Appendix A


                                        All  references  herein  to  numbers  of
                                        shares  already  take into  account  and
                                        give effect to the 2-for-3 reverse stock
                                        split effective on December 7, 1995.


                          MOLECULAR DEVICES CORPORATION
                             1995 STOCK OPTION PLAN
                            ADOPTED OCTOBER 30, 1995
                  APPROVED BY SHAREHOLDERS ON DECEMBER 12, 1995
                    AMENDED BY THE BOARD ON JANUARY 29, 1999
                 AS AMENDED BY THE STOCKHOLDERS ON MAY 20, 1999


1.       PURPOSES.

         (a) The  purpose  of the Plan is to  provide a means by which  selected
Employees and Directors of and  Consultants to the Company,  and its Affiliates,
may be given an opportunity to purchase stock of the Company.

         (b) The Company,  by means of the Plan, seeks to retain the services of
persons who are now Employees or Directors of or  Consultants  to the Company or
its  Affiliates,  to secure and retain the services of new Employees,  Directors
and  Consultants,  and to provide  incentives  for such persons to exert maximum
efforts for the success of the Company and its Affiliates.

         (c) The Company  intends that the Options  issued under the Plan shall,
in the  discretion  of the Board or any  Committee to which  responsibility  for
administration  of the Plan has been delegated  pursuant to subsection  3(c), be
either Incentive Stock Options or Nonstatutory Stock Options.  All Options shall
be separately  designated  Incentive Stock Options or Nonstatutory Stock Options
at the time of grant,  and in such form as issued  pursuant  to Section 6, and a
separate  certificate  or  certificates  will be issued for shares  purchased on
exercise of each type of Option.

2.       DEFINITIONS.

         (a) "Affiliate" means any parent corporation or subsidiary corporation,
whether now or hereafter existing, as those terms are defined in Sections 424(e)
and (f) respectively, of the Code.

         (b) "Board" means the Board of Directors of the Company.

         (c) "Code" means the Internal Revenue Code of 1986, as amended.

         (d) "Committee" means a Committee  appointed by the Board in accordance
with subsection 3(c) of the Plan.

         (e) "Company" means Molecular Devices Corporation.

         (f) "Consultant" means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting services and who is compensated for
such services,  provided

                                       1
<PAGE>
                                        All  references  herein  to  numbers  of
                                        shares  already  take into  account  and
                                        give effect to the 2-for-3 reverse stock
                                        split effective on December 7, 1995.

that the term  "Consultant"  shall  not  include  Directors  who are paid only a
director's  fee by the  Company or who are not  compensated  by the  Company for
their services as Directors.

         (g) "Continuous  Status as an Employee,  Director or Consultant"  means
the employment or relationship as a Director or Consultant is not interrupted or
terminated.  The Board, in its sole discretion, may determine whether Continuous
Status as an Employee, Director or Consultant shall be considered interrupted in
the case of: (i) any leave of absence  approved  by the  Board,  including  sick
leave,  military leave,  or any other personal leave; or (ii) transfers  between
locations of the Company or between the Company, Affiliates or their successors.

         (h) "Covered  Employee" means the chief executive  officer and the four
(4)  other  highest   compensated   officers  of  the  Company  for  whom  total
compensation is required to be reported to shareholders  under the Exchange Act,
as determined for purposes of Section 162(m) of the Code.

         (i) "Director" means a member of the Board.

         (j)  "Employee"  means any person,  including  Officers and  Directors,
employed by the Company or any  Affiliate of the Company.  Neither  service as a
Director nor payment of a director's  fee by the Company  shall be sufficient to
constitute "employment" by the Company.

         (k)  "Exchange  Act"  means the  Securities  Exchange  Act of 1934,  as
amended.

         (l) "Fair Market  Value" means as of any date,  the value of the Common
Stock of the Company determined as follows:

                  (1) If the  common  stock is listed on any  established  stock
exchange or a national market system,  including without limitation the National
Market System of the National Association of Securities Dealers,  Inc. Automated
Quotation  ("NASDAQ")  System,  the Fair Market Value of a share of common stock
shall be the closing sales price for such stock (or the closing bid, if no sales
were  reported) as quoted on such system or exchange  (or the exchange  with the
greatest volume of trading in common stock) on the last market trading day prior
to the day of  determination,  as reported  in the Wall  Street  Journal or such
other source as the Board deems reliable;

                  (2) If the common  stock is quoted on the NASDAQ  System  (but
not  on  the  National  Market  System  thereof)  or is  regularly  quoted  by a
recognized  securities  dealer but  selling  prices are not  reported,  the Fair
Market  Value of a share of common  stock shall be the mean  between the bid and
asked  prices for the common  stock on the last market  trading day prior to the
day of  determination,  as  reported  in the Wall  Street  Journal or such other
source as the Board deems reliable;

                  (3) In the  absence  of an  established  market for the common
stock, the Fair Market Value shall be determined in good faith by the Board.

                                       2
<PAGE>
                                        All  references  herein  to  numbers  of
                                        shares  already  take into  account  and
                                        give effect to the 2-for-3 reverse stock
                                        split effective on December 7, 1995.

         (m) "Incentive  Stock Option" means an Option intended to qualify as an
incentive  stock  option  within the  meaning of Section 422 of the Code and the
regulations promulgated thereunder.

         (n) "Non-Employee  Director" means a Director of the Company who either
(i) is not a current  Employee  or  Officer  of the  Company  or its parent or a
subsidiary,  does not receive  compensation  (directly or  indirectly)  from the
Company or its parent or a subsidiary  for services  rendered as a consultant or
in any  capacity  other  than as a  Director  (except  for an amount as to which
disclosure would not be required under Item 404(a) of Regulation S-K promulgated
pursuant to the Securities Act ("Regulation S-K")), does not possess an interest
in any other  transaction  as to which  disclosure  would be required under Item
404(a) of  Regulation  S-K and is not engaged in a business  relationship  as to
which  disclosure would be required under Item 404(b) of Regulation S-K; or (ii)
is otherwise considered a "non-employee director" for purposes of Rule 16b-3.

         (o) "Nonstatutory Stock Option" means an Option not intended to qualify
as an Incentive Stock Option.

         (p)  "Officer"  means a person who is an officer of the Company  within
the  meaning  of Section 16 of the  Exchange  Act and the rules and  regulations
promulgated thereunder.

         (q) "Option" means a stock option granted pursuant to the Plan.

         (r) "Option  Agreement" means a written  agreement  between the Company
and an Optionee  evidencing  the terms and  conditions of an  individual  Option
grant. Each Option Agreement shall be subject to the terms and conditions of the
Plan.

         (s) "Optionee"  means an Employee,  Director or Consultant who holds an
outstanding Option.

         (t) "Outside Director" means a Director who either (i) is not a current
employee of the Company or an  "affiliated  corporation"  (within the meaning of
the Treasury regulations promulgated under Section 162(m) of the Code), is not a
former  employee  of  the  Company  or  an  "affiliated  corporation"  receiving
compensation  for prior  services  (other than  benefits  under a tax  qualified
pension plan), was not an officer of the Company or an "affiliated  corporation"
at any time, and is not currently receiving direct or indirect remuneration from
the Company or an  "affiliated  corporation"  for services in any capacity other
than as a Director,  or (ii) is otherwise  considered an "outside  director" for
purposes of Section 162(m) of the Code.

         (u) "Plan" means this Molecular Devices 1995 Stock Option Plan.

         (v) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any  successor
to Rule 16b-3,  as in effect when  discretion is being exercised with respect to
the Plan.

                                       3
<PAGE>
                                        All  references  herein  to  numbers  of
                                        shares  already  take into  account  and
                                        give effect to the 2-for-3 reverse stock
                                        split effective on December 7, 1995.

3.       ADMINISTRATION.

         (a) The Plan shall be  administered  by the Board  unless and until the
Board delegates administration to a Committee, as provided in subsection 3(c).

         (b) The  Board  shall  have the  power,  subject  to,  and  within  the
limitations of, the express provisions of the Plan:

                  (1) To  determine  from  time to  time  which  of the  persons
eligible under the Plan shall be granted Options; when and how each Option shall
be  granted;  whether  an  Option  will  be  an  Incentive  Stock  Option  or  a
Nonstatutory Stock Option; the provisions of each Option granted (which need not
be identical), including the time or times such Option may be exercised in whole
or in part;  and the  number of shares  for which an Option  shall be granted to
each such person.

                  (2) To construe  and  interpret  the Plan and Options  granted
under it, and to  establish,  amend and  revoke  rules and  regulations  for its
administration.  The Board,  in the  exercise  of this  power,  may  correct any
defect,  omission or inconsistency in the Plan or in any Option Agreement,  in a
manner and to the extent it shall deem  necessary  or expedient to make the Plan
fully effective.

                  (3) To amend the Plan or an Option as provided in Section 11.

                  (4)  Generally,  to exercise  such powers and to perform  such
acts as the Board deems  necessary or expedient to promote the best interests of
the Company.

         (c) The Board may  delegate  administration  of the Plan to a committee
composed of not fewer than two (2) members (the "Committee"), all of the members
of which  Committee  shall be  Non-Employee  Directors  and may also be,  in the
discretion of the Board, Outside Directors.  If administration is delegated to a
Committee,  the Committee shall have, in connection with the  administration  of
the Plan, the powers theretofore  possessed by the Board (and references in this
Plan to the Board shall thereafter be to the Committee),  subject,  however,  to
such  resolutions,  not inconsistent  with the provisions of the Plan, as may be
adopted from time to time by the Board.  The Board may abolish the  Committee at
any time and revest in the Board the administration of the Plan. Notwithstanding
anything  in this  Section 3 to the  contrary,  the Board or the  Committee  may
delegate to a committee  of one or more  members of the Board the  authority  to
grant Options to eligible  persons who (1) are not then subject to Section 16 of
the Exchange Act and/or (2) are either (i) not then  Covered  Employees  and are
not  expected  to be  Covered  Employees  at the time of  recognition  of income
resulting from such Option, or (ii) not persons with respect to whom the Company
wishes to comply with Section 162(m) of the Code.

4.       SHARES SUBJECT TO THE PLAN.

         (a) Subject to the  provisions  of Section 10  relating to  adjustments
upon changes in stock,  the stock that may be sold pursuant to Options shall not
exceed in the aggregate one million  seven  hundred fifty  thousand  (1,750,000)
shares of Company  common stock,  plus up to one million  (1,000,000)  shares of
Company  Common Stock to the extent that such shares

                                       4
<PAGE>
                                        All  references  herein  to  numbers  of
                                        shares  already  take into  account  and
                                        give effect to the 2-for-3 reverse stock
                                        split effective on December 7, 1995.

previously  reserved under the Company's  terminated 1988 Stock Option Plan (the
"1988  Plan")  (i)  have  not,  as of the  date of the  adoption  of this  Plan,
previously  been issued pursuant to the exercise of options under the 1988 Plan,
and (ii) are not, as of the date of  adoption  of this Plan,  subject to options
outstanding  under the 1988 Plan.  If any Option  granted  under the Plan or any
stock  option  granted  under  the 1988  Plan  shall  for any  reason  expire or
otherwise terminate, in whole or in part, without having been exercised in full,
the stock not acquired  shall revert to and again become  available for issuance
under this Plan.

         (b) The stock subject to the Plan may be unissued  shares or reacquired
shares, bought on the market or otherwise.

5.       ELIGIBILITY.

         (a)  Incentive   Stock  Options  may  be  granted  only  to  Employees.
Nonstatutory  Stock  Options  may be granted  only to  Employees,  Directors  or
Consultants.

         (b) No person  shall be eligible  for the grant of an Option if, at the
time of grant,  such person owns (or is deemed to own pursuant to Section 424(d)
of the Code) stock  possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any of its  Affiliates
unless the  exercise  price of such  Option is at least one  hundred ten percent
(110%)  of the  Fair  Market  Value of such  stock at the date of grant  and the
Option is not  exercisable  after the expiration of five (5) years from the date
of grant.

         (c) Subject to the  provisions  of Section 10  relating to  adjustments
upon  changes  in stock,  no person  shall be  eligible  to be  granted  Options
covering  more than Five  Hundred  Thousand  (500,000)  shares of the  Company's
common stock in any calendar year.

6.       OPTION PROVISIONS.

         Each  Option  shall be in such form and shall  contain  such  terms and
conditions  as the Board  shall deem  appropriate.  The  provisions  of separate
Options  need  not  be  identical,   but  each  Option  shall  include  (through
incorporation of provisions  hereof by reference in the Option or otherwise) the
substance of each of the following provisions:

         (a) Term. No Option shall be  exercisable  after the  expiration of ten
(10) years from the date it was granted.

         (b) Price.  The exercise price of each Incentive  Stock Option shall be
not less than one hundred  percent  (100%) of the Fair Market Value of the stock
subject to the Option on the date the Option is granted.  The exercise  price of
each Nonstatutory Stock Option shall be not less than eighty-five  percent (85%)
of the Fair  Market  Value of the stock  subject  to the  Option on the date the
Option  is  granted.  Notwithstanding  the  foregoing,  an Option  (whether  and
Incentive  Stock  Option or  Nonstatutory  Stock  Option) may be granted with an
option  exercise price lower than that set forth above if such option is granted
pursuant  to an  assumption  or  substitution  for  another  option  in a manner
qualifying with the provisions of Section 424(a) of the Code.

                                       5
<PAGE>
                                        All  references  herein  to  numbers  of
                                        shares  already  take into  account  and
                                        give effect to the 2-for-3 reverse stock
                                        split effective on December 7, 1995.

         (c) Consideration.  The purchase price of stock acquired pursuant to an
Option  shall be paid,  to the  extent  permitted  by  applicable  statutes  and
regulations,  either (i) in cash at the time the Option is exercised, or (ii) at
the  discretion of the Board or the  Committee,  at the time of the grant of the
Option, (A) by delivery to the Company of other common stock of the Company, (B)
according to a deferred payment or other arrangement (which may include, without
limiting the generality of the  foregoing,  the use of other common stock of the
Company)  with the person to whom the Option is granted or to whom the Option is
transferred  pursuant  to  subsection  6(d),  or (C) in any other  form of legal
consideration that may be acceptable to the Board.

         In the case of any  deferred  payment  arrangement,  interest  shall be
payable at least  annually  and shall be charged at the minimum rate of interest
necessary to avoid the treatment as interest, under any applicable provisions of
the Code,  of any amounts  other than  amounts  stated to be interest  under the
deferred payment arrangement.

         (d) Transferability. An Option shall not be transferable except by will
or by the laws of descent and distribution,  and shall be exercisable during the
lifetime  of the  person to whom the Option is granted  only by such  person.  A
Nonstatutory  Stock  Option shall not be  transferable  except by will or by the
laws of descent  and  distribution  or pursuant  to a domestic  relations  order
satisfying the  requirements  of Rule 16b-3 and the rules  thereunder (a "DRO"),
and shall be exercisable during the lifetime of the person to whom the Option is
granted only by such person or any  transferee  pursuant to a DRO. The person to
whom the Option is granted may, by delivering written notice to the Company,  in
a form satisfactory to the Company, designate a third party who, in the event of
the death of the Optionee, shall thereafter be entitled to exercise the Option.

         (e) Vesting.  The total number of shares of stock  subject to an Option
may,  but need not, be allotted in periodic  installments  (which may,  but need
not, be equal).  The Option  Agreement may provide that from time to time during
each of such installment  periods,  the Option may become  exercisable  ("vest")
with respect to some or all of the shares  allotted to that  period,  and may be
exercised  with  respect to some or all of the shares  allotted  to such  period
and/or any prior period as to which the Option  became  vested but was not fully
exercised.  The Option may be subject to such other terms and  conditions on the
time or times when it may be  exercised  (which may be based on  performance  or
other  criteria)  as the  Board may deem  appropriate.  The  provisions  of this
subsection  6(e) are  subject to any Option  provisions  governing  the  minimum
number of shares as to which an Option may be exercised.

         (f) Securities Law Compliance. The Company may require any Optionee, or
any  person  to whom an  Option  is  transferred  under  subsection  6(d),  as a
condition  of  exercising  any  such  Option,  (1) to  give  written  assurances
satisfactory  to the Company as to the  Optionee's  knowledge and  experience in
financial  and  business  matters  and/or to employ a  purchaser  representative
reasonably  satisfactory to the Company who is knowledgeable  and experienced in
financial  and business  matters,  and that he or she is capable of  evaluating,
alone or together  with the  purchaser  representative,  the merits and risks of
exercising the Option;  and (2) to give written  assurances  satisfactory to the
Company  stating that such person is acquiring  the stock  subject to the Option
for such  person's own account and not with any present  intention of selling or
otherwise distributing the stock. The foregoing requirements, and any assurances
given pursuant

                                       6
<PAGE>
                                        All  references  herein  to  numbers  of
                                        shares  already  take into  account  and
                                        give effect to the 2-for-3 reverse stock
                                        split effective on December 7, 1995.

to such  requirements,  shall be  inoperative  if (i) the issuance of the shares
upon the  exercise  of the Option  has been  registered  under a then  currently
effective  registration  statement  under the Securities Act of 1933, as amended
(the  "Securities   Act"),  or  (ii)  as  to  any  particular   requirement,   a
determination  is made by counsel for the Company that such requirement need not
be met in the  circumstances  under the then  applicable  securities  laws.  The
Company  may,  upon  advice of counsel to the  Company,  place  legends on stock
certificates   issued  under  the  Plan  as  such  counsel  deems  necessary  or
appropriate in order to comply with applicable securities laws,  including,  but
not limited to, legends restricting the transfer of the stock.

         (g)  Termination  of  Employment  or  Relationship  as  a  Director  or
Consultant.  In the  event  an  Optionee's  Continuous  Status  as an  Employee,
Director  or  Consultant  terminates  (other than upon the  Optionee's  death or
disability), the Optionee may exercise his or her Option (to the extent that the
Optionee was entitled to exercise it at the date of termination) but only within
such period of time ending on the earlier of (i) the date three (3) months after
the termination of the Optionee's Continuous Status as an Employee,  Director or
Consultant,  or such longer or shorter period specified in the Option Agreement,
or (ii) the  expiration  of the term of the  Option as set  forth in the  Option
Agreement.  If, after  termination,  the  Optionee  does not exercise his or her
Option  within the time  specified  in the Option  Agreement,  the Option  shall
terminate,  and the shares  covered  by such  Option  shall  revert to and again
become available for issuance under the Plan.

         (h)  Disability  of  Optionee.  In the event an  Optionee's  Continuous
Status as an  Employee,  Director or  Consultant  terminates  as a result of the
Optionee's  disability,  the  Optionee  may  exercise  his or her Option (to the
extent  that  the   Optionee  was  entitled  to  exercise  it  at  the  date  of
termination),  but only  within such period of time ending on the earlier of (i)
the date  twelve  (12)  months  following  such  termination  (or such longer or
shorter period specified in the Option Agreement), or (ii) the expiration of the
term of the  Option as set  forth in the  Option  Agreement.  If, at the date of
termination,  the Optionee is not entitled to exercise his or her entire Option,
the shares  covered by the  unexercisable  portion of the Option shall revert to
and again become  available for issuance under the Plan. If, after  termination,
the  Optionee  does not  exercise  his or her Option  within the time  specified
herein, the Option shall terminate,  and the shares covered by such Option shall
revert to and again become available for issuance under the Plan.

         (i) Death of Optionee. In the event of the death of an Optionee during,
or within a period  specified  in the  Option  after  the  termination  of,  the
Optionee's Continuous Status as an Employee,  Director or Consultant, the Option
may be exercised (to the extent the Optionee was entitled to exercise the Option
at the date of death) by the  Optionee's  estate,  by a person who  acquired the
right to exercise the Option by bequest or inheritance or by a person designated
to exercise the option upon the Optionee's  death  pursuant to subsection  6(d),
but only within the period  ending on the earlier of (i) the date  eighteen (18)
months  following the date of death (or such longer or shorter period  specified
in the Option  Agreement),  or (ii) the expiration of the term of such Option as
set forth in the Option  Agreement.  If, at the time of death,  the Optionee was
not entitled to exercise  his or her entire  Option,  the shares  covered by the
unexercisable  portion of the Option shall revert to and again become  available
for issuance under the Plan. If, after death, the Option is not exercised within
the time specified herein, the Option shall

                                       7
<PAGE>
                                        All  references  herein  to  numbers  of
                                        shares  already  take into  account  and
                                        give effect to the 2-for-3 reverse stock
                                        split effective on December 7, 1995.

terminate,  and the shares  covered  by such  Option  shall  revert to and again
become available for issuance under the Plan.

         (j) Early Exercise.  The Option may, but need not,  include a provision
whereby  the  Optionee  may elect at any time  while an  Employee,  Director  or
Consultant to exercise the Option as to any part or all of the shares subject to
the Option  prior to the full  vesting of the  Option.  Any  unvested  shares so
purchased may be subject to a repurchase right in favor of the Company or to any
other restriction the Board determines to be appropriate.

         (k)  Withholding.  To the  extent  provided  by the  terms of an Option
Agreement,  the Optionee may satisfy any federal, state or local tax withholding
obligation relating to the exercise of such Option by any of the following means
or by a combination of such means: (1) tendering a cash payment; (2) authorizing
the Company to withhold  shares  from the shares of the common  stock  otherwise
issuable  to the  Optionee as a result of the  exercise  of the  Option;  or (3)
delivering to the Company owned and  unencumbered  shares of the common stock of
the Company.

7.       COVENANTS OF THE COMPANY.

         (a) During the terms of the Options,  the Company shall keep  available
at all times the number of shares of stock required to satisfy such Options.

         (b) The Company shall seek to obtain from each regulatory commission or
agency having  jurisdiction  over the Plan such  authority as may be required to
issue and sell shares of stock upon exercise of the Options; provided,  however,
that this  undertaking  shall not  require  the  Company to  register  under the
Securities  Act either  the Plan,  any  Option or any stock  issued or  issuable
pursuant to any such Option. If, after reasonable efforts, the Company is unable
to obtain from any such  regulatory  commission  or agency the  authority  which
counsel for the Company  deems  necessary  for the lawful  issuance  and sale of
stock under the Plan,  the  Company  shall be relieved  from any  liability  for
failure to issue and sell stock upon  exercise of such Options  unless and until
such authority is obtained.

8.       USE OF PROCEEDS FROM STOCK.

         Proceeds from the sale of stock  pursuant to Options  shall  constitute
general funds of the Company.

9.       MISCELLANEOUS.

         (a) The Board shall have the power to  accelerate  the time at which an
Option may first be  exercised  or the time  during  which an Option or any part
thereof will vest pursuant to subsection 6(e), notwithstanding the provisions in
the  Option  stating  the time at which it may  first be  exercised  or the time
during which it will vest.

         (b) Neither an Optionee nor any person to whom an Option is transferred
under subsection 6(d) shall be deemed to be the holder of, or to have any of the
rights of a holder with

                                       8
<PAGE>
                                        All  references  herein  to  numbers  of
                                        shares  already  take into  account  and
                                        give effect to the 2-for-3 reverse stock
                                        split effective on December 7, 1995.

respect to, any shares  subject to such Option  unless and until such person has
satisfied all requirements for exercise of the Option pursuant to its terms.

         (c) Nothing in the Plan or any  instrument  executed or Option  granted
pursuant  thereto  shall  confer  upon any  Employee,  Director,  Consultant  or
Optionee any right to continue in the employ of the Company or any Affiliate (or
to continue acting as a Director or Consultant) or shall affect the right of the
Company or any  Affiliate to  terminate  the  employment  or  relationship  as a
Director or Consultant of any Employee, Director, Consultant or Optionee with or
without cause.

         (d) To the extent that the aggregate  Fair Market Value  (determined at
the time of  grant) of stock  with  respect  to which  Incentive  Stock  Options
granted after 1986 are exercisable for the first time by any Optionee during any
calendar  year under all plans of the  Company  and its  Affiliates  exceeds one
hundred  thousand  dollars  ($100,000),  the Options or portions  thereof  which
exceed such limit  (according to the order in which they were granted)  shall be
treated as Nonstatutory Stock Options.

         (e) (1) The Board or the Committee  shall have the authority to effect,
at any time and from time to time (i) the repricing of any  outstanding  Options
under the Plan and/or (ii) with the consent of the affected  holders of Options,
the  cancellation  of any  outstanding  Options  and the  grant in  substitution
therefor of new Options under the Plan covering the same or different numbers of
shares of Common  Stock,  but having an  exercise  price per share not less than
eighty-five  percent (85%) of the Fair Market Value (one hundred  percent (100%)
of the Fair Market  Value in the case of an  Incentive  Stock  Option or, in the
case of a ten percent (10%)  stockholder  (as defined in subsection  5(b)),  not
less than one hundred and ten percent (110%) of the Fair Market Value) per share
of Common Stock on the new grant date.

             (2) Shares subject to an Option canceled under this subsection 9(e)
shall continue to be counted  against the maximum award of Options  permitted to
be granted  pursuant to subsection  5(c) of the Plan. The repricing of an Option
under this  subsection  9(e),  resulting in a reduction  of the exercise  price,
shall be deemed to be a cancellation  of the original  Option and the grant of a
substitute  Option;  in the event of such  repricing,  both the original and the
substituted  Options  shall be counted  against  the  maximum  awards of Options
permitted to be granted  pursuant to subsection 5(c) of the Plan. The provisions
of this  subsection  9(e) shall be  applicable  only to the extent  required  by
Section 162(m) of the Code.

10.      ADJUSTMENTS UPON CHANGES IN STOCK.

         (a) If any change is made in the stock  subject to the Plan, or subject
to any Option (through merger, consolidation, reorganization,  recapitalization,
stock dividend,  dividend in property other than cash, stock split,  liquidating
dividend,  combination  of  shares,  exchange  of  shares,  change in  corporate
structure or otherwise), the Plan will be appropriately adjusted in the types of
securities  and  maximum  number  of  shares  subject  to the Plan  pursuant  to
subsection  4(a) and the maximum number of shares subject to award to any person
during any  calendar  year  pursuant to  subsection  5(c),  and the  outstanding
Options will be appropriately  adjusted in the

                                       9
<PAGE>
                                        All  references  herein  to  numbers  of
                                        shares  already  take into  account  and
                                        give effect to the 2-for-3 reverse stock
                                        split effective on December 7, 1995.

types of securities and number of shares and price per share of stock subject to
such outstanding Options.

         (b)  In the  event  of:  (1) a  dissolution,  liquidation  or  sale  of
substantially all of the assets of the Company; (2) a merger or consolidation in
which the Company is not the surviving  corporation;  or (3) a reverse merger in
which the Company is the surviving  corporation  but the shares of the Company's
common  stock  outstanding  immediately  preceding  the merger are  converted by
virtue of the merger  into other  property,  whether in the form of  securities,
cash or  otherwise,  then to the extent  permitted  by  applicable  law: (i) any
surviving  corporation  shall assume any Options  outstanding  under the Plan or
shall substitute  similar Options for those  outstanding under the Plan, or (ii)
such Options shall continue in full force and effect. In the event any surviving
corporation refuses to assume or continue such Options, or to substitute similar
options for those outstanding under the Plan, then, with respect to Options held
by persons then performing services as Employees, Directors or Consultants, then
such Options shall be terminated if not exercised prior to such event; provided,
however,  that the time during which such  Options may be exercised  may, at the
discretion of the Board of Directors,  be accelerated and the Options terminated
if not exercised prior to such event.

11.      AMENDMENT OF THE PLAN AND OPTIONS.

         (a) The Board at any time,  and from time to time,  may amend the Plan.
However,  except as provided in Section 10 relating to adjustments  upon changes
in stock, no amendment shall be effective unless approved by the stockholders of
the  Company  within  twelve  (12)  months  before or after the  adoption of the
amendment, where the amendment will:

             (1)  Increase the number of shares  reserved for Options  under the
Plan;

             (2) Modify the requirements as to eligibility for  participation in
the Plan (to the extent such modification requires stockholder approval in order
for the Plan to  satisfy  the  requirements  of  Section  422 of the Code or any
Nasdaq or securities exchange listing requirements); or

             (3) Modify the Plan in any other way if such modification  requires
stockholder  approval  in order  for the Plan to  satisfy  the  requirements  of
Section 422 of the Code or to comply with the requirements of Rule 16b-3, or any
Nasdaq or securities exchange listing requirements.

         (b) The Board may in its sole discretion  submit any other amendment to
the Plan for stockholder approval,  including, but not limited to, amendments to
the Plan intended to satisfy the  requirements of Section 162(m) of the Code and
the   regulations    promulgated   thereunder   regarding   the   exclusion   of
performance-based  compensation  from the limit on  corporate  deductibility  of
compensation paid to certain executive officers.

         (c) It is expressly  contemplated  that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide Optionees with the
maximum benefits provided or to be provided under the provisions of the Code and
the  regulations  promulgated  thereunder

                                       10
<PAGE>
                                        All  references  herein  to  numbers  of
                                        shares  already  take into  account  and
                                        give effect to the 2-for-3 reverse stock
                                        split effective on December 7, 1995.

relating to Incentive  Stock Options  and/or to bring the Plan and/or  Incentive
Stock Options granted under it into compliance therewith.

         (d) Rights and obligations under any Option granted before amendment of
the Plan  shall not be  impaired  by any  amendment  of the Plan  unless (i) the
Company  requests  the  consent of the person to whom the Option was granted and
(ii) such person consents in writing.

         (e) The Board at any time,  and from time to time,  may amend the terms
of any one or more Options;  provided,  however, that the rights and obligations
under any Option  shall not be  impaired  by any such  amendment  unless (i) the
Company  requests  the  consent of the person to whom the Option was granted and
(ii) such person consents in writing.

12.      TERMINATION OR SUSPENSION OF THE PLAN.

         (a) The Board may  suspend or  terminate  the Plan at any time.  Unless
sooner terminated,  the Plan shall terminate on October 29, 2005, which shall be
within ten (10) years from the date the Plan is adopted by the Board or approved
by the  stockholders  of the Company,  whichever  is earlier.  No Options may be
granted under the Plan while the Plan is suspended or after it is terminated.

         (b) Rights and  obligations  under any Option granted while the Plan is
in effect shall not be impaired by suspension or termination of the Plan, except
with the consent of the person to whom the Option was granted.

13.      EFFECTIVE DATE OF PLAN.

         The Plan shall become  effective  as  determined  by the Board,  but no
Options granted under the Plan shall be exercised  unless and until the Plan has
been approved by the stockholders of the Company, which approval shall be within
twelve  (12)  months  before or after the date the Plan is adopted by the Board,
and, if required,  an appropriate  permit has been issued by the Commissioner of
Corporations of the State of California.


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