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                                                                   EXHIBIT 10.13


                          QUINTILES TRANSNATIONAL CORP.
                            EQUITY COMPENSATION PLAN

                   (AS AMENDED AND RESTATED NOVEMBER 4, 1999)



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                          QUINTILES TRANSNATIONAL CORP.
                            EQUITY COMPENSATION PLAN

                   (AS AMENDED AND RESTATED NOVEMBER 4, 1999)


                                TABLE OF CONTENTS


ARTICLE I - GENERAL PROVISIONS................................................1
ARTICLE II - DEFINITIONS......................................................2
ARTICLE III - ADMINISTRATION..................................................8
ARTICLE IV - INCENTIVE STOCK OPTIONS.........................................13
ARTICLE V - NONQUALIFIED STOCK OPTIONS.......................................16
ARTICLE VI - STOCK APPRECIATION RIGHTS.......................................17
ARTICLE VII - INCIDENTS OF STOCK OPTIONS AND STOCK RIGHTS....................19
ARTICLE VIII - RESTRICTED STOCK..............................................21
ARTICLE IX - ACCELERATION EVENTS.............................................24
ARTICLE X - AMENDMENT AND TERMINATION........................................26
ARTICLE XI - MISCELLANEOUS PROVISIONS........................................28





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                          QUINTILES TRANSNATIONAL CORP.
                            EQUITY COMPENSATION PLAN

                         ARTICLE I - GENERAL PROVISIONS


1.1      The Plan is designed for the benefit of the executives, directors and
         key employees of the Corporation and its Subsidiaries; to attract and
         retain for the Corporation and its subsidiaries personnel of
         exceptional ability; to motivate such personnel through added
         incentives to make a maximum contribution to greater profitability; to
         develop and maintain a highly competent management team; and to be
         competitive with other companies with respect to executive
         compensation.

1.2      Awards under the Plan may be made to Participants in the form of (i)
         Incentive Stock Options; (ii) Nonqualified Stock Options; (iii) Stock
         Appreciation Rights; and (iv) Restricted Stock.

1.3      The Plan shall be effective February 21, 1994 (the "Effective Date"),
         subject to the approval of the Plan by a vote of a majority of the
         Board of Directors and by a majority of the votes cast by the holders
         of the Corporation's Common Stock that may be voted at the meetings of
         the Board of Directors and shareholders, respectively, scheduled for
         February 21, 1994.


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                            ARTICLE II - DEFINITIONS


DEFINITIONS. Except where the context otherwise indicates, the following
definitions apply:

2.1      "Acceleration Event" means the occurrence of an event defined in
         Article IX of the Plan.

2.2      "Act" means the Securities Exchange Act of 1934, as now in effect or as
         hereafter amended. (All citations to sections of the Act or rules
         thereunder are to such sections or rules as they may from time to time
         be amended or renumbered.)

2.3      "Agreement" means the written agreement evidencing each Award granted
         to a Participant under the Plan.

2.4      "Award" means an award granted to a Participant in accordance with the
         provisions of the Plan, including, but not limited to, a Stock Option,
         Stock Right, Restricted Stock, or any combination of the foregoing.

2.5      "Board" means the Board of Directors of the Corporation.

2.6      "Board-Approved Change in Control" shall have the meaning set forth in
         Section 9.3 of the Plan.

2.7      "Change in Control" shall have the meaning set forth in Section 9.2 of
         the Plan.

2.8      "Change in Control Price" shall have the meaning set forth in Section
         9.8 of the Plan.

2.9      "Code" means the Internal Revenue Code of 1986, as now in effect or as
         hereafter amended. (All citations to sections of the Code are to such
         sections as they may from time to time be amended or renumbered.)

2.10     "Committee" means the Compensation Committee or such other committee
         consisting of three (3) or more members as may be appointed by the
         Board to administer this Plan pursuant to Article III. To the extent
         required by Rule 16b-3 under the Act, the Committee shall consist of
         individuals who are members of the Board and Non-Employee Directors.
         Committee members may also be appointed for such limited purposes as
         may be provided by the Board.

2.11     "Corporation" means Quintiles Transnational Corp., a North Carolina
         corporation, and its successors and assigns. "Corporation" also means
         Quintiles Transnational Corp. and its Subsidiaries, unless the context
         clearly indicates otherwise.

2.12     "Disability" means disability as determined under procedures
         established by the Committee or in any Award.

2.13     "Discount Stock Options" means the Nonqualified Stock Options that
         provide for an


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         exercise price of less than the Fair Market Value of the Stock at the
         date of the Award.


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2.14     "Early Retirement" means retirement from active employment with the
         Corporation or any Subsidiary, with the express consent of the
         Committee, pursuant to the early retirement provisions established by
         the Committee or in any Award.

2.15     "Effective Date" shall have the meaning set forth in Section 1.3 of the
         Plan.

2.16     "Eligible Participant" means any executive, key employee or director of
         the Corporation or its Subsidiaries, as shall be determined by the
         Committee, as well as any other person whose participation the
         Committee determines is in the best interest of the Corporation,
         subject to limitations as may be provided by the Code, the Act or the
         Committee.

2.17     "ERISA" means the Employee Retirement Income Security Act of 1974, as
         now in effect or as hereafter amended.

2.18     "Fair Market Value" means, with respect to any given day, the closing
         price of the Stock reported on the Nasdaq National Market for such day,
         or if the Stock is not traded on such day, then on the next day on
         which the Stock is traded, all as reported by such source as the
         Committee may select. The Committee may establish an alternative method
         of determining Fair Market Value.

2.19     "Incentive Stock Option" means a Stock Option granted under Article IV
         of the Plan, and as defined in Section 422 of the Code.

2.20     "Limited Stock Appreciation Rights" means a Stock Right that is
         exercisable only in the event of a Change in Control and/or a Potential
         Change in Control, as described in Section 6.8 of this Plan, that
         provides for an amount payable solely in cash, equal to the excess of
         the Stock Appreciation Right Fair Market Value of a share of Stock on
         the day the Stock Right is surrendered over the price at which a
         Participant could exercise a related Stock Option to purchase the share
         of Stock.

2.21     "Non-Employee Directors" shall have the meaning set forth under Rule
         16b-3(b)(3) of the Act.

2.22     "Nonqualified Stock Option" means a Stock Option granted under Article
         V of the Plan.

2.23     "Normal Retirement" means retirement from active employment with the
         Corporation or any Subsidiary on or after age 65, or pursuant to such
         other requirements as may be established by the Committee or in any
         Award.

2.24     "Option Grant Date" means, as to any Stock Option, the latest of:

         (a)      the date on which the Committee grants the Stock Option by
                  entering into an Award Agreement with the Participant;

         (b)      the date the Participant receiving the Stock Option becomes an
                  employee of the Corporation or its Subsidiaries, to the extent
                  employment status is a condition of the


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                  grant or a requirement of the Code or the Act; or

         (c)      such other date (later than the dates described in (i) and
                  (ii) above) as the Committee may designate.

2.25     "Participant" means an Eligible Participant to whom an Award of
         equity-based compensation has been granted and who has entered into an
         Agreement evidencing the Award.

2.26     "Potential Change in Control" shall have the meaning set forth in
         Section 9.4 of the Plan.

2.27     "Plan" means the Quintiles Transnational Corp. Equity Compensation
         Plan, as amended from time to time.

2.28     "Restricted Stock" means an Award of Stock under Article VIII of the
         Plan, which Stock is issued with the restriction that the holder may
         not sell, transfer, pledge, or assign such Stock and with such other
         restrictions as the Committee, in its sole discretion, may impose
         (including, without limitation, any restriction on the right to vote
         such Stock, and the right to receive any cash dividends), which
         restrictions may lapse separately or in combination at such time or
         times, in installments or otherwise, as the Committee may deem
         appropriate.

2.29     "Restriction Period" means the period commencing on the date an Award
         of Restricted Stock is granted and ending on such date as the Committee
         shall determine.

2.30     "Retirement" means Normal or Early Retirement.

2.31     "Stock" means shares of Common Stock of the Corporation, as may be
         adjusted pursuant to the provisions of Section 3.11.

2.32     "Stock Appreciation Right" means a Stock Right, as described in Article
         VI of this Plan, that provides for an amount payable in Stock and/or
         cash, as determined by the Committee, equal to the excess of the Fair
         Market Value of a share of Stock on the day the Stock Right is
         exercised over the price at which the Participant could exercise a
         related Stock Option to purchase the share of Stock.

2.33     "Stock Appreciation Right Fair Market Value" means a value established
         by the Committee for the exercise of a Stock Appreciation Right or a
         Limited Stock Appreciation Right.

2.34     "Stock Option" means an Award under Article IV or V of the Plan of an
         option to purchase Stock. A Stock Option may be either an Incentive
         Stock Option or a Nonqualified Stock Option.

2.35     "Stock Right" means an Award under Article VI of the Plan. A Stock
         Right may be either a Stock Appreciation Right or a Limited Stock
         Appreciation Right.

2.36     "Subsidiary" or "Subsidiaries" means:


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         (a)      for the purpose of an Incentive Stock Option, any corporation
                  (other than the Corporation) in an unbroken chain of
                  corporations beginning with the Corporation if, at the time of
                  the granting of the Option, each of the corporations other
                  than the last corporation in the unbroken chain owns stock
                  possessing fifty percent (50%)


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                  or more of the total combined voting power of all classes of
                  stock in one of the other corporations in such chain; and

         (b)      for the purposes of all other types of equity-based
                  compensation provided for under the Plan, any corporation (or
                  partnership, joint venture, limited liability company, or
                  other enterprise) of which the Corporation owns or controls,
                  directly or indirectly, fifty percent (50%) or more of the
                  outstanding shares of stock normally entitled to vote for the
                  election of directors (or comparable equity participation and
                  voting power).

2.37     "Termination of Employment" means the discontinuance of employment of a
         Participant with the Corporation or its Subsidiaries for any reason
         other than a Transfer. The determination of whether a Participant has
         discontinued employment shall be made by the Committee in its
         discretion. In determining whether a Termination of Employment has
         occurred, the Committee may provide that service as a consultant or
         service with a business enterprise in which the Corporation has a
         significant ownership interest shall be treated as employment with the
         Corporation. The Committee shall have the discretion, exercisable
         either at the time the Award is granted or at the time the Participant
         terminates employment, to establish as a provision applicable to the
         exercise of one or more Awards that during the limited period of
         exercisability following Termination of Employment, the Award may be
         exercised not only with respect to the number of shares of Stock for
         which it is exercisable at the time of the Termination of Employment
         but also with respect to one or more subsequent installments for which
         the Award would have become exercisable had the Termination of
         Employment not occurred.

2.38     "Transfer" means a change of employment of a Participant within the
         group consisting of the Corporation and its Subsidiaries.


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                          ARTICLE III - ADMINISTRATION

3.1      This Plan shall be administered by the Committee. The Committee, in its
         discretion, may delegate to one or more of its members, or to one or
         more officers of the Corporation, all or part of the Committee's
         authority and duties with respect to grants and awards to individuals
         who are not subject to the reporting and other provisions of Section 16
         of the Act; provided, however, that such persons must exercise any
         authority so delegated to them within any guidelines established by the
         Committee. The Committee may revoke or amend the terms of a delegation
         at any time but such action shall not invalidate any prior actions of
         the Committee's delegate or delegates that were consistent with the
         terms of the Plan. Members of the Committee shall be appointed
         originally, and as vacancies occur, by the Board, to serve at the
         pleasure of the Board. The Board may serve as the Committee, if by the
         terms of the Plan all Board members are otherwise eligible to serve on
         the Committee.

3.2      The Committee shall meet at such times and places as it determines. A
         majority of its members shall constitute a quorum, and the decision of
         a majority of those present at any meeting at which a quorum is present
         shall constitute the decision of the Committee. A memorandum signed by
         all of its members shall constitute the decision of the Committee
         without necessity, in such event, for holding an actual meeting.

3.3      The Committee shall have the exclusive right to interpret, construe and
         administer the Plan, to select the persons who are eligible to receive
         an Award, and to act in all matters pertaining to the granting of an
         Award and the contents of the Agreement evidencing the Award,
         including, without limitation, the determination of the number of Stock
         Options, Stock Rights, and shares of Restricted Stock subject to an
         Award and the form, terms, conditions and duration of each Award, and
         any amendment thereof consistent with the provisions of the Plan. All
         acts, determinations and decisions of the Committee made or taken
         pursuant to grants of authority under the Plan or with respect to any
         questions arising in connection with the administration and
         interpretation of the Plan, including the severability of any and all
         of the provisions thereof, shall be conclusive, final and binding upon
         all Participants, Eligible Participants and their beneficiaries.

3.4      The Committee may adopt such rules, regulations and procedures of
         general application for the administration of this Plan, as it deems
         appropriate.

3.5      Without limiting the foregoing Sections 3.1, 3.2, 3.3 and 3.4, and
         notwithstanding any other provisions of the Plan, the Committee is
         authorized to take such action as it determines to be necessary or
         advisable, and fair and equitable to Participants, with respect to an
         Award in the event of an Acceleration Event as defined in Article IX.
         Such action may include, but shall not be limited to, establishing,
         amending or waiving the forms, terms, conditions and duration of an
         Award and the Award Agreement, so as to provide for earlier, later,
         extended or additional times for exercise or payments, differing
         methods for calculating payments, alternate forms and amounts of
         payment, an accelerated release of restrictions or other modifications.
         The Committee may take such actions pursuant to this Section 3.5 by
         adopting rules and regulations of general applicability to all
         Participants or to certain


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         categories of Participants, by including, amending or waiving terms and
         conditions in an Award and the Award Agreement, or by taking action
         with respect to individual Participants.

3.6      The maximum aggregate number of shares of Stock subject to Awards under
         the Plan shall be five million eight hundred forty-one thousand three
         hundred and nineteen (5,841,319) shares, plus an annual increase to be
         added as of January 1 of each year, beginning January 1, 2000, equal to
         the lesser of (i) five hundred thousand (500,000) shares, (ii) five
         percent (5%) of any increase, other than any increase due to Awards
         under this Plan or any other similar plan of the Corporation, in the
         number of authorized and issued shares (on a fully diluted basis) above
         the number of authorized and outstanding shares as of the preceding
         January 1, or (iii) a lesser number determined by the Board.

         (a)      If, for any reason, any shares of Stock awarded or subject to
                  purchase under the Plan are not delivered or purchased, or are
                  reacquired by the Corporation, for reasons including, but not
                  limited to, a forfeiture of Restricted Stock or termination,
                  expiration or cancellation of a Stock Option or Stock Right,
                  or any other termination of an Award without payment being
                  made in the form of Stock (whether or not Restricted Stock),
                  such shares of Stock shall not be charged against the
                  aggregate number of shares of Stock available for Award under
                  the Plan, and shall again be available for Award under the
                  Plan.

         (b)      To the extent a Stock Right granted in connection with a Stock
                  Option is exercised without payment being made in the form of
                  Stock (whether or not Restricted Stock), the shares of Stock
                  that otherwise would have been issued upon the exercise of
                  such related Stock Option shall not be charged against the
                  aggregate number of shares of Stock subject to an Award under
                  the Plan, and shall again be available for Award under the
                  Plan.

3.7      Each Award granted under the Plan shall be evidenced by a written Award
         Agreement. Each Award Agreement shall be subject to and incorporate (by
         reference or otherwise) the applicable terms and conditions of the
         Plan, and any other terms and conditions (not inconsistent with the
         Plan) required by the Committee.

3.8      The Corporation shall not be required to issue or deliver any
         certificates for shares of Stock prior to:

         (a)      the listing of such shares on any stock exchange or the
                  national market system on which the Stock may then be listed;
                  and

         (b)      the completion of any registration or qualification of such
                  shares of Stock under any federal or state law, or any ruling
                  or regulation of any government body that the Corporation
                  shall, in its discretion, determine to be necessary or
                  advisable.

3.9      All certificates for shares of Stock delivered under the Plan shall
         also be subject to such


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         stop-transfer orders and other restrictions as the Committee may deem
         advisable under the rules, regulations, and other requirements of the
         Securities and Exchange Commission, any stock exchange or the national
         market system upon which the Stock is then listed and any applicable
         federal or state laws, and the Committee may cause a legend or legends
         to be placed on any such certificates to make appropriate reference to
         such restrictions. In making such determination, the Committee may rely
         upon an opinion of counsel for the Corporation.

3.10     Subject to the restrictions on Restricted Stock, as provided in Article
         VIII of the Plan and in the Restricted Stock Award Agreement, each
         Participant who receives an Award of Restricted Stock shall have all of
         the rights of a shareholder with respect to such shares of Stock,
         including the right to vote the shares to the extent, if any, such
         shares possess voting rights and receive dividends and other
         distributions. Except as provided otherwise in the Plan or in an Award
         Agreement, no Participant awarded a Stock Option or Stock Right shall
         have any right as a shareholder with respect to any shares of Stock
         covered by his or her Stock Option or Stock Right prior to the date of
         issuance to him or her of a certificate or certificates for such shares
         of Stock.

3.11     If any reorganization, recapitalization, reclassification, stock
         split-up, stock dividend, or consolidation of shares of Stock, merger
         or consolidation of the Corporation or its subsidiaries or sale or
         other disposition by the Corporation or its Subsidiaries of all or a
         portion of its assets, any other change in the Corporation's or its
         Subsidiaries' corporate structure, or any distribution to shareholders
         other than a cash dividend results in the outstanding shares of Stock,
         or any securities exchanged therefor or received in their place, being
         exchanged for a different number or class of shares of Stock or other
         securities of the Corporation, or for shares of Stock or other
         securities of any other corporation; or new, different or additional
         shares or other securities of the Corporation or of any other
         corporation being received by the holders of outstanding shares of
         Stock, then equitable adjustments shall be made by the Committee in:

         (a)      the limitation of the aggregate number of shares of Stock that
                  may be awarded as set forth in Section 3.6 of the Plan;

         (b)      the number and class of Stock that may be subject to an Award
                  and that have not been issued or transferred under an
                  outstanding Award;

         (c)      the purchase price to be paid per share of Stock under
                  outstanding Stock Options and the number of shares of Stock to
                  be transferred in settlement of outstanding Stock Rights; and

         (d)      the terms, conditions or restrictions of any Award and Award
                  Agreement, including the price payable for the acquisition of
                  Stock; provided, however, that all adjustments made as the
                  result of the foregoing in respect of each Incentive Stock
                  Option shall be made so that such Stock Option shall continue
                  to be an Incentive Stock Option, as defined in Section 422 of
                  the Code.


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3.12     In addition to such other rights of indemnification as they may have as
         directors or as members of the Committee, the members of the Committee
         shall be indemnified by the Corporation against reasonable expenses,
         including attorney's fees, actually and necessarily incurred in
         connection with the defense of any action, suit or proceeding, or in
         connection with any appeal therein, to which they or any of them may be
         a party by reason of any action taken or failure to act under or in
         connection with the Plan or any Award granted thereunder, and against
         all amounts paid by them in settlement thereof (provided such
         settlement is approved by independent legal counsel selected by the
         Corporation) or paid by them in satisfaction of a judgment or
         settlement in any such action, suit or proceeding, except as to matters
         as to which the Committee member has been negligent or engaged in
         misconduct in the performance of his duties; provided, that within
         sixty (60) days after institution of any such action, suit or
         proceeding, a Committee member shall in writing offer the Corporation
         the opportunity, at its own expense, to handle and defend the same.

3.13     The Committee may require each person purchasing shares of Stock
         pursuant to a Stock Option or other Award under the Plan to represent
         to and agree with the Corporation in writing that he is acquiring the
         shares of Stock without a view to distribution thereof. The
         certificates for such shares of Stock may include any legend that the
         Committee deems appropriate to reflect any restrictions on transfer.

3.14     The Committee shall be authorized to make adjustments in the terms and
         conditions of Awards in recognition of unusual or nonrecurring events
         affecting the Corporation (or any Subsidiary, if applicable) or its
         financial statements or changes in applicable laws, regulations or
         accounting principles. The Committee may correct any defect, supply any
         omission or reconcile any inconsistency in the Plan or any Award
         Agreement in the manner and to the extent it shall deem desirable to
         carry it into effect. If the Corporation (or any Subsidiary, if
         applicable) shall assume outstanding employee benefit awards or the
         right or obligation to make future such awards in connection with the
         acquisition of another corporation or business entity, the Committee
         may, in its discretion, make such adjustments in the terms of Awards
         under the Plan as it shall deem appropriate.

3.15     The Committee shall have full power and authority to determine whether,
         to what extent and under what circumstances, any Award shall be
         canceled or suspended. In particular, but without limitation, all
         outstanding Awards to any Participant shall be canceled if (a) the
         Participant, without the consent of the Committee, while employed by
         the Corporation or any Subsidiary or after termination of such
         employment, becomes associated with, employed by, renders services to,
         or owns any interest in (other than any nonsubstantial interest, as
         determined by the Committee), any business that is in competition with
         the Corporation or with any business in which the Corporation and/or
         its Subsidiaries have a substantial interest as determined by the
         Committee; or (b) is terminated for cause as determined by the
         Committee.

3.16     The following limitations shall apply to grants of Options:

         (a)      No Eligible Participant shall be granted, in any fiscal year
                  of the Company, Options to purchase more than 500,000 shares
                  of Stock.


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         (b)      In connection with his or her initial service, an Eligible
                  Participant may be granted Options to purchase up to an
                  additional 200,000 shares that shall not count against the
                  limit set forth in subsection (a) above.

         (c)      The foregoing limitations shall be adjusted proportionately in
                  connection with any change in the Company's capitalization as
                  described in Section 3.11.

         (d)      If an Option is cancelled in the same fiscal year of the
                  Company in which it was granted (other than in connection with
                  a transaction described in Article IX of the Plan), the
                  cancelled Option will be counted against the limits set forth
                  in subsections (a) and (b) above. For this purpose, if the
                  exercise price of an Option is reduced, the transaction will
                  be treated as a cancellation of the Option and the grant of a
                  new Option.


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                      ARTICLE IV - INCENTIVE STOCK OPTIONS


4.1      Each provision of this Article IV and of each Incentive Stock Option
         granted hereunder shall be construed in accordance with the provisions
         of Section 422 of the Code, and any provision hereof that cannot be so
         construed shall be disregarded. Incentive Stock Options shall be
         granted only to Eligible Participants, each of whom may be granted one
         or more such Incentive Stock Options at such time or times determined
         by the Committee following the Effective Date until February 21, 2004,
         subject to the following conditions:

         (a)      The Incentive Stock Option price per share of Stock shall be
                  set in the Award Agreement, but shall not be less than one
                  hundred percent (100%) of the Fair Market Value of the Stock
                  at the time of the Option Grant Date.

         (b)      The Incentive Stock Option and its related Stock Right, if
                  any, may be exercised in full or in part from time to time
                  within ten (10) years from the Option Grant Date, or such
                  shorter period as may be specified by the Committee in the
                  Award; provided, that in any event, the Incentive Stock Option
                  and related Stock Right shall lapse and cease to be
                  exercisable upon, or within such period following, a
                  Termination of Employment as shall have been determined by the
                  Committee and as specified in the Incentive Stock Option Award
                  Agreement or its related Stock Right Award Agreement;
                  provided, however, that such period following a Termination of
                  Employment shall not exceed three (3) months unless employment
                  shall have terminated:

                  (i)      as a result of death or Disability, in which event
                           such period shall not exceed one year after the date
                           of death or Disability; and

                  (ii)     as a result of death, if death shall have occurred
                           following a Termination of Employment and while the
                           Incentive Stock Option or Stock Right was still
                           exercisable, in which event such period shall not
                           exceed one year after the date of death;

                  provided further, that such period following a Termination of
                  Employment shall in no event extend the original exercise
                  period of the Incentive Stock Option or any related Stock
                  Right.

         (c)      The aggregate Fair Market Value, determined as of the Option
                  Grant Date, of the shares of Stock with respect to which
                  Incentive Stock Options are first exercisable during any
                  calendar year by any Eligible Participant shall not exceed one
                  hundred thousand dollars (100,000); provided, however, to the
                  extent permitted under Section 422 of the Code:

                  (i)      if a Participant's employment is terminated by reason
                           of death, Disability or Retirement and the portion of
                           any Incentive Stock Option that is otherwise
                           exercisable during the post-termination period
                           applied without regard to the


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                           one hundred thousand dollar (100,000) limitation
                           contained in Section 422 of the Code is greater than
                           the portion of such option that is immediately
                           exercisable as an Incentive Stock Option during such
                           post-termination


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                           period under Section 422, such excess shall be
                           treated as a Nonqualified Stock Option; and

                  (ii)     if the exercise of an Incentive Stock Option is
                           accelerated by reason of an Acceleration Event, any
                           portion of such Award that is not exercisable as an
                           Incentive Stock Option by reason of the one hundred
                           thousand dollar ($100,000) limitation contained in
                           Section 422 of the Code shall be treated as a
                           Nonqualified Stock Option.

         (d)      Incentive Stock Options shall be granted only to Eligible
                  Participants who, at the time of the Option Grant Date, do not
                  own stock possessing more than ten percent (10%) of the total
                  combined voting power of all classes of stock of the
                  Corporation, unless the Incentive Stock Option Price per share
                  of Stock shall not be less than one hundred and ten percent
                  (110%) of the Fair Market Value of the Stock at the time of
                  the Option Grant Date and the Incentive Stock Options by their
                  terms are not exercisable after the expiration of five (5)
                  years from the Option Grant Date.

         (e)      The Committee may adopt any other terms and conditions that it
                  determines should be imposed for Incentive Stock Options to
                  qualify under Section 422 of the Code, as well as any other
                  terms and conditions not inconsistent with this Article IV, as
                  determined by the Committee.

4.2      The Committee may at any time offer to buy out for a payment in cash,
         Stock, or Restricted Stock an Incentive Stock Option previously
         granted, based on such terms and conditions as the Committee shall
         establish and communicate to the Participant at the time that such
         offer is made.

4.3      If the Incentive Stock Option Award Agreement so provides, the
         Committee may require that all or part of the shares of Stock to be
         issued upon the exercise of an Incentive Stock Option shall take the
         form of Restricted Stock, which shall be valued on the date of
         exercise, as determined by the Committee, on the basis of the Fair
         Market Value of such Restricted Stock determined without regard to the
         forfeiture restrictions involved.


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                     ARTICLE V - NONQUALIFIED STOCK OPTIONS


5.1      One or more Stock Options may be granted as Nonqualified Stock Options
         to Eligible Participants to purchase shares of Stock at such time or
         times determined by the Committee, following the Effective Date,
         subject to the terms and conditions set forth in this Article V.

5.2      The Nonqualified Stock Option price per share of Stock shall be
         established in the Award Agreement and may be less than one hundred
         percent (100%) of the Fair Market Value at the time of the grant.

5.3      The times and conditions upon which a Nonqualified Stock Option and its
         related Stock Right, if any, will terminate where a Participant to whom
         such an option and related right has been granted under the Plan
         terminates, or the Corporation terminates, his or her employment,
         consultant, or service relationship with the Corporation shall be
         determined by the Committee when the option and any related right are
         granted; provided, however, that in no event shall an option or related
         right be exercisable more than ten (10) years from the date it was
         granted. Nothing in the Plan or in any option or related right granted
         pursuant to the Plan shall (a) confer on any individual any right to
         continue in the employ of the Corporation or to continue any consultant
         or service relationship with the Corporation or (b) interfere in any
         way with the Corporation's right to terminate such individual's
         employment, consultant or service relationship at any time.

5.4      The Nonqualified Stock Option Award Agreement may include any other
         terms and conditions not inconsistent with this Article V or Article
         VII below, as determined by the Committee.


                                      -16-


<PAGE>   19

                     ARTICLE VI - STOCK APPRECIATION RIGHTS


6.1      A Stock Appreciation Right may be granted to an Eligible Participant in
         connection with an Incentive Stock Option or a Nonqualified Stock
         Option granted under Article IV or Article V of this Plan, or may be
         granted independent of any related Stock Option.

6.2      A related Stock Appreciation Right shall entitle a holder of a Stock
         Option, within the period specified for the exercise of the Stock
         Option, to surrender the unexercised Stock Option (or a portion
         thereof) and to receive in exchange therefor a payment in cash or
         shares of Stock having an aggregate value equal to the amount by which
         the Fair Market Value of each share of Stock exceeds the Stock Option
         price per share of Stock, times the number of shares of Stock under the
         Stock Option, or portion thereof, that is surrendered.

6.3      Each related Stock Appreciation Right granted hereunder shall be
         subject to the same terms and conditions as the related Stock Option,
         including limitations on transferability, and shall be exercisable only
         to the extent such Stock Option is exercisable and shall terminate or
         lapse and cease to be exercisable when the related Stock Option
         terminates or lapses. The grant of Stock Appreciation Rights related to
         Incentive Stock Options must be concurrent with the grant of the
         Incentive Stock Options. With respect to Nonqualified Stock Options,
         the grant either may be concurrent with the grant of the Nonqualified
         Stock Options or in connection with Nonqualified Stock Options
         previously granted under Article V, which are unexercised and have not
         terminated or lapsed.

6.4      The Committee shall have sole discretion to determine in each case
         whether the payment with respect to the exercise of a Stock
         Appreciation Right will be in the form of all cash, all Stock, or any
         combination thereof. If payment is to be made in Stock, the number of
         shares of Stock shall be determined based on the Fair Market Value of
         the Stock on the date of exercise. If the Committee elects to make full
         payment in Stock, no fractional shares of Stock shall be issued and
         cash payments shall be made in lieu of fractional shares.

6.5      The Committee shall have sole discretion as to the timing of any
         payment made in cash, Stock, or a combination thereof, upon exercise of
         Stock Appreciation Rights. Payment may be made in a lump sum, in annual
         installments or may be otherwise deferred; and the Committee shall have
         sole discretion to determine whether any deferred payments may bear
         amounts equivalent to interest or cash dividends.

6.6      Upon exercise of a Stock Appreciation Right, the number of shares of
         Stock subject to exercise under any related Stock Option shall
         automatically be reduced by the number of shares of Stock represented
         by the Stock Option or portion thereof that is surrendered.

6.7      The Committee, in its sole discretion, may also provide that, in the
         event of a Change in Control and/or a Potential Change in Control, the
         amount to be paid upon the exercise of a Stock Appreciation Right or
         Limited Stock Appreciation Right shall be based on the Change in
         Control Price, subject to such terms and conditions as the Committee
         may specify at grant.


                                      -17-


<PAGE>   20

6.8      In its sole discretion, the Committee may grant Limited Stock
         Appreciation Rights under this Article VI. Limited Stock Appreciation
         Rights become exercisable only in the event of a Change in Control
         and/or a Potential Change in Control, subject to such terms and
         conditions as the Committee, in its sole discretion, may specify at
         grant. Such Limited Stock Appreciation Rights shall be settled solely
         in cash. A Limited Stock Appreciation Right shall entitle the holder of
         the related Stock Option to surrender such Stock Option, or any portion
         thereof, to the extent unexercised in respect of the number of shares
         of Stock as to which such Limited Stock Appreciation Right is
         exercised, and to receive a cash payment equal to the difference
         between (a) the Stock Appreciation Right Fair Market Value (at the date
         of surrender) of a share of Stock for which the surrendered Stock
         Option or portion thereof is then exercisable, and (b) the price at
         which a Participant could exercise a related Stock Option to purchase
         the share of Stock. Such Stock Option shall, to the extent so
         surrendered, thereupon cease to be exercisable.


                                      -18-


<PAGE>   21

            ARTICLE VII - INCIDENTS OF STOCK OPTIONS AND STOCK RIGHTS


7.1      Each Stock Option and Stock Right shall be granted subject to such
         terms and conditions, if any, not inconsistent with this Plan, as shall
         be determined by the Committee, including any provisions as to
         continued employment as consideration for the grant or exercise of such
         Stock Option or Stock Right and any provisions that may be advisable to
         comply with applicable laws, regulations or rulings of any governmental
         authority.

7.2      Unless determined otherwise by the Committee (or a designee of the
         Committee, as applicable), a Stock Option or Stock Right shall not be
         transferable by the Participant other than by will or by the laws of
         descent and distribution, or, to the extent allowed by applicable law,
         pursuant to a qualified domestic relations order as defined by the Code
         or ERISA and the rules thereunder, and shall be exercisable during the
         lifetime of the Participant only by him or by his guardian or legal
         representative. If the Committee (or its designee) in its sole
         discretion permits an option or Stock Right to be transferable, it
         shall be transferable only by gift or by domestic relations order to or
         for the benefit of a "family member" of the Participant, as such term
         is defined in the General Instructions to Form S-8 under the Securities
         Act of 1933, as amended.

7.3      Shares of Stock purchased upon exercise of a Stock Option shall be paid
         for in such amounts, at such times and upon such terms as shall be
         determined by the Committee, subject to limitations set forth in the
         Stock Option Award Agreement. Without limiting the foregoing, the
         Committee may establish payment terms for the exercise of Stock Options
         that permit the Participant to deliver shares of Stock (or other
         evidence of ownership of Stock satisfactory to the Corporation) with a
         Fair Market Value equal to the Stock Option price as payment.

7.4      No cash dividends shall be paid on shares of Stock subject to
         unexercised Stock Options. The Committee may provide, however, that a
         Participant to whom a Stock Option has been granted that is exercisable
         in whole or in part at a future time for shares of Stock shall be
         entitled to receive an amount per share equal in value to the cash
         dividends, if any, paid per share on issued and outstanding Stock, as
         of the dividend record dates occurring during the period between the
         date of the grant and the time each such share of Stock is delivered
         pursuant to exercise of such Stock Option or the related Stock Right.
         Such amounts (herein called "dividend equivalents") may, in the
         discretion of the Committee, be:

         (a)      paid in cash or Stock either from time to time prior to, or at
                  the time of the delivery of, such Stock, or upon expiration of
                  the Stock Option if it shall not have been fully exercised; or

         (b)      converted into contingently credited shares of Stock (with
                  respect to which dividend equivalents may accrue) in such
                  manner, at such value, and deliverable at such time or times,
                  as may be determined by the Committee.

         Such Stock (whether delivered or contingently credited) shall be
         charged against the


                                      -19-


<PAGE>   22

         limitations set forth in Section 3.6.

7.5      The Committee, in its sole discretion, may authorize payment of
         interest equivalents on dividend equivalents that are payable in cash
         at a future time.

7.6      In the event of death or Disability, the Committee, with the consent of
         the Participant or his legal representative, may authorize payment, in
         cash or in Stock, or partly in cash and partly in Stock, as the
         Committee may direct, of an amount equal to the difference at the time
         between the Fair Market Value of the Stock subject to a Stock Option
         and the Option price in consideration of the surrender of the Stock
         Option.

7.7      If a Participant is required to pay to the Corporation an amount with
         respect to income and employment tax withholding obligations in
         connection with exercise of a Nonqualified Stock Option, and/or with
         respect to certain dispositions of Stock acquired upon the exercise of
         an Incentive Stock Option, the Committee, in its discretion and subject
         to such rules as it may adopt, may permit the Participant to satisfy
         the obligation, in whole or in part, by making an irrevocable election
         that a portion of the total Fair Market Value of the shares of Stock
         subject to the Nonqualified Stock Option and/or with respect to certain
         dispositions of Stock acquired upon the exercise of an Incentive Stock
         Option, be paid in the form of cash in lieu of the issuance of Stock
         and that such cash payment be applied to the satisfaction of the
         withholding obligations. The amount to be withheld shall not exceed the
         statutory minimum federal and state income and employment tax liability
         arising from the Stock Option exercise transaction.

7.8      The Committee may permit the voluntary surrender of all or a portion of
         any Stock Option granted under the Plan to be conditioned upon the
         granting to the Participant of a new Stock Option for the same or a
         different number of shares of Stock as the Stock Option surrendered, or
         may require such voluntary surrender as a condition precedent to a
         grant of a new Stock Option to such Participant. Subject to the
         provisions of the Plan, such new Stock Option shall be exercisable at
         the same price, during such period and on such other terms and
         conditions as are specified by the Committee at the time the new Stock
         Option is granted. Upon surrender, the Stock Option surrendered shall
         be canceled and the shares of Stock previously subject to it shall be
         available for the grant of other Stock Options.


                                      -20-



<PAGE>   23


                         ARTICLE VIII - RESTRICTED STOCK


8.1      Restricted Stock Awards may be made to certain Participants as
         incentives for the performance of future services that will contribute
         materially to the successful operation of the Corporation and its
         Subsidiaries. Awards of Restricted Stock may be made either alone, in
         addition to or in tandem with other Awards granted under the Plan
         and/or cash payments made outside of the Plan.

8.2      With respect to Awards of Restricted Stock, the Committee shall:

         (a)      determine the purchase price, if any, to be paid for such
                  Restricted Stock, which may be equal to or less than par value
                  and may be zero, subject to such minimum consideration as may
                  be required by applicable law;

         (b)      determine the length of the Restriction Period;

         (c)      determine any restrictions applicable to the Restricted Stock
                  such as service or performance, other than those set forth in
                  this Article VIII;

         (d)      determine if the restrictions shall lapse as to all shares of
                  Restricted Stock at the end of the Restriction Period or as to
                  a portion of the shares of Restricted Stock in installments
                  during the Restriction Period; and

         (e)      determine if dividends and other distributions on the
                  Restricted Stock are to be paid currently to the Participant
                  or withheld by the Corporation for the account of the
                  Participant.

8.3      Awards of Restricted Stock must be accepted within a period of sixty
         (60) days (or such shorter periods as the Committee may specify at
         grant) after the Award date, by executing a Restricted Stock Award
         Agreement and paying whatever price (if any) is required.

         The prospective recipient of a Restricted Stock Award shall not have
         any rights with respect to such Award, unless such recipient has
         executed a Restricted Stock Award Agreement and has delivered a fully
         executed copy thereof to the Committee, and has otherwise complied with
         the applicable terms and conditions of such Award.

8.4      Except when the Committee determines otherwise, or as otherwise
         provided in the Restricted Stock Award Agreement, if a Participant
         terminates employment with the Corporation or its Subsidiaries for any
         reason before the expiration of the Restriction Period, all shares of
         Restricted Stock still subject to restriction shall be forfeited by the
         Participant and shall be reacquired by the Corporation.

8.5      Except as otherwise provided in this Article VIII, no shares of
         Restricted Stock received by a Participant shall be sold, exchanged,
         transferred, pledged, hypothecated or otherwise disposed of during the
         Restriction Period.


                                      -21-


<PAGE>   24

8.6      To the extent not otherwise provided in a Restricted Stock Award
         Agreement, in cases of death, Disability or Retirement or in cases of
         special circumstances, the Committee, if it


                                      -22-

<PAGE>   25


         finds that a waiver would be appropriate, may elect to waive any or all
         remaining restrictions with respect to such Participant's Restricted
         Stock.

8.7      In the event of hardship or other special circumstances of a
         Participant whose employment with the Corporation or any Subsidiary is
         involuntarily terminated (other than for cause), the Committee may
         waive in whole or in part any or all remaining restrictions with
         respect to any or all of the Participant's Restricted Stock, based on
         such factors and criteria as the Committee may deem appropriate.

8.8      The certificates representing shares of Restricted Stock may either:

         (a)      be held in custody by the Corporation until the Restriction
                  Period expires or until restrictions thereon otherwise lapse,
                  and the Participant shall deliver to the Corporation a stock
                  power endorsed in blank relating to the Restricted Stock;
                  and/or

         (b)      be issued to the Participant and registered in the name of the
                  Participant, and shall bear an appropriate restrictive legend
                  and shall be subject to appropriate stop-transfer orders.

8.9      Except as provided in this Article VIII, a Participant receiving a
         Restricted Stock Award shall have, with respect to the shares of
         Restricted Stock covered by any Award, all of the rights of a
         shareholder of the Corporation, including the right to vote the shares
         to the extent, if any, such shares possess voting rights, and the right
         to receive any dividends; provided, however, the Committee may require
         that any dividends on such shares of Restricted Stock shall be
         automatically deferred and reinvested in additional Restricted Stock
         subject to the same restrictions as the underlying Award, or may
         require that dividends and other distributions on Restricted Stock
         shall be withheld by the corporation for the account of the
         Participant. The Committee shall determine whether interest shall be
         paid on amounts withheld, the rate of any such interest, and the other
         terms applicable to such withheld amounts.

8.10     If and when the Restriction Period expires without a prior forfeiture
         of the Restricted Stock subject to such Restriction Period,
         unrestricted certificates for such shares shall be delivered to the
         Participant.

8.11     In order to better ensure that Award payments actually reflect the
         performance of the Corporation and its Subsidiaries and the service of
         the Participant, the Committee may provide, in its sole discretion, for
         a tandem performance-based or other Award designed to guarantee a
         minimum value, payable in cash or Stock to the recipient of a
         Restricted Stock Award, subject to such performance, future service,
         deferral and other terms and conditions as may be specified by the
         Committee.


                                      -23-


<PAGE>   26

                        ARTICLE IX - ACCELERATION EVENTS


9.1      For the purposes of the Plan, an Acceleration Event shall occur in the
         event of a "Potential Change in Control," or "Change in Control" or a
         "Board-Approved Change in Control", as those terms are defined below.

9.2      A "Change in Control" shall be deemed to have occurred if:

         (a)      Any "Person" as defined in Section 3(a)(9) of the Act,
                  including a "group" (as that term is used in Sections 3(d)(3)
                  and 14(d)(2) of the Act), but excluding the Corporation and
                  any Subsidiary and any employee benefit plan sponsored or
                  maintained by the Corporation and any Subsidiary (including
                  any trustee of such plan acting as trustee) or Dennis B.
                  Gillings, Ph.D. individually, who:

                  (i)      makes a tender or exchange offer for any shares of
                           the Corporation's Stock (as defined below) pursuant
                           to which any shares of the Corporation's Stock are
                           purchased (an "Offer"); or

                  (ii)     together with its "affiliates" and "associates" (as
                           those terms are defined in Rule 12b-2 under the Act)
                           becomes the "Beneficial Owner" (within the meaning of
                           Rule 13d-3 under the Act) of at least twenty percent
                           (20%) of the Corporation's Stock (an "Acquisition");

         (b)      The shareholders of the Corporation approve a definitive
                  agreement or plan to merge or consolidate the Corporation with
                  or into another corporation, to sell or otherwise dispose of
                  all or substantially all of its assets, or to liquidate the
                  Corporation (individually, a "Transaction"); or

         (c)      When, during any period of twenty-four (24) consecutive months
                  during the existence of the Plan, the individuals who, at the
                  beginning of such period, constitute the Board (the "Incumbent
                  Directors") cease for any reason other than death to
                  constitute at least a majority thereof; provided, however,
                  that a director who was not a director at the beginning of
                  such twenty-four (24) month period shall be deemed to have
                  satisfied such twenty-four (24) month requirement (and be an
                  Incumbent Director) if such director was elected by, or on the
                  recommendation of or with the approval of, at least two-thirds
                  of the directors who then qualified as Incumbent Directors
                  either actually (because they were directors at the beginning
                  of such twenty-four (24) month period) or by prior operation
                  of this Section 9.2(c).

9.3      A "Board-Approved Change in Control" shall be deemed to have occurred
         if the Offer, Acquisition or Transaction, as the case may be, is
         approved by a two-thirds (2/3) majority of the Directors serving as
         members of the Board at the time of the Potential Change in Control or
         Change in Control.

9.4      A "Potential Change in Control" means the happening of any one of the
         following:


                                      -24-



<PAGE>   27

         (a)      The approval by shareholders of an agreement by the
                  Corporation, the consummation of which would result in a
                  Change in Control of the Corporation, as defined in Section
                  9.2; or

         (b)      The acquisition of Beneficial Ownership, directly or
                  indirectly, by any entity, person or group (other than the
                  Corporation or any Subsidiary or any Corporation or Subsidiary
                  employee benefit plan (including any trustee of such plan
                  acting as such trustee) or Dennis B. Gillings, Ph.D.
                  individually), of securities of the Corporation representing
                  ten percent (10%) or more of the combined voting power of the
                  Corporation's outstanding securities and the adoption by the
                  Board of a resolution to the effect that a Potential Change in
                  Control of the Corporation has occurred for the purposes of
                  this Plan.

9.5      Upon the occurrence of an Acceleration Event, subject to the approval
         of the Committee if the Acceleration Event results from a
         Board-Approved Change in Control, the Committee in its discretion may
         declare any or all then outstanding Stock Options (and any or all
         related Stock Rights outstanding for at least six (6) months) not
         previously exercisable and vested as immediately exercisable and fully
         vested, in whole or in part.

9.6      Upon the occurrence of an Acceleration Event, subject to the approval
         of the Committee if the Acceleration Event results from a
         Board-Approved Change in Control, the Committee in its discretion, may
         declare the restrictions applicable to Awards of Restricted Stock to
         have lapsed, in which case the Corporation shall remove all restrictive
         legends and stop-transfer orders applicable to the certificates for
         such shares of Stock, and deliver such certificates to the Participants
         in whose names they are registered.

9.7      The value of all outstanding Stock Options, Stock Rights, and
         Restricted Stock, in each case to the extent vested, shall, unless
         otherwise determined by the Committee in its sole discretion at or
         after grant but prior to any Change in Control, be cashed out on the
         basis of the "Change in Control Price," as defined in Section 9.8 as of
         the date such Change in Control or such Potential Change in Control is
         determined to have occurred or such other date as the Committee may
         determine prior to the Change in Control.

9.8      For purposes of Section 9.7, "Change in Control Price" means the
         highest price per share of Stock paid in any transaction reported on
         the Nasdaq National Market or paid or offered in any bona fide
         transaction related to a Potential or actual Change in Control of the
         Corporation at any time during the sixty (60) day period immediately
         preceding the occurrence of the Change in Control (or, where
         applicable, the occurrence of the Potential Change in Control event),
         in each case as determined by the Committee except that, in the case of
         Incentive Stock Options and Stock Appreciation Rights (or Limited Stock
         Appreciation Rights) relating to such Incentive Stock Options, such
         price shall be based only on transactions reported for the date on
         which the optionee exercises such Stock Appreciation Rights (or Limited
         Stock Appreciation Rights).


                                      -25-


<PAGE>   28

                      ARTICLE X - AMENDMENT AND TERMINATION


10.1     The Board, upon recommendation of the Committee, or otherwise, at any
         time and from time to time (subject to the provisions of Section 9.7),
         may amend or terminate the Plan as may be necessary or desirable to
         implement or discontinue this Plan or any provision thereof. To the
         extent required by Rule 16b-3 under the Act, no amendment, without
         approval by the Corporation's shareholders, shall:

         (a)      alter the group of persons eligible to participate in the
                  Plan;

         (b)      except as provided in Section 3.6, increase the maximum number
                  of shares of Stock or Stock Options or Stock Rights that are
                  available for Awards under the Plan;

         (c)      extend the period during which Incentive Stock Option Awards
                  may granted beyond February 21, 2004;

         (d)      limit or restrict the powers of the Committee with respect to
                  the administration of this Plan;

         (e)      change the definition of an Eligible Participant for the
                  purpose of an Incentive Stock Option or increase the limit or
                  the value of shares of Stock for which an Eligible Participant
                  may be granted an Incentive Stock Option;

         (f)      materially increase the benefits accruing to Participants
                  under this Plan;

         (g)      materially modify the requirements as to eligibility for
                  participation in this Plan; or

         (h)      change any of the provisions of this Article X.

10.2     No amendment to or discontinuance of this Plan or any provision thereof
         by the Board or the shareholders of the Corporation shall, without the
         written consent of the Participant, adversely affect, as shall be
         determined by the Committee, any Award theretofore granted to such
         Participant under this Plan; provided, however, the Committee retains
         the right and power to:

         (a)      annul any Award if the Participant is terminated for cause as
                  determined by the Committee;

         (b)      provide for the forfeiture of shares of Stock or other gain
                  under an Award as determined by the Committee for competing
                  against the Corporation or any Subsidiary; and

         (c)      convert any outstanding Incentive Stock Option to a
                  Nonqualified Stock Option.

10.3     If an Acceleration Event has occurred, no amendment or termination
         shall impair the rights


                                      -26-


<PAGE>   29

         of any person with respect to an outstanding Award as provided in
         Article IX.


                                      -27-

<PAGE>   30

                      ARTICLE XI - MISCELLANEOUS PROVISIONS


11.1     Nothing in the Plan or any Award granted hereunder shall confer upon
         any Participant any right to continue in the employ of the Corporation
         or its Subsidiaries (or to serve as a director thereof) or interfere in
         any way with the right of the Corporation or its subsidiaries to
         terminate his or her employment at any time. Unless specifically
         provided otherwise, no Award granted under the Plan shall be deemed
         salary or compensation for the purpose of computing benefits under any
         employee benefit plan or other arrangement of the Corporation or its
         Subsidiaries for the benefit of its employees unless the Corporation
         shall determine otherwise. No Participant shall have any claim to an
         Award until it is actually granted under the Plan. To the extent that
         any person acquires a right to receive payments from the Corporation
         under the Plan, such right shall, except as otherwise provided by the
         Committee, be no greater than the right of an unsecured general
         creditor of the Corporation. All payments to be made hereunder shall be
         paid from the general funds of the Corporation, and no special or
         separate fund shall be established and no segregation of assets shall
         be made to assure payment of such amounts, except as provided in
         Article VIII with respect to Restricted Stock and except as otherwise
         provided by the Committee.

11.2     The Corporation may make such provisions and take such steps as it may
         deem necessary or appropriate for the withholding of any taxes that the
         Corporation or any Subsidiary is required by any law or regulation of
         any governmental authority, whether federal, state or local, domestic
         or foreign, to withhold in connection with any Stock Option or the
         exercise thereof, any Stock Right or the exercise thereof, or in
         connection with any Restricted Stock, including, but not limited to,
         the withholding of payment of all or any portion of such Award or
         another Award under this Plan until the Participant reimburses the
         Corporation or its Subsidiaries for the amount the Corporation or its
         Subsidiaries is required to withhold with respect to such taxes, or
         canceling any portion of such Award or another Award under this Plan in
         an amount sufficient to reimburse itself for the amount it is required
         to so withhold, or selling any property contingently credited by the
         Corporation for the purpose of paying such Award or another Award under
         this Plan, in order to withhold or reimburse itself for the amount it
         is required to so withhold.

11.3     The Plan and the grant of Awards shall be subject to all applicable
         federal and state laws, rules, and regulations and to such approvals by
         any government or regulatory agency as may be required.

11.4     The terms of the Plan shall be binding upon the Corporation, its
         Subsidiaries, and their successors and assigns.

11.5     Neither a Stock Option, Stock Right, nor any Restricted Stock shall be
         transferable except as provided for herein or in an Award Agreement. If
         any Participant makes such a transfer in violation hereof, any
         obligation of the Corporation shall forthwith terminate.



                                      -28-