1998 DIRECTORS' STOCK OPTION PLAN

EXHIBIT 4.2


LECTEC CORPORATION

1998 DIRECTORS' STOCK OPTION PLAN


1. Purpose.

The purpose of the LecTec Corporation 1998 Directors' Stock Option Plan
(the "Plan") is to aid in attracting and retaining directors capable of assuring
the future success of LecTec Corporation (the "Company"), to offer the directors
incentives to put forth maximum efforts for the success of the Company's
business and to afford the directors an opportunity to acquire a proprietary
interest in the Company.

2. Definitions.

As used in the Plan, the following terms shall have the meanings set
forth below:

(a) "Affiliate" shall mean (i) any entity that, directly or indirectly,
through one or more intermediaries, is controlled by the Company and (ii) any
entity in which the Company has a significant equity interest, as determined by
the Committee.

(b) "Award" shall mean any Option or Stock Appreciation Right granted
under the Plan.

(c) "Award Agreement" shall mean the written agreement, contract or
other instrument or document evidencing an Award granted under the Plan. Each
Award Agreement shall be subject to the applicable terms and conditions of the
Plan and any other terms and conditions (not inconsistent with the Plan)
determined by the Committee.

(d) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and any regulations promulgated thereunder.

(e) "Committee" shall mean the committee of directors designated by the
Board of Directors of the Company to administer the Plan. The Committee shall be
comprised of not less than such number of directors as shall be required to
permit Awards granted under the Plan to qualify under Rule 16b-3, and each
member of the Committee shall be a "Non-Employee Director" within the meaning of
Rule 16b-3.

(f) "Eligible Person" shall mean any director of the Company who is not
an employee of the Company or any Affiliate of the Company.

(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.



(h) "Fair Market Value" shall mean, with respect to any property
(including, without limitation, any Shares or other securities), the fair market
value of such property determined by such methods or procedures as shall be
established from time to time by the Committee. Notwithstanding the foregoing,
for purposes of the Plan, the Fair Market Value of Shares on a given date shall
be (i) the last sale price of the Shares as reported on the Nasdaq National
Market on such date, if the Shares are then quoted on the Nasdaq National
Market, or (ii) the closing price of the Shares on such date on a national
securities exchange, if the Shares are then being traded on a national
securities exchange.

(i) "Option" shall mean an option granted under Section 5(a) of the
Plan that is not intended to qualify as an incentive stock option under Section
422 of the Code or any successor provision.

(j) "Participant" shall mean any Eligible Person designated to be
granted an Award under the Plan.

(k) "Person" shall mean any individual, corporation, partnership,
association or trust.

(l) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities
and Exchange Commission under the Exchange Act or any successor rule or
regulation.

(m) "Shares" shall mean shares of Common Stock, par value $.01 per
share, of the Company or such other securities or property as may become subject
to Awards pursuant to an adjustment made under Section 4(c) of the Plan.

(n) "Stock Appreciation Right" shall mean any right granted under
Section 5(b) of the Plan.

3. Administration.

(a) Power and Authority of the Committee. The Plan shall be
administered by the Committee. Subject to the terms of the Plan and applicable
law, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the Award to be granted to each Participant under
the Plan; (iii) determine the number of Shares to be covered by (or the method
by which payments or other rights are to be calculated in connection with) each
Award; (iv) determine the terms and conditions of any Award or Award Agreement;
(v) amend the terms and conditions of any Award or Award Agreement; (vi)
accelerate the exercisability of any Award or the lapse of restrictions relating
to any Award; (vii) determine whether, to what extent and under what
circumstances Awards may be exercised in cash, Shares, other securities or other
property, or canceled, forfeited or suspended; (viii) determine whether, to what
extent and under what circumstances cash, Shares, other securities, other
property and other amounts payable with respect to an Award under the Plan shall
be deferred either automatically or at the election of the holder thereof or the
Committee; (ix) interpret and administer the Plan and any instrument or
agreement


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relating to, or Award made under, the Plan; (x) establish, amend, suspend or
waive such rules and regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; and (xi) make any other
determination and take any other action that the Committee deems necessary or
desirable for the administration of the Plan. Unless otherwise expressly
provided in the Plan, all designations, determinations, interpretations and
other decisions under or with respect to the Plan or any Award shall be within
the sole discretion of the Committee, may be made at any time and shall be
final, conclusive and binding upon any Participant and any holder or beneficiary
of any Award.

(b) Meetings of the Committee. The Committee shall select one of its
members as its chair and shall hold its meetings at such times and places as the
Committee may determine. A majority of the Committee's members shall constitute
a quorum. All determinations of the Committee shall be made by not less than a
majority of its members. Any decision or determination reduced to writing and
signed by all of the members of the Committee shall be fully effective as if it
had been made by a majority vote at a meeting duly called and held. The
Committee may appoint a secretary and may make such rules and regulations for
the conduct of its business as it shall deem advisable.

4. Shares Available for Awards.

(a) Shares Available. Subject to adjustment as provided in Section
4(c), the number of Shares available for granting Awards under the Plan shall be
200,000. Shares issued pursuant to the Plan may be either from the authorized
but unissued Shares or from Shares reacquired by the Company, including Shares
purchased in the open market. If any Shares covered by an Award or to which an
Award relates are not purchased by the Participant or are forfeited, or if an
Award otherwise terminates without delivery of any Shares, then the number of
Shares counted against the aggregate number of Shares available under the Plan
with respect to such Award, to the extent of any such forfeiture or termination,
shall again be available for granting Awards under the Plan. In addition, any
Shares that are used by a Participant as full or partial payment to the Company
of the purchase price of Shares acquired upon exercise of an Option granted
pursuant to the Plan shall again be available for granting Awards.

(b) Accounting for Awards. For purposes of this Section 4, if an Award
entitles the holder thereof to purchase Shares, the number of Shares covered by
such Award or to which such Award relates shall be counted on the date of grant
of such Award against the aggregate number of Shares available for granting
Awards under the Plan.

(c) Adjustments. In the event that the Committee shall determine that
any dividend or other distribution (whether in the form of cash, Shares, other
securities or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Shares or other securities of the Company, issuance of
warrants or other rights to purchase Shares or other securities of the Company
or other similar corporate transaction or event affects the Shares such that an
adjustment is determined by the


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Committee to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan,
then the Committee shall, in such manner as it may deem equitable, adjust any or
all of (i) the number and type of Shares (or other securities or other property)
which thereafter may be made the subject of Awards, (ii) the number and type of
Shares (or other securities or other property) subject to outstanding Awards and
(iii) the purchase or exercise price with respect to any Award; provided,
however, that the number of Shares covered by any Award or to which such Award
relates shall always be a whole number.

5. Awards.

(a) Options. The Committee is hereby authorized to grant Options to
Eligible Persons with the following terms and conditions, and with such
additional terms and conditions not inconsistent with the provisions of the
Plan, as the Committee shall determine:

(i) Exercise Price. The purchase price per Share purchasable
under an Option shall be determined by the Committee; provided,
however, that such purchase price shall not be less than 100% of the
Fair Market Value of a Share on the date of grant of such Option.

(ii) Option Term. The term of each Option shall be fixed by
the Committee.

(iii) Time and Method of Exercise. The Committee shall
determine the time or times at which an Option may be exercised in
whole or in part and the method or methods by which, and the form or
forms (including, without limitation, cash, Shares, other securities,
other property or a promissory note, which shall provide for interest
at a rate not less than the minimim rate required to avoid imputation
of income, original issue discount or a below market rate loan pursuant
to Sections 483, 1274 or 7872 of the Code or other property, or any
combination thereof, having a Fair Market Value on the exercise date
equal to the applicable exercise price) in which payment of the
exercise price with respect thereto may be made or deemed to have been
made.

(b) Stock Appreciation Rights. The Committee is hereby authorized to
grant Stock Appreciation Rights to Eligible Persons subject to the terms of the
Plan and any applicable Award Agreement. A Stock Appreciation Right granted
under the Plan shall confer on the holder thereof a right to receive upon
exercise thereof the excess of (i) the Fair Market Value of one Share on the
date of exercise (or, if the Committee shall so determine, at any time during a
specified period before or after the date of exercise) over (ii) the grant price
of the Stock Appreciation Right as specified by the Committee, which price shall
not be less than 100% of the Fair Market Value of one Share on the date of grant
of the Stock Appreciation Right. Subject to the terms of the Plan and any
applicable Award Agreement, the grant price, term, methods of exercise, dates of
exercise, methods of settlement and any other terms and conditions of any Stock
Appreciation Right shall be as determined by the Committee. The Committee may
impose such conditions or restrictions on the exercise of any Stock Appreciation
Right as it may deem appropriate.


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(c) General.

(i) Awards May Be Granted Separately or Together. Awards may,
in the discretion of the Committee, be granted either alone or in
addition to, in tandem with or in substitution for any other Award or
any award granted under any plan of the Company or any Affiliate other
than the Plan. Awards granted in addition to or in tandem with other
Awards or in addition to or in tandem with awards granted under any
such other plan of the Company or any Affiliate may be granted either
at the same time as or at a different time from the grant of such other
Awards or awards.

(ii) Forms of Payment under Awards. Subject to the terms of
the Plan and any applicable Award Agreement, payments or transfers to
be made by the Company or an Affiliate upon the grant, exercise or
payment of an Award may be made in such form or forms as the Committee
shall determine (including, without limitation, cash, Shares, other
securities or other property, or any combination thereof) and may be
made in a single payment or transfer, in installments or on a deferred
basis, in each case in accordance with rules and procedures established
by the Committee.

(iii) Limits on Transfer of Awards. No Award and no right
under any such Award shall be transferable by a Participant other than
by will or by the laws of descent and distribution or the transfer or
assignment of fully exercisable Awards for gifting purposes; provided,
however, that, if so determined by the Committee, a Participant may, in
the manner established by the Committee, designate a beneficiary or
beneficiaries to exercise the rights of the Participant and receive any
property distributable with respect to any Award upon the death of the
Participant. Each Award or right under any Award shall be exercisable
during the Participant's lifetime only by the Participant or, if
permissible under applicable law, by the Participant's guardian or
legal representative. No Award or right under any such Award may be
pledged, alienated, attached or otherwise encumbered, and any purported
pledge, alienation, attachment or encumbrance thereof shall be void and
unenforceable against the Company or any Affiliate.

(iv) Restrictions; Securities Exchange Listing. All
certificates for Shares or other securities delivered under the Plan
pursuant to any Award or the exercise thereof shall be subject to such
stop transfer orders and other restrictions as the Committee may deem
advisable under the Plan or the rules, regulations and other
requirements of the Securities and Exchange Commission and any
applicable federal or state securities laws, and the Committee may
cause a legend or legends to be placed on any such certificates to make
appropriate reference to such restrictions. If the Shares or other
securities are traded on a securities exchange, the Company shall not
be required to deliver any Shares or other securities covered by an
Award unless and until such Shares or other securities have been
admitted for trading on such securities exchange.


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6. Amendment and Termination; Corrections.

(a) Amendments to the Plan. The Board of Directors of the Company may
amend, alter, suspend, discontinue or terminate the Plan; provided, however,
that, notwithstanding any other provision of the Plan or any Award Agreement, no
amendment to the Plan will be made without the prior approval of the
shareholders of the Company that: (i) requires shareholder approval under the
rules or regulations of the National Association of Securities Dealers, Inc. or
any securities exchange that are applicable to the Company; (ii) increases the
number of shares authorized under the Plan as specified in Section 4(a); or
(iii) permits the award of Options or Stock Appreciation Rights at a price less
than 100% of the Fair Market Value of a Share on the date of grant of such
Option or Stock Appreciation Right, as prohibited by Sections 5(a)(i) and 5(b).

(b) Amendments to Awards. Subject to the provisions of the Plan, the
Committee may waive any conditions of or rights of the Company under any
outstanding Award, prospectively or retroactively. The Committee may not amend,
alter, suspend, discontinue or terminate any outstanding Award, prospectively or
retroactively, without the consent of the Participant or holder or beneficiary
thereof, except as otherwise herein provided.

(c) Correction of Defects, Omissions and Inconsistencies. The Committee
may correct any defect, supply any omission or reconcile any inconsistency in
the Plan or any Award in the manner and to the extent it shall deem desirable to
carry the Plan into effect.

7. Income Tax Withholding and Tax Bonuses.

(a) In order to comply with all applicable federal or state income tax
laws or regulations, the Company may take such action as it deems appropriate to
ensure that all applicable federal or state payroll, withholding, income or
other taxes, which are the sole and absolute responsibility of a Participant
under the Plan, are withheld or collected from such Participant. In order to
assist a Participant in paying all federal and state taxes to be withheld or
collected upon exercise of an Award, the Committee, in its absolute discretion
and subject to such additional terms and conditions as it may adopt, shall
permit the Participant to satisfy such tax obligation by (i) electing to have
the Company withhold a portion of the Shares otherwise to be delivered upon
exercise of such Award with a Fair Market Value equal to such taxes or (ii)
delivering to the Company Shares other than the Shares issuable upon exercise of
such Award with a Fair Market Value equal to such taxes.

(b) The Committee shall have the authority, at the time of grant of an
Award under the Plan or at any time thereafter, to approve tax bonuses to
designated Participants to be paid upon their exercise of Awards granted
hereunder. The amount of any such payments shall be determined by the Committee.
The Committee shall have full authority in its absolute discretion to determine
the amount of any such tax bonus and the terms and conditions affecting the
vesting and payment thereafter.


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8. Effect of Termination of Directorship.

A Participant's rights hereunder or under any outstanding Award shall
not terminate because that Participant ceases to be a Director.

9. General Provisions.

(a) No Rights to Awards. No Eligible Person, Participant or other
Person shall have any claim to be granted any Award under the Plan, and there is
no obligation for uniformity of treatment of Eligible Persons, Participants or
holders or beneficiaries of Awards under the Plan. The terms and conditions of
Awards need not be the same with respect to different Participants.

(b) Award Agreements. No Participant shall have rights under an Award
granted to such Participant unless and until an Award Agreement shall have been
duly executed on behalf of the Company.

(c) No Rights of Shareholders. Neither a Participant nor the
Participant's legal representative shall be, or have any of the rights and
privileges of, a shareholder of the Company in respect of any Shares issuable
upon the exercise or payment of any Award, in whole or in part, unless and until
certificates for such Shares shall have been issued.

(d) No Limit on Other Compensation Plans or Arrangements. Nothing
contained in the Plan shall prevent the Company or any Affiliate from adopting
or continuing in effect other or additional compensation plans or arrangements,
and such plans or arrangements may be either generally applicable or applicable
only in specific cases.

(e) Governing Law. The internal law, and not the law of conflicts, of
the State of Minnesota will govern all questions concerning the validity,
construction and effect of the Plan and any rules and regulations relating to
the Plan.

(f) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction
or would disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be so construed or deemed amended without, in
the determination of the Committee, materially altering the purpose or intent of
the Plan or the Award, such provision shall be stricken as to such jurisdiction
or Award, and the remainder of the Plan or any such Award shall remain in full
force and effect.

(g) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such


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right shall be no greater than the right of any unsecured general creditor of
the Company or any Affiliate.

(h) No Fractional Shares. No stock certificate for a fractional Share
shall be issued or delivered pursuant to the Plan or any Award, and the
Committee shall determine, in connection with the issuance or delivery of any
stock certificate pursuant to an Award, whether cash shall be paid in lieu of
any fractional Share or whether such fractional Share and any rights thereto
shall be canceled, terminated or otherwise eliminated.

(i) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.

10. Effective Date of the Plan.

The Plan shall be effective as of the date of its approval by the
shareholders of the Company.

11. Term of the Plan.

Unless the Plan shall have been discontinued as provided in Section 6,
the Plan shall terminate on November 19, 2008. No Award may be granted after
such termination, but termination of the Plan shall not, without the consent of
the Participant, alter or impair any rights or obligations under any Award
theretofore granted.


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