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                                                                   Exhibit 10.50
                                                                   -------------
                            SYNBIOTICS CORPORATION
                     1995 STOCK OPTION/STOCK ISSUANCE PLAN
                     -------------------------------------
                       as amended through March 29, 1999
                       ---------------------------------


                                  ARTICLE ONE
                              GENERAL PROVISIONS
                              ------------------


I.   PURPOSE OF THE PLAN

This 1995 Stock Option/Stock Issuance Plan (the "Plan") is intended to promote
the interests of Synbiotics Corporation, a California corporation, by providing
eligible persons with the opportunity to acquire a proprietary interest, or
otherwise increase their proprietary interest, in the Corporation as an
incentive for them to remain in the service of the Corporation.

Capitalized terms not otherwise defined shall have the meanings assigned to such
terms in the attached Appendix.

II.  STRUCTURE OF THE PLAN

     A.   The Plan shall be divided into three separate equity programs:

          (i)    the Discretionary Option Grant Program under which eligible
                 persons may, at the discretion of the Plan Administrator, be
                 granted options to purchase shares of common stock of the
                 Corporation,

          (ii)   the Stock Issuance Program under which eligible persons may, at
                 the discretion of the Plan Administrator, be issued shares of
                 common stock of the Corporation directly, either through the
                 immediate purchase of such shares or as a bonus for services
                 rendered the Corporation (or any Parent or Subsidiary), and

          (iii)  the Automatic Option Grant Program under which non-employee
                 directors shall automatically receive option grants at periodic
                 intervals to purchase shares of common stock of the
                 Corporation.

     B.   The provisions of Articles One and Five shall apply to all equity
          programs under the Plan and shall accordingly govern the interests of
          all persons under the Plan.


III. ADMINISTRATION OF THE PLAN

     A.   Plan Administrator.  Either the Board or a committee of two (2) or
          ------------------
          more non-employee Board members appointed by the Board to administer
          the Discretionary Option Grant and Stock Issuance Programs with
          respect to Section 16 insiders (the "Primary Committee") shall have
          sole and exclusive authority to administer the Plan with respect to
          Section 16 Insiders.

     B.   Committees.  Administration of the Discretionary Option Grant and
          ----------
          Stock Issuance Programs with respect to all other persons eligible to
          participate in those programs may, at the Board's discretion, be

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          vested in the Board, the Primary Committee or a committee of two (2)
          or more Board members appointed by the Board to administer the
          Discretionary Option Grant Program and Stock Issuance Program with
          respect to eligible persons other than Section 16 insiders (the
          "Secondary Committee"), or the Board may retain the power to
          administer those programs with respect to all such persons.  All Board
          members are eligible to be members of the Secondary Committee,
          including Board members who are Employees eligible to receive
          discretionary option grants or direct stock issuances under the Plan
          or any other stock option, stock appreciation, stock bonus or other
          stock plan of the Corporation (or any Parent or Subsidiary).

     C.   Members of Committees.  Members of the Primary Committee or any
          ---------------------
          Secondary Committee shall serve for such period of time as the Board
          may determine and may be removed by the Board at any time.  The Board
          may also at any time terminate the functions of any Secondary
          Committee and assume all powers and authority previously delegated to
          such committee.

     D.   Service as Committee Members.  Service on the Primary Committee or the
          ----------------------------
          Secondary Committee shall constitute service as a Board member, and
          members of each such committee shall accordingly be entitled to full
          indemnification and reimbursement as Board members for their service
          on such committee.  No member of the Primary Committee or the
          Secondary Committee shall be liable for any act or omission made in
          good faith with respect to the Plan or any option grants or stock
          issuances under the Plan.

     E.   Authority.  Each Plan Administrator shall, within the scope of its
          ---------
          administrative functions under the Plan, have full power and authority
          (subject to the express provisions of the Plan) to (i) establish such
          rules and regulations as it may deem appropriate for the proper
          administration of the Discretionary Option Grant Program and Stock
          Issuance Program and to make such determinations under, and issue such
          interpretations of, such programs and any outstanding option grants or
          stock issuances as it may deem necessary or advisable, (ii) determine,
          with respect to the option grants under the Discretionary Option Grant
          Program, which eligible persons are to receive option grants, the time
          or times when such option grants are to be made, the number of shares
          to be covered by each such grant, the status of the granted option as
          either an Incentive Option or a Non-Statutory Option, the time or
          times at which each option is to become exercisable, the vesting
          schedule (if any) applicable to the option shares and the maximum term
          for which the option is to remain outstanding and (iii) determine,
          with respect to stock issuances under the Stock Issuance Program,
          which eligible persons are to receive stock issuances, the time or
          times when such issuances are to be made, the number of shares to be
          issued to each Participant, the vesting schedule (if any) applicable
          to the issued shares and the consideration to be paid by the
          Participant for such shares.  The Plan Administrator(s) shall have the
          absolute discretion either to grant options in accordance with the
          Discretionary Option Grant Program or to effect stock issuances in
          accordance with the Stock Issuance Program.  Decisions of each Plan
          Administrator shall be final and binding on all parties who have an
          interest in the Discretionary Option Grant Program and Stock Issuance
          Program or any outstanding option or stock issuance thereunder.

     F.   Restriction on Discretion.  The administration of the Automatic Option
          -------------------------
          Grant Program under Article Three shall be self executing in
          accordance with the terms and conditions thereof and the Plan
          Administrator shall not exercise any discretionary functions in
          respect to matters governed by Article Three.

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IV.  OPTION GRANTS AND STOCK ISSUANCES

     A.   Subject to Section V.B below, the persons eligible to receive stock
          issuances under the Stock Issuance Program ("Participant") and/or
          option grants pursuant to the Discretionary Option Grant Program
          ("Optionee") are as follows:

          (i)    officers and other employees of the Corporation (or its parent
                 or subsidiary corporations) who render services which
                 contribute to the management, growth and financial success of
                 the Corporation (or its parent or subsidiary corporations);

          (ii)   non-employee members of the Board; and

          (iii)  those consultants or other independent contractors who provide
                 valuable services to the Corporation (or its parent or
                 subsidiary corporations).

     B.   The individuals eligible to receive option grants under the Automatic
          Option Grant Program shall be those individuals who serve as non-
          employee Board members during the term of the Plan.


V.   STOCK SUBJECT TO THE PLAN

     A.   The stock issuable under the Plan shall be shares of authorized but
          unissued or reacquired common stock of the Corporation ("Common
          Stock"), including shares repurchased by the Corporation on the open
          market.  The maximum number of shares of Common Stock which may be
          issued over the term of the Plan shall not exceed 2,752,565 shares.
          Such authorized share reserve is comprised of (i) the number of shares
          available for issuance under the Predecessor Plan as last approved by
          the Corporation prior to their incorporation into this Plan, including
          the shares subject to the outstanding options incorporated into the
          Plan and any other shares which would have been available for future
          option grants under the Predecessor Plan, plus (ii) an additional
          increase of 1,332,055 shares authorized by the Board under the Plan,
          subject to stockholder approval.

     B.   No one person participating in the Plan may receive options and direct
          stock issuances for more than 800,000 shares of Common Stock in the
          aggregate over the term of the Plan.

     C.   Shares of Common Stock subject to outstanding options shall be
          available for subsequent issuance under the Plan to the extent (i) the
          options  (including any options incorporated from the Predecessor
          Plan) expire or terminate for any reason prior to exercise in full or
          (ii) the options are cancelled in accordance with the cancellation-
          regrant provisions of Article Two.  All shares issued under the Plan
          (including shares issued upon exercise of options incorporated from
          the Predecessor Plan), whether or not those shares are subsequently
          repurchased by the Corporation pursuant to its repurchase rights under
          the Plan, shall reduce on a share-for-share basis the number of shares
          of Common Stock available for subsequent issuance under the Plan.  In
          addition, should the exercise price of an option under the Plan
          (including any option incorporated from the Predecessor Plan) be paid
          with shares of Common Stock or should shares of Common Stock otherwise
          issuable under the Plan be withheld by the Corporation in satisfaction
          of the withholding taxes incurred in connection with the exercise of
          an option or the vesting of a stock issuance under the Plan, then the
          number of shares of Common Stock available for issuance under the Plan
          shall be reduced by the gross number of shares for which the option is
          exercised or which vest under the stock issuance, and not by the net
          number of shares of Common Stock issued to the holder of such option
          or stock issuance.

     D.   Should any change be made to the Common Stock by reason of any stock
          split, stock dividend,

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          recapitalization, combination of shares, exchange of shares or other
          change affecting the outstanding Common Stock as a class without the
          Corporation's receipt of consideration, appropriate adjustments shall
          be made to (i) the maximum number and/or class of securities issuable
          under the Plan, (ii) the maximum number and/or class of securities for
          which the share reserve is to increase automatically each year, (iii)
          the number and/or class of securities for which any one person may be
          granted options and direct stock issuances over the term of the Plan,
          (iv) the number and/or class of securities for which automatic option
          grants are to be subsequently made under the Automatic Option Grant
          Program and (v) the number and/or class of securities and the exercise
          price per share in effect under each outstanding option (including any
          option incorporated from the Predecessor Plan) in order to prevent the
          dilution or enlargement of benefits thereunder. The adjustments
          determined by the Plan Administrator shall be final, binding and
          conclusive.


                                  ARTICLE TWO
                      DISCRETIONARY OPTION GRANT PROGRAM
                      ----------------------------------

I.   OPTION TERMS

Each option shall be evidenced by one or more documents in the form approved by
the Plan Administrator; provided, however, that each such document shall comply
                        --------
with the terms specified below.  Each document evidencing an Incentive Option
shall, in addition, be subject to the provisions of the Plan applicable to such
options.

     A.   Exercise Price.
          --------------

          1.   The exercise price per share shall be fixed by the Plan
               Administrator but shall not be less than eighty-five percent
               (85%) of the Fair Market Value per share of  Common Stock on the
               option grant date, provided that the Plan Administrator may fix
               the exercise price at less than 85% if the optionee makes a
               payment to the Company (including payment made by means of a
               salary reduction agreement) of no less than the excess of 85% of
               the Fair Market Value of the Common Stock on the option grant
               date over such exercise price.

          2.   The exercise price shall become immediately due upon exercise of
               the option and shall, subject to the provisions of Section II of
               Article Five and the documents evidencing the option, be payable
               in one or more of the forms specified below:

               (i)    cash or check made payable to the Corporation,

               (ii)   shares of Common Stock held for the requisite period
                      necessary to avoid a charge to the Corporation's earnings
                      for financial reporting purposes and valued at Fair Market
                      Value on the exercise date, or

               (iii)  to the extent the option is exercised for vested shares,
                      through a special sale and remittance procedure pursuant
                      to which the Optionee shall concurrently provide
                      irrevocable written instructions to (a) a Corporation-
                      designated brokerage firm to effect the immediate sale of
                      the purchased shares and remit to the Corporation, out of
                      the sale proceeds available on the settlement date,
                      sufficient funds to cover the aggregate exercise price
                      payable for the purchased shares plus all applicable
                      Federal, state and local income and employment taxes
                      required to be withheld by the Corporation by reason of
                      such exercise and (b) the Corporation to deliver the
                      certificates for the purchased shares directly to such
                      brokerage firm in order to

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                      complete the sale transaction.

               Except to the extent such sale and remittance procedure is
               utilized, payment of the exercise price for the purchased shares
               must be made on the exercise date.

     B.   Exercise and Term of Options.  Each option shall be exercisable at
          ----------------------------
          such time or times, during such period and for such number of shares
          as shall be determined by the Plan Administrator and set forth in the
          documents evidencing the option.  However, no option shall have a term
          in excess of ten (10) years measured from the option grant date.

     C.   Effect of Termination of Service.
          --------------------------------

          1.   The following provisions shall govern the exercise of any options
               held by the Optionee at the time of cessation of Service or
               death:

               (i)    Any option outstanding at the time of the Optionee's
                      cessation of Service for any reason shall remain
                      exercisable for such period of time thereafter as shall be
                      determined by the Plan Administrator and set forth in the
                      documents evidencing the option, but no such option shall
                      be exercisable after the expiration of the option term.

               (ii)   Any option exercisable in whole or in part by the Optionee
                      at the time of death may be subsequently exercised by the
                      personal representative of the Optionee's estate or by the
                      person or persons to whom the option is transferred
                      pursuant to the Optionee's will or in accordance with the
                      laws of descent and distribution.

               (iii)  During the applicable post-Service exercise period, the
                      option may not be exercised in the aggregate for more than
                      the number of vested shares for which the option is
                      exercisable on the date of the Optionee's cessation of
                      Service. Upon the expiration of the applicable exercise
                      period or (if earlier) upon the expiration of the option
                      term, the option shall terminate and cease to be
                      outstanding for any vested shares for which the option has
                      not been exercised. However, the option shall, immediately
                      upon the Optionee's cessation of Service, terminate and
                      cease to be outstanding to the extent it is not
                      exercisable for vested shares on the date of such
                      cessation of Service.

               (iv)   In the event of a Corporate Transaction,the provisions of
                      Section III of this Article Two shall govern the period
                      for which the outstanding options are to remain
                      exercisable following the Optionee's cessation of Service
                      and shall supersede any provisions to the contrary in this
                      section.

          2.   The Plan Administrator shall have the discretion, exercisable
               either at the time an option is granted or at any time while the
               option remains outstanding, to:

               (i)    extend the period of time for which the option is to
                      remain exercisable following the Optionee's cessation of
                      Service from the period otherwise in effect for that
                      option to such greater period of time as the Plan
                      Administrator shall deem appropriate, but in no event
                      beyond the expiration of the option term, and/or

               (ii)   permit the option to be exercised, during the applicable
                      post-Service exercise period, not only with respect to the
                      number of vested shares of Common Stock for

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                      which such option is exercisable at the time of the
                      Optionee's cessation of Service but also with respect to
                      one or more additional installments in which the Optionee
                      would have vested under the option had the Optionee
                      continued in Service.

     D.   Stockholder Rights.  The holder of an option shall have no stockholder
          ------------------
          rights with respect to the shares subject to the option until such
          person shall have exercised the option, paid the exercise price and
          become a holder of record of the purchased shares.

     E.   Repurchase Rights.  The Plan Administrator shall have the discretion
          -----------------
          to grant options which are exercisable for unvested shares of Common
          Stock.  Should the Optionee cease Service while holding such unvested
          shares, the Corporation shall have the right to repurchase, at the
          exercise price paid per share, any or all of those unvested shares.
          The terms upon which such repurchase right shall be exercisable
          (including the period and procedure for exercise and the appropriate
          vesting schedule for the purchased shares) shall be established by the
          Plan Administrator and set forth in the document evidencing such
          repurchase right.

     F.   Limited Transferability of Options.  Unless the Plan Administrator
          ----------------------------------
          otherwise expressly approves in writing, the option shall be
          exercisable only by the Optionee during the lifetime of the Optionee,
          and shall not be assignable or transferable other than by will or by
          the laws of descent and distribution following the Optionee's death.
          However, a Non-Statutory Option may be assigned in accordance with the
          terms of a Qualified Domestic Relations Order within the meaning of
          Internal Revenue Code Section 414(p).  The assigned option may only be
          exercised by the person or persons who acquire a proprietary interest
          in the option pursuant to such Qualified Domestic Relations Order.
          The terms applicable to the assigned option (or portion thereof) shall
          be the same as those in effect for the option immediately prior to
          such assignment and shall be set forth in such documents issued to the
          assignee as the Plan Administrator may deem appropriate


II.  INCENTIVE OPTIONS

The terms specified below shall be applicable to all Incentive Options.  Except
as modified by the provisions of this Section II, all the provisions of Articles
One, Two and Five shall be applicable to Incentive Options. Options which are
specifically designated as Non-Statutory Options when issued under the Plan
shall not be subject to the terms of this Section II.
      ---

     A.   Eligibility.  Incentive Options may only be granted to Employees.
          -----------

     B.   Exercise Price.  The exercise price per share shall not be less than
          --------------
          one hundred percent (100%) of the Fair Market Value per share of
          Common Stock on the option grant date.

     C.   Dollar Limitation.  The aggregate Fair Market Value of the shares of
          -----------------
          Common Stock (determined as of the respective date or dates of grant)
          for which one or more options granted to any Employee under the Plan
          (or any other option plan of the Corporation or any Parent or
          Subsidiary) may for the first time become exercisable as Incentive
          Options during any one (1) calendar year shall not exceed the sum of
          One Hundred Thousand Dollars ($100,000).  To the extent the Employee
          holds two (2) or more such options which become exercisable for the
          first time in the same calendar year, the foregoing limitation on the
          exercisability of such options as Incentive Options shall be applied
          on the basis of the order in which such options are granted.

     D.   10% Stockholder.  If any Employee to whom an Incentive Option is
          ---------------
          granted is a 10% stockholder (within the meaning of Internal Revenue
          Code Section 424(d)), then the exercise price per share shall

                                      -6-
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          not be less than one hundred ten percent (110%) of the Fair Market
          Value per share of Common Stock on the option grant date, and the
          option term shall not exceed five (5) years measured from the option
          grant date.

III. CORPORATE TRANSACTION

     A.   In the event of any Corporate Transaction, each outstanding option
          shall automatically accelerate so that each such option shall,
          immediately prior to the effective date of the Corporate Transaction,
          become fully exercisable for all of the shares of Common Stock at the
          time subject to such option and may be exercised for any or all of
          those shares as fully-vested shares of Common Stock.  However, an
          outstanding option shall not so accelerate if and to the extent:  (i)
          such option is, in connection with the Corporate Transaction, either
          to be assumed by the successor corporation (or parent thereof) or to
          be replaced with a comparable option to purchase shares of the capital
          stock of the successor corporation (or parent thereof), (ii) such
          option is to be replaced with a cash incentive program of the
          successor corporation which preserves the spread existing on the
          unvested option shares at the time of the Corporate Transaction and
          provides for subsequent payout in accordance with the same vesting
          schedule applicable to such option or (iii) the acceleration of such
          option is subject to other limitations imposed by the Plan
          Administrator at the time of the option grant.  The determination of
          option comparability under clause (i) above shall be made by the Plan
          Administrator, and its determination shall be final, binding and
          conclusive.

     B.   All outstanding repurchase rights shall also terminate automatically,
          and the shares of Common Stock subject to those terminated rights
          shall immediately vest in full, in the event of any Corporate
          Transaction, except to the extent: (i) those repurchase rights are to
          be assigned to the successor corporation (or parent thereof) in
          connection with such Corporate Transaction or (ii) such accelerated
          vesting is precluded by other limitations imposed by the Plan
          Administrator at the time the repurchase right is issued.

     C.   Immediately following the consummation of the Corporate Transaction,
          all outstanding options shall terminate and cease to be outstanding,
          except to the extent assumed by the successor corporation (or parent
          thereof).

     D.   Each option which is assumed in connection with a Corporate
          Transaction shall be appropriately adjusted, immediately after such
          Corporate Transaction, to apply to the number and class of securities
          which would have been issuable to the Optionee in consummation of such
          Corporate Transaction had the option been exercised immediately prior
          to such Corporate Transaction.  Appropriate adjustments shall also be
          made to (i) the number and class of securities available for issuance
          under the Plan on both an aggregate and per Optionee basis following
          the consummation of such Corporate Transaction and (ii) the exercise
          price payable per share under each outstanding option, provided the
                                                                 --------
          aggregate exercise price payable for such securities shall remain the
          same.

     E.   Any options which are assumed or replaced in the Corporate Transaction
          and do not otherwise accelerate at that time, shall automatically
          accelerate (and any of the Corporation's outstanding repurchase rights
          which do not otherwise terminate at the time of the Corporate
          Transaction shall automatically terminate and the shares of Common
          Stock subject to those terminated rights shall immediately vest in
          full) in the event the Optionee's Service should subsequently
          terminate by reason of an Involuntary Termination within eighteen (18)
          months following the effective date of such Corporate Transaction.
          Any options so accelerated shall remain exercisable for fully-vested
          shares until the earlier of (i) the expiration of the option term or
                           -------
          (ii) the expiration of the one (1)-year period measured from the
          effective date of the Involuntary Termination.

                                      -7-
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     F.   The portion of any Incentive Option accelerated in connection with a
          Corporate Transaction or Change in Control shall remain exercisable as
          an Incentive Option only to the extent the applicable One Hundred
          Thousand Dollar limitation is not exceeded.  To the extent such dollar
          limitation is exceeded, the accelerated portion of such option shall
          be exercisable as a Non-Statutory Option under the Federal tax laws.

     G.   The grant of options under the Discretionary Option Grant Program
          shall in no way affect the right of the Corporation to adjust,
          reclassify, reorganize or otherwise change its capital or business
          structure or to merge, consolidate, dissolve, liquidate or sell or
          transfer all or any part of its business or assets.


IV.  CANCELLATION AND REGRANT OF OPTIONS

The Plan Administrator shall have the authority to effect, at any time and from
time to time, with the consent of the affected option holders, the cancellation
of any or all outstanding options under the Discretionary Option Grant Program
(including outstanding options incorporated from the Predecessor Plan) and to
grant in substitution new options covering the same or different number of
shares of Common Stock but with an exercise price per share based on the Fair
Market Value per share of Common Stock on the new option grant date.


                                 ARTICLE THREE
                            STOCK ISSUANCE PROGRAM
                            ----------------------


I.   STOCK ISSUANCE TERMS

Shares of Common Stock may be issued under the Stock Issuance Program through
direct and immediate issuances without any intervening option grants.  Each such
stock issuance shall be evidenced by a Stock Issuance Agreement which complies
with the terms specified below.

     A.   Purchase Price
          --------------

          1.   The purchase price per share shall be fixed by the Plan
               Administrator, but shall not be less than eighty-five percent
               (85%) of the Fair Market Value per share of Common Stock on the
               stock issuance date.

          2.   Subject to the provisions of Section II of Article Five, shares
               of Common Stock may be issued under the Stock Issuance Program
               for one or both of the following items of consideration which the
               Plan Administrator may deem appropriate in each individual
               instance:

          (i)  cash or check made payable to the Corporation, or

          (ii) past services rendered to the Corporation (or any Parent or
               Subsidiary).

     B.   Vesting Provisions
          ------------------

          1.   Shares of Common Stock issued under the Stock Issuance Program
               may, in the discretion of the Plan Administrator, be fully and
               immediately vested upon issuance or may vest in one or more
               installments over the Participant's period of Service or upon
               attainment of specified

                                      -8-
<PAGE>

               performance objectives. The elements of the vesting schedule
               applicable to any unvested shares of Common Stock issued under
               the Stock Issuance Program, namely:

               (i)    the Service period to be completed by the Participant or
                      the performance objectives to be attained,

               (ii)   the number of installments in which the shares are to
                      vest,

               (iii)  the interval or intervals (if any) which are to lapse
                      between installments, and

               (iv)   the effect which death, Permanent Disability or other
                      event designated by the Plan Administrator is to have upon
                      the vesting schedule,

               shall be determined by the Plan Administrator and incorporated
               into the stock issuance agreement.

          2.   Any new, substituted or additional securities or other property
               (including money paid other than as a regular cash dividend)
               which the Participant may have the right to receive with respect
               to the Participant's unvested shares of Common Stock by reason of
               any stock dividend, stock split, recapitalization, combination of
               shares, exchange of shares or other change affecting the
               outstanding Common Stock as a class without the Corporation's
               receipt of consideration shall be issued subject to (i) the same
               vesting requirements applicable to the Participant's unvested
               shares of Common Stock and (ii) such escrow arrangements as the
               Plan Administrator shall deem appropriate.

          3.   The Participant shall have full stockholder rights with respect
               to any shares of Common Stock issued to the Participant under the
               Stock Issuance Program, whether or not the Participant's interest
               in those shares is vested.  Accordingly, the Participant shall
               have the right to vote such shares and to receive any regular
               cash dividends paid on such shares.

          4.   Should the Participant cease to remain in Service while holding
               one or more unvested shares of Common Stock issued under the
               Stock Issuance Program or should the performance objectives not
               be attained with respect to one or more such unvested shares of
               Common Stock, then those shares shall be immediately surrendered
               to the Corporation for cancellation, and the Participant shall
               have no further stockholder rights with respect to those shares.
               To the extent the surrendered shares were previously issued to
               the Participant for consideration paid in cash or cash equivalent
               (including the Participant's purchase-money indebtedness), the
               Corporation shall repay to the Participant the cash consideration
               paid for the surrendered shares and shall cancel the unpaid
               principal balance of any outstanding purchase-money note of the
               Participant attributable to such surrendered shares.

          5.   The Plan Administrator may in its discretion waive the surrender
               and cancellation of one or more unvested shares of Common Stock
               (or other assets attributable thereto) which would otherwise
               occur upon the non-completion of the vesting schedule applicable
               to such shares.  Such waiver shall result in the immediate
               vesting of the Participant's interest in the shares of Common
               Stock as to which the waiver applies.  Such waiver may be
               effected at any time, whether before or after the Participant's
               cessation of Service or the attainment or non-attainment of the
               applicable performance objectives.


II.  CORPORATE TRANSACTION

                                      -9-
<PAGE>

     A.   All of the outstanding repurchase rights under the Stock Issuance
          Program shall terminate automatically, and all the shares of Common
          Stock subject to those terminated rights shall immediately vest in
          full, in the event of any Corporate Transaction, except to the extent
          (i) those repurchase rights are assigned to the successor corporation
          (or parent thereof) in connection with such Corporate Transaction or
          (ii) such accelerated vesting is precluded by other limitations
          imposed in the stock issuance agreement.

     B.   Any repurchase rights that are assigned in the Corporate Transaction
          shall automatically terminate, and all the shares of Common Stock
          subject to those terminated rights shall immediately vest in full, in
          the event the Optionee's Service should subsequently terminate by
          reason of an Involuntary Termination within eighteen (18) months
          following the effective date of such Corporate Transaction.


III. SHARE ESCROW/LEGENDS

Unvested shares may, in the Plan Administrator's discretion, be held in escrow
by the Corporation until the Participant's interest in such shares vests or may
be issued directly to the Participant with restrictive legends on the
certificates evidencing those unvested shares.


                                 ARTICLE FOUR
                        AUTOMATIC OPTION GRANT PROGRAM
                        ------------------------------


I.   OPTION TERMS

     A.   Grant Dates.  Option grants shall be made on the dates specified
          -----------
          below:

          1.   Each non-employee director who is who is first elected or
               appointed as a non-employee Board member after the effective date
               of the Plan shall automatically be granted, on such initial
               election or appointment, a Non-Statutory Option to purchase 7,000
               shares of Common Stock.

          2.   On the date of each Annual Stockholders Meeting, beginning with
               the 1995 Annual Meeting, each individual who is to continue to
               serve as a non-employee director after such meeting, shall
               automatically be granted, whether or not such individual is
               standing for re-election as a Board member at that Annual
               Meeting, a Non-Statutory Option to purchase an additional 7,000
               shares of Common Stock, provided such individual has served as a
               non-employee Board member for at least six (6) months prior to
               the date of such Annual Meeting.  There shall be no limit on the
               number of such 7,000-share option grants any one non-employee
               director may receive over his or her period of Board service.

                                      -10-
<PAGE>

     B.   Exercise Price.
          --------------

          1.   The exercise price per share shall be equal to one hundred
               percent (100%) of the Fair Market Value per share of Common Stock
               on the option grant date.

          2.   The exercise price shall be payable in one or more of the
               alternative forms authorized under the Discretionary Option Grant
               Program.  Except to the extent the sale and remittance procedure
               specified thereunder is utilized, payment of the exercise price
               for the purchased shares must be made on the exercise date.

     C.   Option Term.  Each option shall have a term of ten (10) years measured
          -----------
          from the option grant date.

     D.   Exercise and Vesting of Options.  Each option shall be immediately
          -------------------------------
          exercisable for any or all of the option shares.  However, any shares
          purchased under the option shall be subject to repurchase by the
          Corporation, at the exercise price paid per share, upon the Optionee's
          cessation of Board service prior to vesting in those shares.  Each
          grant shall vest, and the Corporation's repurchase right shall lapse,
          in a series of four (4) equal and successive quarterly installments
          over the Optionee's period of continued service as a Board member,
          with the first such installment to vest upon the Optionee's completion
          of three (3) months of Board service measured from the option grant
          date.

     E.   Effect of Termination of Board Service.  The following provisions
          --------------------------------------
          shall govern the exercise of any options held by the Optionee at the
          time the Optionee ceases to serve as a Board member:

          (i)    The Optionee (or, in the event of Optionee's death, the
                 personal representative of the Optionee's estate or the person
                 or persons to whom the option is transferred pursuant to the
                 Optionee's will or in accordance with the laws of descent and
                 distribution) shall have the balance of the option term in
                 which to exercise each such option.

          (ii)   Following cessation of service on the Board for other than
                 death or disability, the option may not be exercised in the
                 aggregate for more than the number of vested shares of Common
                 Stock for which the option was exercisable at the time of the
                 Optionee's cessation of Board service.

          (iii)  Should the Optionee cease to serve as a Board member by reason
                 of death or Permanent Disability, then all shares at the time
                 subject to the option shall immediately vest so that such
                 option may be exercised for all or any portion of such shares
                 as fully-vested shares of Common Stock.

          (iv)   Upon expiration of the option term, the option shall terminate
                 and cease to be outstanding for any vested shares for which the
                 option has not been exercised. However, the option shall,
                 immediately upon the Optionee's cessation of Board service,
                 terminate and cease to be outstanding to the extent it is not
                 exercisable for vested shares on the date of such cessation of
                 Board service.

                                      -11-
<PAGE>

II.  CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER

     A.   In the event of any Corporate Transaction, the shares of Common Stock
          at the time subject to each outstanding option but not otherwise
          vested shall automatically vest in full so that each such option
          shall, immediately prior to the effective date of the Corporate
          Transaction, become fully exercisable for all of the shares of Common
          Stock at the time subject to such option and may be exercised for all
          or any portion of such shares as fully-vested shares of Common Stock.
          Immediately following the consummation of the Corporate Transaction,
          each automatic option grant shall terminate and cease to be
          outstanding, except to the extent assumed by the successor corporation
          (or parent thereof).

     B.   In connection with any Change in Control, the shares of Common Stock
          at the time subject to each outstanding option but not otherwise
          vested shall automatically vest in full so that each such option
          shall, immediately prior to the effective date of the Change in
          Control, become fully exercisable for all of the shares of Common
          Stock at the time subject to such option and may be exercised for all
          or any portion of such shares as fully-vested shares of Common Stock.
          Each such option shall remain exercisable for such fully-vested option
          shares until the expiration or sooner termination of the option term
          or the surrender of the option in connection with a Hostile Take-Over.

     C.   Upon the occurrence of a Hostile Take-Over, the Optionee shall have a
          thirty (30)-day period in which to surrender to the Corporation each
          automatic option held by him or her for a period of at least six (6)
          months.  The Optionee shall in return be entitled to a cash
          distribution from the Corporation in an amount equal to the excess of
          (i) the Take-Over Price of the shares of Common Stock at the time
          subject to the surrendered option (whether or not the Optionee is
          otherwise at the time vested in those shares) over (ii) the aggregate
          exercise price payable for such shares.  Such cash distribution shall
          be paid within five (5) days following the surrender of the option to
          the Corporation.  No approval or consent of the Board shall be
          required in connection with such option surrender and cash
          distribution.

     D.   The grant of options under the Automatic Option Grant Program shall in
          no way affect the right of the Corporation to adjust, reclassify,
          reorganize or otherwise change its capital or business structure or to
          merge, consolidate, dissolve, liquidate or sell or transfer all or any
          part of its business or assets.


III. REMAINING TERMS
     ---------------

The remaining terms of each option granted under the Automatic Option Grant
Program shall be the same as the terms in effect for option grants made under
the Discretionary Option Grant Program.


                                 ARTICLE FIVE
                                 MISCELLANEOUS
                                 -------------


I.   ACCELERATION

     A.   The Plan Administrator shall have the discretion, exercisable either
          at the time an option is granted under the Discretionary Stock Option
          Program, at the time that stock is issued under the Stock Issuance
          Program or at any time while the option or stock remains outstanding,
          to provide for the acceleration of one or

                                      -12-
<PAGE>

          more outstanding options and the termination of repurchase rights on
          one or more outstanding shares upon the occurrence of such events as
          the Plan Administrator may determine, including upon a Corporate
          Transaction regardless or whether or not such options are to be
          assumed or replaced or the repurchase rights are to be assigned in the
          Corporate Transaction.

     B.   The Plan Administrator shall not have the discretion to provide for
          the acceleration of any options granted under the Automatic Option
          Grant Program.


II.  FINANCING

     A.   The Plan Administrator may permit any Optionee or Participant to pay
          the option exercise price under the Discretionary Option Grant Program
          or the purchase price for shares issued under the Stock Issuance
          Program by delivering a promissory note payable in one or more
          installments.   The terms of any such promissory note (including the
          interest rate and the terms of repayment) shall be established by the
          Plan Administrator in its sole discretion.  Promissory notes may be
          authorized with or without security or collateral.  In all events, the
          maximum credit available to the Optionee or Participant may not exceed
          the sum of (i) the aggregate option exercise price or purchase price
          payable for the purchased shares plus (ii) any Federal, state and
          local income and employment tax liability incurred by the Optionee or
          the Participant in connection with the option exercise or share
          purchase.

     B.   The Plan Administrator may, in its discretion, determine that one or
          more such promissory notes shall be subject to forgiveness by the
          Corporation in whole or in part upon such terms as the Plan
          Administrator may deem appropriate.


III. TAX WITHHOLDING

     A.   The Corporation's obligation to deliver shares of Common Stock upon
          the exercise of options or upon the issuance or vesting of such shares
          under the Plan shall be subject to the satisfaction of all applicable
          Federal, state and local income and employment tax withholding
          requirements.

     B.   The Plan Administrator may, in its discretion, provide any or all
          holders of Non-Statutory Options or unvested shares of Common Stock
          under the Plan (other than the options granted or the shares issued
          under the Automatic Option Grant Program) with the right to use shares
          of Common Stock in satisfaction of all or part of the federal, state
          and local income or employment taxes incurred by such holders in
          connection with the exercise of their options or the vesting of their
          shares.  Such right may be provided to any such holder in either or
          both of the following formats:

          (i)    Stock Withholding:  The election to have the Corporation
                 -----------------
                 withhold, from the shares of Common Stock otherwise issuable
                 upon the exercise of such Non-Statutory Option or the vesting
                 of such shares, a portion of those shares with an aggregate
                 Fair Market Value equal to the percentage of such taxes (not to
                 exceed one hundred percent (100%)) designated by the holder.

          (ii)   Stock Delivery:  The election to deliver to the Corporation, at
                 --------------
                 the time the Non-Statutory Option is exercised or the shares
                 vest, one or more shares of Common Stock previously acquired by
                 such holder (other than in connection with the option exercise
                 or share vesting triggering the taxes) with an aggregate Fair
                 Market Value equal to the percentage of such taxes (not to
                 exceed one hundred percent (100%)) designated by the holder.

                                      -13-
<PAGE>

IV.  EFFECTIVE DATE AND TERM OF THE PLAN

     A.   The Plan shall become effective on the date the Plan is adopted by the
          Board, and options may be granted under the Discretionary Option Grant
          Program from and after the effective date.  However, no options
          granted under the Plan may be exercised, and no shares shall be issued
          under the Plan, until the Plan is approved by the Corporation's
          stockholders.  If such stockholder approval is not obtained within
          twelve (12) months after such effective date, then all options
          previously granted under this Plan shall terminate and cease to be
          outstanding, and no further options shall be granted and no shares
          shall be issued under the Plan.

     B.   The Plan shall serve as the successor to the Predecessor Plan, and no
          further option grants shall be made under the Predecessor Plan after
          the effective date of the Plan.  All options outstanding under the
          Predecessor Plan as of such date shall, immediately upon approval of
          the Plan by the Corporations's stockholders, be incorporated into the
          Plan and treated as outstanding options under the Plan.  However, each
          outstanding option so incorporated shall continue to be governed
          solely by the terms of the documents evidencing such option.  No
          provision of the Plan shall be deemed to adversely affect or otherwise
          diminish the rights or obligations of the holders of such incorporated
          options with respect to their acquisition of shares of Common Stock
          which may exist under the terms of the Predecessor Plan under which
          such incorporated option was issued.  Subject to the rights of the
          optionee under the incorporated option documents and Predecessor Plan,
          the discretion delegated to the Plan Administrator hereunder may be
          exercised with respect to incorporated options to the same extent as
          it is exercisable with respect to options originally granted under
          this Plan.

     C.   The option/vesting acceleration provisions of Article Two relating to
          Corporate Transactions and Changes in Control may, in the Plan
          Administrator's discretion, be extended to one or more options
          incorporated from the Predecessor Plan which do not otherwise provide
          for such acceleration.

     D.   The Plan shall terminate upon the earliest of (i) April 27, 2005, (ii)
                                            --------
          the date on which all shares available for issuance under the Plan
          shall have been issued pursuant to the exercise of the options or the
          issuance of shares (whether vested or unvested) under the Plan or
          (iii) the termination of all outstanding options in connection with a
          Corporate Transaction.  Upon such Plan termination, all options and
          unvested stock issuances outstanding on such date shall thereafter
          continue to have force and effect in accordance with the provisions of
          the documents evidencing such options or issuances.


V.   AMENDMENT OF THE PLAN

     A.   The Board shall have complete and exclusive power and authority to
          amend or modify the Plan in any or all respects.  However, no such
          amendment or modification shall adversely affect the rights and
          obligations with respect to options or unvested stock issuances at the
          time outstanding under the Plan unless the Optionee or the Participant
          consents to such amendment or modification.  In addition, certain
          amendments may require stockholder approval if so determined by the
          Board or pursuant to applicable laws or regulations.

     B.   If stockholder approval is required, pursuant to the previous
          sentence, to amend the Plan to increase the number of shares of Common
          Stock available for issuance under the Plan, then upon Board approval
          of such an amendment, options to purchase shares of Common Stock may
          be granted under the Discretionary Option Grant Program and shares of
          Common Stock may be issued under the Stock Issuance Program that are
          in each instance in excess of the number of shares then available for
          issuance under the Plan, provided any excess shares actually issued
          under those programs are held in

                                      -14-
<PAGE>

           escrow until there is obtained stockholder approval of an amendment
           sufficiently increasing the number of shares of Common Stock
           available for issuance under the Plan. If such stockholder approval
           (if so required) is not obtained within twelve (12) months after the
           date the first such excess issuances are made, then (i) any
           unexercised options granted on the basis of such excess shares shall
           terminate and cease to be outstanding and (ii) the Corporation shall
           promptly refund to the Optionees and the Participants the exercise or
           purchase price paid for any excess shares issued under the Plan and
           held in escrow, together with interest (at the applicable Short Term
           Federal Rate) for the period the shares were held in escrow, and such
           shares shall thereupon be automatically cancelled and cease to be
           outstanding.


VI.   USE OF PROCEEDS

Any cash proceeds received by the Corporation from the sale of shares of Common
Stock under the Plan shall be used for general corporate purposes.


VII.  REGULATORY APPROVALS

      A.   The implementation of the Plan, the granting of any option under the
           Plan and the issuance of any shares of Common Stock (i) upon the
           exercise of any option or (ii) under the Stock Issuance Program shall
           be subject to the Corporation's procurement of all approvals and
           permits required by regulatory authorities having jurisdiction over
           the Plan, the options granted under it and the shares of Common Stock
           issued pursuant to it.

      B.   No shares of Common Stock or other assets shall be issued or
           delivered under the Plan unless and until there shall have been
           compliance with all applicable requirements of Federal and state
           securities laws, including the filing and effectiveness of the Form
           S-8 registration statement for the shares of Common Stock issuable
           under the Plan, and all applicable listing requirements of any stock
           exchange (or the Nasdaq National Market, if applicable) on which
           Common Stock is then listed for trading.


VIII. NO EMPLOYMENT/SERVICE RIGHTS

Nothing in the Plan shall confer upon the Optionee or the Participant any right
to continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining such person) or of the Optionee or the
Participant, which rights are hereby expressly reserved by each, to terminate
such person's Service at any time for any reason, with or without cause.

                                      -15-
<PAGE>

                                   APPENDIX
                                   --------

The following definitions shall be in effect under the Plan:

A.   Board shall mean the Corporation's Board of Directors.
     -----

B.   Change in Control shall mean a change in ownership or control of the
     -----------------
     Corporation effected through either of the following transactions:

     (i)     the acquisition, directly or indirectly, by any person or related
             group of persons (other than the Corporation or a person that
             directly or indirectly controls, is controlled by, or is under
             common control with, the Corporation), of beneficial ownership
             (within the meaning of Rule 13d-3 of the Securities Exchange Act of
             1934) of securities possessing more than fifty percent (50%) of the
             total combined voting power of the Corporation's outstanding
             securities pursuant to a tender or exchange offer made directly to
             the Corporation's stockholders which the Board does not recommend
             such stockholders to accept, or

     (ii)    a change in the composition of the Board over a period of thirty-
             six (36) consecutive months or less such that a majority of the
             Board members ceases, by reason of one or more contested elections
             for Board membership, to be comprised of individuals who either (A)
             have been Board members continuously since the beginning of such
             period or (B) have been elected or nominated for election as Board
             members during such period by at least a majority of the Board
             members described in clause (A) who were still in office at the
             time the Board approved such election or nomination.

C.   Corporate Transaction shall mean either of the following stockholder-
     ---------------------
     approved transactions to which the Corporation is a party:

     (i)    a merger or consolidation in which the Company is not the surviving
            entity, except for a transaction the principal purpose of which is
            to change the State of the Company's incorporation,

     (ii)   the sale, transfer or other disposition of all or substantially all
            of the assets of the Company in liquidation or dissolution of the
            Company, or

     (iii)  any reverse merger in which the Company is the surviving entity but
            in which securities possessing more than fifty percent (50%) of the
            total combined voting power of the Company's outstanding securities
            are transferred to holders different from those who held such
            securities immediately prior to such merger.

D.   Corporation shall mean Synbiotics Corporation, a California corporation.
     -----------

E.   Employee shall mean an individual who is in the employ of the Corporation
     --------
     (or any Parent or Subsidiary), subject to the control and direction of the
     employer entity as to both the work to be performed and the manner and
     method of performance.

F.   Fair Market Value per share of Common Stock on any relevant date shall be
     -----------------
     determined in accordance with the following provisions:

     (i)    If the Common Stock is at the time traded on the Nasdaq National
            Market, then the Fair Market Value shall be the closing selling
            price per share of Common Stock on the date in question, as such
            price is reported by the National Association of Securities Dealers
            on the Nasdaq National Market or any successor system. If there is
            no closing selling price for the Common Stock on the date in

                                      A-1
<PAGE>

            question, then the Fair Market Value shall be the closing selling
            price on the last preceding date for which such quotation exists.

     (ii)   If the Common Stock is at the time listed on any stock exchange,
            then the Fair Market Value shall be the closing selling price per
            share of Common Stock on the date in question on the Stock Exchange
            determined by the Plan Administrator to be the primary market for
            the Common Stock, as such price is officially quoted in the
            composite tape of transactions on such exchange. If there is no
            closing selling price for the Common Stock on the date in question,
            then the Fair Market Value shall be the closing selling price on the
            last preceding date for which such quotation exists.

     (iii)  If the Common Stock is at the time not traded on the Nasdaq National
            Market or listed on any stock exchange, then the Fair Market Value
            shall be determined according to whatever method is from time to
            time approved in good faith by the Board.

G.   Hostile Take-Over shall mean a change in ownership of the Corporation
     -----------------
     effected through acquisition, directly or indirectly, by any person or
     related group of persons (other than the Corporation or a person that
     directly or indirectly controls, is controlled by, or is under common
     control with, the Corporation) of beneficial ownership (within the meaning
     of Rule 13d-3 of the Securities Exchange Act of 1934) of securities
     possessing more than fifty percent (50%) of the total combined voting power
     of the Corporation's outstanding securities  pursuant to a tender or
     exchange offer made directly to the Corporation's stockholders which the
     Board does not recommend such stockholders to accept.

H.   Incentive Option shall mean an option which satisfies the requirements of
     ----------------
     Internal Revenue Code Section 422.

I.   Involuntary Termination shall mean the termination of the Service of any
     -----------------------
     individual which occurs by reason of:

     (i)    such individual's involuntary dismissal or discharge by the
            Corporation for reasons other than Misconduct, or

     (ii)   such individual's voluntary resignation following (A) a change in
            his or her position with the Corporation which materially reduces
            his or her level of responsibility, (B) a reduction in his or her
            level of compensation (including base salary, fringe benefits and
            any non-discretionary and objective-standard incentive payment or
            bonus award) by more than fifteen percent (15%) or (C) a relocation
            of such individual's place of employment by more than fifty (50)
            miles, provided and only if such change, reduction or relocation is
            effected by the Corporation without the individual's consent.

J.   Misconduct shall mean the commission of any act of fraud, embezzlement or
     ----------
     dishonesty by the Optionee or Participant, any unauthorized use or
     disclosure by such person of confidential information or trade secrets of
     the Corporation (or any Parent or Subsidiary), or any other intentional
     misconduct by such person adversely affecting the business or affairs of
     the Corporation (or any Parent or Subsidiary) in a material manner.  The
     foregoing definition shall not be deemed to be inclusive of all the acts or
     omissions which the Corporation (or any Parent or Subsidiary) may consider
     as grounds for the dismissal or discharge of any Optionee, Participant or
     other person in the Service of the Corporation (or any Parent or
     Subsidiary).

K.   Non-Statutory Option shall mean an option which is not an Incentive Option.
     --------------------

L.   Parent shall mean any corporation (other than the Corporation) in an
     ------
     unbroken chain of corporations ending with the Corporation, provided each
     corporation in the unbroken chain (other than the Corporation) owns, at the
     time of the determination, stock possessing fifty percent (50%) or more of
     the total combined voting power

                                      A-2
<PAGE>

     of all classes of stock in one of the other corporations in such chain.

M.   Permanent Disability or Permanently Disabled shall mean the inability of
     --------------------------------------------
     the Optionee or the Participant to engage in any substantial gainful
     activity by reason of any medically determinable physical or mental
     impairment expected to result in death or to be of continuous duration of
     twelve (12) months or more.

N.   Predecessor Plan shall mean, collectively, the Corporation's existing 1986
     ----------------
     Stock Option Plan, 1987 Stock Option Plan, 1988 Stock Option Plan, 1991
     Stock Option Plan, 1994 Stock Option Plan, 1996 Stock Option Plan and 1998
     Stock Option Plan.

O.   Service shall mean the provision of services to the Corporation (or any
     -------
     Parent or Subsidiary) by a person in the capacity of an Employee, a non-
     employee member of the board of directors or a consultant or independent
     advisor, except to the extent otherwise specifically provided in the
     documents evidencing the option grant.

P.   Subsidiary shall mean any corporation (other than the Corporation) in an
     ----------
     unbroken chain of corporations beginning with the Corporation, provided
     each corporation (other than the last corporation) in the unbroken chain
     owns, at the time of the determination, stock possessing fifty percent
     (50%) or more of the total combined voting power of all classes of stock in
     one of the other corporations in such chain.

Q.   Take-Over Price shall mean the greater of (i) the Fair Market Value per
     ---------------                -------
     share of Common Stock on the date the option is surrendered to the
     Corporation in connection with a Hostile Take-Over or (ii) the highest
     reported price per share of Common Stock paid by the tender offeror in
     effecting such Hostile Take-Over.  However, if the surrendered option is an
     Incentive Option, the Take-Over Price shall not exceed the clause (i) price
     per share.

                                      A-3