EXHIBIT 10.2

 

IDEXX LABORATORIES, INC.

 

1991 STOCK OPTION PLAN

 

(as of February 13, 2002)

1.        Purpose.

           The purpose of this plan (the "Plan") is to secure for IDEXX
Laboratories, Inc. (the "Company") and its shareholders the benefits arising
from capital stock ownership by employees, officers and directors of, and
consultants or advisors to, the Company and its parent and subsidiary
corporations who are expected to contribute to the Company's future growth and
success. Except where the context otherwise requires, the term "Company" shall
include the parent and all present and future subsidiaries of the Company as
defined in Sections 424(e) and 424(f) of the Internal Revenue Code of 1986, as
amended or replaced from time to time (the "Code"). Those provisions of the Plan
which make express reference to Section 422 of the Code shall apply only to
Incentive Stock Options (as that term is defined in the Plan).

2.        Type of Options and Administration.

           (a)      Types of Options. Options granted pursuant to the Plan shall
be authorized by action of the Board of Directors of the Company (or a Committee
designated by the Board of Directors) and may be either incentive stock options
("Incentive Stock Options") meeting the requirements of Section 422 of the Code
or non-qualified options which are not intended to meet the requirements of
Section 422 of the Code.

           (b)      Administration. The Plan will be administered by the Board
of Directors of the Company, whose construction and interpretation on the terms
and provisions of the Plan shall be final and conclusive. The Board of Directors
may in its sole discretion grant options to purchase shares of the Company's
Common Stock, par value $.10 per share ("Common Stock"), and issue shares upon
exercise of such options as provided in the Plan. The Board shall have
authority, subject to the express provisions of the Plan, to construe the
respective option agreements and the Plan, to prescribe, amend and rescind rules
and regulations relating to the Plan, to determine the terms and provisions of
the respective options agreements, which need not be identical, and to make all
other determinations in the judgment of the Board of Directors necessary or
desirable for the administration of the Plan. The Board of Directors may correct
any defect or supply any omission or reconcile any inconsistency in the Plan or
in any option agreement in the manner and to the extent it shall deem expedient
to carry the Plan into effect and it shall be the sole and final judge of such
expediency. No director or person acting pursuant to authority delegated by the
Board of Directors shall be liable for any action or determination made in good
faith. The Board of Directors may, to the full extent permitted by or consistent
with applicable laws or regulations (including, without limitation, applicable
state law and Rule 16b-3 promulgated under the Securities Exchange Act of 1934
(the "Exchange Act"), or any successor rule ("Rule 16b-3")), delegate any or all
of its powers under the Plan to a committee (the "Committee") appointed by the
Board of Directors, and if the Committee is so appointed all references to the
Board of Directors in the Plan shall mean and relate to such Committee or to the
executive officers referred to in Section 2(c) to the extent that the Board of
Directors' power or authority under the Plan has been delegated to such
executive officers.

           (c)      Delegation to Executive Officers. To the extent permitted by
applicable law, the Board of Directors may delegate to one or more executive
officers of the Company the power to grant options to employees or officers of
the Company or any of its present or future subsidiary corporations and to
exercise such other powers under the Plan as the Board of Directors may
determine, provided that the Board of Directors shall fix the terms of the
options to be granted by such executive officers (including the exercise price
of such options, which may include a formula by which the exercise price will be
determined) and the maximum number of shares subject to options that the
executive officers may grant; provided further, however, that no executive
officer shall be authorized to grant options to any "executive officer" of the
Company (as defined by Rule 3b-7 under the Exchange Act) or to any "officer" of
the Company (as defined by Rule 16a-1 under the Exchange Act).

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           (d)      Applicability of Rule 16b-3. Those provisions of the Plan
which make express reference to Rule 16b-3 shall apply to the Company only at
such time as the Company's Common Stock or another class of equity security is
registered under the Exchange Act, and then only to such persons as are required
to file reports under Section 16(a) of the Exchange Act.

3.        Eligibility.

           (a)      General. Options may be granted to persons who are, at the
time of grant, employees or officers of the Company; provided, that Incentive
Stock Options may be granted only to persons who are eligible to receive such
options under Section 422 of the Code. In additional, no person shall be granted
any Incentive Stock Option under the Plan who, at the time such option is
granted, owns, directly or indirectly, stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company, unless the
requirements of Section 11(b) are satisfied. The attribution of stock ownership
provisions of Section 424(d) of the Code, and any successor provisions thereto,
shall be applied in determining the shares of stock owned by a person for
purposes of applying the foregoing percentage limitation. A person who has been
granted an option may, if he or she is otherwise eligible, be granted an
additional option or options if the Board of Directors shall so determine.
Subject to adjustment as provided in Section 15 below, the maximum number of
shares with respect to which options may be granted to any employee under the
Plan shall not exceed 1,000,000 shares of common stock during any one calendar
year. For the purpose of calculating such maximum number, (a) an option shall
continue to be treated as outstanding notwithstanding its repricing,
cancellation, or expiration and (b) the repricing of an outstanding option or
the issuance of a new option in substitution for a cancelled option shall be
deemed to constitute the grant of a new additional option separate from the
original grant of the option that is repriced or cancelled.

           (b)      Grant of Options to Directors and Officers. From and after
the registration of the Common Stock of the Company under the Exchange Act, the
selection of a director or an officer (as the terms "director" and "officer" are
defined for the purposes of Rule 16b-3) as a recipient of an option, the timing
of the option grant, the exercise price of the option and the number of shares
subject to the option shall be determined either (i) by the Board of Directors,
of which all members shall be "disinterested persons" (as hereinafter defined),
or (ii) by a committee of two or more directors having full authority to act in
the matter, of which all members shall be "disinterested persons". For the
purposes of the Plan, a director shall be deemed to be a "disinterested person"
only is such person qualifies as a "disinterested person" within the meaning of
Rule 16b-3, as such term is interpreted from time to time.

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4.        Stock Subject to Plan.

           Subject to adjustment as provided in Section 15 below, the maximum
number of shares of Common Stock of the Company which may be issued and sold
under the Plan is 6,475,000 shares. Such shares may be authorized and unissued
shares or may be shares issued and thereafter acquired by the Company. If an
option granted under the Plan shall expire or terminate for any reason without
having been exercised in full, the unpurchased shares subject to such option
shall again be available for subsequent option grants under the Plan. If shares
issued upon exercise of an option under the Plan are tendered to the Company in
payment of the exercise price of an option granted under the Plan, such tendered
shares shall again be available for subsequent option grants under the Plan;
provided, that in no event shall (i) the total number of shares issued pursuant
to the exercise of Incentive Stock Options under the Plan, on a cumulative
basis, exceed the maximum number of shares authorized for issuance under the
Plan exclusive of shares made available for issuance pursuant to this sentence
or (ii) the total number of shares issued pursuant to the exercise of options by
persons who are required to file reports under Section 16(a) of the Exchange
Act, on a cumulative basis, exceed the maximum number of shares authorized for
issuance under the Plan exclusive of shares made available for issuance pursuant
to this sentence.

5.        Forms of Option Agreements.

           As a condition to the grant of an option under the Plan, each
recipient of an option shall execute an option agreement in such form not
inconsistent with the Plan as may be approved by the Board of Directors. Each
option agreement shall specifically state whether the options granted thereby
are intended to be Incentive Stock Options or non-qualified options. Such option
agreements may differ among recipients.

6.        Purchase Price.

           (a)      General. The purchase price per share of stock deliverable
upon the exercise of an option shall be determined by the Board of Directors,
provided, however, that the exercise price shall not be less than 100% of the
fair market value of such stock, as determined by the Board of Directors, at the
time of grant of such option, or less than 110% of such fair market value in the
case of options described in Section 11(b).

           (b)      Payment of Purchase Price. Options granted under the Plan
may provide for the payment of the exercise price by delivery of cash or a check
to the order of the Company in an amount equal to the exercise price of such
options, or, to the extent provided in the applicable option agreement, (i) by
delivery to the Company of shares of Common Stock of the Company already owned
by the optionee having a fair market value equal in amount to the exercise price
of the options being exercised, (ii) by any other means which the Board of
Directors determines are consistent with the purpose of the Plan and with the
applicable laws and regulations (including, without limitation, the provisions
of Rule 16b-3 and Regulation T promulgated by the Federal Reserve Board) or
(iii) by any combination of such methods of payment. The fair market value of
any shares of the Company's Common Stock or other non-cash consideration which
may be delivered upon exercise of an option shall be determined by the Board of
Directors.

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7.        Option Period.

           Each option and all rights thereunder shall expire on such date as
the Board of Directors shall determine, except that (i) in the case of an
Incentive Stock Option, such date shall not be later than ten years after the
date on which the option is granted, (ii) in the case of an Incentive Stock
Option described in Section 11(b), such date shall not be later than five years
after the date on which the option is granted and (iii) in all cases, options
shall be subject to earlier termination as provided in the Plan.

8.        Exercise of Options.

           Each option granted under the Plan shall be exercisable either in
full or in installments at such time or times and during such period as shall be
set forth in the agreement evidencing such option, subject to the provisions of
the Plan.

9.        Nontransferability of Options.

           Incentive Stock Options shall not be assignable or transferable by
the person to whom they are granted, either voluntarily or by operation of law,
except by will or the laws of decent and distribution, and, during the life of
the optionee, shall be exercisable only by the optionee. With the approval of
the Board of Directors, non-qualified stock options may be transferred by gift
to (i) one or more members of the optionee's family or entities controlled by,
or for the benefit of the optionee or such family members, or (ii) one or more
charitable organizations (including charitable trusts). Except as the Board of
Directors may otherwise determine, no option or interest therein may be
transferred, assigned, pledged or hypothecated by the optionee during his
lifetime, whether by operation of law or otherwise, or be made subject to
execution, attachment or similar process.

10.      Effect of Termination of Employment

           Except as provided in Section 11(d) with respect to Incentive Stock
Options, the Board of Directors shall determine the period of time during which
an optionee may exercise an option following (i) the termination of the
optionee's employment with the Company or (ii) the death or disability of the
optionee. Such periods shall be set forth in the agreement evidencing such
option.

11.      Incentive Stock Options.

           Options granted under the Plan which are intended to be Incentive
Stock Options shall be subject to the following additional terms and conditions:

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           (a)      Express Designation. All Incentive Stock Options granted
under the Plan shall, at the time of grant, be specifically designated as such
in the option agreement covering such Incentive Stock Options.

           (b)      10% Stockholder. If any employee to whom an Incentive Stock
Option is to be granted under the Plan is, at the time of the grant of such
option, the owner of stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company (after taking into account the
attribution of stock ownership rules of Section 424(d) of the Code), then the
following special provisions shall be applicable to the Incentive Stock Option
granted to such individual:

           (i)      the purchase price per share of the Common Stock subject to
such Incentive Stock Option shall not be less than 110% of the fair market value
of one share of Common Stock at the time of grant; and

           (ii)      the option exercise period shall not exceed five years from
the date of grant.

           (c)      Dollar Limitation. For so long as the Code shall so provide,
options granted to any employee under the Plan (and any other incentive stock
option plans of the Company) which are intended to constitute Incentive Stock
Options shall not constitute Incentive Stock Options to the extent that such
options, in the aggregate, become exercisable for the first time in any one
calendar year for shares of Common Stock with an aggregate fair market value
(determined as of the respective date or dates of grant) of more than $100,000.

           (d)      Termination of Employment, Death or Disability. No Incentive
Stock Option may be exercised unless, at the time of such exercise, the optionee
is, and has been continuously since the date of grant of his or her option,
employed by the Company, except that:

           (i)      an Incentive Stock Option may be exercised within the period
of three months after the date the optionee ceases to be an employee of the
Company (or within such lesser period as may be specified in the applicable
option agreement), provided, that the agreement with respect to such option may
designate a longer exercise period and that the exercise after such three-month
period shall be treated as the exercise of a non-qualified option under the
Plan;

           (ii)      if the optionee dies while in the employ of the Company, or
within three months after the optionee ceases to be such an employee, the
Incentive Stock Option may be exercised by the person to whom it is transferred
by will or the laws of descent and distribution within the period of one year
after the date of death (or within such lesser period as may be specified in the
applicable option agreement); and

           (iii)      if the optionee becomes disabled (within the meaning of
Section 22(e)(3) of the Code or any successor provision thereto) while in the
employ of the Company, the Incentive Stock Option may be exercised within the
period of one year after the date the optionee ceases to be such an employee
because of such disability (or within such lesser period as may be specified in
the applicable option agreement).

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           For all purposes of the Plan and any option granted hereunder,
"employment" shall be defined in accordance with the provisions of Section
1.421-7(h) of the Income Tax Regulations (or any successor regulations).
Notwithstanding the foregoing provisions, no Incentive Stock Option may be
exercised after its expiration date.

12.      Additional Provisions.

           (a)      Additional Option Provisions. The Board of Directors may, in
its sole discretion, include additional provision in any option agreement
covering options granted under the Plan, including without limitation
restrictions on transfer, repurchase rights, commitments to pay cash bonuses, to
make, arrange for or guaranty loans or to transfer other property to optionees
upon exercise of options, or such other provisions as shall be determined by the
Board of Directors; provided that such additional provisions shall not be
inconsistent with any other term or condition of the Plan and such additional
provisions shall not cause any Incentive Stock Option granted under the Plan to
fail to qualify as an Incentive Stock Option within the meaning of Section 422
of the Code.

           (b)      Acceleration, Extension, Etc. The Board of Directors may, in
its sole discretion, (i) accelerate the date or dates on which all or any
particular option or options granted under the Plan may be exercised or (ii)
extend the dates during which all, or any particular option or options granted
under the Plan may be exercised; provided, however, that no such extension shall
be permitted if it would cause the Plan to fail to comply with Section 422 of
the Code or with Rule 16b-3.

13.      General Restrictions.

           (a)      Investment Representations. The Company may require any
person to whom an option is granted, as a condition of exercising such option,
to give written assurances in substance and form satisfactory to the Company to
the effect that such person is acquiring the Common Stock subject to the option
for his or her own account for investment and not with any present intention of
selling or otherwise distributing the same, and to such other effects as the
Company deems necessary or appropriate in order to comply with federal and
applicable state securities laws, or with covenants or representations made by
the Company in connection with any public offering of its Common Stock.

           (b)      Compliance With Securities Laws. Each option shall be
subject to the requirement that if, at any time, counsel to the Company shall
determine that the listing, registration or qualification of the shares subject
to such option upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental or regulatory body, or that the
disclosure of non-public information or the satisfaction of any other condition
is necessary as a condition of, or in connection with, the issuance or purchase
of shares thereunder, such option may not be exercised, in whole or in part,
unless such listing, registration, qualification, consent or approval, or
satisfaction of such condition shall have been effected or obtained on
conditions acceptable to the Board of Directors. Nothing herein shall be deemed
to require the Company to apply for or to obtain such listing, registration or
qualification, or to satisfy such condition.

14.      Rights as a Shareholder.

           The holder of an option shall have no rights as a shareholder with
respect to any shares covered by the option (including, without limitation, any
rights to receive dividends or non-cash distributions with respect to such
shares) until the date of issue of a stock certificate to him or her for such
shares. No adjustment shall be made for dividends or other rights for which the
record date is prior to the date such stock certificate is issued.

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15.      Adjustment Provisions for Recapitalizations and Related Transactions.

           (a)      General. If, through or as a result of any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split, or other similar transaction, (i) the outstanding shares of
Common Stock are increased or decreased or are exchanged for a different number
or kind of shares or other securities of the Company, or (ii) additional shares
or new or different shares or other securities of the Company or other non-cash
assets are distributed with respect to such shares of Common Stock or other
securities, an appropriate and proportionate adjustment may be made in (x) the
maximum number and kind of shares reserved for issuance under the Plan, (y) the
number and kind of shares or other securities subject to then outstanding
options under the Plan, and (z) the price for each share subject to any then
outstanding options under the Plan, without changing the aggregate purchase
price as to which such options remain exercisable, provided that no adjustment
shall be made pursuant to this Section 15 if such adjustment would cause the
Plan to fail to comply with Section 422 of the Code or with Rule 16b-3.

           (b)      Board Authority to Make Adjustments. Any adjustments under
this Section 15 will be made by the Board of Directors, whose determination as
to what adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive. No fractional shares will be issued under the Plan on
account of any such adjustments.

16.      Merger, Consolidation, Asset Sale, Liquidation, Etc.

           (a)      General. In the event of a consolidation or merger or sale
of all or substantially all of the assets of the Company in which outstanding
shares of Common Stock are exchanged for securities, cash or other property of
any other corporation or business entity or in the event of a liquidation of the
Company (each of these events collectively being referred to herein as an
"Acquisition Event"), the Board shall provide that all outstanding options shall
be assumed, or equivalent options shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof), provided that any options
substituted for Incentive Stock Options shall satisfy, in the determination of
the Board, the requirements of Section 424(a) of the Code. Notwithstanding the
foregoing, if the acquiring or succeeding corporation (or an affiliate thereof)
does not agree to assume, or substitute for, such options, then the Board of
Directors shall upon written notice to the optionees, provide that all then
unexercised options will become exercisable in full as of a specified time (the
"Acceleration Time") prior to an Acquisition Event and will terminate
immediately prior to the consummation of such Acquisition Event, except to the
extent exercised by the optionees before the consummation of such Acquisition
Event; provided, however, that, in the event of an Acquisition Event under the
terms of which holders of Common Stock will receive upon consummation thereof a
cash payment for each share of Common Stock surrendered pursuant to such
Acquisition Event (the "Acquisition Price"), then the Board may instead provide
that all outstanding options shall terminate upon consummation of such
Acquisition Event and that each optionee shall receive, in exchange therefor, a
cash payment equal to the amount (if any) by which (A) the Acquisition Price
multiplied by the number of shares of Common Stock subject to such outstanding
options (whether or not then exercisable), exceeds (B) the aggregate exercise
price of such options.

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           (b)      Substitute Options. The Company may grant options under the
Plan in substitution for options held by employees of another corporation who
become employees of the Company, or a subsidiary of the Company, as the result
of a merger or consolidation of the employing corporation with the Company or a
subsidiary of the Company, or as a result of the acquisition by the Company, or
one of its subsidiaries, of property or stock of the employing corporation. The
Company may direct that substitute options be granted on such terms and
conditions as the Board of Directors considers appropriate in the circumstances.

           (c)      Acceleration of Options Upon Change of Control. Immediately
prior to the consummation of a Change of Control, each then outstanding option
under the Plan shall become immediately exercisable as to twenty-five percent
(25%) of the number of shares as to which such option would otherwise not then
be exercisable (rounded down to the nearest whole share), and the number of
shares as to which each such option shall become exercisable on each vesting
date set forth in the applicable option agreement shall be reduced by 25%. In
addition, all such options held by an optionee that are not terminated pursuant
to Section 16(a) above shall immediately become exercisable in full if and when,
within 24 months after a Change of Control, such optionee's employment with the
Company (or the acquiring or succeeding entity) is involuntarily terminated by
the Company (or such acquiring or succeeding entity) other than for Cause (as
defined below).

           (d)      Definition of Change of Control. "Change of Control" shall
mean:

           (i)      The acquisition by an individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or
more of either (A) the then-outstanding shares of common stock of the Company
(the "Outstanding Company Common Stock") or (B) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (d)(i), the following
acquisitions shall not constitute a Change of Control: (1) any acquisition
directly from the Company, (2) any acquisition by the Company, (3) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (4)
any acquisition by any corporation pursuant to a transaction which satisfies the
criteria set forth in clauses (A), (B) and (C) of subsection (d)(iii) of this
Section 16; or

           (ii)      Individuals who, as of the date hereof, constitute the
Board of Directors (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board of Directors; provided, however, that any
individual becoming a director subsequently to the date hereof whose election,
or nomination for election by the Company's shareholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board of Directors; or

           (iii)      Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, immediately following
such Business Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or indirectly, more than
60% of, respectively, the then-outstanding shares of common stock and the
combined voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, of the corporation resulting from such
Business Combination (which as used in this Section 16(d)(iii) shall include,
without limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case may
be, (B) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 30% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination, or the combined voting power of the then-outstanding voting
securities of such corporation and (C) at least half of the members of the board
of directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board of Directors, providing for such
Business Combination; or

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           (iv)      Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

           (e)      Definition of Cause. "Cause" shall mean:

           (i)      the failure of the optionee to perform substantially the
optionee's duties with the Company (other than any such failure resulting from
incapacity due to physical or mental illness), which failure is not cured within
30 days after a written demand for substantial performance is delivered to the
optionee by the optionee's manager or the Board of Directors which specifically
identifies the manner in which such manager or the Board of Directors, as
applicable, believes that the optionee has not substantially performed the
optionee's duties, or

           (ii)      the engaging by the optionee in illegal conduct or gross
misconduct which is injurious to the Company."

17.      No Special Employment Rights.

           Nothing contained in the Plan or in any option shall confer upon any
optionee any right with respect to the continuation of his or her employment by
the Company or interfere in any way with the right of the Company at any time to
terminate such employment or to increase or decrease the compensation of the
optionee.

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18.      Other Employee Benefits.

           Except as to plans which by their terms include such amounts as
compensation, the amount of any compensation deemed to be received by an
employee as a result of the exercise of an option or the sale of shares received
upon such exercise will not constitute compensation with respect to which any
other employee benefits of such employee are determined, including, without
limitation, benefits under any bonus, pension, profit-sharing, life insurance or
salary continuation plan, except as otherwise specifically determined by the
Board of Directors.

19.      Amendment of the Plan.

           (a)      The Board of Directors may at any time, and from time to
time, modify or amend the Plan in any respect, except that if at any time the
approval of the shareholders of the Company is required under Section 422 of the
Code or any successor provision with respect to Incentive Stock Options or under
Rule 16b-3 or with respect to options held by persons who are required to file
reports pursuant to Section 16(a) of the Exchange Act, the Board of Directors
may not effect such modification or amendment without such approval. In
addition, the Board of Directors may not amend Section 24 of the Plan without
the prior approval of the shareholders of the Company.

           (b)      The termination or any modification or amendment of the Plan
shall not, without the consent of an optionee, affect his or her rights under an
option previously granted to him or her. With the consent of the optionee
affected, the Board of Directors may amend outstanding option agreements in a
manner not inconsistent with the Plan. The Board of Directors shall have the
right to amend or modify (i) the terms and provisions of the Plan and of any
outstanding Incentive Stock Options granted under the Plan to the extent
necessary to qualify any or all such options for such favorable federal income
tax treatment (including deferral of taxation upon exercise) as may be afforded
incentive stock options under Section 422 of the Code and (ii) the terms and
provisions of the Plan and of any outstanding option to the extent necessary to
ensure the qualification of the Plan under Rule 16b-3.

20.      Withholding.

           (a)      The Company shall have the right to deduct from payments of
any kind otherwise due to the optionee any federal, state or local taxes of any
kind required by law to be withheld with respect to any shares issued upon
exercise of options under the Plan. Subject to the prior approval of the
Company, which may be withheld by the Company in its sole discretion, the
optionee may elect to satisfy such obligations, in whole or in part, (i) by
causing the Company to withhold shares of Common Stock otherwise issuable
pursuant to the exercise of an option or (ii) by delivering to the Company
shares of Common Stock already owned by the optionee. The shares so delivered or
withheld shall have a fair market value equal to such withholding obligation.
The fair market value of the shares used to satisfy such withholding obligation
shall be determined by the Company as of the date that the amount of tax to be
withheld is to be determined. An optionee who has made an election pursuant to
this Section 20(a) may only satisfy his or her withholding obligation with
shares of Common Stock which are not subject to any repurchase, forfeiture,
unfulfilled vesting or other similar requirements.

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           (b)      Notwithstanding the foregoing, in the case of a director or
officer, no election to use shares for the payment of withholding taxes shall be
effective unless made in compliance with any applicable requirements of Rule
16b-3.

21.      Cancellation and New Grant of Options, Etc.

           The Board of Directors shall have the authority to effect, at any
time and from time to time, with the consent of the affected optionees, (i) the
cancellation of any or all outstanding options under the Plan and the grant in
substitution therefor of new options under the Plan covering the same or
different numbers of shares of Common Stock and having an option exercise price
per share which may be lower or higher than the exercise price per share of the
cancelled options or (ii) the amendment of the terms of any and all outstanding
options under the Plan to provide an option exercise price per share which is
higher or lower that the then-current exercise price per share of such
outstanding options.

22.      Effective Date and Duration of the Plan.

           (a)      Effective Date. The Plan shall become effective when adopted
by the Board of Directors, but no Incentive Stock Option granted under the Plan
shall become exercisable unless and until the Plan shall have been approved by
the Company's shareholders. If such shareholder approval is not obtained within
twelve months after the date of the Board's adoption of the Plan, no options
previously granted under the Plan shall be deemed to be Incentive Stock Options
and no further Incentive Stock Options shall be granted. Amendments to the Plan
not requiring shareholder approval shall become effective when adopted by the
Board of Directors; amendments requiring shareholder approval (as provided in
Section 19) shall become effective when adopted by the Board of Directors, but
no Incentive Stock Option granted after the date of such amendment shall become
exercisable (to the extent that such amendment to the Plan was required to
enable the Company to grant such Incentive Stock Option to a particular
optionee) unless and until such amendment shall have been approved by the
Company's shareholders. If such shareholder approval is not obtained within
twelve months of the Board's adoption of such amendment, any Incentive Stock
Options granted on or after the date of such amendment shall terminate to the
extent that such amendment to the Plan was required to enable the Company to
grant such option to a particular optionee. Subject to this limitation, options
may be granted under the Plan at any time after the effective date and before
the date fixed for termination of the Plan.

           (b)      Termination. Unless sooner terminated in accordance with
Section 16, the Plan shall terminate, with respect to Incentive Stock Options,
upon the earlier of (i) the close of business on the day next preceding the
tenth anniversary of the date of its adoption by the Board of Directors, or (ii)
the date on which all shares available for issuance under the Plan shall have
been issued pursuant to the exercise or cancellation of options granted under
the Plan. Unless sooner terminated in accordance with Section 16, the Plan shall
terminate with respect to options which are not Incentive Stock Options on the
date specified in (ii) above. If the date of termination is determined under (i)
above, then options outstanding on such date shall continue to have force and
effect in accordance with the provisions of the instruments evidencing such
options.

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23.      Provisions for Foreign Participants.

           The Board of Directors may, without amending the Plan, modify awards
or options granted to participants who are foreign nationals or employed outside
the United States to recognize differences in laws, rules, regulations or
customs of such foreign jurisdictions with respect to tax, securities, currency,
employee benefit or other matters.

24.      Prohibition on Repricing of Options.

           Neither the Board of Directors nor the Company may amend the terms of
any issued and outstanding option to reduce the exercise price, other than
pursuant to Section 15 of the Plan, without prior approval of shareholders of
the Company.

Adopted by the Board of Directors on April 24, 1991; adopted by stockholders on
June 10, 1991.

 

Amended by the Board of Directors on February 12, 1992; amendment approved by
stockholders

on May 1, 1992.

 

Amended by the Board of Directors on February 26, 1993; amendment approved by
stockholders

on May 18, 1993.

 

Number of shares covered by the Plan reflects 2 for 1 stock split in the form of
a stock dividend

paid on October 1, 1993.

 

Amended by the Board of Directors on February 9, 1995; amendment approved by
stockholders

on May 26, 1995.

 

Number of shares covered by the Plan reflects 2 for 1 stock split in the form of
a stock dividend

paid on June 5, 1995.

 

Amended by the Board of Directors on March 5, 1996; amendment approved by the
stockholders

on May 24, 1996.

 

Amended by the Board of Directors on February 17, 1999.

 

Amended by the Board of Directors on July 21, 1999.

 

Amended by the Board of Directors on May 23, 2001.

 

Amended by the Board of Directors on February 13, 2002.

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