<PAGE>   1


      As filed with the Securities and Exchange Commission on June 20, 1997
                                                      Registration No. 333-_____
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                    FORM S-8
                             REGISTRATION STATEMENTS
                                      Under
                           The Securities Act of 1933

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

                        IDEC PHARMACEUTICALS CORPORATION
             (Exact name of registrant as specified in its charter)

           Delaware                                       33-0112644
 (State or other jurisdiction                  (IRS Employer Identification No.)
of incorporation or organization)

                              11011 Torreyana Road
                           San Diego, California 92121
               (Address of principal executive offices) (Zip Code)

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

                   AMENDED AND RESTATED 1988 STOCK OPTION PLAN
                        1995 EMPLOYEE STOCK PURCHASE PLAN
                           (Full titles of the Plans)

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

                           William H. Rastetter, Ph.D.
                 Chairman, President and Chief Executive Officer
                        IDEC Pharmaceuticals Corporation
                    11011 Torreyana Road, San Diego, CA 92121
                     (Name and address of agent for service)
                                 (619) 550-8500
          (Telephone number, including area code, of agent for service)

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

                         CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
                                                             Proposed           Proposed
                                                             Maximum            Maximum
                                       Amount to be       Offering Price    Aggregate Offering     Amount of
Title of Securities to be Registered   Registered(1)       per Share(2)         Price(2)        Registration Fee
=================================================================================================================
<S>                                      <C>                <C>              <C>                 <C>     
Amended and Restated 1988 Stock
- -------------------------------
Option Plan
- -----------
Options to Purchase Common Stock         800,000                 N/A                 N/A                N/A

Common Stock, $0.001 par value           800,000 shares       $26.00         $20,800,000          $6,303.03

1995 Employee Stock Purchase Plan 
- ---------------------------------
Common Stock, $0.001 par value           150,000              $26.00          $3,900,000          $1,181.82

=================================================================================================================
</TABLE>


(1) This Registration Statement shall also cover any additional shares of Common
    Stock which become issuable under the Amended and Restated 1988 Stock Option
    Plan and/or the 1995 Employee Stock Purchase Plan by reason of any stock
    dividend, stock split, recapitalization or other similar transaction
    effected without the receipt of consideration which results in an increase
    in the number of the outstanding shares of IDEC Pharmaceuticals Corporation
    Common Stock.

(2) Calculated solely for purposes of this offering under Rule 457(h) of the
    Securities Act of 1933, as amended, (the "1933 Act") on the basis of the 
    average of the high and low selling prices per share of Common Stock of 
    IDEC Pharmaceuticals Corporation on June 16, 1997 as reported by the 
    Nasdaq National Market.



<PAGE>   2



                                     PART II

               Information Required in the Registration Statement


Item 3. Incorporation of Certain Documents by Reference

        IDEC Pharmaceuticals Corporation (the "Registrant") hereby incorporates
by reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "Commission"):

        (a)    The Registrant's Annual Report on Form 10-K for the fiscal year
               ended December 31, 1996, filed with the Commission on March 31,
               1997 pursuant to Section 13 of the Securities Exchange Act of
               1934, as amended (the "Exchange Act");

        (b)    The Registrant's Quarterly Report on Form 10-Q for the fiscal
               quarter ended March 31, 1997, filed with the Commission on May
               15, 1997 pursuant to Section 13 of the Exchange Act;

        (c)    The Registrant's Registration Statement No. 0-19311 on Form 8-B 
               filed with the Commission on June 2, 1997, in which there is
               described the terms, rights and provisions applicable to the
               Registrant's outstanding Common Stock.

        All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the
date of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any subsequently filed
document which is also deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.


Item 4. Description of Securities

        Not applicable.


Item 5. Interests of Named Experts and Counsel

        Not applicable.


<PAGE>   3



Item 6. Indemnification of Directors and Officers

        The Registrant's Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Delaware law. Delaware law provides
that directors of a corporation will not be personally liable for monetary
damages for breach of their fiduciary duties as directors, except for liability
(i) for any breach of their duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for unlawful
payments of dividends or unlawful stock repurchases or redemptions as provided
in Section 174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit.

        The Registrant's Bylaws provide that the Registrant shall indemnify its
directors and may indemnify its other officers and employees and other agents to
the fullest extent permitted by law. The Registrant believes that
indemnification under its Bylaws covers at least negligence and gross negligence
on the part of indemnified parties. The Registrant's Bylaws also permit it to
secure insurance on behalf of any officer, director, employee or other agent for
any liability arising out of his or her actions in such capacity, regardless of
whether the Bylaws have the power to indemnify him or her against such liability
under the General Corporation law of Delaware. The Registrant currently has
secured such insurance on behalf of its directors and officers.

        The Registrant has entered into agreements to indemnify its directors
and executive officers, in addition to indemnification provided for in the
Registrant's Bylaws. These agreements, among other things, indemnify the
Registrant's directors and executive officers for certain expenses (including
attorneys' fees), judgments, fines and settlement amounts incurred by any such
person in any action or proceeding, including any action by or in the right of
the Registrant, arising out of such person's services as a director or executive
officer of the Registrant, any subsidiary of the Registrant or any other company
or enterprise to which the person provides services at the request of the
Registrant. The Registrant believes that these provisions and agreements are
necessary to attract and retain qualified persons as directors and executive
officers.

        At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent of the Registrant where indemnification
will be required or permitted. The Registrant is not aware of any threatened
litigation or proceeding that might result in a claim for such indemnification.


Item 7. Exemption from Registration Claimed

        Not applicable.



                                      II-2


<PAGE>   4



Item 8. Exhibits


<TABLE>
<CAPTION>
Exhibit Number    Exhibit
- --------------    -------
    <S>           <C>                                                        
    4             Instruments Defining Rights of Stockholders.  Reference is made to Registrant's Registration
                  Statement No. 0-19311 on Form 8-B which is incorporated herein by reference pursuant to
                  Item 3(c).
    5.1           Opinion of Brobeck, Phleger & Harrison LLP.
    23.1          Consent of Independent Auditors - KPMG Peat Marwick LLP.
    23.2          Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5.1.
    24            Power of Attorney.  Reference is made to page II-5 of this Registration Statement.
    99.1          Amended and Restated 1988 Stock Option Plan (Amended and Restated through May 22,
                  1997).
    99.2*         Form of Notice of Grant.
    99.3*         Form of Stock Option Agreement.
    99.4          1995 Employee Stock Purchase Plan (Amended and Restated through May 22, 1997).
    99.5**        Form of Enrollment/Change Form under 1995 Employee Stock Purchase Plan.
    99.6**        Form of Stock Purchase Agreement under 1995 Employee Stock Purchase Plan.
</TABLE>


*       Exhibits 99.2 and 99.3 are incorporated herein by reference to Exhibits
        28.2 and 28.3, respectively, of Registrant's Registration Statement No.
        33-45172 on Form S-8 which was filed with the Commission on January 21,
        1992.
**      Exhibits 99.5 and 99.6 are incorporated herein by reference to Exhibits
        28.2 and 28.3, respectively, of Registrant's Registration Statement No.
        33-60224 on Form S-8 which was filed with the Commission on April 5,
        1993.


Item 9. Undertakings

        A. The undersigned Registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement (i) to include any prospectus required by Section
10(a)(3) of the 1933 Act, (ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement, and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; provided, however, that clauses (1)(i) and (1)(ii) shall
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference into this Registration Statement; (2) that for the
purpose of determining any liability under the 1933 Act each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; and (3) to remove
from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the Registrant's
Amended and Restated 1988 Stock Option Plan and/or 1995 Employee Stock Purchase
Plan.

        B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference into this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.


                                      II-3


<PAGE>   5



        C. Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers or controlling persons of the Registrant
pursuant to the indemnity provisions incorporated by reference in Item 6, or
otherwise, the Registrant has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the 1933 Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the 1933 Act
and will be governed by the final adjudication of such issue.


                                      II-4


<PAGE>   6



                                   SIGNATURES


        Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Diego, State of California, on this 19th day
of June, 1997.

                            IDEC PHARMACEUTICALS CORPORATION


                            By  /s/ William H. Rastetter
                                ------------------------------------------------
                                William H. Rastetter, Ph.D.
                                Chairman, President and Chief Executive Officer

                                POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

       That the undersigned officers and directors of IDEC Pharmaceuticals
Corporation, a Delaware corporation, do hereby constitute and appoint William H.
Rastetter and Phillip M. Schneider, and each of them, the lawful attorneys and
agents, with full power and authority to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, and any one of
them, determines may be necessary or advisable or required to enable said
corporation to comply with the Securities Act of 1933, as amended, and any rules
or regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents, and any one of them, shall do or cause to be
done by virtue hereof. This Power of Attorney may be signed in several
counterparts.

       IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.

       Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.


<TABLE>
<CAPTION>
Signatures                       Title                                       Date
- ----------                       -----                                       ----
<S>                              <C>                                    <C>
/s/ William H. Rastetter         Chairman, President and                June 19, 1997
- -----------------------------    Chief Executive Officer                             
   William H. Rastetter, Ph.D.   (Principal Executive Officer)


                                 
/s/ Phillip M. Schneider         Vice President and Chief               June 19, 1997
- ---------------------------
   Phillip M. Schneider          Financial Officer (Principal
                                 Financial and Accounting Officer)
</TABLE>



                                      II-5


<PAGE>   7




<TABLE>
<CAPTION>
Signatures                          Title                       Date
- ----------                          -----                       ----

<S>                                <C>                     <C>
/s/ Charles C. Edwards              Director                June 19, 1997
- ----------------------------                                
Charles C. Edwards, M.D.         
                                 
                                 
                                 
/s/ Alan B. Glassberg               Director                June 19, 1997
- ----------------------------                                
Alan B. Glassberg, M.D.          
                                 
                                 
                                 
/s/ John Groom                      Director                June 19, 1997
- ----------------------------                                
John Groom                       
                                 
                                 
                                 
                                    Director                June __, 1997
- ----------------------------                                
Kazuhiro Hashimoto               
                                 
                                 
                                 
/s/ Franklin P. Johnson, Jr.        Director                June 19, 1997
- ----------------------------                                
Franklin P. Johnson, Jr.         
                                 
                                 
                                 
/s/ Lynn Schenk                     Director                June 19, 1997
- ----------------------------                                
Lynn Schenk                      
                                 
                                 
                                 
/s/ William D. Young                Director                June 19, 1997
- ----------------------------                                
William D. Young                 
</TABLE>

                             



                                      II-6


<PAGE>   8



                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    EXHIBITS

                                       TO

                                    FORM S-8

                                      UNDER

                             SECURITIES ACT OF 1933


                        IDEC PHARMACEUTICALS CORPORATION





<PAGE>   9



                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
Exhibit Number    Exhibit
- --------------    -------

    <S>           <C>
    4             Instruments Defining Rights of Stockholders.  Reference is made to Registrant's Registration
                  Statement No. 0-19311 on Form 8-B which is incorporated herein by reference pursuant to
                  Item 3(c).
    5.1           Opinion of Brobeck, Phleger & Harrison LLP.
    23.1          Consent of Independent Auditors - KPMG Peat Marwick LLP.
    23.2          Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5.1.
    24            Power of Attorney.  Reference is made to page II-4 of this Registration Statement.
    99.1          Amended and Restated 1988 Stock Option Plan (Amended and Restated through May 22,
                  1997).
    99.2*         Form of Notice of Grant.
    99.3*         Form of Stock Option Agreement.
    99.4          1995 Employee Stock Purchase Plan (Amended and Restated through May 22, 1997).
    99.5**        Form of Enrollment/Change Form under 1995 Employee Stock Purchase Plan.
    99.6**        Form of Stock Purchase Agreement under 1995 Employee Stock Purchase Plan.
</TABLE>


*   Exhibits 99.2 and 99.3 are incorporated herein by reference to Exhibits 28.2
    and 28.3, respectively, of Registrant's Registration Statement No. 33-45172
    on Form S-8 which was filed with the Commission on January 21, 1992.

**  Exhibits 99.5 and 99.6 are incorporated herein by reference to Exhibits 28.2
    and 28.3, respectively, of Registrant's Registration Statement No. 33-60224
    on Form S-8 which was filed with the Commission on April 5, 1993.






<PAGE>   1
                                                                    Exhibit 5.1

                                June 19, 1997






IDEC Pharmaceuticals Corporation
11011 Torreyana Road
San Diego, California  92121


     Re:    IDEC Pharmaceuticals Corporation (the "Company")
            Registration Statement of an Aggregate of 950,000 Shares 
            of Common Stock


Ladies and Gentlemen:

        We refer to your Registration Statement on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, of (i) Eight Hundred
Thousand (800,000) shares of common stock ("Common Stock") of IDEC
Pharmaceuticals Corporation (the "Company") issuable under the Company's Amended
and Restated 1988 Stock Option Plan, as amended and restated, (the "Option
Plan") and (ii) One Hundred Fifty Thousand (150,000) shares of Common Stock
issuable under the Company's 1995 Employee Stock Purchase Plan (the "Purchase
Plan"). We advise you that, in our opinion, when such shares have been issued
and sold pursuant to the applicable provisions of the Option Plan and/or the
Purchase Plan and in accordance with the Registration Statement, such shares
will be validly issued, fully paid and non-assessable shares of the Company's
Common Stock.

        We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.


                                           Very truly yours,


                                           /s/ Brobeck, Phleger & Harrison
 LLP

                                           Brobeck, Phleger & Harrison LLP








<PAGE>   1
                                                                    EXHIBIT 23.1

                      [KPMG PEAT MARWICK LLP LETTERHEAD]




                        INDEPENDENT AUDITORS' CONSENT


The Board of Directors
IDEC Pharmaceuticals Corporation:


We consent to the use of our report incorporated herein by reference in the
registration statement on Form S-8 of IDEC Pharmaceuticals Corporation.


                                       /s/ KPMG Peat Marwick LLP


San Diego, California
June 19, 1997





<PAGE>   1
                                                                   EXHIBIT 99.1

                        IDEC PHARMACEUTICALS CORPORATION
                             1988 STOCK OPTION PLAN

                    AMENDED AND RESTATED THROUGH MAY 22, 1997


       I.      PURPOSES OF THE PLAN

               (a)  This Stock Option Plan (the "Plan") is intended to promote
the interests of IDEC Pharmaceuticals Corporation, a Delaware corporation (the
"Corporation"), by providing a method whereby (i) key employees (including
officers and directors) of the Corporation (or its parent or subsidiary
corporations) responsible for the management, growth and financial success of
the Corporation (or its parent or subsidiary corporations), (ii) the
non-employee members of the Corporation's Board of Directors (or any parent or
subsidiary corporations) and (iii) independent consultants and advisors who
provide valuable services to the Corporation (or its parent or subsidiary
corporations) may be offered incentives and rewards which will encourage them to
acquire a proprietary interest, or otherwise increase their proprietary
interest, in the Corporation and continue to render services to the Corporation
(or its parent or subsidiary corporations).

               (b)  The following provisions shall be applicable in determining
the parent and subsidiary corporations of the Corporation:

                    (i)  Any corporation
 (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation shall be considered
to be a PARENT corporation of the Corporation, provided each such corporation in
the unbroken chain (other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

                   (ii)  Each corporation (other than the Corporation) in an
unbroken chain of corporations beginning with the Corporation shall be
considered to be a SUBSIDIARY of the Corporation, provided each such corporation
(other than the last corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.


<PAGE>   2



     II.       ADMINISTRATION OF THE PLAN

               (a)    The Corporation's Board of Directors (the "Board") shall
appoint a committee ("Committee") of two (2) or more non-employee Board members
to assume full responsibility for the administration of the Plan. Members of the
Committee shall serve for such period of time as the Board may determine and
shall be subject to removal by the Board at any time.

               (b)    The Committee as Plan Administrator shall have full power 
and authority (subject to the express provisions of the Plan) to establish such
rules and regulations as it may deem appropriate for the proper administration
of the Plan and to make such determinations under, and issue such
interpretations of, the Plan and any outstanding option grants or stock
issuances as it may deem necessary or advisable. Decisions of the Plan
Administrator shall be final and binding on all parties who have an interest in
the Plan or any outstanding option or stock issuance thereunder.

     III.      ELIGIBILITY FOR OPTION GRANTS

               (a)    The persons eligible to receive option grants under the 
Plan are as follows:

                           (i)     key employees (including officers and 
        directors) of the Corporation (or its parent or subsidiary corporations)
        who render services which contribute to the success and growth of the
        Corporation (or its parent or subsidiary corporations) or which may
        reasonably be anticipated to contribute to the future success and growth
        of the Corporation (or its parent or subsidiary corporations);

                          (ii)     the non-employee members of the Board or the
        non-employee members of the board of directors of any parent or
        subsidiary corporations; and

                         (iii)     those independent consultants or other 
        advisors who provide valuable services to the Corporation (or its parent
        or subsidiary corporations).

               (b)    The Plan Administrator shall have full authority to 
determine which eligible individuals are to receive option grants under the
Plan, the number of shares to be covered by each such grant, whether the granted
option is to be an incentive stock option ("Incentive Option") which satisfies
the requirements of Section 422 of the Internal Revenue Code or a non-statutory
option not intended to meet such requirements, the time or times at which each
such option is to become exercisable, and the maximum term for which the option
is to be outstanding.


                                       2.


<PAGE>   3



      IV.      STOCK SUBJECT TO THE PLAN

               (a) The stock issuable under the Plan shall be shares of the
Corporation's authorized but unissued or reacquired Common Stock. The maximum
number of shares which may be issued under the Plan shall not exceed 5,480,000
shares.* The total number of shares issuable under the Plan shall be subject to
adjustment from time to time in accordance with Section IV(d) of the Plan.

               (b) In no event may the aggregate number of shares of Common
Stock for which any one individual participating in the Plan may be granted
stock options and separately exercisable stock appreciation rights exceed
1,250,000 shares in the aggregate over the remaining term of the Plan, subject
to adjustment from time to time in accordance with Section IV(d) of the Plan.
For purposes of such limitation, no stock options or stock appreciation rights
granted prior to January 1, 1994 shall be taken into account.

               (c) Should an option expire or terminate for any reason prior to
exercise in full (including options cancelled in accordance with the
cancellation-regrant provisions of Section VIII of the Plan), the shares subject
to the portion of the option not so exercised shall be available for subsequent
option grants under the Plan. Unvested shares issued under the Plan and
subsequently repurchased by the Corporation, at the option exercise price paid
per share, pursuant to the Corporation's repurchase rights under the Plan, shall
be added back to the number of shares of Common Stock reserved for issuance
under the Plan and shall accordingly be available for reissuance through one or
more subsequent option grants under the Plan. Shares subject to any option
cancelled in accordance with Section IX of the Plan shall reduce on a
share-for-share basis the number of shares of Common Stock available for
subsequent option grants under this Plan. In addition, should the exercise price
of an outstanding option under the Plan be paid with shares of Common Stock,
then the number of shares of Common Stock available for issuance under the Plan

- -----------------------
* Adjusted to reflect (i) the 1 for 2.5 reverse Common Stock split effected by
the Company on August 18, 1991, (ii) the 670,000 share increase authorized by
the Board on March 18, 1992 and approved by the stockholders at the 1992 Annual
Meeting, (iii) the 700,000 share increase authorized by the Board on January 13,
1993 and approved by the stockholders at the 1993 Annual Meeting, (iv) the
650,000 share increase authorized by the Board on February 28, 1994 and approved
by the stockholders at the 1994 Annual Meeting, (v) the 500,000 share increase
authorized by the Board on January 25, 1995, and approved by the stockholders at
the 1995 Annual Meeting, (vi) the 1,200,000 share increase authorized by the
Board on January 24, 1996, and approved by the stockholders at the 1996 Annual
Meeting, and (vii) the 800,000 share increase authorized by the Board on
February 24, 1997 and approved by the stockholders at the 1997 Annual Meeting.
In no event, however, shall more than 4,793,277 shares of Common Stock be issued
under the Plan after February 28, 1997, subject to adjustment under Section
IV(d) in the event of changes in the Company's capital structure.

                                       3.




<PAGE>   4



shall be reduced by the gross number of shares for which the option is
exercised, and not by the net number of shares of Common Stock actually issued
to the option holder.

               (d) In the event any change is made to the Common Stock issuable
under the Plan by reason of any stock split, stock dividend, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Corporation's receipt of consideration, then
appropriate adjustments shall be made to (I) the maximum number and/or class of
securities issuable under the Plan, (II) the maximum number and/or class of
securities for which stock options and separately exercisable stock appreciation
rights may be granted to any one participant in the aggregate after December 31,
1993 and (III) the number and/or class of securities and exercise price per
share in effect under each outstanding option in order to prevent the dilution
or enlargement of benefits thereunder. The adjustments determined by the Plan
Administrator shall be final, binding and conclusive.

       V.      TERMS AND CONDITIONS OF OPTIONS

               Options granted pursuant to the Plan shall be authorized by
action of the Plan Administrator and may, at the Plan Administrator's
discretion, be either Incentive Options or non-statutory options. Individuals
who are not Employees (as defined in Section V.3.D below) may only be granted
non-statutory options. Each granted option shall be evidenced by one or more
instruments in the form approved by the Plan Administrator; provided, however,
that each such instrument shall comply with the terms and conditions specified
below. Each instrument evidencing an Incentive Option shall, in addition, be
subject to the applicable provisions of Section VI.

               1.     Option Price.

                      A.     The option price per share shall be fixed by the 
Plan Administrator, but in no event shall the option price per share be less
than eighty-five percent (85%) of the fair market value of a share of Common
Stock on the date of the option grant.

                      B.     The option price shall become immediately due upon 
exercise of the option and shall, subject to the provisions of Section X and the
instrument evidencing the grant, be payable in one of the alternative forms
specified below:

                           (i)      full payment in cash or check payable to the
        Corporation; or

                          (ii)      full payment in shares of Common Stock held 
        by the optionee for the requisite period necessary to avoid a charge to
        the Corporation's reported earnings and valued at fair market value on
        the Exercise Date (as such term is defined below); or

                                       4.




<PAGE>   5


                         (iii)      full payment through a combination of shares
        of Common Stock held by the optionee for the requisite period necessary
        to avoid a charge to the Corporation's reported earnings and valued at
        fair market value on the Exercise Date and cash or check payable to the
        Corporation; or

                          (iv)      full payment effected through a broker-
        dealer sale and remittance procedure pursuant to which the optionee
        shall provide irrevocable written instructions (I) to a
        Corporation-designated brokerage firm to (A) effect the immediate sale
        of a sufficient number of the purchased shares to enable such firm to
        remit to the Corporation, out of the sale proceeds available on the
        settlement date, sufficient funds to cover the aggregate option price
        payable for the purchased shares plus all applicable Federal and State
        income and employment taxes required to be withheld by the Corporation
        in connection with such purchase and (B) remit those funds to the
        Corporation on the settlement date, and (II) to the Corporation to
        deliver the certificates for the purchased shares directly to such
        brokerage firm.

                      For purposes of this subparagraph B, the Exercise Date 
shall be the date on which written notice of the option exercise is received by
the Corporation. Except to the extent the sale and remittance procedure is
utilized in connection with the exercise of the option, payment of the option
price for the purchased shares must accompany such notice.

                      C.     The fair market value per share of Common Stock on 
any relevant date under subparagraph A or B (and for all other valuation
purposes under the Plan) shall be determined in accordance with the following
provisions:

                           (i)      If the Common Stock is not at the time 
        listed or admitted to trading on any national stock exchange but is
        traded on the Nasdaq National Market, the fair market value shall be the
        closing selling price per share of Common Stock on the date in question,
        as reported by the National Association of Securities Dealers on the
        Nasdaq National Market or any successor system. If there is no reported
        closing selling price for the Common Stock on the date in question, then
        the closing selling price on the last preceding date for which such
        quotation exists shall be determinative of fair market value.

                          (ii)      If the Common Stock is at the time listed or
        admitted to trading on any national stock exchange, then the fair market
        value shall be the closing selling price per share of Common Stock on
        the date in question on the stock exchange determined by the Plan
        Administrator to be the primary market for the Common Stock, as such
        price is officially quoted

                                       5.




<PAGE>   6



        in the composite tape of transactions on such exchange. If there is no
        reported sale of Common Stock on such exchange on the date in question,
        then the fair market value shall be the closing selling price on the
        exchange on the last preceding date for which such quotation exists.

               2.     Term and Exercise of Options. Each option granted under 
the Plan shall be exercisable at such time or times, during such period, and for
such number of shares as shall be determined by the Plan Administrator and set
forth in the instrument evidencing such option; provided, however, that no such
option shall have a term in excess of ten (10) years from the grant date.

               3.     Limited Transferability of Options. During the lifetime of
the optionee, Incentive Options shall be exercisable only by the optionee and
shall not be assignable or transferable other than by will or by the laws of
descent and distribution following the optionee's death. However, non-statutory
options may, in connection with the optionee's estate plan, be assigned in whole
or in part during the optionee's lifetime to one or more members of the
optionee's immediate family or to a trust established exclusively for one or
more such family members. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
the assignment. The terms applicable to the assigned portion shall be the same
as those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate.

               4.     Effect of Termination of Service.

                      A.     Should an optionee cease to remain in Service (as 
defined in subparagraph D below) for any reason (including death or permanent
disability as defined in Section 22(e)(3) of the Internal Revenue Code) while
the holder of one or more outstanding options granted to such optionee under the
Plan, then such option or options shall not (except to the extent otherwise
provided pursuant to Section XI below) remain exercisable for more than a
thirty-six (36)-month period (or such shorter period determined by the Plan
Administrator and specified in the instrument evidencing the grant) following
the date of such cessation of Service. Under no circumstances, however, shall
any such option be exercisable after the specified expiration date of the option
term. Each such option shall, during such thirty-six (36)-month or shorter
period, be exercisable only to the extent of the number of shares (if any) for
which the option is exercisable on the date of the optionee's cessation of
Service. Upon the expiration of such thirty-six (36)-month or shorter period or
(if earlier) upon the expiration of the option term, the option shall terminate
and cease to be exercisable. However, the option shall, immediately upon the
optionee's cessation of Service for any reason, terminate and cease to be
outstanding for any option shares for which the option is not otherwise at that
time exercisable.


                                       6.




<PAGE>   7



                      B.     Any outstanding option held by the optionee and 
exercisable in whole or in part on the date of his or her death may be
subsequently exercised, but only to the extent of the number of shares (if any)
for which the option is exercisable on the date of the optionee's cessation of
Service (less any option shares subsequently purchased by the optionee prior to
death), by the personal representative of the optionee's estate or by the person
or persons to whom the option is transferred pursuant to the optionee's will or
in accordance with the laws of descent and distribution. The right to exercise
the option for those shares shall terminate upon the earlier of (i) the third
anniversary of the date of the optionee's cessation of Service or (ii) the
specified expiration date of the option term.

                      C.     Notwithstanding subparagraphs A and B above, the 
Plan Administrator shall have complete discretion, exercisable either at the
time the option is granted or at any time while the option remains outstanding,
to permit one or more options held by the optionee under the Plan to be
exercised, during the limited period of exercisability provided under Section
V.4.A above, not only with respect to the number of shares for which each such
option is exercisable at the time of the optionee's cessation of Service but
also with respect to one or more subsequent installments for which the option
would otherwise have become exercisable had such cessation of Service not
occurred.

                      D.     For purposes of the foregoing provisions of this 
Section V.4 (and all other provisions of the Plan), the optionee shall be deemed
to remain in the SERVICE of the Corporation for so long as such individual
renders services on a periodic basis to the Corporation or any parent or
subsidiary corporation in the capacity of an Employee, a non-employee member of
the board of directors or an independent consultant or advisor, unless the
option agreement evidencing the option grant and/or the purchase agreement
evidencing the purchased option shares specifically provides otherwise. The
optionee shall be considered to be an EMPLOYEE for so long as such individual
remains in the employ of the Corporation or one or more of its parent or
subsidiary corporations, subject to the control and direction of the employer
entity as to the work to be performed and as to the manner and method of
performance.

               5.     Stockholder Rights.  An optionee shall have none of the 
rights of a stockholder with respect to any shares covered by the option until
such individual shall have exercised the option and paid the option price for
the purchased shares.

               6.     Repurchase Rights.  Unvested shares of Common Stock may be
issued under the Plan which are subject to repurchase by the Corporation in
accordance with the following provisions:

                      (a)     Upon the optionee's cessation of Service while 
        holding unvested shares under the Plan, the Corporation shall have the
        right to repurchase any or all of those unvested shares at the option
        price paid per share. The terms and conditions upon which such
        repurchase right shall be

                                       7.


<PAGE>   8

        exercisable (including the period and procedure for exercise and the
        appropriate vesting schedule for the purchased shares) shall be
        established by the Plan Administrator and set forth in the instrument
        evidencing such repurchase right.

                      (b)     All of the Corporation's outstanding repurchase 
        rights shall automatically terminate, and all shares subject to such
        terminated rights shall immediately vest in full, upon the occurrence of
        any Corporate Transaction under Section VII of this Plan, except to the
        extent: (i) any such repurchase right is to be assigned to the successor
        corporation (or parent thereof) in connection with the Corporate
        Transaction or (ii) such accelerated vesting is precluded by other
        limitations imposed by the Plan Administrator at the time the repurchase
        right is issued.

                      (c)     The Plan Administrator shall have the 
        discretionary authority, exercisable either before or after the
        optionee's cessation of Service, to cancel the Corporation's outstanding
        repurchase rights with respect to any or all unvested shares purchased
        or purchasable by the optionee under the Plan and thereby accelerate the
        vesting of those shares in whole or in part at any time.

      VI.      INCENTIVE OPTIONS.

               The terms and conditions specified below shall be applicable to
all Incentive Options granted under the Plan. Incentive Options may only be
granted to individuals who are Employees. Options which are specifically
designated as "non-statutory" options when issued under the Plan shall not be
subject to such terms and conditions.

               (a)    Option Price. The option price per share of the Common 
Stock subject to an Incentive Option shall in no event be less than one hundred
percent (100%) of the fair market value of a share of Common Stock on the date
of grant.

               (b)    Dollar Limitation. The aggregate fair market value
(determined as of the respective date or dates of grant) of the Common Stock for
which one or more options granted to any Employee after December 31, 1986 under
this Plan (or any other option plan of the Corporation or its parent or
subsidiary corporations) may for the first time become exercisable as incentive
stock options under the Federal tax laws during any one calendar year shall not
exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the
Employee holds two or more such options which become exercisable for the first
time in the same calendar year, the foregoing limitation on the exercisability
of such options as incentive stock options under the Federal tax laws shall be
applied on the basis of the order

                                       8.




<PAGE>   9



in which such options are granted. Should the number of shares of Common Stock
for which an Incentive Option first becomes exercisable in any calendar year
exceed the applicable One Hundred Thousand Dollar ($100,000) limitation, the
option may nevertheless be exercised for those excess shares in such calendar
year as a non-statutory option.

               (c)  10% Stockholder. If any individual to whom the Incentive
Option is granted is the owner of stock (as determined under Section 424(d) of
the Internal Revenue Code) possessing ten percent (10%) or more of the total
combined voting power of all classes of stock of the Corporation or any one of
its parent or subsidiary corporations, then the option price per share shall not
be less than one hundred and ten percent (110%) of the fair market value per
share of Common Stock on the grant date, and the option term shall not exceed
five (5) years, measured from such grant date.

               Except as modified by the preceding provisions of this Section
VI, all the provisions of the Plan shall be applicable to the Incentive Options
granted hereunder.

     VII.      CORPORATE TRANSACTION/CHANGE IN CONTROL

               (a)    In the event of any of the following transactions (a 
"Corporate Transaction"):

                           (i)      a merger or consolidation in which the
        Corporation is not the surviving entity, except for a transaction the 
        principal purpose of which is to change the State of the Corporation's
        incorporation,

                          (ii)      the sale, transfer or other disposition of 
        all or substantially all of the assets of the Corporation in liquidation
        or dissolution of the Corporation, or

                         (iii)      any reverse merger in which the Corporation 
        is the surviving entity but in which fifty percent (50%) or more of the
        Corporation's outstanding voting stock is transferred to persons
        different from those who held the stock immediately prior to such
        merger,

                      each outstanding option under the Plan shall automatically
accelerate so that each such option shall, immediately prior to the specified
effective date for the Corporate Transaction, become exercisable for the total
number of shares of Common Stock at the time subject to such option and may be
exercised for all or any portion of those shares as fully-vested shares of
Common Stock. However, an outstanding option under the Plan shall not so
accelerate if and to the extent: (i) such option is, in connection with the
Corporate Transaction, either to be assumed by the successor corporation or
parent thereof or be replaced with a comparable option to purchase shares of the
capital stock of the successor corporation or parent thereof or (ii) the
acceleration of such option is subject to

                                       9.




<PAGE>   10



other applicable limitations imposed by the Plan Administrator at the time of
grant. The determination of comparability under clause (i) above shall be made
by the Plan Administrator and its determination shall be final, binding and
conclusive.

               (b)    Each outstanding option under the Plan which is assumed in
connection with the Corporate Transaction or is otherwise to continue in effect
shall be appropriately adjusted, immediately after such Corporate Transaction,
to apply and pertain to the number and class of securities which would have been
issued, in consummation of such Corporate Transaction, to an actual holder of
the same number of shares of Common Stock as are subject to such option
immediately prior to such Corporate Transaction. Appropriate adjustments shall
also be made to the option price payable per share, provided the aggregate
option price payable for such securities shall remain the same. In addition, the
class and number of securities available for issuance under the Plan on both an
aggregate and per participant basis shall be appropriately adjusted to reflect
the effect of the Corporate Transaction upon the Corporation's capital
structure.

               (c)    In connection with any Change in Control (as defined 
below), the Plan Administrator shall have full power and authority, exercisable
either at the time the option is granted or at any time while the option remains
outstanding, to provide for the automatic acceleration of each outstanding
option under the Plan so that each such option shall, immediately prior to the
effective date of the Change in Control, become exercisable for the total number
of shares at the time subject to such option and may be exercised for all or any
portion of those shares as fully-vested shares of Common Stock. The Plan
Administrator shall also have full power and authority to condition such option
acceleration, and the termination of any of the Corporation's repurchase rights
with respect to any unvested shares purchased or purchasable under the Plan,
upon the subsequent termination of the optionee's Service within a designated
period following the Change in Control.

           A CHANGE IN CONTROL shall be deemed to occur in the event:

                           (i)     twenty-five percent (25%) or more of the
        Corporation's outstanding voting stock is acquired pursuant to a tender
        or exchange offer (A) which is made directly to the Corporation's
        stockholders by any person or related group of persons (other than the
        Corporation or a person that directly or indirectly controls, is
        controlled by or is under common control with, the Corporation) and (B)
        which the Board does not recommend the stockholders to accept; or

                          (ii)     there is a change in the composition of the 
        Board over a period of twenty-four (24) consecutive months or less such
        that a majority of the Board members ceases, by reason of one or more
        proxy contests for the election of Board members, to be comprised of
        individuals who either (A) have been Board members continuously since
        the beginning of such period or (B) have been elected or nominated for
        election as Board

                                       10.




<PAGE>   11

        members during such period by at least a majority of the Board members
        described in clause (A) who were still in office at the time such
        election or nomination was approved by the Board.

               (d)    Immediately following the consummation of a Corporate
Transaction, all outstanding options under the Plan shall terminate and cease to
be outstanding, except to the extent assumed by the successor corporation or its
parent company. Upon a Change in Control, each outstanding option accelerated
pursuant to subsection VII(c) above shall remain fully exercisable until the
expiration or sooner termination of the option term specified in the agreement
evidencing such grant.

               (e)    The exercisability as incentive stock options under the
Federal tax laws of any options accelerated in connection with a Corporate
Transaction or Change in Control shall remain subject to the dollar limitation
of Section VI(b) of the Plan. To the extent such dollar limitation is exceeded,
the accelerated option shall be exercisable as a non-statutory option under the
Federal tax laws.

               (f)    The grant of options under this Plan shall in no way 
affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.

    VIII.      CANCELLATION AND REGRANT OF OPTIONS

               The Plan Administrator shall have the authority to effect, at any
time and from time to time, with the consent of the affected optionees, the
cancellation of any or all outstanding options under the Plan and to grant in
substitution therefor new options under the Plan covering the same or different
numbers of shares of Common Stock but having an option price per share not less
than (i) eighty-five percent (85%) of the fair market value per share of the
Common Stock on the new grant date or (ii) one hundred percent (100%) of such
fair market value in the case of an Incentive Option or (iii) one hundred and
ten percent (110%) of such fair market value in the case of an Incentive Option
granted to a 10% Stockholder.

      IX.      STOCK APPRECIATION RIGHTS

               (a)    Provided and only if the Plan Administrator determines in 
its discretion to implement the stock appreciation right provisions of this
Section IX, one or more optionees may be granted the right, exercisable upon
such terms and conditions as the Plan Administrator may establish, to surrender
all or part of an unexercised option under the Plan in exchange for a
distribution from the Corporation in an amount equal to the excess of (i) the
fair market value (on the option surrender date) of the number of shares in
which

                                       11.




<PAGE>   12



the optionee is at the time vested under the surrendered option (or surrendered
portion thereof) over (ii) the aggregate option price payable for such vested
shares.

               (b)    No surrender of an option shall be effective hereunder 
unless it is approved by the Plan Administrator. If the surrender is so
approved, then the distribution to which the optionee shall accordingly become
entitled under this Section IX may be made in shares of Common Stock valued at
fair market value on the option surrender date, in cash, or partly in shares and
partly in cash, as the Plan Administrator shall in its sole discretion deem
appropriate.

               (c)    If the surrender of an option is rejected by the Plan
Administrator, then the optionee shall retain whatever rights the optionee had
under the surrendered option (or surrendered portion thereof) on the option
surrender date and may exercise such rights at any time prior to the later of
(i) five (5) business days after the receipt of the rejection notice or (ii) the
last day on which the option is otherwise exercisable in accordance with the
terms of the instrument evidencing such option, but in no event may such rights
be exercised more than ten (10) years after the date of the option grant.

               (d)    One or more officers of the Corporation subject to the
short-swing profit restrictions of the Federal securities laws may, in the Plan
Administrator's sole discretion, be granted limited stock appreciation rights in
tandem with their outstanding options under the Plan. Upon the occurrence of a
Hostile Take-Over, each outstanding option with such a limited stock
appreciation right shall automatically be cancelled, to the extent such option
is at the time exercisable for fully-vested shares of Common Stock (including
any shares which may vest in connection with such Hostile Take-Over). The
optionee shall in return be entitled to a cash distribution from the Corporation
in an amount equal to the excess of (i) the Take-Over Price of the vested shares
of Common Stock at the time subject to the cancelled option (or cancelled
portion of such option) over (ii) the aggregate exercise price payable for such
shares. The cash distribution payable upon such cancellation shall be made
within five (5) days following the consummation of the Hostile Take-Over. The
Plan Administrator shall pre-approve, at the time the limited stock appreciation
right is granted, the subsequent exercise of that right in accordance with the
terms of the grant and the provisions of this Section IX(d). No additional
approval of the Plan Administrator or the Board shall be required at the time of
the actual option cancellation and cash distribution. The balance of the option
(if any) shall continue to remain outstanding and exercisable in accordance with
the terms and conditions of the instrument evidencing such grant.

               (e)    For purposes of Section IX(d), the following definitions 
shall be in effect:

                      A HOSTILE TAKE-OVER shall be deemed to occur in the event
        any person or related group of persons (other than the Corporation or a
        person that directly or indirectly controls, is controlled by, or is
        under common

                                       12.




<PAGE>   13



        control with, the Corporation) directly or indirectly acquires
        beneficial ownership (within the meaning of Rule 13d-3 of the Securities
        Exchange Act of 1934) of securities possessing more than twenty-five
        percent (25%) of the total combined voting power of the Corporation's
        outstanding securities pursuant to a tender or exchange offer made
        directly to the Corporation's stockholders which the Board does not
        recommend such stockholders to accept.

                      The TAKE-OVER PRICE per share shall be deemed to be equal
        to the greater of (a) the fair market value per share on the date of
        cancellation, as determined pursuant to the valuation provisions of
        Section V.1.C, or (b) the highest reported price per share paid by the
        acquiring entity in effecting such Hostile Take-Over. However, to the
        extent the cancelled option is an Incentive Option, the Take-Over Price
        shall not exceed the clause (a) price per share.

               (f)    The shares of Common Stock subject to any option 
surrendered or cancelled for an appreciation distribution pursuant to this
Section IX shall NOT be available for subsequent option grant under the Plan.

       X.      LOANS OR INSTALLMENT PAYMENTS

               The Plan Administrator may, in its discretion, assist any
optionee (including any officer or director of the Corporation) in the exercise
of one or more options granted to such individual under the Plan, including the
satisfaction of any Federal and State income and employment tax obligations
arising therefrom, by (i) authorizing the extension of a loan from the
Corporation to such optionee or (ii) permitting the optionee to pay the option
price for the purchased Common Stock in installments over a period of years. The
terms of any such loan or installment method of payment (including the interest
rate and terms of repayment) will be upon such terms as the Plan Administrator
specifies in the applicable option agreement or otherwise deems appropriate
under the circumstances. Loans or installment payments may be granted with or
without security or collateral (other than to individuals who are independent
consultants or advisors, in which event the loan must be adequately secured by
collateral other than the purchased shares). However, the maximum credit
available to the optionee may not exceed the option price of the acquired shares
plus any Federal and State income and employment tax liability incurred by the
optionee in connection with the exercise of the option.

      XI.      EXTENSION OF EXERCISE PERIOD

               The Plan Administrator shall have full power and authority, to
extend the period of time for which the option is to remain exercisable
following the optionee's

                                       13.




<PAGE>   14


cessation of Service from the thirty-six (36) month or shorter period set forth
in the option agreement to such greater period of time as the Plan Administrator
shall deem appropriate. In no event, however, shall such option be exercisable
after the specified expiration date of the option term.

     XII.      AMENDMENT OF THE PLAN

               The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects whatsoever; provided,
however, that no such amendment or modification shall, without the consent of
the holders, adversely affect rights and obligations with respect to options at
the time outstanding under the Plan. In addition, certain amendments may require
stockholder approval pursuant to applicable laws or regulations.


    XIII.      EFFECTIVE DATE AND TERM OF PLAN

               (a) The Plan was initially adopted by the Board on July 19, 1988
and approved by the Corporation's stockholders on March 29, 1989. The Plan was
subsequently amended by the Board on July 18, 1990, and such amendment was
approved by the Corporation's stockholders in October, 1990. In January 1991,
the Plan was again amended to increase by 480,000 shares the number of shares of
Common Stock issuable under the Plan, and such share increase was approved by
the Corporation's stockholders on March 20, 1991. The Board further amended the
Plan on May 22, 1991, with such amendments to become effective as of the date
the Corporation's Common Stock first became traded on the Nasdaq National
Market, in order to revise certain provisions previously required when the Plan
was subject to the permit requirements of the California Corporations
Department. On March 18, 1992, the Plan was amended and restated in its
entirety, including an increase of 670,000 shares to the number of shares of
Common Stock issuable thereunder. The 1992 restatement, including the
670,000-share increase, was approved by the stockholders at the 1992 Annual
Meeting. On January 13, 1993, the Board amended the Plan to increase by an
additional 700,000 shares the number of shares of Common Stock issuable under
the Plan, and such share increase was approved by the stockholders at the 1993
Annual Meeting. On February 28, 1994, the Board amended the Plan to increase by
an additional 650,000 shares the number of shares of Common Stock issuable under
the Plan, and such increase was approved by the stockholders at the 1994 Annual
Meeting. On January 25, 1995, the Board amended the Plan to increase by an
additional 500,000 shares the number of shares of Common Stock issuable under
the Plan, and such increase was approved by the stockholders at the 1995 Annual
Meeting. On January 24, 1996, the Board adopted an amendment which increased the
number of shares of Common Stock issuable under the Plan by an additional
1,200,000 shares, and such increase was approved by the stockholders at the 1996
Annual Meeting.


                                       14.




<PAGE>   15



               On February 24, 1997, the Board adopted a series of amendments to
the Plan (the "1997 Amendments") which (i) increased the number of shares of
Common Stock reserved for issuance over the term of the Plan by an additional
800,000 shares, (ii) rendered non-employee Board members serving as Plan
Administrator eligible to receive option grants under the Plan, (iii) allowed
unvested shares issued under the Plan and subsequently repurchased by the
Corporation at the option exercise price paid per share to be reissued under the
Plan, (iv) removed certain restrictions on the eligibility of non-employee Board
members to serve as Plan Administrator, (v) extended the term of the Option Plan
from July 19, 1998 to December 31, 2002 and (vi) effected a series of additional
changes to the provisions of the Plan (including the stockholder approval
requirements, the transferability of non-statutory stock options and the
elimination of the six (6)-month holding period requirement as a condition to
the exercise of stock appreciation rights) in order to take advantage of the
recent amendments to Rule 16b-3 of the 1934 Act which exempts certain officer
and director transactions under the Plan from the short-swing liability
provisions of the federal securities laws. The 1997 Amendments were approved by
the Corporation's stockholders at the 1997 Annual Meeting.

               (b) The provisions of the 1992 restatement and of each subsequent
amendment to the Plan shall apply only to stock options and stock appreciation
rights granted under the Plan from and after the applicable effective date of
such restatement or amendment. All stock options and stock appreciation rights
issued and outstanding under the Plan immediately prior to each such effective
date shall continue to be governed by the terms and conditions of the Plan (and
the respective agreements evidencing each such option or stock appreciation
right) as in effect on the date each such option or stock appreciation right was
previously granted, and nothing in the 1992 restatement or in any subsequent
amendment shall be deemed to affect or otherwise modify the rights or
obligations of the holders of such prior options or stock appreciation rights
with respect to their acquisition of shares of Common Stock under such options
or their exercise of such stock appreciation rights. However, the Plan
Administrator may, in its discretion, modify stock option or stock appreciation
right issued and outstanding immediately prior to the effective date of the 1992
restatement or any subsequent amendment to include one or more provisions to the
Plan added by such restatement or amendment.

               (c) Unless sooner terminated in accordance with Section VII, the
Plan shall terminate upon the earlier of (i) December 31, 2002 or (ii) the date
on which all shares available for issuance under the Plan shall have been issued
or cancelled pursuant to the exercise, surrender of cash-out of the stock
options and stock appreciation rights granted hereunder. If the date of
termination is determined under clause (i) above, then each stock option or
stock appreciation right outstanding on such date shall thereafter continue to
have force and effect in accordance with the provisions of the instruments
evidencing such grant.

               (d) Options may be granted under this Plan to purchase shares of
Common Stock in excess of the number of shares then available for issuance under
the Plan, provided any excess shares actually issued under the Plan are held in
escrow until stockholder

                                       15.




<PAGE>   16


approval is obtained for a sufficient increase in the number of shares available
for issuance under the Plan. If such stockholder approval is not obtained within
twelve (12) months after the date the first such excess option grants are made,
then (I) any unexercised excess options shall terminate and cease to be
exercisable and (II) the Corporation shall promptly refund the purchase price
paid for any excess shares actually issued under the Plan and held in escrow,
together with interest (at the applicable Short Term Federal Rate) for the
period the shares were held in escrow.

     XIV.      USE OF PROCEEDS

               Any cash proceeds received by the Corporation from the sale of
shares pursuant to options granted under the Plan shall be used for general
corporate purposes.

      XV.      REGULATORY APPROVALS

               The implementation of the Plan, the granting of any stock option
or stock appreciation right hereunder, and the issuance of stock upon the
exercise of any such option or stock appreciation right shall be subject to the
procurement by the Corporation of all approvals and permits required by
regulatory authorities having jurisdiction over the Plan, the options and stock
appreciation rights granted under it and the stock issued pursuant to it.


                                       16.




<PAGE>   1
                                                                   EXHIBIT 99.4




                        IDEC PHARMACEUTICALS CORPORATION
                       1995 EMPLOYEE STOCK PURCHASE PLAN

                   AMENDED AND RESTATED THROUGH MAY 22, 1997



       I.        PURPOSE OF THE PLAN

                 This Employee Stock Purchase Plan is intended to promote the
interests of IDEC Pharmaceuticals Corporation by providing eligible employees
with the opportunity to acquire a proprietary interest in the Corporation
through participation in a payroll-deduction based employee stock purchase plan
designed to qualify under Section 423 of the Code.

                 Capitalized terms herein shall have the meanings assigned to
such terms in the attached Appendix.

     II.         ADMINISTRATION OF THE PLAN

                 The Compensation Committee of the Board in its capacity as
Plan Administrator shall have full authority to interpret and construe any
provision of the Plan and to adopt such rules and regulations for proper
administration of the Plan as it may deem necessary or appropriate.  Decisions
of the Plan Administrator shall be final and binding on all parties having an
interest in the Plan.

     III.        STOCK SUBJECT TO PLAN

                 A.       The stock purchasable under the Plan shall be shares
of authorized but unissued or reacquired Common Stock, including shares of
Common Stock purchased on the open
 market.  The maximum number of shares of
Common Stock which may be issued over the term of the Plan shall not exceed
495,000 shares, inclusive of the 150,000 share increase which the Board
authorized on February 24, 1997 and approved by the Corporation's stockholders
at the 1997 Annual Meeting.

                 B.       Should any change be made to the Common Stock by
reason of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Corporation's receipt of consideration,
appropriate adjustments shall be made to (i) the maximum number and class of
securities issuable under the Plan, (ii) the maximum number and class of
securities purchasable per Participant on any one Purchase Date and (iii) the
number and class of securities and the price per share in effect under each
outstanding purchase right in order to prevent the dilution or enlargement of
benefits thereunder.

<PAGE>   2
     IV.         OFFERING PERIODS

                 A.       Shares of Common Stock shall be offered for purchase
under the Plan through a series of successive offering periods until such time
as (i) the maximum number of shares of Common Stock available for issuance
under the Plan shall have been purchased or (ii) the Plan shall have been
sooner terminated.

                 B.       Each offering period shall be of such duration (not
to exceed twenty-four (24) months) as determined by the Plan Administrator
prior to the start date.  Subject to the provisions of Section IV.D, the
initial offering period shall commence on the Effective Date and shall end on
the last business day in June 1997; the next offering period shall commence on
the first business day in July 1997; and subsequent offering periods shall
commence as designated by the Plan Administrator.

                 C.       Each offering period shall be comprised of a series
of successive quarterly Purchase Periods.  Purchase Periods shall commence on
the first business day in July, October, January and April each year and shall
end on the last business day in the following September, December, March and
June, respectively, each year.  Accordingly, there shall be a maximum of eight
(8) quarterly Purchase Periods within each offering period.

                 D.       Should the Fair Market Value per share of Common
Stock on any Purchase Date within an offering period be less than the Fair
Market Value per share of Common Stock on the start date of that offering
period, then that offering period shall automatically terminate immediately
after the purchase of shares of Common Stock on such Purchase Date, and a new
offering period shall commence on the next business day following such Purchase
Date.  The duration of that new offering period shall be established by the
Plan Administrator within five (5) business days following the start date.

                 E.       Under no circumstances shall any offering period
commence under the Plan, nor shall any shares of Common Stock be issued
hereunder, until such time as (i) the Plan shall have been approved by the
Corporation's stockholders and (ii) the Corporation shall have complied with
all applicable requirements of the Securities Act, all applicable listing
requirements of any securities exchange (or the Nasdaq National Market if
applicable) on which shares of the Common Stock are listed for trading and all
other applicable statutory and regulatory requirements.

       V.        ELIGIBILITY

                 A.       Each Eligible Employee shall be eligible to enter an
offering period under the Plan on the start date of any Purchase Period (within
that offering period) which begins on or after his or her completion of thirty
(30) days of continuous service with the

                                       2.

<PAGE>   3
Corporation or any Corporate Affiliate, provided he or she remains an Eligible
Employee on such start date.  The date such individual enters the offering
period shall be designated his or her Entry Date for purposes of that offering
period.

                 B.       To participate in the Plan for a particular offering
period, the Eligible Employee must complete the enrollment forms prescribed by
the Plan Administrator (including a stock purchase agreement and a payroll
deduction authorization form) and file such forms with the Plan Administrator
(or its designate) prior to his or her scheduled Entry Date.  However, each
individual who is a Participant in an offering period on the date such offering
period terminates pursuant to Section IV.D shall automatically be enrolled in
the new offering period which commences immediately after such termination
date, provided the Participant is an Eligible Employee on the start date of
that new offering period.  Such start date shall be the Participant's Entry
Date for the new offering period.

     VI.         PAYROLL DEDUCTIONS

                 A.       The payroll deduction authorized by the Participant
for purposes of acquiring shares of Common Stock in an offering period may be
any multiple of one percent (1%) of the Eligible Earnings paid to the
Participant during each Purchase Period within that offering period, up to a
maximum of ten percent (10%).  The deduction rate so authorized shall continue
in effect for the remainder of the offering period, except to the extent such
rate is changed in accordance with the following guidelines:

                               (i)         The Participant may, at any time
         during an offering period, reduce his or her rate of payroll deduction
         to any lower multiple of one percent of Eligible Earnings to become
         effective as soon as possible after filing the appropriate form with
         the Plan Administrator.  The Participant may not, however, effect more
         than one (1) such reduction per Purchase Period.

                              (ii)         The Participant may, prior to the
         commencement of any new Purchase Period within the offering period,
         increase or decrease the rate of his or her payroll deduction by
         filing the appropriate form with the Plan Administrator prior to the
         start date of that Purchase Period.  The new rate (which may not
         exceed the ten percent (10%) maximum) shall become effective as of the
         start date of the first Purchase Period following the filing of such
         form.

                 B.       Payroll deductions shall begin on the first pay day
following the Participant's Entry Date into the offering period and shall
(unless sooner terminated by the Participant) continue through the pay day
ending with or immediately prior to the last day of that offering period.  The
amounts so collected shall be credited to the Participant's book account under
the Plan, but no interest shall be paid on the balance from time to time





                                       3.

<PAGE>   4
outstanding in such account.  The amounts collected from the Participant shall
not be held in any segregated account or trust fund and may be commingled with
the general assets of the Corporation and used for general corporate purposes.

                 C.       Payroll deductions shall automatically cease upon the
termination of the Participant's purchase right in accordance with the
provisions of the Plan.

                 D.       The Participant's acquisition of Common Stock under
the Plan on any Purchase Date shall neither limit nor require the Participant's
acquisition of Common Stock on any subsequent Purchase Date, whether within the
same or a different offering period.

     VII.        PURCHASE RIGHTS

                 A.       GRANT OF PURCHASE RIGHT.  A Participant shall be
granted a separate purchase right for each offering period in which he or she
participates.  The purchase right shall be granted on the Participant's Entry
Date into the offering period and shall provide the Participant with the right
to purchase shares of Common Stock, in a series of successive installments over
the remainder of such offering period, upon the terms set forth below.  The
Participant shall execute a stock purchase agreement embodying such terms and
such other provisions (not inconsistent with the Plan) as the Plan
Administrator may deem advisable.

                 Under no circumstances shall purchase rights be granted under
the Plan to any Eligible Employee if such individual would, immediately after
the grant, own (within the meaning of Code Section 424(d)) or hold outstanding
options or other rights to purchase, stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Corporation or any Corporate Affiliate.

                 B.       EXERCISE OF THE PURCHASE RIGHT.  Each purchase right
shall be automatically exercised in installments on each Purchase Date within
the offering period, and shares of Common Stock shall accordingly be purchased
on behalf of each Participant (other than any Participant whose payroll
deductions have previously been refunded in accordance with the Termination of
Purchase Right provisions below) on each such Purchase Date.  The purchase
shall be effected by applying the Participant's payroll deductions for the
Purchase Period ending on such Purchase Date (together with any carryover
deductions from the preceding Purchase Period) to the purchase of whole shares
of Common Stock (subject to the limitation on the maximum number of shares
purchasable per Participant on any one Purchase Date) at the purchase price in
effect for the Participant for that Purchase Date.

                 C.       PURCHASE PRICE.  The purchase price per share at
which Common Stock will be purchased on the Participant's behalf on each
Purchase Date within the offering period shall be equal to eighty-five percent
(85%) of the lower of (i) the Fair Market Value per share of Common Stock on
the Participant's Entry Date into that offering period or (ii)





                                       4.

<PAGE>   5
the Fair Market Value per share of Common Stock on that Purchase Date.
However, for each Participant whose Entry Date is other than the start date of
the offering period, the clause (i) amount shall in no event be less than the
Fair Market Value per share of Common Stock on the start date of that offering
period.

                 D.       NUMBER OF PURCHASABLE SHARES.  The number of shares
of Common Stock purchasable by a Participant on each Purchase Date during the
offering period shall be the number of whole shares obtained by dividing the
amount collected from the Participant through payroll deductions during the
Purchase Period ending with that Purchase Date (together with any carryover
deductions from the preceding Purchase Period) by the purchase price in effect
for the Participant for that Purchase Date.  However, the maximum number of
shares of Common Stock purchasable per Participant on any one Purchase Date
shall not exceed 2,500 shares, subject to periodic adjustments in the event of
certain changes in the Corporation's capitalization.

                 E.       EXCESS PAYROLL DEDUCTIONS.  Any payroll deductions
not applied to the  purchase of shares of Common Stock on any Purchase Date
because they are not sufficient to purchase a whole share of Common Stock shall
be held for the purchase of Common Stock on the next Purchase Date.  However,
any payroll deductions not applied to the purchase of Common Stock by reason of
the limitation on the maximum number of shares purchasable by the Participant
on the Purchase Date shall be promptly refunded.

                 F.       TERMINATION OF PURCHASE RIGHT.  The following
provisions shall govern the termination of outstanding purchase rights:

                               (i)         A Participant may, at any time at
         least five (5) business days prior to the next Purchase Date in the
         offering period, terminate his or her outstanding purchase right by
         filing the appropriate form with the Plan Administrator (or its
         designate), and no further payroll deductions shall be collected from
         the Participant with respect to the terminated purchase right.  Any
         payroll deductions collected during the Purchase Period in which such
         termination occurs shall, at the Participant's election, be
         immediately refunded or held for the purchase of shares on the next
         Purchase Date.  If no such election is made at the time such purchase
         right is terminated, then the payroll deductions collected with
         respect to the terminated right shall be refunded as soon as possible.

                              (ii)         The termination of such purchase
         right shall be irrevocable, and the Participant may not subsequently
         rejoin the offering period for which the terminated purchase right was
         granted.  In order to resume participation in any subsequent offering
         period, such individual must re-enroll in the Plan (by making a timely
         filing of the prescribed enrollment forms) prior to his or her
         scheduled Entry Date into that offering period.





                                       5.

<PAGE>   6
                             (iii)         Should the Participant cease to
         remain an Eligible Employee for any reason (including death,
         disability or change in status) while his or her purchase right
         remains outstanding, then such individual (or the personal
         representative of the estate of a deceased Participant) shall have the
         following election, exercisable up until the end of the Purchase
         Period in which such cessation of Eligible Employee status occurs:

                                        - to withdraw all of the Participant's
         payroll deductions to date during that Purchase Period or

                                        - to have such funds held for the
purchase of shares on the next Purchase Date.

                          In the absence of such a timely election, the
         Participant's payroll deductions shall be refunded as soon as possible
         after the close of the Purchase Period.  In no event, however, may any
         payroll deductions be made on the Participant's behalf following
         his/her cessation of Eligible Employee status.

                          (iv)             Should the Participant cease to
         remain in active service by reason of an approved unpaid leave of
         absence, then the Participant shall have the election, exercisable up
         until the last business day of the Purchase Period in which such leave
         commences, to (a) withdraw all the funds in the Participant's payroll
         account at the time of the commencement of such leave or (b) have such
         funds held for the purchase of shares at the end of such Purchase
         Period.  In no event, however, shall any further payroll deductions be
         added to the Participant's account during such unpaid leave.  Upon the
         Participant's return to active service, his or her payroll deductions
         under the Plan shall automatically resume at the rate in effect at the
         time the leave began, provided the Participant returns to service
         prior to the expiration date of the offering period in which such
         leave began.

                 G.       CORPORATE TRANSACTION.  Each outstanding purchase
right shall automatically be exercised, immediately prior to the effective date
of any Corporate Transaction, by applying the payroll deductions of each
Participant for the Purchase Period in which such Corporate Transaction occurs
to the purchase of whole shares of Common Stock at a purchase price per share
equal to eighty-five percent (85%) of the lower of (i) the Fair Market Value
per share of Common Stock on the Participant's Entry Date into the offering
period in which such Corporate Transaction occurs or (ii) the Fair Market Value
per share of Common Stock immediately prior to the effective date of such
Corporate Transaction.  However, the applicable limitation on the number of
shares purchasable per





                                       6.

<PAGE>   7
Participant shall continue to apply to any such purchase, and the clause (i)
amount above shall not, for any Participant whose Entry Date for the offering
period is other than the start date of that offering period, be less than the
Fair Market Value per share of Common Stock on such start date.

                 The Corporation shall use its best efforts to provide at least
ten (10)-days prior written notice of the occurrence of any Corporate
Transaction, and Participants shall, following the receipt of such notice, have
the right to terminate their outstanding purchase rights prior to the effective
date of the Corporate Transaction.

                 H.       PRORATION OF PURCHASE RIGHTS.  Should the total
number of shares of Common Stock which are to be purchased pursuant to
outstanding purchase rights on any particular date exceed the number of shares
then available for issuance under the Plan, the Plan Administrator shall make a
pro-rata allocation of the available shares on a uniform and nondiscriminatory
basis, and the payroll deductions of each Participant, to the extent in excess
of the aggregate purchase price payable for the Common Stock pro-rated to such
individual, shall be refunded.

                 I.       ASSIGNABILITY.  No purchase right granted under the
Plan shall be assignable or transferable by the Participant other than by will
or by the laws of descent and distribution following the Participant's death,
and during the Participant's lifetime the purchase right shall be exercisable
only by the Participant.

                 J.       STOCKHOLDER RIGHTS.  A Participant shall have no
stockholder rights with respect to the shares subject to his or her outstanding
purchase right until the shares are purchased on the Participant's behalf in
accordance with the provisions of the Plan and the Participant has become a
holder of record of the purchased shares.

                 A Participant shall be issued, as soon as practicable after
the date of each purchase, a stock certificate for the number of shares
purchased on the Participant's behalf.  Such certificate may, upon the
Participant's request, be issued in the names of the Participant and his/her
spouse as community property or as joint tenants with right of survivorship.
Alternatively, the stock certificate may be delivered to a designated stock
brokerage account maintained for the Participant and held in "street name" in
order to facilitate the subsequent sale of the purchased shares.

   VIII.         ACCRUAL LIMITATIONS

                 A.       No Participant shall be entitled to accrue rights to
acquire Common Stock pursuant to any purchase right outstanding under this Plan
if and to the extent such accrual, when aggregated with (i) rights to purchase
Common Stock accrued under any other purchase right granted under this Plan and
(ii) similar rights accrued under other employee stock purchase plans (within
the meaning of Code Section 423) of the Corporation or any Corporate Affiliate,
would otherwise permit such Participant to purchase more than Twenty-





                                       7.

<PAGE>   8
Five Thousand Dollars ($25,000) worth of stock of the Corporation or any
Corporate Affiliate (determined on the basis of the Fair Market Value of such
stock on the date or dates such rights are granted) for each calendar year such
rights are at any time outstanding.

                 B.       For purposes of applying such accrual limitations,
the following provisions shall be in effect:

                               (i)         The right to acquire Common Stock
         under each outstanding purchase right shall accrue in a series of
         installments on each Purchase Date during the offering period on which
         such right remains outstanding.

                              (ii)         No right to acquire Common Stock
         under any outstanding purchase right shall accrue to the extent the
         Participant has already accrued in the same calendar year the right to
         acquire Common Stock under one (1) or more other purchase rights at a
         rate equal to Twenty-Five Thousand Dollars ($25,000) worth of Common
         Stock (determined on the basis of the Fair Market Value of such stock
         on the date or dates of grant) for each calendar year such rights were
         at any time outstanding.

                 C.       If by reason of such accrual limitations, any
purchase right of a Participant does not accrue for a particular Purchase
Period, then the payroll deductions which the Participant made during that
Purchase Period with respect to such purchase right shall be promptly refunded.

                 D.       In the event there is any conflict between the
provisions of this Article and one or more provisions of the Plan or any
instrument issued thereunder, the provisions of this Article shall be
controlling.

     IX.         EFFECTIVE DATE AND TERM OF THE PLAN

                 A.       The Plan was adopted by the Board on January 25, 1995
and was approved by the Corporation's stockholders at the 1995 Annual Meeting.

                 B.       On February 24, 1997, the Board amended the Plan to
increase the total share reserve available for issuance under the Plan by an
additional 150,000 shares, and such increase was approved by the Corporation's
stockholders at the 1997 Annual Meeting.

                 C.       Unless sooner terminated by the Board, the Plan shall
terminate upon the earliest of (i) the last business day in June 2005, (ii) the
date on which all shares available for issuance under the Plan shall have been
sold pursuant to purchase rights exercised under the Plan or (iii) the date on
which all purchase rights are exercised in connection with a Corporate
Transaction.  No further purchase rights shall be granted or





                                       8.

<PAGE>   9
exercised, and no further payroll deductions shall be collected, under the Plan
following its termination.

       X.        AMENDMENT OF THE PLAN

                 The Board may alter, amend, suspend or discontinue the Plan at
any time to become effective immediately following the close of any Purchase
Period.  However, the Board may not, without the approval of the Corporation's
stockholders, (i) materially increase the number of shares of Common Stock
issuable under the Plan or the maximum number of shares purchasable per
Participant on any one Purchase Date, except for permissible adjustments in the
event of certain changes in the Corporation's capitalization, (ii) alter the
purchase price formula so as to reduce the purchase price payable for the
shares of Common Stock purchasable under the Plan, or (iii) materially increase
the benefits accruing to Participants under the Plan or materially modify the
requirements for eligibility to participate in the Plan.

         XI.     GENERAL PROVISIONS

                 A.       All costs and expenses incurred in the administration
of the Plan shall be paid by the Corporation.

                 B.       Nothing in the Plan shall confer upon the Participant
any right to continue in the employ of the Corporation or any Corporate
Affiliate for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Corporate Affiliate
employing such person) or of the Participant, which rights are hereby expressly
reserved by each, to terminate such person's employment  at any time for any
reason, with or without cause.

                 C.       The provisions of the Plan shall be governed by the
laws of the State of California without resort to that State's conflict-of-laws
rules.





                                       9.

<PAGE>   10
                                   SCHEDULE A

                         CORPORATIONS PARTICIPATING IN
                          EMPLOYEE STOCK PURCHASE PLAN
                            AS OF THE EFFECTIVE DATE


                        IDEC Pharmaceuticals Corporation






<PAGE>   11
                                    APPENDIX


                 The following definitions shall be in effect under the Plan:

                 A.       BOARD shall mean the Corporation's Board of
Directors.

                 B.       CODE shall mean the Internal Revenue Code of 1986, as
amended.

                 C.       COMMON STOCK shall mean the Corporation's common
stock.

                 D.       CORPORATE AFFILIATE shall mean any parent or
subsidiary corporation of the Corporation (as determined in accordance with
Code Section 424), whether now existing or subsequently established.

                 E.       CORPORATE TRANSACTION shall mean either of the
following stockholder-approved transactions to which the Corporation is a
party:

                                (i)        a merger or consolidation in which
         securities possessing more than fifty percent (50%) of the total
         combined voting power of the Corporation's outstanding securities are
         transferred to a person or persons different from the persons holding
         those securities immediately prior to such transaction, or

                               (ii)        the sale, transfer or other
         disposition of all or substantially all of the assets of the
         Corporation in complete liquidation or dissolution of the Corporation.

                 F.       CORPORATION shall mean IDEC Pharmaceuticals
Corporation, a Delaware corporation, and any corporate successor to all or
substantially all of the assets or voting stock of IDEC Pharmaceuticals
Corporation which shall by appropriate action adopt the Plan.

                 G.       EFFECTIVE DATE shall mean July 3, 1995, the first
business day in July 1995.  Any Corporate Affiliate which becomes a
Participating Corporation after such Effective Date shall designate a
subsequent Effective Date with respect to its employee-Participants.

                 H.       ELIGIBLE EARNINGS shall mean the (i) regular base
salary paid to a Participant by one or more Participating Companies during such
individual's period of participation in the Plan, plus (ii) any pre-tax
contributions made by the Participant to any Code Section 401(k) salary
deferral plan or any Code Section 125 cafeteria benefit program now or
hereafter established by the Corporation or any Corporate Affiliate, plus (iii)
all of the following amounts to the extent paid in cash: overtime payments,
bonuses, commissions,





                                      A-1.

<PAGE>   12
profit-sharing distributions and other incentive-type payments.  However,
Eligible Earnings shall NOT include any contributions (other than Code Section
401(k) or Code Section 125 contributions) made on the Participant's behalf by
the Corporation or any Corporate Affiliate to any deferred compensation plan or
welfare benefit program now or hereafter established.

                 I.       ELIGIBLE EMPLOYEE shall mean any person who is
engaged, on a regularly-scheduled basis of more than twenty (20) hours per week
for more than five (5) months per calendar year, in the rendition of personal
services to any Participating Corporation as an employee for earnings
considered wages under Code Section 3401(a).

                 J.       ENTRY DATE shall mean the date an Eligible Employee
first commences participation  in the offering period in effect under the Plan.
The earliest Entry Date under the Plan shall be the Effective Date.

                 K.       FAIR MARKET VALUE per share of Common Stock on any
relevant date shall be determined in accordance with the following provisions:

                                (i)        If the Common Stock is at the time
         traded on the Nasdaq National Market, then the Fair Market Value shall
         be the closing selling price per share of Common Stock on the date in
         question, as such price is reported by the National Association of
         Securities Dealers on the Nasdaq National Market or any successor
         system.  If there is no closing selling price for the Common Stock on
         the date in question, then the Fair Market Value shall be the closing
         selling price on the last preceding date for which such quotation
         exists.

                               (ii)        If the Common Stock is at the time
         listed on any Stock Exchange, then the Fair Market Value shall be the
         closing selling price per share of Common Stock on the date in
         question on the Stock Exchange determined by the Plan Administrator to
         be the primary market for the Common Stock, as such price is
         officially quoted in the composite tape of transactions on such
         exchange.  If there is no closing selling price for the Common Stock
         on the date in question, then the Fair Market Value shall be the
         closing selling price  on the last preceding date for which such
         quotation exists.

                 L.       PARTICIPANT shall mean any Eligible Employee of a
Participating Corporation who is actively participating in the Plan.

                 M.       PARTICIPATING CORPORATION shall mean the Corporation
and such Corporate Affiliate or Affiliates as may be authorized from time to
time by the Board to extend the benefits of the Plan to their Eligible
Employees.  The Participating Corporations in the Plan as of the Effective Date
are listed in attached Schedule A.





                                      A-2.

<PAGE>   13
                 N.       PLAN shall mean the Corporation's 1995 Employee Stock
Purchase Plan, as set forth in this document.

                 O.       PLAN ADMINISTRATOR shall mean the Compensation
Committee of the Board in its capacity as administrator of the Plan.

                 P.       PREDECESSOR PLAN shall mean the Corporation's
existing Employee Stock Purchase Plan.

                 Q.       PURCHASE PERIOD shall mean each successive period
within the offering period at the end of which there shall be purchased shares
of Common Stock on behalf of each Participant.

                 R.       PURCHASE DATE shall mean the last business day of
each Purchase Period.  The initial Purchase Date shall be September 30, 1995.

                 S.       SECURITIES ACT shall mean the Securities Act of 1933,
as amended.

                 T.       STOCK EXCHANGE shall mean either the American Stock
Exchange or the New York Stock Exchange.





                                      A-3.