Purchase Rights to Employees:

                           (i)      The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 12.

                           (ii)     If an Option or Stock Purchase Right is
cancelled in the same fiscal year of the Company in which it was granted (other
than in connection with a transaction described in Section 12), the cancelled
Option or Stock Purchase Right shall be counted against the limit set forth in
subsection (i) above. For this purpose, if the exercise price of an Option or
Stock Purchase Right is reduced, such reduction will be treated as a
cancellation of the Option or Stock Purchase Right and the grant of a new Option
or Stock Purchase Right.

         6.       Term of Plan. The Plan shall become effective upon the earlier
to occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company, as described in Section 18 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 14 of the Plan.

         7.       Term of Option. The term of each Option shall be the term
stated in the Option Agreement; provided, however, that the term shall be no
more than ten (10) years from the date of grant thereof. In the case of an
Incentive Stock Option granted to an Optionee who, at the time the Option is
granted, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the term of
the Option shall be five (5) years from the date of grant thereof or such
shorter term as may be provided in the Option Agreement.

         8.       Option Exercise Price and Consideration.

                  (a)      The per share exercise price for the Shares to be
issued upon exercise of an Option shall be such price as is determined by the
Administrator, but shall be subject to the following:

                           (i)      In the case of an Incentive Stock Option

                                    (A)       granted to an Employee who, at the
time of grant of such Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.

                                    (B)      granted to any other Employee, the
per Share exercise price shall be no less than 100% of the Fair Market Value per
Share on the date of grant.

                           (ii)     In the case of a Nonstatutory Stock Option

                                    (A)      granted to a person who, at the
time of grant of such Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of the grant.

                                    (B)      granted to any other person, the
per Share exercise price shall be no less than 85% of the Fair Market Value per
Share on the date of grant.

                  (b)      The consideration to be paid for the Shares to be
issued upon exercise of an Option, including the method of payment, shall be
determined by the Administrator (and, in the case of an Incentive Stock Option,
shall be determined at the time of grant). Such consideration may consist of (1)
cash, (2) check, (3) promissory note, (4) other Shares which (x) in the case of
Shares acquired upon exercise of an Option, have been owned by the Optionee for
more than six months on the date of surrender, and (y) have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the Shares as
to which such Option shall be exercised, (5) delivery of a properly executed
exercise notice together with such other documentation as the Administrator and
a broker, if applicable, shall require to effect an exercise of the

                                 Exhibit 4.2.5
<PAGE>   6

Option and delivery to the Company of the sale or loan proceeds required to pay
the exercise price, or (6) any combination of the foregoing methods of payment.
In making its determination as to the type of consideration to accept, the
Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.

         9.       Exercise of Option.

                  (a)      Procedure for Exercise; Rights as a Shareholder. Any
Option granted hereunder shall be exercisable at such times and under such
conditions as determined by the Administrator, including performance criteria
with respect to the Company and/or the Optionee, and as shall be permissible
under the terms of the Plan.

                           An Option may not be exercised for a fraction of a
Share.

                           An Option shall be deemed to be exercised when
written notice of such exercise has been given to the Company in accordance with
the terms of the Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may, as authorized by the Administrator,
consist of any consideration and method of payment allowable under Section 8(b)
hereof. Until the issuance (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company) of the
stock certificate evidencing such Shares, no right to vote, receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Company shall issue (or
cause to be issued) such stock certificate promptly upon exercise of the Option.
No adjustment shall be made for a dividend or other right for which the record
date is prior to the date the stock certificate is issued, except as provided in
Section 12 hereof.

                           Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the number of Shares as
to which the Option is exercised.

                  (b)      Termination of Employment or Consulting Relationship.
In the event of termination of an Optionee's Continuous Status as an Employee or
Consultant (but not in the event of an Optionee's change of status from Employee
to Consultant (in which case an Employee's Incentive Stock Option shall
automatically convert to a Nonstatutory Stock Option on the date three (3)
months and one day following such change of status) or from Consultant to
Employee), such Optionee may, but only within such period of time as is
determined by the Administrator, of at least thirty (30) days, with such
determination in the case of an Incentive Stock Option not exceeding three (3)
months after the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise his or her Option to the extent that the Optionee was
entitled to exercise it at the date of such termination. To the extent that the
Optionee was not entitled to exercise the Option at the date of such
termination, or if the Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.

                  (c)      Disability of Optionee. In the event of termination
of an Optionee's Continuous Status as an Employee or Consultant as a result of
his or her disability, the Optionee may, but only within twelve (12) months from
the date of such termination (and in no event later than the expiration date of
the term of such Option as set forth in the Option Agreement), exercise the
Option to the extent otherwise entitled to exercise it at the date of such
termination. If such disability is not a "disability" as such term is defined in
Section 22(e)(3) of the Code, in the case of an Incentive Stock Option such
Incentive Stock Option shall automatically cease to be treated as an Incentive
Stock Option and shall be treated for tax purposes as a Nonstatutory Stock
Option on the day three months and one day following such termination. To the
extent that the Optionee was not entitled to exercise the Option at the date of
termination, or if the Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

                  (d)      Death of Optionee. In the event of the death of an
Optionee, the Option may be exercised at any time within twelve (12) months
following the date of death (but in no event later than the expiration of the
term of such Option as set forth in the Notice of Grant) by the Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent that the Optionee was entitled to
exercise the Option on the date of

                                 Exhibit 4.2.6
<PAGE>   7

death. If, at the time of death, the Optionee was not entitled to exercise his
or her entire Option, the Shares covered by the unexercisable portion of the
Option shall immediately revert to the Plan. If, after the Optionee's death, the
Optionee's estate or a person who acquires the right to exercise the Option by
bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

                  (e)      Rule 16b-3. Options granted to persons subject to
Section 16(b) of the Exchange Act must comply with Rule 16b-3 and shall contain
such additional conditions or restrictions as may be required thereunder to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.

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

         10.      Non-Transferability of Options and Stock Purchase Rights.
Options and Stock Purchase Rights may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by
the laws of descent or distribution and may be exercised, during the lifetime of
the Optionee, only by the Optionee.

         11.      Stock Purchase Rights.

                  (a)      Rights to Purchase. Stock Purchase Rights may be
issued either alone, in addition to, or in tandem with other awards granted
under the Plan and/or cash awards made outside of the Plan. After the
Administrator determines that it will offer Stock Purchase Rights under the
Plan, it shall advise the offeree in writing of the terms, conditions and
restrictions related to the offer, including the number of Shares that such
person shall be entitled to purchase, the price to be paid, and the time within
which such person must accept such offer, which shall in no event exceed thirty
(30) days from the date upon which the Administrator makes the determination to
grant the Stock Purchase Right. The offer shall be accepted by execution of a
Restricted Stock purchase agreement in the form determined by the Administrator.
Shares purchased pursuant to the grant of a Stock Purchase Right shall be
referred to herein as "Restricted Stock."

                  (b)      Repurchase Option. Unless the Administrator
determines otherwise, the Restricted Stock purchase agreement shall grant the
Company a repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser's employment with the Company for any reason
(including death or disability). The purchase price for Shares repurchased
pursuant to the Restricted Stock purchase agreement shall be the original price
paid by the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine, but in no case at a rate of less than 20% per year
over five years from the date of purchase.

                  (c)      Other Provisions. The Restricted Stock purchase
agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in its sole
discretion. In addition, the provisions of Restricted Stock purchase agreements
need not be the same with respect to each purchaser.

                  (d)      Rights as a Shareholder. Once the Stock Purchase
Right is exercised, the purchaser shall have rights equivalent to those of a
shareholder and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
shall be made for a dividend or other right for which the record date is prior
to the date the Stock Purchase Right is exercised, except as provided in Section
12 of the Plan.

         12.      Adjustments Upon Changes in Capitalization or Merger.

                  (a)      Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of shares of Common Stock
covered by each outstanding Option or Stock Purchase Right, and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but as to which no Options or Stock Purchase Rights have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option or Stock Purchase Right, as well as the price per share of Common Stock
covered by each such outstanding Option or Stock Purchase Right, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock

                                 Exhibit 4.2.7
<PAGE>   8

resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company. The conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option or Stock Purchase Right.

                  (b)      Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Administrator shall
notify the Optionee at least fifteen (15) days prior to such proposed action. To
the extent it has not been previously exercised, the Option or Stock Purchase
Right shall terminate immediately prior to the consummation of such proposed
action.

                  (c)      Merger. In the event of a merger of the Company with
or into another corporation, each outstanding Option or Stock Purchase Right may
be assumed or an equivalent option or right may be substituted by such successor
corporation or a parent or subsidiary of such successor corporation. If, in such
event, an Option or Stock Purchase Right is not assumed or substituted, the
Option or Stock Purchase Right shall terminate as of the date of the closing of
the merger. For the purposes of this paragraph, the Option or Stock Purchase
Right shall be considered assumed if, following the merger, the Option or Stock
Purchase Right confers the right to purchase or receive, for each Share of
Optioned Stock subject to the Option or Stock Purchase Right immediately prior
to the merger, the consideration (whether stock, cash, or other securities or
property) received in the merger by holders of Common Stock for each Share held
on the effective date of the transaction (and if the holders are offered a
choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares). If such consideration received in the
merger is not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide
for the consideration to be received upon the exercise of the Option or Stock
Purchase Right, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger.

         13.      Time of Granting Options and Stock Purchase Rights. The date
of grant of an Option or Stock Purchase Right shall, for all purposes, be the
date on which the Administrator makes the determination granting such Option or
Stock Purchase Right, or such other date as is determined by the Administrator.
Notice of the determination shall be given to each Employee or Consultant to
whom an Option or Stock Purchase Right is so granted within a reasonable time
after the date of such grant.

         14.      Amendment and Termination of the Plan.

                  (a)      Amendment and Termination. The Board may at any time
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made which would impair the rights of any
Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3 under
the Exchange Act or with Section 422 of the Code (or any other applicable law or
regulation, including the requirements of the NASD or an established stock
exchange), the Company shall obtain shareholder approval of any Plan amendment
in such a manner and to such a degree as required.

                  (b)      Effect of Amendment or Termination. Any such
amendment or termination of the Plan shall not affect Options or Stock Purchase
Rights already granted, and such Options and Stock Purchase Rights shall remain
in full force and effect as if this Plan had not been amended or terminated,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.

         15.      Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the issuance and delivery of
such Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock

                                 Exhibit 4.2.8
<PAGE>   9

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 or Stock Purchase
Right, the Company may require the person exercising such Option or Stock
Purchase Right 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
relevant provisions of law.

         16.      Reservation of Shares. The Company, during the term of this
Plan, shall at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.

                  The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.

         17.      Agreements. Options and Stock Purchase Rights shall be
evidenced by written agreements in such form as the Administrator shall approve
from time to time.

         18.      Shareholder Approval. Continuance of the Plan shall be subject
to approval by the shareholders of the Company within twelve (12) months before
or after the date the Plan is adopted. Such shareholder approval shall be
obtained in the degree and manner required under Applicable Laws and the rules
of any stock exchange upon which the Common Stock is listed.

         19.      Information to Optionees and Purchasers. The Company shall
provide to each Optionee and to each individual who acquires Shares pursuant to
the Plan, not less frequently than annually during the period such Optionee or
purchaser has one or more Options or Stock Purchase Rights outstanding, and, in
the case of an individual who acquires Shares pursuant to the Plan, during the
period such individual owns such Shares, copies of annual financial statements.
The Company shall not be required to provide such statements to key employees
whose duties in connection with the Company assure their access to equivalent
information.

                                 Exhibit 4.2.9

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