Exhibit
        10.2

      


      HUDSON
        HEALTH SCIENCES, INC.

      


      2003
        Stock Option Plan

      


      1.   Purpose.
        The
        purpose of the 2003 Stock Option Plan (the “Plan”)
        of
        Hudson Health Sciences, Inc. (the “Company”)
        is to
        increase shareholder value and to advance the interests of the Company by
        furnishing a variety of economic incentives (“Incentives”)
        designed to attract, retain and motivate employees, directors and consultants.
        Incentives may consist of opportunities to purchase or receive shares of
        Common
        Stock, $0.001 par value, of the Company (“Common
        Stock”),
        monetary payments or both on terms determined under this Plan.

      


      2.   Administration.
        

      


      2.1   The
        Plan
        shall be administered by a committee of the Board of Directors of the Company
        (the “Committee”).
        The
        Committee shall consist of not less than two directors of the Company who
        shall
        be appointed from time to time by the board of directors of the Company.
        Each
        member of the Committee shall be a “non-employee director” within the meaning of
        Rule 16b-3 of the Exchange Act of 1934, as amended (together with the rules
        and
        regulations promulgated thereunder, the “Exchange
        Act”),
        and
        an “outside director” as defined in Section 162(m) of the Internal Revenue Code
        of 1986, as amended (the “Code”).
        The
        Committee shall have complete authority to determine all provisions of all
        Incentives awarded under the Plan (as consistent with the terms of the Plan),
        to
        interpret the Plan, and to make any other determination which it believes
        necessary and advisable for the proper administration of the Plan. The
        Committee’s decisions and matters relating to the Plan shall be final and
        conclusive on the Company and its participants. No member of the Committee
        will
        be liable for any action or determination made in good faith with respect
        to the
        Plan or any Incentives granted under the Plan. The Committee will also have
        the
        authority under the Plan to amend or modify the terms of any outstanding
        Incentives in any manner; provided, however, that the amended or modified
        terms
        are permitted by the Plan as then in effect and that any recipient on an
        Incentive adversely affected by such amended or modified terms has consented
        to
        such amendment or modification. No amendment or modification to an Incentive,
        however, whether pursuant to this Section 2 or any other provisions of the
        Plan,
        will be deemed to be a re-grant of such Incentive for purposes of this Plan.
        If
        at any time there is no Committee, then for purposes of the Plan the term
        “Committee” shall mean the Company’s Board of Directors.

      


      2.2   In
        the
        event of (i) any reorganization, merger, consolidation, recapitalization,
        liquidation, reclassification, stock dividend, stock split, combination of
        shares, rights offering, extraordinary dividend or divestiture (including
        a
        spin-off) or any other similar change in corporate structure or shares,
        (ii) any purchase, acquisition, sale or disposition of a significant
        amount
        of assets or a significant business, (iii) any change in accounting
        principles or practices, or (iv) any other similar change, in each
        case
        with respect to the Company or any other entity whose performance is relevant
        to
        the grant or vesting of an Incentive, the Committee (or, if the Company is
        not
        the surviving corporation in any such transaction, the board of directors
        of the
        surviving corporation) may, without the consent of any affected participant,
        amend or modify the vesting criteria of any outstanding Incentive that is
        based
        in whole or in part on the financial performance of the Company (or any
        subsidiary or division thereof) or such other entity so as equitably to reflect
        such event, with the desired result that the criteria for evaluating such
        financial performance of the Company or such other entity will be substantially
        the same (in the sole discretion of the Committee or the board of directors
        of
        the surviving corporation) following such event as prior to such event;
        provided, however, that the amended or modified terms are permitted by the
        Plan
        as then in effect.

      


      
        
           

        

        
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      3.   Eligible
        Participants. Employees of the Company or its subsidiaries (including
        officers and employees of the Company or its subsidiaries), directors and
        consultants, advisors or other independent contractors who provide services
        to
        the Company or its subsidiaries (including members of the Company’s scientific
        advisory board) or other parties, as determined by the Board, shall become
        eligible to receive Incentives under the Plan when designated by the Committee.
        Participants may be designated individually or by groups or categories (for
        example, by pay grade) as the Committee deems appropriate. Participation
        by
        officers of the Company or its subsidiaries and any performance objectives
        relating to such officers must be approved by the Committee. Participation
        by
        others and any performance objectives relating to others may be approved
        by
        groups or categories (for example, by pay grade) and authority to designate
        participants who are not officers and to set or modify such targets may be
        delegated. 

       

      4.   Types
        of Incentives.
        Incentives under the Plan may be granted in any one or a combination of the
        following forms: (a) incentive stock options and non-statutory stock options
        (Section 6); (b) stock appreciation rights (“SARs”)
        (Section 7); (c) stock awards (Section 8); (d) restricted stock (Section
        8); and
        (e) performance shares (Section 9).

      


      5.   Shares
        Subject to the Plan.

      


      5.1.   Number
        of Shares.
        Subject
        to adjustment as provided in Section 11.6, the number of shares of Common
        Stock
        which may be issued under the Plan shall not exceed 1,410,068 shares of Common
        Stock. Shares of Common Stock that are issued under the Plan or that are
        subject
        to outstanding Incentives will be applied to reduce the maximum number of
        shares
        of Common Stock remaining available for issuance under the Plan. 

      


      5.2.   Cancellation.
        To the
        extent that cash in lieu of shares of Common Stock is delivered upon the
        exercise of an SAR pursuant to Section 7.4, the Company shall be deemed,
        for
        purposes of applying the limitation on the number of shares, to have issued
        the
        greater of the number of shares of Common Stock which it was entitled to
        issue
        upon such exercise or on the exercise of any related option. In the event
        that a
        stock option or SAR granted hereunder expires or is terminated or canceled
        unexercised or unvested as to any shares of Common Stock, such shares may
        again
        be issued under the Plan either pursuant to stock options, SARs or otherwise.
        In
        the event that shares of Common Stock are issued as restricted stock or pursuant
        to a stock award and thereafter are forfeited or reacquired by the Company
        pursuant to rights reserved upon issuance thereof, such forfeited and reacquired
        shares may again be issued under the Plan, either as restricted stock, pursuant
        to stock awards or otherwise. The Committee may also determine to cancel,
        and
        agree to the cancellation of, stock options in order to make a participant
        eligible for the grant of a stock option at a lower price than the option
        to be
        canceled.

      


      6.   Stock
        Options.
        A stock
        option is a right to purchase shares of Common Stock from the Company. The
        Committee may designate whether an option is to be considered an incentive
        stock
        option or a non-statutory stock option. To the extent that any incentive
        stock
        option granted under the Plan ceases for any reason to qualify as an “incentive
        stock option” for purposes of Section 422 of the Code, such incentive stock
        option will continue to be outstanding for purposes of the Plan but will
        thereafter be deemed to be a non-statutory stock option. Each stock option
        granted by the Committee under this Plan shall be subject to the following
        terms
        and conditions:

       

      
        
           

        

        
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      6.1.   Price.
        The
        option price per share shall be determined by the Committee, subject to
        adjustment under Section 11.6.

      


      6.2.   Number.
        The
        number of shares of Common Stock subject to the option shall be determined
        by
        the Committee, subject to adjustment as provided in Section 11.6. The number
        of
        shares of Common Stock subject to a stock option shall be reduced in the
        same
        proportion that the holder thereof exercises a SAR if any SAR is granted
        in
        conjunction with or related to the stock option. No individual may receive
        options to purchase more than 1,410,068 shares in any year. 

       

      6.3.   Duration
        and Time for Exercise.
        Subject
        to earlier termination as provided in Section 11.4, the term of each stock
        option shall be determined by the Committee but shall not exceed ten years
        and
        one day from the date of grant. Each stock option shall become exercisable
        at
        such time or times during its term as shall be determined by the Committee
        at
        the time of grant. The Committee may accelerate the exercisability of any
        stock
        option. Subject to the foregoing and with the approval of the Committee,
        all or
        any part of the shares of Common Stock with respect to which the right to
        purchase has accrued may be purchased by the Company at the time of such
        accrual
        or at any time or times thereafter during the term of the option.

      


      6.4.   Manner
        of Exercise.
        Subject
        to the conditions contained in this Plan and in the agreement with the recipient
        evidencing such option, a stock option may be exercised, in whole or in part,
        by
        giving written notice to the Company, specifying the number of shares of
        Common
        Stock to be purchased and accompanied by the full purchase price for such
        shares. The exercise price shall be payable (a) in United States dollars
        upon
        exercise of the option and may be paid by cash; uncertified or certified
        check;
        bank draft; (b) at the discretion of the Committee, by delivery of shares
        of
        Common Stock that are already owned by the participant in payment of all
        or any
        part of the exercise price, which shares shall be valued for this purpose
        at the
        Fair Market Value on the date such option is exercised; or (c) at the discretion
        of the Committee, by instructing the Company to withhold from the shares
        of
        Common Stock issuable upon exercise of the stock option shares of Common
        Stock
        in payment of all or any part of the exercise price and/or any related
        withholding tax obligations, which shares shall be valued for this purpose
        at
        the Fair Market Value or in such other manner as may be authorized from time
        to
        time by the Committee. The shares of Common Stock delivered by the participant
        pursuant to Section 6.4(b) must have been held by the participant for a period
        of not less than six months prior to the exercise of the option, unless
        otherwise determined by the Committee. Prior to the issuance of shares of
        Common
        Stock upon the exercise of a stock option, a participant shall have no rights
        as
        a shareholder. Except as otherwise provided in the Plan, no adjustment will
        be
        made for dividends or distributions with respect to such stock options as
        to
        which there is a record date preceding the date the participant becomes the
        holder of record of such shares, except as the Committee may determine in
        its
        discretion.

      


      6.5.   Incentive
        Stock Options.
        Notwithstanding anything in the Plan to the contrary, the following additional
        provisions shall apply to the grant of stock options which are intended to
        qualify as Incentive Stock Options (as such term is defined in Section 422
        of
        the Code):

      


      (a)   The
        aggregate Fair Market Value (determined as of the time the option is granted)
        of
        the shares of Common Stock with respect to which Incentive Stock Options
        are
        exercisable for the first time by any participant during any calendar year
        (under the Plan and any other incentive stock option plans of the Company
        or any
        subsidiary or parent corporation of the Company) shall not exceed $100,000.
        The
        determination will be made by taking incentive stock options into account
        in the
        order in which they were granted. 

      


      
        
           

        

        
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      (b)   Any
        Incentive Stock Option certificate authorized under the Plan shall contain
        such
        other provisions as the Committee shall deem advisable, but shall in all
        events
        be consistent with and contain all provisions required in order to qualify
        the
        options as Incentive Stock Options.

      


      (c)   All
        Incentive Stock Options must be granted within ten years from the earlier
        of the
        date on which this Plan was adopted by board of directors or the date this
        Plan
        was approved by the Company’s shareholders. 

      


      (d)   Unless
        sooner exercised, all Incentive Stock Options shall expire no later than
        10
        years after the date of grant. No Incentive Stock Option may be exercisable
        after ten (10) years from its date of grant (five (5) years from its date
        of
        grant if, at the time the Incentive Stock Option is granted, the Participant
        owns, directly or indirectly, more than 10% of the total combined voting
        power
        of all classes of stock of the Company or any parent or subsidiary corporation
        of the Company).

      


      (e)   The
        exercise price for Incentive Stock Options shall be not less than 100% of
        the
        Fair Market Value of one share of Common Stock on the date of grant with
        respect
        to an Incentive Stock Option; provided that the exercise price shall be 110%
        of
        the Fair Market Value if, at the time the Incentive Stock Option is granted,
        the
        participant owns, directly or indirectly, more than 10% of the total combined
        voting power of all classes of stock of the Company or any parent or subsidiary
        corporation of the Company.

      


      7.   Stock
        Appreciation Rights.
        An SAR
        is a right to receive, without payment to the Company, a number of shares
        of
        Common Stock, cash or any combination thereof, the amount of which is determined
        pursuant to the formula set forth in Section 7.4. An SAR may be granted (a)
        with
        respect to any stock option granted under this Plan, either concurrently
        with
        the grant of such stock option or at such later time as determined by the
        Committee (as to all or any portion of the shares of Common Stock subject
        to the
        stock option), or (b) alone, without reference to any related stock option.
        Each
        SAR granted by the Committee under this Plan shall be subject to the following
        terms and conditions:

      


      7.1.   Number;
        Exercise Price.
        Each
        SAR granted to any participant shall relate to such number of shares of Common
        Stock as shall be determined by the Committee, subject to adjustment as provided
        in Section 11.6. In the case of an SAR granted with respect to a stock option,
        the number of shares of Common Stock to which the SAR pertains shall be reduced
        in the same proportion that the holder of the option exercises the related
        stock
        option. The exercise price of an SAR will be determined by the Committee,
        in its
        discretion, at the date of grant but may not be less than 100% of the Fair
        Market Value of one share of Common Stock on the date of grant.

      


      7.2.   Duration.
        Subject
        to earlier termination as provided in Section 11.4, the term of each SAR
        shall
        be determined by the Committee but shall not exceed ten years and one day
        from
        the date of grant. Unless otherwise provided by the Committee, each SAR shall
        become exercisable at such time or times, to such extent and upon such
        conditions as the stock option, if any, to which it relates is exercisable.
        The
        Committee may in its discretion accelerate the exercisability of any
        SAR.

      


      
        
           

        

        
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      7.3.   Exercise.
        An SAR
        may be exercised, in whole or in part, by giving written notice to the Company,
        specifying the number of SARs which the holder wishes to exercise. Upon receipt
        of such written notice, the Company shall, within 90 days thereafter, deliver
        to
        the exercising holder certificates for the shares of Common Stock or cash
        or
        both, as determined by the Committee, to which the holder is entitled pursuant
        to Section 7.4.

      


      7.4.   Payment.
        Subject
        to the right of the Committee to deliver cash in lieu of shares of Common
        Stock
        (which, as it pertains to officers and directors of the Company, shall comply
        with all requirements of the Exchange Act), the number of shares of Common
        Stock
        which shall be issuable upon the exercise of an SAR shall be determined by
        dividing:

      


      (a)   the
        number of shares of Common Stock as to which the SAR is exercised multiplied
        by
        the amount of the appreciation in such shares (for this purpose, the
“appreciation” shall be the amount by which the Fair Market Value of the shares
        of Common Stock subject to the SAR on the exercise date exceeds (1) in the
        case
        of an SAR related to a stock option, the exercise price of the shares of
        Common
        Stock under the stock option or (2) in the case of an SAR granted alone,
        without
        reference to a related stock option, an amount which shall be determined
        by the
        Committee at the time of grant, subject to adjustment under Section 11.6);
        by

      


      (b)   the
        Fair
        Market Value of a share of Common Stock on the exercise date.

      


      In
        lieu
        of issuing shares of Common Stock upon the exercise of a SAR, the Committee
        may
        elect to pay the holder of the SAR cash equal to the Fair Market Value on
        the
        exercise date of any or all of the shares which would otherwise be issuable.
        No
        fractional shares of Common Stock shall be issued upon the exercise of an
        SAR;
        instead, the holder of the SAR shall be entitled to receive a cash adjustment
        equal to the same fraction of the Fair Market Value of a share of Common
        Stock
        on the exercise date or to purchase the portion necessary to make a whole
        share
        at its Fair Market Value on the date of exercise.

      


      8.   Stock
        Awards and Restricted Stock.
        A stock
        award consists of the transfer by the Company to a participant of shares
        of
        Common Stock, without other payment therefor, as additional compensation
        for
        services to the Company. The participant receiving a stock award will have
        all
        voting, dividend, liquidation and other rights with respect to the shares
        of
        Common Stock issued to a participant as a stock award under this Section
        8 upon
        the participant becoming the holder of record of such shares. A share of
        restricted stock consists of shares of Common Stock which are sold or
        transferred by the Company to a participant at a price determined by the
        Committee (which price shall be at least equal to the minimum price required
        by
        applicable law for the issuance of a share of Common Stock) and subject to
        restrictions on their sale or other transfer by the participant, which
        restrictions and conditions may be determined by the Committee as long as
        such
        restrictions and conditions are not inconsistent with the terms of the Plan.
        The
        transfer of Common Stock pursuant to stock awards and the transfer and sale
        of
        restricted stock shall be subject to the following terms and
        conditions:

      


      8.1.   Number
        of Shares.
        The
        number of shares to be transferred or sold by the Company to a participant
        pursuant to a stock award or as restricted stock shall be determined by the
        Committee.

      


      8.2.   Sale
        Price.
        The
        Committee shall determine the price, if any, at which shares of restricted
        stock
        shall be sold or granted to a participant, which may vary from time to time
        and
        among participants and which may be below the Fair Market Value of such shares
        of Common Stock at the date of sale.

      


      
        
           

        

        
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      8.3.   Restrictions.
        All
        shares of restricted stock transferred or sold hereunder shall be subject
        to
        such restrictions as the Committee may determine, including, without limitation
        any or all of the following:

      


      (a)   a
        prohibition against the sale, transfer, pledge or other encumbrance of the
        shares of restricted stock, such prohibition to lapse at such time or times
        as
        the Committee shall determine (whether in annual or more frequent installments,
        at the time of the death, disability or retirement of the holder of such
        shares,
        or otherwise);

      


      (b)   a requirement
        that the holder of shares of restricted stock forfeit, or (in the case of
        shares
        sold to a participant) resell back to the Company at his or her cost, all
        or a
        part of such shares in the event of termination of his or her employment
        or
        consulting engagement during any period in which such shares are subject
        to
        restrictions; or

      


      (c)   such
        other conditions or restrictions as the Committee may deem
        advisable.

      


      8.4.   Escrow.
        In
        order to enforce the restrictions imposed by the Committee pursuant to Section
        8.3, the participant receiving restricted stock shall enter into an agreement
        with the Company setting forth the conditions of the grant. Shares of restricted
        stock shall be registered in the name of the participant and deposited, together
        with a stock power endorsed in blank, with the Company. Each such certificate
        shall bear a legend in substantially the following form:

      


      The
        transferability of this certificate and the shares of Common Stock represented
        by it are subject to the terms and conditions (including conditions of
        forfeiture) contained in the 2003 Stock Option Plan of Hudson Health Sciences,
        Inc., (the “Company”), and an agreement entered into between the registered
        owner and the Company. A copy of the 2003 Stock Option Plan and the agreement
        is
        on file in the office of the secretary of the Company.

      


      8.5.   End
        of
        Restrictions.
        Subject
        to Section 11.5, at the end of any time period during which the shares of
        restricted stock are subject to forfeiture and restrictions on transfer,
        such
        shares will be delivered free of all restrictions to the participant or to
        the
        participant’s legal representative, beneficiary or heir.

      


      8.6.   Shareholder.
        Subject
        to the terms and conditions of the Plan, each participant receiving restricted
        stock shall have all the rights of a shareholder with respect to shares of
        stock
        during any period in which such shares are subject to forfeiture and
        restrictions on transfer, including without limitation, the right to vote
        such
        shares. Dividends paid in cash or property other than Common Stock with respect
        to shares of restricted stock shall be paid to the participant currently.
        Unless
        the Committee determines otherwise in its sole discretion, any dividends
        or
        distributions (including regular quarterly cash dividends) paid with respect
        to
        shares of Common Stock subject to the restrictions set forth above will be
        subject to the same restrictions as the shares to which such dividends or
        distributions relate. In the event the Committee determines not to pay dividends
        or distributions currently, the Committee will determine in its sole discretion
        whether any interest will be paid on such dividends or distributions. In
        addition, the Committee in its sole discretion may require such dividends
        and
        distributions to be reinvested (and in such case the participant consents
        to
        such reinvestment) in shares of Common Stock that will be subject to the
        same
        restrictions as the shares to which such dividends or distributions
        relate.

      


      
        
           

        

        
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      9.   Performance
        Shares.
        A
        performance share consists of an award which shall be paid in shares of Common
        Stock, as described below. The grant of a performance share shall be subject
        to
        such terms and conditions as the Committee deems appropriate, including the
        following:

      


      9.1.   Performance
        Objectives.
        Each
        performance share will be subject to performance objectives for the Company
        or
        one of its operating units to be achieved by the participant before the end
        of a
        specified period. The number of performance shares granted shall be determined
        by the Committee and may be subject to such terms and conditions, as the
        Committee shall determine. If the performance objectives are achieved, each
        participant will be paid in shares of Common Stock or cash as determined
        by the
        Committee. If such objectives are not met, each grant of performance shares
        may
        provide for lesser payments in accordance with formulas established in the
        award.

      


      9.2.   Not
        Shareholder.
        The
        grant of performance shares to a participant shall not create any rights
        in such
        participant as a shareholder of the Company, until the payment of shares
        of
        Common Stock with respect to an award.

      


      9.3.   No
        Adjustments.
        No
        adjustment shall be made in performance shares granted on account of cash
        dividends which may be paid or other rights which may be issued to the holders
        of Common Stock prior to the end of any period for which performance objectives
        were established.

      


      9.4.   Expiration
        of Performance Share.
        If any
        participant’s employment or consulting engagement with the Company is terminated
        for any reason other than normal retirement, death or disability prior to
        the
        achievement of the participant’s stated performance objectives, all the
        participant’s rights on the performance shares shall expire and terminate unless
        otherwise determined by the Committee. In the event of termination of employment
        or consulting by reason of death, disability, or normal retirement, the
        Committee, in its own discretion may determine what portions, if any, of
        the
        performance shares should be paid to the participant.

      


      10.   Change
        of Control.

      


      10.1   Change
        in Control.
        For
        purposes of this Section 10, a “Change
        in Control”
        of the
        Company will mean the following:

       

      (a)   the
        sale,
        lease, exchange or other transfer, directly or indirectly, of substantially
        all
        of the assets of the Company (in one transaction or in a series of related
        transactions) to a person or entity that is not controlled by the Company;
        

       

      (b)   the
        approval by the shareholders of the Company of any plan or proposal for the
        liquidation or dissolution of the Company;

       

      (c)   any
        person becomes after the effective date of the Plan the “beneficial owner” (as
        defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
        (i)
        20% or more, but not 50% or more, of the combined voting power of the Company’s
        outstanding securities ordinarily having the right to vote at elections of
        directors, unless the transaction resulting in such ownership has been approved
        in advance by the Continuing Directors (as defined below), or (ii) 50% or
        more
        of the combined voting power of the Company’s outstanding securities ordinarily
        having the right to vote at elections of directors (regardless of any approval
        by the Continuing Directors); provided that a traditional institution or
        venture
        capital financing transaction shall be excluded from this
        definition;

       

      
        
           

        

        
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      (d)   a
        merger
        or consolidation to which the Company is a party if the shareholders of the
        Company immediately prior to effective date of such merger or consolidation
        have
“beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act),
        immediately following the effective date of such merger or consolidation,
        of
        securities of the surviving corporation representing (i) 50% or more, but
        less
        than 80%, of the combined voting power of the surviving corporation’s then
        outstanding securities ordinarily having the right to vote at elections of
        directors, unless such merger or consolidation has been approved in advance
        by
        the Continuing Directors, or (ii) less than 50% of the combined voting
        power of the surviving corporation’s then outstanding securities ordinarily
        having the right to vote at elections of directors (regardless of any approval
        by the Continuing Directors); or

       

      (e)   after
        the
        date the Company’s securities are first sold in a registered public offering,
        the Continuing Directors cease for any reason to constitute at least a majority
        of the Board. 

       

      10.2   Continuing
        Directors. For purposes of this Section 10, “Continuing Directors” of the
        Company will mean any individuals who are members of the Board on the effective
        date of the Plan and any individual who subsequently becomes a member of
        the
        Board whose election, or nomination for election by the Company’s shareholders,
        was approved by a vote of at least a majority of the Continuing Directors
        (either by specific vote or by approval of the Company’s proxy statement in
        which such individual is named as a nominee for director without objection
        to
        such nomination).

       

      10.3   Acceleration
        of Incentives.
        Without
        limiting the authority of the Committee under the Plan, if a Change in Control
        of the Company occurs whereby the acquiring entity or successor to the Company
        does not assume the Incentives or replace them with substantially equivalent
        incentive awards, then, unless otherwise provided by the Committee in its
        sole
        discretion in the agreement evidencing an Incentive at the time of grant,
        then
        as of the date of the Change of Control (a) all outstanding options and SARs
        will vest and will become immediately exercisable in full and will remain
        exercisable for the remainder of their terms, regardless of whether the
        participant to whom such options or SARs have been granted remains in the
        employ
        or service of the Company or any subsidiary of the Company or any acquiring
        entity or successor to the Company; (b) the restrictions on all shares of
        restricted stock awards shall lapse immediately; and (c) all performance
        shares
        shall be deemed to be met and payment made immediately.

       

      10.4   Cash
        Payment for Options.
        If a
        Change in Control of the Company occurs, then the Committee, if approved
        by the
        Committee in its sole discretion either in an agreement evidencing an option
        at
        the time of grant or at any time after the grant of an option, and without
        the
        consent of any participant affected thereby, may determine that:

       

      (a)   some
        or
        all participants holding outstanding options will receive, with respect to
        some
        or all of the shares of Common Stock subject to such options, as of the
        effective date of any such Change in Control of the Company, cash in an amount
        equal to the excess of the Fair Market Value of such shares immediately prior
        to
        the effective date of such Change in Control of the Company over the exercise
        price per share of such options; and

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

         

      

      (b)   any
        options as to which, as of the effective date of any such Change in Control,
        the
        Fair Market Value of the shares of Common Stock subject to such options is
        less
        than or equal to the exercise price per share of such options, shall terminate
        as of the effective date of any such Change in Control.

       

      
        	 	
                If
                  the Committee makes a determination as set forth in subparagraph
                  (a) of
                  this Section 10.4, then as of the effective date of any such Change
                  in
                  Control of the Company such options will terminate as to such shares
                  and
                  the participants formerly holding such options will only have the
                  right to
                  receive such cash payment(s). If the Committee makes a determination
                  as
                  set forth in subparagraph (b) of this Section 10.4, then as of
                  the
                  effective date of any such Change in Control of the Company such
                  options
                  will terminate, become void and expire as to all unexercised shares
                  of
                  Common Stock subject to such options on such date, and the participants
                  formerly holding such options will have no further rights with
                  respect to
                  such options.

              


      

      


      11.   General.

      


      11.1.   Effective
        Date.
        The
        Plan will become effective upon approval by the Company’s board of directors.


      


      11.2.   Duration.
        The
        Plan shall remain in effect until all Incentives granted under the Plan have
        either been satisfied by the issuance of shares of Common Stock or the payment
        of cash or been terminated under the terms of the Plan and all restrictions
        imposed on shares of Common Stock in connection with their issuance under
        the
        Plan have lapsed. No Incentives may be granted under the Plan after the tenth
        anniversary of the date the Plan is approved by the shareholders of the
        Company.

      


      11.3.   Non-transferability
        of Incentives.
        Except,
        in the event of the holder’s death, by will or the laws of descent and
        distribution to the limited extent provided in the Plan or the Incentive,
        unless
        approved by the Committee, no stock option, SAR, restricted stock or performance
        award may be transferred, pledged or assigned by the holder thereof, either
        voluntarily or involuntarily, directly or indirectly, by operation of law
        or
        otherwise, and the Company shall not be required to recognize any attempted
        assignment of such rights by any participant. During a participant’s lifetime,
        an Incentive may be exercised only by him or her or by his or her guardian
        or
        legal representative.

      


      11.4.   Effect
        of Termination or Death.
        In the
        event that a participant ceases to be an employee of or consultant to the
        Company, or the participants other service with the Company is terminated,
        for
        any reason, including death, any Incentives may be exercised or shall expire
        at
        such times as may be determined by the Committee in its sole discretion in
        the
        agreement evidencing an Incentive. Notwithstanding the other provisions of
        this
        Section 10.4, upon a participant’s termination of employment or other
        service with the Company and all subsidiaries, the Committee may, in its
        sole
        discretion (which may be exercised at any time on or after the date of grant,
        including following such termination), cause options and SARs (or any part
        thereof) then held by such participant to become or continue to become
        exercisable and/or remain exercisable following such termination of employment
        or service and Restricted Stock Awards, Performance Shares and Stock Awards
        then
        held by such participant to vest and/or continue to vest or become free of
        transfer restrictions, as the case may be, following such termination of
        employment or service, in each case in the manner determined by the Committee;
        provided, however, that no Incentive may remain exercisable or continue to
        vest
        beyond its expiration date. Any Incentive Stock Option that remains unexercised
        more than one (1) year following termination of employment by reason of death
        or
        disability or more than three (3) months following termination for any reason
        other than death or disability will thereafter be deemed to be a Non-Statutory
        Stock Option. 

      


      
        
           

        

        
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      11.5.   Additional
        Conditions.
        Notwithstanding anything in this Plan to the contrary: (a) the Company may,
        if
        it shall determine it necessary or desirable for any reason, at the time
        of
        award of any Incentive or the issuance of any shares of Common Stock pursuant
        to
        any Incentive, require the recipient of the Incentive, as a condition to
        the
        receipt thereof or to the receipt of shares of Common Stock issued pursuant
        thereto, to deliver to the Company a written representation of present intention
        to acquire the Incentive or the shares of Common Stock issued pursuant thereto
        for his or her own account for investment and not for distribution; and (b)
        if
        at any time the Company further determines, in its sole discretion, that
        the
        listing, registration or qualification (or any updating of any such document)
        of
        any Incentive or the shares of Common Stock issuable pursuant thereto is
        necessary on any securities exchange or under any federal or state securities
        or
        blue sky law, or that the consent or approval of any governmental regulatory
        body is necessary or desirable as a condition of, or in connection with the
        award of any Incentive, the issuance of shares of Common Stock pursuant thereto,
        or the removal of any restrictions imposed on such shares, such Incentive
        shall
        not be awarded or such shares of Common Stock shall not be issued or such
        restrictions shall not be removed, as the case may be, in whole or in part,
        unless such listing, registration, qualification, consent or approval shall
        have
        been effected or obtained free of any conditions not acceptable to the Company.
        Notwithstanding any other provision of the Plan or any agreements entered
        into
        pursuant to the Plan, the Company will not be required to issue any shares
        of
        Common Stock under this Plan, and a participant may not sell, assign, transfer
        or otherwise dispose of shares of Common Stock issued pursuant to any Incentives
        granted under the Plan, unless (a) there is in effect with respect
        to such
        shares a registration statement under the Securities Act of 1933, as amended
        (the “Securities
        Act”),
        and
        any applicable state or foreign securities laws or an exemption from such
        registration under the Securities Act and applicable state or foreign securities
        laws, and (b) there has been obtained any other consent, approval
        or permit
        from any other regulatory body which the Committee, in its sole discretion,
        deems necessary or advisable. The Company may condition such issuance, sale
        or
        transfer upon the receipt of any representations or agreements from the parties
        involved, and the placement of any legends on certificates representing shares
        of Common Stock, as may be deemed necessary or advisable by the Company in
        order
        to comply with such securities law or other restrictions.

      


      11.6.   Adjustment.
        In the
        event of any merger, consolidation or reorganization of the Company with
        any
        other corporation or corporations, there shall be substituted for each of
        the
        shares of Common Stock then subject to the Plan, including shares subject
        to
        restrictions, options, or achievement of performance share objectives, the
        number and kind of shares of stock or other securities to which the holders
        of
        the shares of Common Stock will be entitled pursuant to the transaction.
        In the
        event of any recapitalization, reclassification, stock dividend, stock split,
        combination of shares or other similar change in the corporate structure
        of the
        Company or shares of the Company, the exercise price of an outstanding Incentive
        and the number of shares of Common Stock then subject to the Plan, including
        shares subject to restrictions, options or achievements of performance shares,
        shall be adjusted in proportion to the change in outstanding shares of Common
        Stock in order to prevent dilution or enlargement of the rights of the
        participants. In the event of any such adjustments, the purchase price of
        any
        option, the performance objectives of any Incentive, and the shares of Common
        Stock issuable pursuant to any Incentive shall be adjusted as and to the
        extent
        appropriate, in the discretion of the Committee, to provide participants
        with
        the same relative rights before and after such adjustment.

      


      
        
           

        

        
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      11.7.   Incentive
        Plans and Agreements.
        Except
        in the case of stock awards or cash awards, the terms of each Incentive shall
        be
        stated in a plan or agreement approved by the Committee. The Committee may
        also
        determine to enter into agreements with holders of options to reclassify
        or
        convert certain outstanding options, within the terms of the Plan, as Incentive
        Stock Options or as non-statutory stock options and in order to eliminate
        SARs
        with respect to all or part of such options and any other previously issued
        options.

      


      11.8.   Withholding.

      


      (a)   The
        Company shall have the right to (i) withhold and deduct from any payments
        made
        under the Plan or from future wages of the participant (or from other amounts
        that may be due and owing to the participant from the Company or a subsidiary
        of
        the Company), or make other arrangements for the collection of, all legally
        required amounts necessary to satisfy any and all foreign, federal, state
        and
        local withholding and employment-related tax requirements attributable to
        an
        Incentive, or (ii) require the participant promptly to remit the amount of
        such
        withholding to the Company before taking any action, including issuing any
        shares of Common Stock, with respect to an Incentive. At any time when a
        participant is required to pay to the Company an amount required to be withheld
        under applicable income tax laws in connection with a distribution of Common
        Stock or upon exercise of an option or SAR, the participant may satisfy this
        obligation in whole or in part by electing (the “Election”)
        to
        have the Company withhold from the distribution shares of Common Stock having
        a
        value up to the amount required to be withheld. The value of the shares to
        be
        withheld shall be based on the Fair Market Value of the Common Stock on the
        date
        that the amount of tax to be withheld shall be determined (“Tax
        Date”).

      


      (b)   Each
        Election must be made prior to the Tax Date. The Committee may disapprove
        of any
        Election, may suspend or terminate the right to make Elections, or may provide
        with respect to any Incentive that the right to make Elections shall not
        apply
        to such Incentive. An Election is irrevocable.

      


      (c)   If
        a
        participant is an officer or director of the Company within the meaning of
        Section 16 of the Exchange Act, then an Election is subject to the following
        additional restrictions:

      


      (1)   No
        Election shall be effective for a Tax Date which occurs within six months
        of the
        grant or exercise of the award, except that this limitation shall not apply
        in
        the event death or disability of the participant occurs prior to the expiration
        of the six-month period.

      


      (2)   The
        Election must be made either six months prior to the Tax Date or must be
        made
        during a period beginning on the third business day following the date of
        release for publication of the Company’s quarterly or annual summary statements
        of sales and earnings and ending on the twelfth business day following such
        date.

      


      
        
           

        

        
          11

          
            

          

        

        
           

        

         

      

      11.9.   No
        Continued Employment, Engagement or Right to Corporate Assets.
        No
        participant under the Plan shall have any right, because of his or her
        participation, to continue in the employ of the Company for any period of
        time
        or to any right to continue his or her present or any other rate of
        compensation. Nothing contained in the Plan shall be construed as giving
        an
        employee, a consultant, such persons’ beneficiaries or any other person any
        equity or interests of any kind in the assets of the Company or creating
        a trust
        of any kind or a fiduciary relationship of any kind between the Company and
        any
        such person.

      


      11.10.   Deferral
        Permitted.
        Payment
        of cash or distribution of any shares of Common Stock to which a participant
        is
        entitled under any Incentive shall be made as provided in the Incentive.
        Payment
        may be deferred at the option of the participant if provided in the
        Incentive.

      


      11.11.   Amendment
        of the Plan.
        The
        Board may amend, suspend or discontinue the Plan at any time; provided, however,
        that no amendments to the Plan will be effective without approval of the
        shareholders of the Company if shareholder approval of the amendment is then
        required pursuant to Section 422 of the Code or the rules of any stock exchange
        or Nasdaq or similar regulatory body. No termination, suspension or amendment
        of
        the Plan may adversely affect any outstanding Incentive without the consent
        of
        the affected participant; provided, however, that this sentence will not
        impair
        the right of the Committee to take whatever action it deems appropriate under
        Section 11.6 of the Plan. 

       

      11.12.   Definition
        of Fair Market Value.
        For
        purposes of this Plan, the “Fair
        Market Value”
        of a
        share of Common Stock at a specified date shall, unless otherwise expressly
        provided in this Plan, be the amount which the Committee or the board of
        directors of the Company determines in good faith in the exercise of its
        reasonable discretion to be 100% of the fair market value of such a share
        as of
        the date in question; provided, however, that notwithstanding the foregoing,
        if
        such shares are listed on a U.S. securities exchange or are quoted on the
        Nasdaq
        National Market System or Nasdaq SmallCap Stock Market (“Nasdaq”),
        then
        Fair Market Value shall be determined by reference to the last sale price
        of a
        share of Common Stock on such U.S. securities exchange or Nasdaq on the
        applicable date. If such U.S. securities exchange or Nasdaq is closed for
        trading on such date, or if the Common Stock does not trade on such date,
        then
        the last sale price used shall be the one on the date the Common Stock last
        traded on such U.S. securities exchange or Nasdaq.

      


      11.13   Breach
        of Confidentiality, Assignment of Inventions, or Non-Compete
        Agreements.
        Notwithstanding anything in the Plan to the contrary, in the event that a
        participant materially breaches the terms of any confidentiality, assignment
        of
        inventions, or non-compete agreement entered into with the Company or any
        subsidiary of the Company, whether such breach occurs before or after
        termination of such participant’s employment or other service with the Company
        or any subsidiary, the Committee in its sole discretion may immediately
        terminate all rights of the participant under the Plan and any agreements
        evidencing an Incentive then held by the participant without notice of any
        kind.

      


      11.13   Governing
        Law.
        The
        validity, construction, interpretation, administration and effect of the
        Plan
        and any rules, regulations and actions relating to the Plan will be governed
        by
        and construed exclusively in accordance with the laws of the State of Minnesota,
        notwithstanding the conflicts of laws principles of any
        jurisdictions.

      


      11.14   Successors
        and Assigns.
        The
        Plan will be binding upon and inure to the benefit of the successors and
        permitted assigns of the Company and the participants in the Plan.

      


      
        
           

        

        
          12