Exhibit 10.5

                             DIANON SYSTEMS, INC.
                           2001 STOCK INCENTIVE PLAN

SECTION 1. Purposes

   The purposes of the Dianon Systems, Inc. 2001 Stock Incentive Plan (the
"Plan") are (i) to enable Dianon Systems, Inc. (the "Company") and its
Related Companies (as defined below) to attract, retain and reward employees
and strengthen the existing mutuality of interests between such employees and
the Company's stockholders by offering such employees an equity interest in
the Company, and (ii) to enable the Company to pay part of the compensation
of its Outside Directors (as defined in Section 5.2) in the form of equity of
the Company, thereby increasing such directors' proprietary interests in the
Company. For purposes of the Plan, a "Related Company" means any corporation,
partnership, joint venture or other entity in which the Company owns, directly
or indirectly, at least a 20% beneficial ownership interest. In addition, for
purposes of this Plan, the term "Stock" shall refer to the common stock of the
Company, par value $.01 per share.

SECTION 2. Types of Awards

   2.1 Awards under the Plan may be in the form of (i) Stock Options; (ii)
Stock Appreciation Rights; (iii) Restricted Stock; (iv) Deferred Stock; (v)
Bonus Stock; (vi) Loans; and/or (vii) Tax Offset Payments. One or more types
of awards may be granted, which may be independent or granted in tandem. If
two awards are granted in tandem, the award holder may exercise (or otherwise
receive the benefit of) one award only to the extent he or she relinquishes
the tandem award.

   2.2 Outside Directors shall receive Stock Options, Limited Stock
Appreciation Rights and Stock Grants as provided in Section 15. In addition,
Outside Directors may be granted discretionary awards in one or more of the
forms set forth in Section 2.1.

SECTION 3. Administration

   3.1 The Plan shall be administered (i) by the Compensation Committee of
the Company's Board of Directors (the "Board") or such other committee of
directors as the Board shall designate (the "Committee"), with respect to
awards to persons other than Outside Directors, and (ii) by the Board with
respect to awards to Outside Directors (except as provided in Section 4.5).
The Committee shall consist of not less than two directors each of whom is an
Outside Director. The members of the Committee shall serve at the pleasure of
the Board.

   3.2 For purposes of this Plan the term "Granting Authority" shall mean (i)
the Board of Directors with respect to awards to Outside Directors (except as
provided in Section 4.5), and (ii) the Committee with respect to all other
awards. The Granting Authority shall have the following authority with
respect to awards under the Plan within its jurisdiction: to grant such
awards to persons eligible to receive them under the Plan; to adopt, alter
and repeal such administrative rules, guidelines and practices governing the
Plan as it shall deem advisable; to interpret the terms and provisions of the
Plan and any award granted by it under the Plan; and to otherwise supervise
the administration of the Plan. In particular, and without limiting its
authority and powers, the Granting Authority shall have the authority with
respect to the awards within its jurisdiction:

      (a) to determine whether and to what extent any award or combination of
   awards will be granted hereunder, including whether any awards will be
   granted in tandem with each other;

      (b) to select the eligible persons to whom awards will be granted;

      (c) to determine the number of shares of the Stock of the Company to be
   covered by each award granted hereunder subject to the limitations
   contained herein;

      (d) to determine the terms and conditions of any award granted
   hereunder, including, but not limited to, any vesting or other restrictions
   based on such performance objectives (the "Performance Objectives") and
   such other factors as the Granting Authority may establish, and to
   determine whetherthe Performance Objectives and other terms and conditions
   of the award are satisfied;

      (e) to determine the treatment of awards upon an award holder's
   retirement, disability, death, termination for cause or other termination
   of employment or service with the Company or Related Company;

      (f) to determine pursuant to a formula or otherwise the fair market
   value of the Stock on a given date; provided, however, that if the Granting
   Authority fails to make such a determination, fair market value of the
   Stock on a given date shall be the closing sale price on a given date, or
   if no such sale of Stock occurs on such date, the weighted average of the
   closing sale prices on the nearest trading dates before and after such
   date;

      (g) to determine that amounts equal to the amount of any dividends
   declared with respect to the number of shares covered by an award (i) will
   be paid to the award holder currently or (ii) will be deferred and deemed
   to be reinvested or (iii) will otherwise be credited to the award holder,
   or that the award holder has no rights with respect to such dividends;

      (h) to determine whether, to what extent, and under what circumstances
   Stock and other amounts payable with respect to an award will be deferred
   either automatically or at the election of an award holder, including
   providing for and determining the amount (if any) of deemed earnings on
   any deferred amount during any deferral period;

      (i) to provide that the shares of Stock received as a result of an
   award shall be subject to a right of first refusal, pursuant to which the
   award holder shall be required to offer to the Company any shares that the
   award holder wishes to sell, subject to such terms and conditions as the
   Granting Authority may specify;

      (j) to amend the terms of any award (including those granted under
   Section 15), prospectively or retroactively; provided, however, that no
   amendment shall impair the rights of the award holder without his or her
   written consent; and

      (k) to substitute new Stock Options for previously granted Stock
   Options, or for options granted under other plans or agreements, in each
   case including previously granted options having higher option prices.

   3.3 The Committee shall have the right to designate awards as "Performance
Awards." Awards so designated shall be granted and administered in a manner
designed to preserve the deductibility of the compensation resulting from
such awards in accordance with Section 162(m) of the Internal Revenue Code
(the "Code"). The grant or vesting of a Performance Award shall be subject to
the achievement of Performance Objectives established by the Committee based
on one or more of the following criteria, in each case applied to the Company
on a consolidated basis and/or to a business unit and which the Committee may
use as an absolute measure, as a measure of improvement relative to prior
performance, or as a measure of comparable performance relative to a peer
group of companies: sales, operating profits, operating profits before
interest expense and taxes, net earnings, earnings per share, return on
equity, return on assets, return on invested capital, total stockholder
return, cash flow, debt to equity ratio, market share, stock price, economic
value added, and market value added.

   The Performance Objectives for a particular Performance Award relative to
a particular fiscal year shall be established by the Committee in writing no
later than 90 days after the beginning of such year. The Committee's
determination as to the achievement of Performance Objectives relating to a
Performance Award shall be made in writing. The Committee shall have
discretion to modify the Performance Objectives or vesting conditions of a
Performance Award only to the extent that the exercise of such discretion
would not cause the Performance Award to fail to qualify as "performance-
based compensation" within the meaning of Section 162(m) of the Code.

   3.4 All determinations made by the Granting Authority pursuant to the
provisions of the Plan shall be final and binding on all persons, including
the Company and Plan participants.

   3.5 The Committee may from time to time delegate to one or more officers
of the Company any or all of its authorities granted hereunder except with
respect to awards granted to persons subject to Section 16 of the Securities
Exchange Act of 1934 or Performance Awards. The Committee shall specify the
maximum number of shares that the officer or officers to whom such authority
is delegated may award.

   3.6 All awards granted under this Plan shall be evidenced by a grant
certificate and the terms and conditions of the award shall be set forth in a
written agreement between the Company and the award recipient.

SECTION 4. Stock Subject to Plan

   4.1 The total number of shares of Stock which may be awarded or issued
pursuant to the exercise of an award granted under this Plan shall be
640,000, of which 500,000 shall be used for awards to employees and 140,000
shall be used for awards to Outside Directors (all subject to adjustment as
provided below). Such shares may consist of authorized but unissued shares or
treasury shares. The exercise of a Stock Appreciation Right for cash or the
payment of any other award in cash shall not count against this share limit.

   4.2 To the extent a Stock Option terminates without having been exercised,
or an award terminates without the award holder having received payment of
the award, or shares awarded are forfeited, the shares subject to such award
shall again be available for distribution in connection with future awards
under the Plan. Shares of Stock equal in number to the shares surrendered in
payment of the option price, and shares of Stock which are withheld in order
to satisfy federal, state or local tax liabilities, shall not count against
the above limit, and shall again be available for grants under the Plan.

   4.3 (a) No employee shall be granted Stock Options, Stock Appreciation
Rights, Restricted Stock, Deferred Stock, and/or Bonus Stock, or any
combination of the foregoing with respect to more than 50,000 shares of Stock
in any fiscal year (subject to adjustment as provided in Section 4.5). No
employee shall be granted a Tax Offset Payment in any fiscal year with
respect to more than the number of shares of Stock covered by awards granted
to such employee in such fiscal year.

   (b) For purposes of Section 162(m) of the Code, no key employee shall be
granted Stock Options or Stock Appreciation Rights with respect to more than
50,000 shares of Stock in any fiscal year (subject to adjustment as provided
in Section 4.5).

   4.4 The maximum number of shares of Stock that may be issued under this
Plan pursuant to the exercise of Options intended to be Incentive Stock
Options shall be 500,000 shares.

   4.5 In the event of any merger, reorganization, consolidation, sale of
substantially all assets, recapitalization, stock dividend, stock split,
spin-oft split-up, split-off distribution of assets or other change in
corporate structure affecting the Stock, a substitution or adjustment shall
be made by the Granting Authority in the aggregate number of shares reserved
for issuance under the Plan, the number of shares as to which awards may be
granted to any individual in any calendar year, the number and type of shares
subject to outstanding awards and the amounts to be paid by award holders or
the Company, as the case may be, with respect to outstanding awards;
provided, however, that no such adjustment shall increase the aggregate value
of any outstanding award. In the event any change described in this Section
4.5 occurs, the Granting Authority shall make appropriate adjustment in the
awards previously granted and to be granted to Outside Directors under the
Plan; provided that no such adjustment shall increase the aggregate value of
any outstanding award.

SECTION 5. Eligibility

   5.1 Key employees of the Company or a Related Company, including key
employees who are officers and/or directors of the Company, are eligible to
be granted awards under the Plan, other than under Section 15. Employees
shall be selected for participation in the Plan from time to time by the
Committee, in its sole discretion, from among those key employees eligible to
participate in this Plan.

   5.2 Awards under Section 15 of the Plan shall be made solely to Outside
Directors, which term shall mean any director of the Company other than one
who is an employee of the Company or a Related Company. The Board, in its
discretion, may also grant other awards under the Plan in one or more of the
forms set forth in Section 2.1 to one or more Outside Directors.
SECTION 6. Stock Options

   6.1 The Stock Options awarded under the Plan may be of two types: (i)
Incentive Stock Options within the meaning of Section 422 of the Code or any
successor provision thereto (which may be granted only to employees); and
(ii) Non-Qualified Stock Options. To the extent that any Stock Option does
not qualify as an Incentive Stock Option, it shall constitute a Non-Qualified
Stock Option.

   6.2 Subject to the following provisions, Stock Options awarded under the
Plan shall be in such form and shall have such terms and conditions as the
Granting Authority may determine:

      (a) Option Price. The option price per share of Stock purchasable under
   a Stock Option shall be determined by the Granting Authority, and may be
   less than the fair market value of the Stock on the date of the award of
   the Stock Option.

      (b) Option Term. The term of each Stock Option shall be fixed by the
   Granting Authority.

      (c) Exercisability. Stock Options shall be exercisable at such time or
   times and subject to such terms and conditions as shall be determined by
   the Granting Authority. The Granting Authority may waive such exercise
   provisions or accelerate the exercisability of the Stock Option at any
   time in whole or in part.

      (d) Method of Exercise. Stock Options may be exercised in whole or in
   part at any time during the option period by giving written notice of
   exercise to the Company specifying the number of shares to be purchased,
   accompanied by payment of the purchase price. Payment of the purchase
   price shall be made in such manner as the Granting Authority may provide
   in the award, which may include cash (including cash equivalents), delivery
   of shares of Stock already owned by the optionee for at least six months,
   "cashless exercise" (which may be either (i) a broker-assisted cash
   exercise effected in accordance with rules adopted by the Granting
   Authority or (ii) a direction to the Company to withhold shares of Stock,
   otherwise deliverable to the option holder with respect to the Option,
   having a fair market value on the date of exercise equal to the option
   price), or in any other manner permitted by law determined by the Granting
   Authority, or any combination of the foregoing. If the Granting Authority
   determines that a Stock Option may be exercised using shares of Restricted
   Stock, then unless the Granting Authority provides otherwise, the shares
   received upon the exercise of a Stock Option which are paid for using
   Restricted Stock shall be restricted in accordance with the original terms
   of the Restricted Stock award.

      (e) No Stockholder Rights. An optionee shall have neither rights to
   dividends or other rights of a stockholder with respect to shares subject
   to a Stock Option until the optionee has given written notice of exercise
   and has paid for such shares.

      (f) Surrender Rights. The Granting Authority may provide that options
   may be surrendered for cash upon any terms and conditions set by the
   Granting Authority.

      (g) Non-transferability. Unless otherwise provided by the Granting
   Authority, (i) Stock Options shall not be transferable by the optionee
   other than by will or by the laws of descent and distribution, and (ii)
   during the optionee's lifetime, all Stock Options shall be exercisable only
   by the optionee or, in the event of the optionee's disability, by his or
   her guardian or legal representative.

      (h) Termination of Service. Following the termination of an optionee's
   service with the Company or a Related Company, the Stock Option shall be
   exercisable to the extent determined by the Granting Authority. The
   Granting Authority may provide different post-termination exercise
   provisions with respect to termination of service for different reasons.
   The Granting Authority may provide that, notwithstanding the option term
   fixed pursuant to Section 6.2(b), a Stock Option which is outstanding on
   the date of an optionee's death shall remain outstanding for an additional
   period after the date of such death.

   6.3 Notwithstanding the provisions of Section 6.2, no Incentive Stock
Option shall (i) have an option price which is less than 100% of the fair
market value of the Stock on the date of the award of the Incentive Stock
Option, (ii) be exercisable more than ten years after the date such Incentive
Stock Option is awarded, or (iii) be awarded more than ten years after the
Effective Date (as defined below) of the Plan specified in Section 19. No
Incentive Stock Option granted to an employee who owns more than 10% of the
total combined voting power of all classes of stock of the Company or any of
its parent or subsidiary corporations, as defined in Section 424 of the Code,
shall (A) have an option price which is less than 110% of the fair market
value of the Stock on the date of award of the Incentive Stock Option or (B)
be exercisable more than five years after the date such Incentive Stock
Option is awarded.

   6.4 A Stock Option granted to a key employee under this Plan will not be
considered an Incentive Stock Option to the extent that such Stock Option,
together with any earlier Stock Option granted to such employee under this or
any other plan of the Company that is intended to be an Incentive Stock
Option, permits the exercise for the first time in any calendar year of
shares of Stock having a fair market value in excess of $100,000 (determined
at the time of grant).

SECTION 7. Stock Appreciation Rights

   7.1 A Stock Appreciation Right shall entitle the holder thereof to receive
payment of an amount, in cash, shares of Stock or a combination thereof, as
determined by the Granting Authority, equal in value to the excess of the
fair market value of the number of shares of Stock as to which the award is
granted on the date of exercise over an amount specified by the Granting
Authority. Any such award shall be in such form and shall have such terms and
conditions as the Granting Authority may determine. The grant shall specify
the number of shares of Stock as to which the Stock Appreciation Right is
granted.

   7.2 The Granting Authority may provide that a Stock Appreciation Right may
be exercised only within the 60-day period following occurrence of a Change
of Control (as defined in Section 17.2) (such Stock Appreciation Right being
referred to herein as a Limited Stock Appreciation Right). The Granting
Authority may also provide that in the event of a Change of Control the
amount to be paid upon exercise of a Stock Appreciation Right shall be based
on the Change of Control Price (as defined in Section 17.3).

SECTION 8. Restricted Stock

   Subject to the following provisions, all awards of Restricted Stock shall
be in such form and shall have such terms and conditions as the Granting
Authority may determine:

      (a) The Restricted Stock award shall specify the number of shares of
   Restricted Stock to be awarded, the price, if any, to be paid by the
   recipient of the Restricted Stock and the date or dates on which, or the
   conditions upon the satisfaction of which, the restrictions shall lapse
   and the Restricted Stock will vest. The grant and/or the vesting of
   Restricted Stock may be conditioned upon the completion of a specified
   period of service with the Company or a Related Company, upon the
   attainment of specified Performance Objectives or upon such other
   criteria as the Granting Authority may determine.

      (b) Stock certificates representing the Restricted Stock awarded under
   the Plan shall be registered in the award holder's name, but the Granting
   Authority may direct that such certificates be held by the Company on
   behalf of the award holder. Except as may be permitted by the Granting
   Authority, no share of Restricted Stock may be sold, transferred, assigned,
   pledged or otherwise encumbered by the award holder until such share has
   vested in accordance with the terms of the Restricted Stock award. At the
   time Restricted Stock vests, a certificate for such vested shares shall be
   delivered to the award holder (or his or her designated beneficiary in the
   event of death), free of all restrictions.

      (c) The Granting Authority may provide that the award holder shall have
   the right to vote or receive dividends on Restricted Stock. Unless the
   Granting Authority provides otherwise, Stock received as a dividend on, or
   in connection with a stock split of, Restricted Stock shall be subject to
   the same restrictions as the Restricted Stock.

      (d) Except as may be provided by the Granting Authority, in the event
   of an award holder's termination of service before all of his or her
   Restricted Stock has vested, or in the event any conditions to the vesting
   of Restricted Stock have not been satisfied prior to any deadline for the
   satisfaction of such conditions set forth in the award, the shares of
   Restricted Stock which have not vested shall be forfeited, and the
   Granting Authority may provide that (i) any purchase price paid by the
   award holder shall be returned to the award holder or (ii) a cash payment
   equal to the Restricted Stock's fair market value on the date of
   forfeiture, if lower, shall be paid to the award holder.

      (e) The Granting Authority may waive, in whole or in part, any or all
   of the conditions to receipt of, or restrictions with respect to, any or
   all of the award holder's Restricted Stock, other than Performance Awards
   whose vesting was made subject to satisfaction of one or more Performance
   Objectives (except that the Committee may waive conditions or restrictions
   with respect to Performance Awards if such waiver would not cause the
   Performance Award to fail to qualify as "performance-based compensation"
   within the meaning of Section 162(m) of the Code).

SECTION 9. Deferred Stock Awards

   Subject to the following provisions, all awards of Deferred Stock shall be
in such form and shall have such terms and conditions as the Granting
Authority may determine:

      (a) The Deferred Stock award shall specify the number of shares of
   Deferred Stock to be awarded and the duration of the period (the "Deferral
   Period") during which, and the conditions under which, receipt of the
   Stock will be deferred. The Granting Authority may condition the grant or
   vesting of Deferred Stock, or receipt of Stock or cash at the end of the
   Deferral Period, upon the attainment of specified Performance Objectives or
   such other criteria as the Granting Authority may determine.

      (b) Except as may be provided by the Granting Authority, Deferred Stock
   awards may not be sold, assigned, transferred, pledged or otherwise
   encumbered during the Deferral Period.

      (c) At the expiration of the Deferral Period, the award holder (or his
   or her designated beneficiary in the event of death) shall receive (i)
   certificates for the number of shares of Stock equal to the number of
   shares covered by the Deferred Stock award, (ii) cash equal to the fair
   market value of such Stock, or (iii) a combination of shares and cash, as
   the Granting Authority may determine.

      (d) Except as may be provided by the Granting Authority, in the event
   of an award holder's termination of service before the Deferred Stock has
   vested, his or her Deferred Stock award shall be forfeited.

      (e) The Granting Authority may waive, in whole or in part, any or all
   of the conditions to receipt of, or restrictions with respect to, Stock or
   cash under a Deferred Stock award, other than with respect to Performance
   Awards (except that the Committee may waive conditions or restrictions with
   respect to Performance Awards if such waiver would not cause the
   Performance Award to fail to qualify as "performance based compensation"
   within the meaning of Section 162(m) of the Code).

SECTION 10. Bonus Stock

   The Granting Authority may award Bonus Stock subject to such terms and
conditions as the Granting Authority shall determine. The grant of Bonus
Stock may be conditioned upon the attainment of specified Performance
Objectives or upon such other criteria as the Granting Authority may
determine. The Granting Authority may waive such conditions in whole or in
part other than with respect to Performance Awards (except that the Committee
may waive conditions or restrictions with respect to Performance Awards if
such waiver would not cause the Performance Award to fail to qualify as
"performance-based compensation" within the meaning of Section 162(m) of the
Code). In making a determination with respect to the terms and conditions of
a Bonus Stock award, the Granting Authority shall also have the right to
eliminate or reduce the amount of Bonus Stock otherwise payable under an
award. Unless otherwise specified by the Granting Authority, no money shall
be paid by the recipient for the Bonus Stock. Alternatively, the Granting
Authority may offer the award holder the opportunity to purchase Bonus Stock
at a discount from its fair market value. The Bonus Stock award shall be
satisfied by the delivery of the designated number of shares of Stock which
are not subject to restriction.

SECTION 11. Loans

   The Granting Authority may provide that the Company shall make, or arrange
for, a loan or loans with respect to the exercise of any Stock Option awarded
under the Plan, with respect to the payment of the purchase price, if any, of
any Restricted Stock awarded hereunder or with respect to any taxes arising
from an award hereunder; provided, however, that the Company shall not loan
more than the sum of (i) the excess of the purchase or exercise price of an
award over the par value of any shares of Stock awarded plus (ii) the amount
of any taxes arising from such award. The Granting Authority shall have full
authority to decide whether a loan will be made hereunder and to determine
the amount, term and provisions of any such loan, including the interest rate
to be charged, whether the loan will be with or without recourse against the
borrower, any security for the loan, the terms on which the loan is to be
repaid and the conditions, if any, under which the loan may be forgiven.

SECTION 12. Tax Offset Payments

   The Granting Authority may provide for a Tax Offset Payment by the Company
with respect to one or more awards granted under the Plan. The Tax Offset
Payment shall be in an amount specified by the Granting Authority, which
shall not exceed the amount necessary to pay the federal, state, local and
other taxes payable with respect to the applicable award and the receipt of
the Tax Offset Payment, assuming that the award holder is taxed at the
maximum tax rate applicable to such income. The Tax Offset Payment shall be
paid solely in cash.

SECTION 13. Election to Defer Awards

   The Granting Authority may permit an employee or Outside Director to elect
to defer receipt of an award (other than an award pursuant to Section 15) for
a specified period or until a specified event, upon such terms as are
determined by the Granting Authority.

SECTION 14. Tax Withholding

   14.1 Each employee shall, no later than the date as of which the value of
an award first becomes includible in such person's gross income for
applicable tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of, any federal, state, local
or other taxes of any kind required by law to be withheld with respect to the
award. The obligations of the Company under the Plan shall be conditional on
such payment or arrangements, and the Company (and, where applicable, any
Related Company), shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment of any kind otherwise due to the
employee.

   14.2 To the extent permitted by the Committee, and subject to such terms
and conditions as the Committee may provide, an employee may elect to have
the withholding tax obligation, or any additional tax obligation with respect
to any awards hereunder, satisfied by (i) having the Company withhold shares
of Stock otherwise deliverable to such person with respect to the award or
(ii) delivering to the Company shares of unrestricted Stock previously owned
by the person for at least six months.

SECTION 15. Automatic Stock Options and Limited Stock Appreciation Rights.

   15.1 Outside Directors shall be granted Stock Options as follows:

      (a) Existing Directors. On the first trading day following the approval
   of this Plan by the Company's stockholders, a Stock Option to purchase
   20,000 shares of Stock, subject to adjustment as provided in Section 4.5,
   shall be granted automatically to each Outside Director who is then a
   member of the Board.

      (b) Triennial Option Grants. On each three-year anniversary of the date
   of grant of the Stock Options granted pursuant to Section 15.1(a), a Stock
   Option to purchase 20,000 shares of Stock, subject to adjustment as
   provided in Section 4.5, shall be granted automatically to each Outside
   Director who is then a member of the Board.

      (c) Initial Grants for New Outside Directors. Each new Outside Director
   who has not been granted a Stock Option pursuant to Section 15.1(a) or
   Section 15.1(b), upon the first trading day coincident with or immediately
   following the effective date of his or her election as an Outside
   Director, shall be granted a Stock Option to purchase a pro-rated number
   of shares of Stock. The pro-rated number of shares of Stock with respect
   to which a Stock Option shall be granted shall be equal to 20,000, subject
   to adjustment as provided in Section 4.5, times a fraction, the numerator
   of which is the number of whole months remaining (if any) until the next
   triennial Stock Option grant under Section 15.1(b) and the denominator of
   which is 36. A "whole" month will include the month in which the Outside
   Director is elected or appointed where the date of election or appointment
   is on or before the tenth of the month.

      (d) For purposes of this Section 15.1, the term trading day shall mean
   a day on which the Stock is traded on a national securities exchange, on
   the Nasdaq National Market, or in the over-the-counter market.

      (e) Notwithstanding the foregoing, if on any date on which Stock
   Options are to be granted under this Section 15.1 the remaining shares
   available for issuance to Outside Directors under the Plan are insufficient
   to enable each Outside Director to receive a Stock Option to purchase the
   applicable number of shares of Stock set forth above, each Outside Director
   who is entitled to be granted a Stock Option pursuant to this Section 15.1
   on such date shall be granted a Stock Option to purchase his or her pro-
   rata portion of such remaining shares.

   15.2 Stock Options granted under this Section 15 shall be Non-Qualified
Stock Options, and shall have the following terms and conditions:

      (a) Option Price. The option price per share of Stock purchasable under
   the Stock Option shall be equal to the closing sales price of the Stock on
   the date the Stock Option is granted.

      (b) Term of Option. The term of the Stock Option shall be ten years
   from the date of grant, subject to earlier termination in the event of
   termination of service as a director, as set forth in paragraphs (f) and
   (g) below.

      (c) Exercisability. Each Stock Option pursuant to Section 15.1 shall
   become exercisable as to one-third of the total number of shares of Stock
   covered by the Stock Option, on a cumulative basis, on each of the first,
   second and third anniversaries of the date of grant if the holder thereof
   has been an Outside Director at all times since such date of grant. The
   minimum number of shares with respect to which a Stock Option may be
   exercised is the lesser of 100 shares or the number of shares then subject
   to the Stock Option.

      (d) Method of Exercise. The Stock Options may be exercised in whole or
   in part at any time during the option period by giving written notice of
   exercise to the Company specifying the number of shares to be purchased,
   accompanied by payment of the purchase price. Payment of the purchase
   price shall be made in cash (including cash equivalents) or by delivery of
   shares of Stock already owned by the optionee for at least six months, or
   by any combination of the foregoing. Shares delivered upon payment of the
   exercise price shall be valued at the average of the high and low sale
   prices of the Stock on the date of exercise (or, if the Stock is not traded
   on such date, at the weighted average of the high and low prices on the
   nearest trading dates before and after such date).

      (e) Termination of Service as Director. If an optionee's service as a
   director is terminated for any reason, such director's Stock Options may
   be exercised for five years following such termination of service (but not
   beyond the Option term), but only to the extent such Options were vested
   on the date of termination of service.

      (f) Change of Control. Notwithstanding any other provision of the Plan,
   upon the occurrence of a Change of Control (as defined in Section 17.2),
   all Stock Options outstanding at the time of such Change of Control shall
   become immediately vested and exercisable and shall remain exercisable for
   five years after the director's termination of service (but not beyond the
   option term).

      (g) Non-transferability. No Stock Option shall be transferable by the
   optionee other than by will or by the laws of descent and distribution.
   During an optionee's lifetime, all Stock Options shall be exercisable only
   by the optionee or, in the event of the optionee's disability, by his or
   her guardian or legal representative.

      (h) Stockholder Rights. The holder of a Stock Option shall, as such,
   have none of the rights of a stockholder.

   15.3 Limited Stock Appreciation Rights in Tandem with Options. Each Stock
Option granted to an Outside Director under this Section 15 shall be granted
in tandem with a Limited Stock Appreciation Right which may be exercised only
within the 60-day period following a Change of Control. Upon exercise of the
Limited Stock Appreciation Right, the holder shall receive, for each share
with respect to which the Limited Stock Appreciation Right is exercised, an
amount equal in value to the excess of the Change of Control Price (as
defined in Section 17.3) over the exercise price of the related Stock Option.
The Limited Stock Appreciation Right shall be payable solely in cash, and
shall be paid within 30 days of the exercise of the Limited Stock
Appreciation Right. Upon the exercise of the Limited Stock Appreciation
Right, the Stock Option granted in tandem with such Right shall expire.

SECTION 16. Amendments and Termination

   The Board may discontinue the Plan at any time and may amend it from time
to time. No amendment or discontinuation of the Plan shall adversely affect
any award previously granted without the award holder's written consent.
Amendments may be made without stockholder approval except as required to
satisfy Section 422 of the Code, Section 162(m) of the Code, or other NASDAQ,
stock exchange, or regulatory requirements.

SECTION 17. Change of Control

   17.1 In the event of a Change of Control, unless otherwise determined by
the Granting Authority at the time of grant or by amendment (with the award
holder's consent) of such grant:

      (a) all outstanding Stock Options and all outstanding Stock
   Appreciation Rights (including Limited Stock Appreciation Rights) awarded
   under the Plan shall become fully exercisable and vested;

      (b) the restrictions and deferral limitations applicable to any
   outstanding Restricted Stock and Deferred Stock awards under the Plan
   shall lapse and such shares and awards shall be deemed fully vested; and

      (c) to the extent the cash payment of any award is based on the fair
   market value of Stock, such fair market value shall be the Change of
   Control Price.

   17.2 A "Change of Control" shall be deemed to occur on:

      (a) the date that any person or group deemed a person under Sections
   3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934 (other than
   the Company and its subsidiaries as determined immediately prior to that
   date) has become the beneficial owner, directly or indirectly (with
   beneficial ownership determined as provided in rule 13d-3, or any successor
   rule, under the Securities Exchange Act of 1934) of securities of the
   Company representing 25% or more of the total combined voting power of all
   classes of stock of the Company having the right under ordinary
   circumstances to vote at an election of the Board, unless such person has
   acquired 80% or more of such securities directly from the Company;

      (b) the date on which one-third or more of the members of the Board
   shall consist of persons other than Current Directors (for these purposes a
   "Current Director" shall mean any member of the Board on the Effective
   Date and any member of the Board whose nomination or election has been
   approved by a majority of the Current Directors then on the Board);

      (c) the date of approval by the stockholders of the Company of an
   agreement providing for the merger or consolidation of the Company with
   another corporation where (i) the stockholders of the Company, immediately
   prior to the merger or consolidation, would not beneficially own,
   immediately after the merger or consolidation, shares entitling such
   stockholders to 50% or more of all votes (without consideration of the
   rights of any class of stock to elect directors by a separate class vote)
   to which all stockholders of the corporation issuing cash or securities in
   the merger or consolidation would be entitled in the election of directors,
   or (ii) where the members of the Board, immediately prior to the merger or
   consolidation, would not, immediately after the merger or consolidation,
   constitute a majority of the board of directors of the corporation issuing
   cash or securities in the merger; or

      (d) the date of approval by the stockholders of the Company of an
   agreement providing for the sale or other disposition of all or
   substantially all of the assets of the Company.

   17.3 "Change of Control Price" means the highest price per share paid in
any transaction reported in the Nasdaq National Market or on any national
securities exchange where the Stock is traded, or paid or offered in any
transaction related to a Change of Control at any time during the 90-day
period ending with the Change of Control. Notwithstanding the foregoing
sentence, in the case of Stock Appreciation Rights granted in tandem with
Incentive Stock Options, the Change of Control Price shall be the highest
price paid on the date on which the Stock Appreciation Right is exercised.

SECTION 18. General Provisions

   18.1 Each award under the Plan shall be subject to the requirement that,
if at any time the Granting Authority shall determine that (i) the listing,
registration or qualification of the Stock subject or related thereto upon
any securities exchange or under any state or federal law, or (ii) the
consent or approval of any government regulatory body or (iii) an agreement
by the recipient of an award with respect to the disposition of Stock is
necessary or desirable (in connection with any requirement or interpretation
of any federal or state securities law, rule or regulation) as a condition
of, or in connection with, the granting of such award or the issuance,
purchase or delivery of Stock thereunder, such award shall not be granted or
exercised, in whole or in part, unless such listing, registration,
qualification, consent, approval or agreement shall have been effected or
obtained free of any conditions not acceptable to the Granting Authority.

   18.2 Nothing set forth in this Plan shall prevent the Board from adopting
other or additional compensation arrangements. Neither the adoption of the
Plan nor any award hereunder shall confer upon any employee of the Company,
or of a Related Company, any right to continued employment, and no award
shall confer upon any Outside Director any right to continued service as a
director.

   18.3 Determinations by the Granting Authority under the Plan relating to
the form, amount, and terms and conditions of awards need not be uniform, and
may be made selectively among persons who receive or are eligible to receive
awards under the Plan, whether or not such persons are similarly situated.

   18.4 No member of the Board or the Committee, nor any officer or employee
of the Company acting on behalf of the Board or the Committee, shall be
personally liable for any action, determination or interpretation taken or
made with respect to the Plan, and all members of the Board or the Committee
and all officers or employees of the Company acting on their behalf shall, to
the extent permitted by law, be fully indemnified and protected by the
Company in respect of any such action, determination or interpretation.

SECTION 19. Effective Date of Plan

   The Plan was adopted by the Company's Board of Directors on August 1,
2001, and shall be effective as of such date (the "Effective Date"), subject
to the approval of the Plan by the Company's stockholders at the 2001 Annual
Meeting of Stockholders.