<PAGE>

                                                                    Exhibit 10.1

                             MYRIAD GENETICS, INC.

           1992 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN
                 (AS AMENDED AND RESTATED SEPTEMBER 20, 2001)

1.  DEFINITIONS.
    -----------

    Unless otherwise specified or unless the context otherwise requires, the
    following terms, as used in this Myriad Genetics, Inc. 1992 Employee,
    Director and Consultant Stock Option Plan, have the following meanings:

          Administrator means the Board of Directors, unless it has delegated
          -------------
          power to act on its behalf to a committee. (See Paragraph 4)

          Affiliate means a corporation which, for purposes of Section 424 of
          ---------
          the Code, is a parent or subsidiary of the Company, direct or
          indirect.

          Board of Directors means the Board of Directors of the Company.
          ------------------

          Code means the United States Internal Revenue Code of 1986, as
          ----
          amended.

          Committee means the Committee to which the Board of Directors has
          ---------
          delegated power to act under or pursuant to the provisions of the
          Plan.

          Common Stock means shares of the Company's common stock, $.01 par
          ------------
          value.

          Company means Myriad Genetics, Inc., a Delaware corporation.
          -------

          Disability or Disabled means permanent and total disability as defined
          ----------    --------
          in Section 22(e)(3) of the Code.

          Fair Market Value of a Share of Common Stock means:
          -----------------

          (1) If the Common Stock is listed on a national securities exchange or
          traded in the over-the-counter market and sales prices are regularly
          reported for the Common Stock, either (a) the average of the closing
          or last prices of the Common Stock on the Composite Tape or other
          comparable reporting system for the ten (10) consecutive trading days
          immediately preceding the applicable date or (b) the closing or last
          price of the Common Stock on the Composite Tape or other comparable
          reporting system for the trading day immediately preceding the
          applicable date, as the Administrator shall determine;

          (2) If the Common Stock is not traded on a national securities
          exchange but is traded on the over-the-counter market, if sales prices
          are not regularly reported for the Common Stock for the trading days
          or day referred to in clause (1), and if bid and asked prices for the
          Common Stock are regularly reported, either (a) the average
<PAGE>

          of the mean between the bid and the asked price for the Common Stock
          at the close of trading in the over-the-counter market for the ten
          (10) days on which Common Stock was traded immediately preceding the
          applicable date or (b) the mean between the bid and the asked price
          for the Common Stock at the close of trading in the over-the-counter
          market for the trading day on which Common Stock was traded
          immediately preceding the applicable date, as the Administrator shall
          determine; and

          (3)  If the Common Stock is neither listed on a national securities
          exchange nor traded in the over-the-counter market, such value as the
          Administrator, in good faith, shall determine.

          ISO means an option meant to qualify as an incentive stock option
          ---
          under Code Section 422.

          Key Employee means an employee of the Company or of an Affiliate
          ------------
          (including, without limitation, an employee who is also serving as an
          officer or director of the Company or of an Affiliate), designated by
          the Administrator to be eligible to be granted one or more Options
          under the Plan.

          Non-Qualified Option means an option which is not intended to qualify
          --------------------
          as an ISO.

          Option means an ISO or Non-Qualified Option granted under the Plan.
          ------

          Option Agreement means an agreement between the Company and a
          ----------------
          Participant delivered pursuant to the Plan.

          Participant means a Key Employee, director or consultant to whom one
          -----------
          or more Options are granted under the Plan. As used herein,
          "Participant" shall include "Participant's Survivors" where the
          context requires.

          Participant's Survivors means a deceased Participant's legal
          -----------------------
          representatives and/or any person or persons who acquired the
          Participant's rights to an Option by will or by the laws of descent
          and distribution.

          Plan means this Myriad Genetics, Inc. 1992 Employee, Director and
          ----
          Consultant Stock Option Plan.

          Shares means shares of the Common Stock as to which Options have been
          ------
          or may be granted under the Plan or any shares of capital stock into
          which the Shares are changed or for which they are exchanged within
          the provisions of Paragraph 3 of the Plan.  The Shares issued upon
          exercise of Options granted under the Plan may be authorized and
          unissued shares or shares held by the Company in its treasury, or
          both.
<PAGE>

2.   PURPOSES OF THE PLAN.
     --------------------

     The Plan is intended to encourage ownership of Shares by Key Employees,
directors and certain consultants to the Company in order to attract such
people, to induce them to work for the benefit of the Company or of an Affiliate
and to provide additional incentive for them to promote the success of the
Company or of an Affiliate.  The Plan provides for the granting of ISOs and Non-
Qualified Options.

3.   SHARES SUBJECT TO THE PLAN.
     --------------------------

     The number of Shares subject to this Plan as to which Options may be
granted from time to time shall be 8,000,000 or the equivalent of such number of
Shares after the Administrator, in its sole discretion, has interpreted the
effect of any stock split, stock dividend, combination, recapitalization or
similar transaction in accordance with Paragraph 16 of the Plan.

     If an Option ceases to be "outstanding", in whole or in part, the Shares
which were subject to such Option shall be available for the granting of other
Options under the Plan. Any Option shall be treated as "outstanding" until such
Option is exercised in full, or terminates or expires under the provisions of
the Plan, or by agreement of the parties to the pertinent Option Agreement.

4.   ADMINISTRATION OF THE PLAN.
     --------------------------

     The Administrator of the Plan will be the Board of Directors, except to the
extent the Board of Directors delegates its authority to a Committee of the
Board of Directors.  Following the date on which the Common Stock is registered
under the Securities and Exchange Act of 1934, as amended (the "1934 Act"), the
Plan is intended to comply in all respects with Rule 16b-3 or its successors,
promulgated pursuant to Section 16 of the 1934 Act with respect to Participants
who are subject to Section 16 of the 1934 Act, and any provision in this Plan
with respect to such persons contrary to Rule 16b-3 shall be deemed null and
void to the extent permissible by law and deemed appropriate by the
Administrator.  Subject to the provisions of the Plan, the Administrator is
authorized to:

     a.   Interpret the provisions of the Plan or of any Option or Option
          Agreement and to make all rules and determinations which it deems
          necessary or advisable for the administration of the Plan;

     b.   Determine which employees of the Company or of an Affiliate shall be
          designated as Key Employees and which of the Key Employees, directors
          and consultants shall be granted Options;

     c.   Determine the number of Shares for which an Option or Options shall be
          granted; and
<PAGE>

     d.   Specify the terms and conditions upon which an Option or Options may
          be granted;

provided, however, that all such interpretations, rules, determinations, terms
and conditions shall be made and prescribed in the context of preserving the tax
status under Code Section 422 of those Options which are designated as ISOs.
Subject to the foregoing, the interpretation and construction by the
Administrator of any provisions of the Plan or of any Option granted under it
shall be final, unless otherwise determined by the Board of Directors, if the
Administrator is other than the Board of Directors.

5.   ELIGIBILITY FOR PARTICIPATION.
     -----------------------------

     The Administrator will, in its sole discretion, name the Participants in
the Plan, provided, however, that each Participant must be a Key Employee,
director or consultant of the Company or of an Affiliate at the time an Option
is granted. Notwithstanding the foregoing, the Administrator may authorize the
grant of an Option to a person not then an employee, director or consultant of
the Company or of an Affiliate. The actual grant of such Option, however, shall
be conditioned upon such person becoming eligible to become a Participant at or
prior to the time of the execution of the Option Agreement evidencing such
Option. ISOs may be granted only to Key Employees. Non-Qualified Options may be
granted to any Key Employee, director or consultant of the Company or an
Affiliate. In no event shall any employee be granted in any calendar year
Options to purchase more than 1,000,000 shares of the Company's Common Stock
pursuant to this Plan. The granting of any Option to any individual shall
neither entitle that individual to, nor disqualify him or her from,
participation in any other grant of Options.

6.   TERMS AND CONDITIONS OF OPTIONS.
     -------------------------------

     Each Option shall be set forth in writing in an Option Agreement, duly
executed by the Company and, to the extent required by law or requested by the
Company, by the Participant.  The Administrator may provide that Options be,
granted subject to such conditions as the Administrator may deem appropriate
including, without limitation, subsequent approval by the stockholders of the
Company of this Plan or any amendments thereto.  The Option Agreements shall be
subject to at least the following terms and conditions:

     A.   Non-Qualified Options:  Each Option intended to be a Non-Qualified
          ---------------------
          Option shall be subject to the terms and conditions which the
          Administrator determines to be appropriate and in the best interest of
          the Company, subject to the following minimum standards for any such
          Non-Qualified Option:

          a.   Option Price: The option price (per share) of the Shares covered
               by each Option shall be determined by the Administrator but shall
               not be less than the par value per share of Common Stock.

          b.   Each Option Agreement shall state the number of Shares to which
               it pertains;
<PAGE>

          c.   Each Option Agreement shall state the date or dates on which it
               first is exercisable and the date after which it may no longer be
               exercised, and may provide that the Option rights accrue or
               become exercisable in installments over a period of months or
               years, or upon the occurrence of certain conditions or the
               attainment of stated goals or events; and

          d.   Exercise of any Option may be conditioned upon the Participant's
               execution of a Share purchase agreement in form satisfactory to
               the Administrator providing for certain protections for the
               Company and its other shareholders including requirements that:

               i.   The Participant's or the Participant's Survivors' right to
                    sell the Shares may be restricted; and

               ii.  The Participant or the Participant's Survivors may be
                    required to execute letters of investment intent and must
                    also acknowledge that the Shares will bear legends noting
                    any applicable restrictions.

          e.   On the date of each annual meeting of the Company's shareholders,
               each director of the Company who is not (i) an employee of the
               Company or (ii) nominated or elected pursuant to or in
               satisfaction of a contractual obligation of the Company, provided
               that on such dates such director has been in the continued and
               uninterrupted service of the Company as a director since his or
               her election or appointment, shall be granted a Non-Qualified
               Option to purchase 15,000 Shares.  Each Option granted under this
               subparagraph shall (i) have an exercise price equal to the Fair
               Market Value (per share) of the Shares on the date of grant of
               the Option, (ii) have a term of ten (10) years, and (iii) shall
               become cumulatively exercisable in three (3) equal annual
               installments of thirty-three and 33/100 percent (33.33%) each,
               upon completion of one full year of service on the Board of
               Directors after the date of grant, and continuing on each of the
               next two (2) full years of service thereafter.  Any director
               entitled to receive an Option grant under this subparagraph may
               elect to decline the Option.  The provisions of Paragraphs 10,
               11, 12 and 13 below shall not apply to Options granted pursuant
               to this subparagraph.

          Except as otherwise provided in the pertinent Option Agreement, if a
          director who receives Options pursuant to this subparagraph:

               i.   ceases to be a member of the Board of Directors of the
                    Company for any reason other than death or disability, any
                    then unexercised Options granted to such director may be
                    exercised by the director within a period of ninety (90)
                    days after the date the director ceases to be a member of
                    the Board of Directors, but only to the extent of
<PAGE>

                    the number of Shares with respect to which the Options are
                    exercisable on the date the director ceases to be a member
                    of the Board of Directors, and in no event later than the
                    expiration date of the Option; or,

               ii.  ceases to be a member of the Board of Directors of the
                    Company by reason of his or her death or Disability, any
                    then unexercised Options granted to such Director may be
                    exercised by the Participant (or by the Participant's
                    personal representative, or the  Participant's Survivors)
                    within a period of one hundred eighty (180) days after the
                    date the director ceases to be a member of the Board of
                    Directors, but only to the extent of the number of Shares
                    with respect to which the Options are exercisable on the
                    date the director ceases to be a member of the Board of
                    Directors, and in no event later than the expiration date of
                    the Option.

     B.   ISOs:  Each Option intended to be an ISO shall be issued only to a Key
          ----
          Employee and be subject to at least the following terms and
          conditions, with such additional restrictions or changes as the
          Administrator determines are appropriate but not in conflict with Code
          Section 422 and relevant regulations and rulings of the Internal
          Revenue Service:

          a.   Minimum standards:  The ISO shall meet the minimum standards
               required of Non-Qualified Options, as described above, except
               clause (a) thereunder.

          b.   Option Price:  Immediately before the Option is granted, if the
               Participant owns, directly or by reason of the applicable
               attribution rules in Code Section 424(d):

               i.   Ten percent (10%) or less of the total combined voting power
                                      -------
                    of all classes of share capital of the Company or an
                    Affiliate, the Option price per share of the Shares covered
                    by each Option shall not be less than one hundred percent
                    (100%) of the Fair Market Value per share of the Shares on
                    the date of the grant of the Option.

               ii.  More than ten percent (10%) of the total combined voting
                    power of all classes of share capital of the Company or an
                    Affiliate, the Option price per share of the Shares covered
                    by each Option shall not be less than one hundred ten
                    percent (110%) of the said Fair Market Value on the date of
                    grant.

          c.   Term of Option:  For Participants who own

               i.   Ten percent (10%) or less of the total combined voting power
                                      -------
                    of all classes of share capital of the Company or an
                    Affiliate, each Option
<PAGE>

                    shall terminate not more than ten (10) years from the date
                    of the grant or at such earlier time as the Option Agreement
                    may provide;

               ii.  More than ten percent (10%) of the total combined voting
                    power of all classes of share capital of the Company or an
                    Affiliate, each Option shall terminate not more than five
                    (5) years from the date of the grant or at such earlier time
                    as the Option Agreement may provide.

          d.   Limitation on Yearly Exercise:  The Option Agreements shall
               restrict the amount of Options which may be exercisable in any
               calendar year (under this or any other ISO plan of the Company or
               an Affiliate) so that the aggregate Fair Market Value (determined
               at the time each ISO is granted) of the stock with respect to
               which ISOs are exercisable for the first time by the Participant
               in any calendar year does not exceed one hundred thousand dollars
               ($100,000), provided that this subparagraph (e) shall have no
               force or effect if its inclusion in the Plan is not necessary for
               Options issued as ISOs to qualify as ISOs pursuant to Section
               422(d) of the Code.

          e.   Limitation on Grant of ISOs:  No ISOs shall be granted after the
               date which is the earlier of ten (10) years from the date of the
                                 -------
               adoption of the Plan by the Company and the date of the approval
               of the Plan by the shareholders of the Company.

7.   EXERCISE OF OPTION AND ISSUE OF SHARES.
     --------------------------------------

     An Option (or any part or installment thereof) shall be exercised by giving
written notice to the Company at its principal office address, together with
provision for payment of the full purchase price in accordance with this
paragraph for the Shares as to which such Option is being exercised, and upon
compliance with any other condition(s) set forth in the Option Agreement.  Such
written notice shall be signed by the person exercising the Option, shall state
the number of Shares with respect to which the Option is being exercised and
shall contain any representation required by the Plan or the Option Agreement.
Payment of the purchase price for the Shares as to which such Option is being
exercised shall be made (a) in United States dollars in cash or by check, or (b)
at the discretion of the Administrator, through delivery of shares of Common
Stock having a fair market value equal as of the date of the exercise to the
cash exercise price of the Option, determined in good faith by the
Administrator, or (c) at the discretion of the Administrator, by delivery of the
grantee's personal recourse note bearing interest payable not less than annually
at no less than 100% of the applicable Federal rate, as defined in Section
1274(d) of the Code, or (d) at the discretion of the Administrator, in
accordance with a cashless exercise program established with a securities
brokerage firm, and approved by the Administrator, (e) at the discretion of the
Administrator, by any combination of (a), (b), (c) and (d) above.
Notwithstanding the foregoing,
<PAGE>

the Administrator shall accept only such payment on exercise of an ISO as is
permitted by Section 422 of the Code.

     The Company shall then reasonably promptly deliver the Shares as to which
such Option was exercised to the Participant (or to the Participant's Survivors,
as the case may be). In determining what constitutes "reasonably promptly," it
is expressly understood that the delivery of the Shares may be delayed by the
Company in order to comply with any law or regulation which requires the Company
to take any action with respect to the Shares prior to their issuance. The
Shares shall, upon delivery, be evidenced by an appropriate certificate or
certificates for fully paid, non-assessable Shares.

     The Administrator shall have the right to accelerate the date of exercise
of any installment of any Option; provided that the Administrator shall not
accelerate the exercise date of any installment of any Option granted to any Key
Employee as an ISO (and not previously converted into a Non-Qualified Option
pursuant to paragraph 19) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as described in paragraph
6(e).

     The Administrator may, in its discretion, amend any term or condition of an
outstanding Option provided (i) such term or condition as amended is permitted
by the Plan, (ii) any such amendment shall be made only with the consent of the
Participant to whom the Option was granted, or in the event of the death of the
Participant, the Participant's Survivors, if the amendment is adverse to the
Participant, (iii) any such amendment of any ISO shall be made only after the
Administrator, after consulting the counsel for the Company, determines whether
such amendment would constitute a "modification" of any Option which is an ISO
(as that term is defined in Section 424(h) of the Code) or would cause any
adverse tax consequences for the holders of such ISO, and (iv) with respect to
any Option held by any Participant who is subject to the provisions of Section
16(a) of the 1934 Act, any such amendment shall be made only after the
Administrator, after consulting with counsel for the Company, determines whether
such amendment would constitute the grant of a new Option.

8.   RIGHTS AS A SHAREHOLDER.
     -----------------------

     No Participant to whom an Option has been granted shall have rights as a
shareholder with respect to any Shares covered by such Option, except after due
exercise of the Option and tender of the full purchase price for the Shares
being purchased pursuant to such exercise and registration of the Shares in the
Company's share register in the name of the Participant.


9.   ASSIGNABILITY AND TRANSFERABILITY OF OPTIONS.
     --------------------------------------------

     By its terms, an Option granted to a Participant shall not be transferable
by the Participant other than (i) by will or by the laws of descent and
distribution, or (ii) as otherwise determined by the Administrator and set forth
in the applicable Option agreement. The designation of a
<PAGE>

beneficiary of an Option by a Participant shall not be deemed a transfer
prohibited by this Paragraph. Except as provided above, an Option shall only be
exercisable, during the Participant's lifetime, by the Participant (or by his or
her legal representative)and shall not be assigned, pledged or hypothecated in
any way (whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted transfer, assignment,
pledge, hypothecation or other disposition of any Option or of any rights
granted thereunder contrary to the provisions of this Plan, or the levy of any
attachment or similar process upon an Option, shall be null and void.

10.  EFFECT OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE".
     -------------------------------------------------------

     Except as otherwise provided in the pertinent Option Agreement, in the
event of a termination of service (whether as an employee, director or
consultant) with the Company or an Affiliate before the Participant has
exercised all Options, the following rules apply:

     a.   A Participant who ceases to be an employee, director or consultant of
          the Company or of an Affiliate (for any reason other than termination
          "for cause", Disability, or death for which events there are special
          rules in Paragraphs 11, 12, and 13, respectively), may exercise any
          Option granted to him or her to the extent that the right to purchase
          Shares has accrued on the date of such termination of service, but
          only within such term as the Administrator has designated in the
          pertinent Option Agreement.

     b.   In no event may an Option Agreement provide, if the Option is intended
          to be an ISO, that the time for exercise be later than three (3)
          months after the Participant's termination of employment.

     c.   The provisions of this paragraph, and not the provisions of Paragraph
          12 or 13, shall apply to a Participant who subsequently becomes
          disabled or dies after the termination of employment, director status
          or consultancy, provided, however, in the case of a Participant's
          death within three (3) months after the termination of employment,
          director status or consulting, the Participant's Survivors may
          exercise the Option within one (1) year after the date of the
          Participant's death, but in no event after the date of expiration of
          the term of the Option.

     d.   Notwithstanding anything herein to the contrary, if subsequent to a
          Participant's termination of employment, termination of director
          status or termination of consultancy, but prior to the exercise of an
          Option, the Board of Directors determines that, either prior or
          subsequent to the Participant's termination, the Participant engaged
          in conduct which would constitute "cause", then such Participant shall
          forthwith cease to have any right to exercise any Option.

     e.   A Participant to whom an Option has been granted under the Plan who is
          absent from work with the Company or with an Affiliate because of
          temporary disability (any disability other than a permanent and total
          Disability as defined in Paragraph 1
<PAGE>

          hereof), or who is on leave of absence for any purpose, shall not,
          during the period of any such absence, be deemed, by virtue of such
          absence alone, to have terminated such Participant's employment,
          director status or consultancy with the Company or with an Affiliate,
          except as the Administrator may otherwise expressly provide.

     f.   Options granted under the Plan shall not be affected by any change of
          employment or other service within or among the Company and any
          Affiliates, so long as the Participant continues to be an employee,
          director or consultant of the Company or any Affiliate, provided,
          however, if a Participant's employment by either the Company or an
          Affiliate should cease (other than to become an employee of an
          Affiliate or the Company), such termination shall affect the
          Participant's rights under any Option granted to such Participant in
          accordance with the terms of the Plan and the pertinent Option
          Agreement.

11.  EFFECT OF TERMINATION OF SERVICE "FOR CAUSE".
     --------------------------------------------

     Except as otherwise provided in the pertinent Option Agreement, the
following rules apply if the Participant's service (whether as an employee,
director or consultant) with the Company or an Affiliate is terminated "for
cause" prior to the time that all of his or her outstanding Options have been
exercised:

     a.   All outstanding and unexercised Options as of the date the Participant
          is notified his or her service is terminated "for cause" will
          immediately be forfeited, unless the Option Agreement provides
          otherwise.

     b.   For purposes of this Article, "cause" shall include (and is not
          limited to) dishonesty with respect to the employer, insubordination,
          substantial malfeasance or non-feasance of duty, unauthorized
          disclosure of confidential information, and conduct substantially
          prejudicial to the business of the Company or any Affiliate.  The
          determination of the Administrator as to the existence of cause will
          be conclusive on the Participant and the Company.

     c.   "Cause" is not limited to events which have occurred prior to a
          Participant's termination of service, nor is it necessary that the
          Administrator's finding of "cause" occur prior to termination.  If the
          Administrator determines, subsequent to a Participant's termination of
          service but prior to the exercise of an Option, that either prior or
          subsequent to the Participant's termination the Participant engaged in
          conduct which would constitute "cause", then the right to exercise any
          Option is forfeited.

     d.   Any definition in an agreement between the Participant and the Company
          or an Affiliate, which contains a conflicting definition of "cause"
          for termination and which is in effect at the time of such
          termination, shall supersede the definition in this Plan with respect
          to such Participant.
<PAGE>

12.  EFFECT OF TERMINATION OF SERVICE FOR DISABILITY.
     -----------------------------------------------

     Except as otherwise provided in the pertinent Option Agreement, a
Participant who ceases to be an employee, director or consultant of the Company
or of an Affiliate by reason of Disability may exercise any Option granted to
such Participant:

     a.   To the extent exercisable but not exercised on the date of Disability;
          and

     b.   In the event rights to exercise the Option accrue periodically, to the
          extent of a pro rata portion of any additional rights as would have
          accrued had the Participant not become Disabled prior to the end of
          the accrual period which next ends following the date of Disability.
          The proration shall be based upon the number of days of such accrual
          period prior to the date of Disability.

     A Disabled Participant may exercise such rights only within a period of not
more than one (1) year after the date that the Participant became Disabled,
notwithstanding that the Participant might have been able to exercise the Option
as to some or all of the Shares on a later date if he or she had not become
disabled and had continued to be an employee, director or consultant or, if
earlier, within the originally prescribed term of the Option.

     The Administrator shall make the determination both of whether Disability
has occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such determination).
If requested, the Participant shall be examined by a physician selected or
approved by the Administrator, the cost of which examination shall be paid for
by the Company.

13.  EFFECT OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.
     ---------------------------------------------------------

     Except as otherwise provided in the pertinent Option Agreement, in the
event of the death of a Participant to whom an Option has been granted while the
Participant is an employee, director or consultant of the Company or of an
Affiliate, such Option may be exercised by the Participant's Survivors:

     a.   To the extent exercisable but not exercised on the date of death; and

     b.   In the event rights to exercise the Option accrue periodically, to the
          extent of a pro rata portion of any additional rights which would have
          accrued had the Participant not died prior to the end of the accrual
          period which next ends following the date of death.  The proration
          shall be based upon the number of days of such accrual period prior to
          the Participant's death.

     If the Participant's Survivors wish to exercise the Option, they must take
all necessary steps to exercise the Option within one (1) year after the date of
death of such Participant, notwithstanding that the decedent might have been
able to exercise the Option as to some or all of
<PAGE>

the Shares on a later date if he or she had not died and had continued to be an
employee, director or consultant or, if earlier, within the originally
prescribed term of the Option.

14.  PURCHASE FOR INVESTMENT.
     -----------------------

     Unless the offering and sale of the Shares to be issued upon the particular
exercise of an Option shall have been effectively registered under the
Securities Act of 1933, as now in force or hereafter amended (the "1933 Act"),
the Company shall be under no obligation to issue the Shares covered by such
exercise unless and until the following conditions have been fulfilled:

     a.   The person(s) who exercise such Option shall warrant to the Company,
          prior to the receipt of such Shares, that such person(s) are acquiring
          such Shares for their own respective accounts, for investment, and not
          with a view to, or for sale in connection with, the distribution of
          any such Shares, in which event the person(s) acquiring such Shares
          shall be bound by the provisions of the following legend which shall
          be endorsed upon the certificate(s) evidencing their Shares issued
          pursuant to such exercise or such grant:

               "The shares represented by this certificate have been taken for
               investment and they may not be sold or otherwise transferred by
               any person, including a pledgee, unless (1) either (a) a
               Registration Statement with respect to such shares shall be
               effective under the Securities Act of 1933, as amended, or (b)
               the Company shall have received an opinion of counsel
               satisfactory to it that an exemption from registration under such
               Act is then available, and (2) there shall have been compliance
               with all applicable state securities laws.

     b.   The Company shall have received an opinion of its counsel that the
          Shares may be issued upon such particular exercise in compliance with
          the 1933 Act without registration thereunder.

     The Company may delay issuance of the Shares until completion of any action
or obtaining of any consent which the Company deems necessary under any
applicable law (including, without limitation, state securities or "blue sky"
laws).

15.  DISSOLUTION OR LIQUIDATION OF THE COMPANY.
     -----------------------------------------

     Upon the dissolution or liquidation of the Company, all Options granted
under this Plan which as of such date shall not have been exercised will
terminate and become null and void; provided, however, that if the rights of a
Participant or a Participant's Survivors have not otherwise terminated and
expired, the Participant or the Participant's Survivors will have the right
immediately prior to such dissolution or liquidation to exercise any Option to
the extent that the Option is exercisable as of the date immediately prior to
such dissolution or liquidation.
<PAGE>

16.  ADJUSTMENTS.
     -----------

     Upon the occurrence of any of the following events, a Participant's rights
with respect to any Option granted to him or her hereunder which have not
previously been exercised in full shall be adjusted as hereinafter provided,
unless otherwise specifically provided in the written agreement between the
Participant and the Company relating to such Option:

     A.  Stock Dividends and Stock Splits. If the shares of Common Stock shall
         --------------------------------
be subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of such Option shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend. The number
of Shares subject to options to be granted to directors pursuant to Subparagraph
e of Paragraph 6 shall also be proportionately adjusted upon the occurrence of
such events.

     B.  Consolidations or Mergers. If the Company is to be consolidated with or
         -------------------------
acquired by another entity in a merger, sale of all or substantially all of the
Company's assets or otherwise (an "Acquisition"), the Administrator or the board
of directors of any entity assuming the obligations of the Company hereunder
(the "Successor Board"), shall, as to outstanding Options, either (i) make
appropriate provision for the continuation of such Options by substituting on an
equitable basis for the Shares then subject to such Options either the
consideration payable with respect to the outstanding shares of Common Stock in
connection with the Acquisition or securities of any successor or acquiring
entity; or (ii) upon written notice to the Participants, provide that all
Options must be exercised (either, to the extent then exercisable or, at the
discretion of the Administrator, all Options being made fully exercisable for
purposes of this subsection), within a specified number of days of the date of
such notice, at the end of which period the Options shall terminate; or (iii)
terminate all Options in exchange for a cash payment equal to the excess of the
Fair Market Value of the shares subject to such Options (either to the extent
then exercisable or, at the discretion of the Administrator, all Options being
made fully exercisable for purposes of this subsection) over the exercise price
thereof.

     C.  Recapitalization or Reorganization. In the event of a recapitalization
         ----------------------------------
or reorganization of the Company (other than a transaction described in
subparagraph B above) pursuant to which securities of the Company or of another
corporation are issued with respect to the outstanding shares of Common Stock, a
Participant upon exercising an Option shall be entitled to receive for the
purchase price paid upon such exercise the securities he or she would have
received if he or she had exercised such Option prior to such recapitalization
or reorganization.

     D.  Modification of ISOs. Notwithstanding the foregoing, any adjustments
         --------------------
made pursuant to subparagraph A, B or C with respect to ISOs shall be made only
after the Administrator, after consulting with counsel for the Company,
determines whether such adjustments would constitute a "modification" of such
ISOs (as that term is defined in Section 424(h) of the Code) or would cause any
adverse tax consequences for the holders of such ISOs. If the Administrator
determines that such adjustments made with respect to ISOs would constitute a
<PAGE>

modification of such ISOs, it may refrain from making such adjustments, unless
the holder of an ISO specifically requests in writing that such adjustment be
made and such writing indicates that the holder has full knowledge of the
consequences of such "modification" on his or her income tax treatment with
respect to the ISO.

17.  ISSUANCES OF SECURITIES.
     -----------------------

  Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares subject to Options.  Except as expressly provided
herein, no adjustments shall be made for dividends paid in cash or in
property (including without limitation, securities) of the Company.

18.  FRACTIONAL SHARES.
     -----------------

     No fractional share shall be issued under the Plan and the person
exercising such right shall receive from the Company cash in lieu of such
fractional share equal to the Fair Market Value thereof.

19.  CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS:  TERMINATION OF ISOs.
     -------------------------------------------------------------------

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

20.  WITHHOLDING.
     -----------

     In the event that any federal, state, or local income taxes, employment
taxes, Federal Insurance Contributions Act ("F.I.C.A.") withholdings or other
amounts are required by applicable law or governmental regulation to be withheld
from the Optionholder's salary, wages or other
<PAGE>

remuneration in connection with the exercise of an Option or a Disqualifying
Disposition (as defined in Paragraph 21), the Optionholder shall advance in cash
to the Company, or to any Affiliate of the Company which employs or employed the
Optionholder, the amount of such withholdings unless a different withholding
arrangement, including the use of shares of the Company's Common Stock, is
authorized by the Administrator (and permitted by law); provided, however, that
with respect to persons subject to Section 16 of the 1934 Act, any such
withholding arrangement shall be in compliance with any applicable provisions of
Rule 16b-3 promulgated under Section 16 of the 1934 Act. For purposes hereof,
the fair market value of the shares withheld for purposes of payroll withholding
shall be determined in the manner provided in Paragraph 1 above, as of the most
recent practicable date prior to the date of exercise. If the fair market value
of the shares withheld is less than the amount of payroll withholdings required,
the Optionholder may be required to advance the difference in cash to the
Company or the Affiliate employer. The Administrator in its discretion may
condition the exercise of an Option for less than the then Fair Market Value on
the Participant's payment of such additional withholding.

21.  NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.
     ----------------------------------------------

     Each Key Employee who receives an ISO must agree to notify the Company in
writing immediately after the Key Employee makes a Disqualifying Disposition of
any shares acquired pursuant to the exercise of an ISO.  A Disqualifying
Disposition is any disposition (including any sale) of such shares before the
later of (a) two years after the date the Key Employee was granted the ISO, or
(b) one year after the date the Key Employee acquired shares by exercising the
ISO.  If the Key Employee has died before such stock is sold, these holding
period requirements do not apply and no Disqualifying Disposition can occur
thereafter.

22.  TERMINATION OF THE PLAN.
     -----------------------

     The Plan will terminate on November 9, 2002, the date which is ten (10)
years from the earlier of the date of its adoption and the date of its approval
               -------
by the shareholders of the Company.  The Plan may be terminated at an earlier
date by vote of the shareholders of the Company; provided, however, that any
such earlier termination will not affect any Options granted or Option
Agreements executed prior to the effective date of such termination.

23.  AMENDMENT OF THE PLAN AND AGREEMENTS.
     ------------------------------------

     The Plan may be amended by the shareholders of the Company. The Plan may
also be amended by the Administrator, including, without limitation, to the
extent necessary to qualify any or all outstanding Options granted under the
Plan or Options to be granted under the Plan for favorable federal income tax
treatment (including deferral of taxation upon exercise) as may be afforded
incentive stock options under Section 422 of the Code, to the extent necessary
to ensure the qualification of the Plan under Rule 16b-3, at such time, if any,
as the Company has a class of stock registered pursuant to Section 12 of the
1934 Act, and to the extent necessary to qualify the shares issuable upon
exercise of any outstanding Options granted, or Options to be granted, under the
Plan for listing on any national securities exchange or quotation in any
national automated
<PAGE>

quotation system of securities dealers. Any amendment approved by the
Administrator which is of a scope that requires shareholder approval in order to
ensure favorable federal income tax treatment for any incentive stock options or
requires shareholder approval in order to ensure the compliance of the Plan with
Rule 16b-3 at such time, if any, as the Company has a class of stock registered
pursuant to Section 12 of the 1934 Act, shall be subject to obtaining such
shareholder approval. Any modification or amendment of the Plan shall not,
without the consent of a Participant, affect his or her rights under an Option
previously granted to him or her. With the consent of the Participant affected,
the Administrator may amend outstanding Option Agreements in a manner which may
be adverse to the Participant but which is not inconsistent with the Plan. In
the discretion of the Administrator, outstanding Option Agreements may be
amended by the Administrator in a manner which is not adverse to the
Participant.

24.  EMPLOYMENT OR OTHER RELATIONSHIP.
     --------------------------------

     Nothing in this Plan or any Option Agreement shall be deemed to prevent the
Company or an Affiliate from terminating the employment, consultancy or director
status of a Participant, nor to prevent a Participant from terminating his or
her own employment, consultancy or director status or to give any Participant a
right to be retained in employment or other service by the Company or any
Affiliate for any period of time.

25.  GOVERNING LAW.
     -------------

     This Plan shall be construed and enforced in accordance with the law of the
State of Delaware.