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                                                                    EXHIBIT 10.3

                       THE 2000 EQUITY PARTICIPATION PLAN

                                       OF

                             GEN-PROBE INCORPORATED

              Gen-Probe Incorporated, a Delaware corporation, has adopted The
2000 Equity Participation Plan of Gen-Probe Incorporated (the "Plan"), effective
August 17, 2000, for the benefit of its eligible Employees, Consultants and
Directors.

              The purposes of the Plan are as follows:

              (1) To provide an additional incentive for Directors, Employees
and Consultants (as such terms are defined below) to further the growth,
development and financial success of the Company by personally benefiting
through the ownership of Company stock and/or rights which recognize such
growth, development and financial success.

              (2) To enable the Company to obtain and retain the services of
Directors, Employees and Consultants considered essential to the long range
success of the Company by offering them an opportunity to own stock in the
Company and/or rights which will reflect the growth, development and financial
success of the Company.

                                   ARTICLE I.

                                   DEFINITIONS

              1.1. General. Wherever the following terms are used in the Plan
they shall have the meanings specified below, unless the context clearly
indicates otherwise.

              1.2. Administrator. "Administrator" shall mean the entity that
conducts the general administration of the Plan as provided herein. With
reference to the administration of the Plan with respect to Options granted to
Non-Employee Directors, the term "Administrator" shall refer to the Board. With
reference to the administration of the Plan with respect to any other Options,
the term "Administrator" shall refer to the Committee, except to the extent the
Board has assumed the authority for administration of the Plan as provided in
Section 7.2.

              1.3. Board. "Board" shall mean the Board of Directors of the
Company.

              1.4. Change in Control. "Change in Control" shall mean a change in
ownership or control of the Company effected through any of the following
transactions:

              (a) any person or related group of persons (other than the Company
or a person that, prior to such transaction, directly or indirectly controls, is
controlled by, or is under common control with, the Company) directly or
indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the
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Company's outstanding securities pursuant to a tender or exchange offer for
securities of the Company; or

              (b) there is a change in the composition of the Board over a
period of thirty-six (36) consecutive months (or less) such that a majority of
the Board members (rounded up to the nearest whole number) ceases, by reason of
one or more proxy contests for the election of Board members, to be comprised of
individuals who either (i) have been Board members continuously since the
beginning of such period or (ii) have been elected or nominated for election as
Board members during such period by at least a majority of the Board members
described in clause (i) who were still in office at the time such election or
nomination was approved by the Board; or

              (c) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation (or other entity), other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity or another entity) more than 66-2/3% of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; provided, however,
that a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no person acquires more than 25% of
the combined voting power of the Company's then outstanding voting securities
shall not constitute a Change in Control; or

              (d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.

              1.5. Code. "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.

              1.6. Committee. "Committee" shall mean the Board, or Compensation
Committee of the Board, or another committee or subcommittee of the Board,
appointed as provided in Section 7.1.

              1.7. Common Stock. "Common Stock" shall mean the Common Stock of
the Company, par value $0.0001 per share.

              1.8. Company. "Company" shall mean Gen-Probe Incorporated, a
Delaware corporation.

              1.9. Consultant. "Consultant" shall mean any consultant or adviser
(other than an Employee) if:

              (a) the consultant or adviser renders bona fide services to the
Company;


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              (b) the services rendered by the consultant or adviser are not in
connection with the offer or sale of securities in a capital-raising transaction
and do not directly or indirectly promote or maintain a market for the Company's
securities; and

              (c) the consultant or adviser is a natural person who has
contracted directly with the Company to render such services.

              1.10. Director. "Director" shall mean a member of the Board.
"Director" shall include both a member of the Board who is an Employee and a
Non-Employee Director.

              1.11. DRO. "DRO" shall mean a domestic relations order as defined
by the Code or Title I of the Employee Retirement Income Security Act of 1974,
as amended, or the rules thereunder.

              1.12. Employee. "Employee" shall mean any officer or other
employee (as defined in accordance with Section 3401(c) of the Code) of the
Company, or of any corporation which is a Subsidiary.

              1.13. Exchange Act. "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.

              1.14. Fair Market Value. "Fair Market Value" of a share of Common
Stock as of a given date shall be (a) the closing price of a share of Common
Stock on the principal exchange on which shares of Common Stock are then
trading, if any (or as reported on any composite index which includes such
principal exchange), on the trading day previous to such date, or if shares were
not traded on the trading day previous to such date, then on the next preceding
date on which a trade occurred, or (b) if Common Stock is not traded on an
exchange but is quoted on NASDAQ or a successor quotation system, the mean
between the closing representative bid and asked prices for the Common Stock on
the trading day previous to such date as reported by NASDAQ or such successor
quotation system, or if shares were not traded on the trading day previous to
such date, then on the next preceding date on which a trade occurred; or (c) if
Common Stock is not publicly traded on an exchange and not quoted on NASDAQ or a
successor quotation system, the fair market value of a share of Common Stock as
established by the Administrator acting in good faith, which value shall be
final and binding on any Holder or other person entitled under an Option.

              1.15. Holder. "Holder" shall mean a person who has been granted an
Option.

              1.16. Incentive Stock Option. "Incentive Stock Option" shall mean
an Option which conforms to the applicable provisions of Section 422 of the Code
and which is designated as an Incentive Stock Option by the Administrator.

              1.17. Non-Employee Director. "Non-Employee Director" shall mean a
member of the Board who is not an Employee.

              1.18. Non-Qualified Stock Option. "Non-Qualified Stock Option"
shall mean an Option which is not designated as an Incentive Stock Option by the
Administrator.


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              1.19. Option. "Option" shall mean a stock option granted under
Article IV of the Plan. An Option granted under the Plan shall, as determined by
the Administrator, be either a Non-Qualified Stock Option or an Incentive Stock
Option; provided, however, that Options granted to Non-Employee Directors and
Consultants shall be Non-Qualified Stock Options.

              1.20. Option Agreement. "Option Agreement" shall mean a written
agreement executed by an authorized officer of the Company and the Holder, which
shall contain such terms and conditions with respect to an Option, as the
Administrator shall determine, consistent with the Plan.

              1.21. Option Limit. "Option Limit" shall mean One Million
(1,000,000) shares of Common Stock, as adjusted pursuant to Section 8.3 of the
Plan.

              1.22. Performance Criteria. "Performance Criteria" shall mean the
following business criteria with respect to the Company, any Subsidiary or any
division or operating unit: (a) net income, (b) pre-tax income, (c) operating
income, (d) cash flow, (e) earnings per share, (f) return on equity, (g) return
on invested capital or assets, (h) cost reductions or savings, (i) funds from
operations, (j) appreciation in the Fair Market Value of Common Stock and (k)
earnings before any one or more of the following items: interest, taxes,
depreciation or amortization.

              1.23. Plan. "Plan" shall mean The 2000 Equity Participation Plan
of Gen-Probe Incorporated.

              1.24. Rule 16b-3. "Rule 16b-3" shall mean that certain Rule 16b-3
under the Exchange Act, as such Rule may be amended from time to time.

              1.25. Section 162(m) Employee. "Section 162(m) Employee" shall
mean any Employee designated by the Administrator as a Employee whose
compensation for the fiscal year in which the Employee is so designated or a
future fiscal year may be subject to the limit on deductible compensation
imposed by Section 162(m) of the Code.

              1.26. Securities Act. "Securities Act" shall mean the Securities
Act of 1933, as amended from time to time.

              1.27. Subsidiary. "Subsidiary" shall mean any corporation in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain then owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.

              1.28. Substitute Option. "Substitute Option" shall mean an Option
granted under the Plan upon the assumption of, or in substitution for,
outstanding equity awards previously granted by another company or entity, in
connection with a corporate or similar transaction, such as a merger,
combination, consolidation or acquisition of property or stock; provided,
however, that in no event shall the term "Substitute Option" be construed to
refer to an option granted in connection with the cancellation and repricing of
an Option.


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              1.29. Termination of Consultancy. "Termination of Consultancy"
shall mean the time when the engagement of a Holder as a Consultant to the
Company or a Subsidiary is terminated for any reason, with or without cause,
including, but not by way of limitation, by resignation, discharge, death,
disability or retirement; but excluding terminations where there is a
simultaneous engagement by or commencement of employment with the Company or any
Subsidiary or a parent corporation thereof (within the meaning of Section 422 of
the Code). The Administrator, in its absolute discretion, shall determine the
effect of all matters and questions relating to Termination of Consultancy,
including, but not by way of limitation, the question of whether a Termination
of Consultancy resulted from a discharge for cause, and all questions of whether
a particular leave of absence constitutes a Termination of Consultancy.
Notwithstanding any other provision of the Plan, the Company or any Subsidiary
has an absolute and unrestricted right to terminate a Consultant's service at
any time for any reason whatsoever, with or without cause, except to the extent
expressly provided otherwise in writing.

              1.30. Termination of Directorship. "Termination of Directorship"
shall mean the time when a Holder who is a Non-Employee Director ceases to be a
Director for any reason, including, but not by way of limitation, a termination
by resignation, removal, failure to be re-elected, death, disability or
retirement. The Board, in its sole and absolute discretion, shall determine the
effect of all matters and questions relating to Termination of Directorship with
respect to Non-Employee Directors.

              1.31. Termination of Employment. "Termination of Employment" shall
mean the time when the employee-employer relationship between a Holder and the
Company or any Subsidiary is terminated for any reason, with or without cause,
including, but not by way of limitation, a termination by resignation,
discharge, death, disability or retirement; but excluding (a) terminations where
there is a simultaneous reemployment or continuing employment of a Holder by the
Company or any Subsidiary or a parent corporation thereof (within the meaning of
Section 422 of the Code), (b) at the discretion of the Administrator,
terminations which result in a temporary severance of the employee-employer
relationship, and (c) at the discretion of the Administrator, terminations which
are followed by the simultaneous establishment of a consulting relationship by
the Company or a Subsidiary with the former employee. The Administrator, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from a discharge
for cause, and all questions of whether a particular leave of absence
constitutes a Termination of Employment; provided, however, that, with respect
to Incentive Stock Options, unless otherwise determined by the Administrator in
its discretion, a leave of absence, change in status from an employee to an
independent contractor or other change in the employee-employer relationship
shall constitute a Termination of Employment if, and to the extent that, such
leave of absence, change in status or other change interrupts employment for the
purposes of Section 422(a)(2) of the Code and the then applicable regulations
and revenue rulings under said Section.

                                   ARTICLE II.

                             SHARES SUBJECT TO PLAN


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              2.1. Shares Subject to Plan.

              (a) The shares of stock subject to Options shall be Common Stock,
subject to Section 8.3 of the Plan. The aggregate number of such shares which
may be issued upon exercise of such Options shall not exceed Eight Million
(8,000,000). The shares of Common Stock issuable upon exercise of such Options
may be either previously authorized but unissued shares or treasury shares.

              (b) The maximum number of shares of Common Stock which may be
subject to Options granted under the Plan to any individual in any calendar year
shall not exceed the Option Limit. To the extent required by Section 162(m) of
the Code, shares subject to Options which are canceled continue to be counted
against the Option Limit.

              (c) Notwithstanding the foregoing, if the offer or sale of shares
of Common Stock under the Plan is subject to Section 260.140.45 of Title 10 of
the California Code of Regulations (or other applicable law limiting the offers
or sales of shares of Common Stock under the Plan), the aggregate number of
shares of Common Stock issuable upon the exercise of all outstanding Options
(together with options and similar awards outstanding under any other stock
option plan of the Company) and the total number of shares provided for under
any stock bonus or similar plan of the Company shall not exceed thirty percent
(30%) (or such other higher percentage limitation as may be approved by the
stockholders of the Company pursuant to Section 260.140.45) of the then
outstanding shares of Common Stock, as calculated in accordance with the
conditions and exclusions of Section 260.140.45 (or such other limitation under
applicable law).

              2.2. Add-Back of Options. If any Option expires or is canceled
without having been fully exercised, the number of shares of Common Stock
subject to such Option but as to which such Option was not exercised prior to
its expiration or cancellation may again be optioned hereunder, subject to the
limitations of Section 2.1. Furthermore, any shares subject to Options which are
adjusted pursuant to Section 8.3 and become exercisable with respect to shares
of stock of another corporation shall be considered cancelled and may again be
optioned hereunder, subject to the limitations of Section 2.1. Shares of Common
Stock which are delivered by the Holder or withheld by the Company upon the
exercise of any Option under the Plan, in payment of the exercise price thereof
or tax withholding thereon, may again be optioned, granted or awarded hereunder,
subject to the limitations of Section 2.1. Notwithstanding the provisions of
this Section 2.2, no shares of Common Stock may again be optioned if such action
would cause an Incentive Stock Option to fail to qualify as an "incentive stock
option" under Section 422 of the Code.

                                  ARTICLE III.

                               GRANTING OF OPTIONS

              3.1. Option Agreement. Each Option shall be evidenced by an Option
Agreement. Option Agreements evidencing Options intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
shall contain such terms and


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conditions as may be necessary to meet the applicable provisions of Section
162(m) of the Code. Option Agreements evidencing Incentive Stock Options shall
contain such terms and conditions as may be necessary to meet the applicable
provisions of Section 422 of the Code.

              3.2. Provisions Applicable to Section 162(m) Employees.

              (a) The Committee, in its discretion, may determine whether an
Option is to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code.

              (b) Notwithstanding anything in the Plan to the contrary, the
Committee may grant any Option to a Section 162(m) Employee that vests or
becomes exercisable upon the attainment of performance goals which are related
to one or more of the Performance Criteria.

              (c) Furthermore, notwithstanding any other provision of the Plan,
any Option which is granted to a Section 162(m) Employee and is intended to
qualify as performance-based compensation as described in Section 162(m)(4)(C)
of the Code shall be subject to any additional limitations set forth in Section
162(m) of the Code (including any amendment to Section 162(m) of the Code) or
any regulations or rulings issued thereunder that are requirements for
qualification as performance-based compensation as described in Section
162(m)(4)(C) of the Code, and the Plan and such Options shall be deemed amended
to the extent necessary to conform to such requirements.

              3.3. Limitations Applicable to Section 16 Persons. Notwithstanding
any other provision of the Plan, the Plan, and any Option granted to any
individual who is then subject to Section 16 of the Exchange Act, shall be
subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of
the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan and the Options
granted hereunder shall be deemed amended to the extent necessary to conform to
such applicable exemptive rule.

              3.4. At-Will Employment. Nothing in the Plan or in any Option
Agreement hereunder shall confer upon any Holder any right to continue in the
employ of, or as a Consultant for, the Company or any Subsidiary, or as a
Director of the Company, or shall interfere with or restrict in any way the
rights of the Company and any Subsidiary, which are hereby expressly reserved,
to discharge any Holder at any time for any reason whatsoever, with or without
cause, except to the extent expressly provided otherwise in a written employment
or consulting agreement between the Holder and the Company and any Subsidiary.

                                   ARTICLE IV.

                        GRANTING OF OPTIONS TO EMPLOYEES,
                     CONSULTANTS AND NON-EMPLOYEE DIRECTORS

              4.1. Eligibility. Any Employee or Consultant selected by the
Committee pursuant to Section 4.4(a)(i) shall be eligible to be granted an
Option. Any Non-Employee Director selected by the Board pursuant to Section
4.5(a)(i) shall be eligible to be granted an


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Option. All grants shall be made at the discretion of the Committee or the
Board, as the case may be, and no person shall be entitled to a grant of an
Option as a matter of right.

              4.2. Disqualification for Stock Ownership. No person may be
granted an Incentive Stock Option under the Plan if such person, at the time the
Incentive Stock Option is granted, owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or any then existing Subsidiary or parent corporation (within the meaning of
Section 422 of the Code) unless such Incentive Stock Option conforms to the
applicable provisions of Section 422 of the Code.

              4.3. Qualification of Incentive Stock Options. No Incentive Stock
Option shall be granted to any person who is not an Employee.

              4.4. Granting of Options to Employees and Consultants.

              (a) The Committee shall from time to time, in its absolute
discretion, and subject to applicable limitations of the Plan:

                     (i) Select from among the Employees or Consultants
       (including Employees or Consultants who have previously been granted
       Options under the Plan) such of them as in its opinion should be granted
       Options;

                     (ii) Subject to the Option Limit, determine the number of
       shares of Common Stock to be subject to such Options granted to the
       selected Employees or Consultants;

                     (iii) Subject to Section 4.3, determine whether such
       Options are to be Incentive Stock Options or Non-Qualified Stock Options
       and whether such Options are to qualify as performance-based compensation
       as described in Section 162(m)(4)(C) of the Code; and

                     (iv) Determine the terms and conditions of such Options,
       consistent with the Plan; provided, however, that the terms and
       conditions of Options intended to qualify as performance-based
       compensation as described in Section 162(m)(4)(C) of the Code shall
       include, but not be limited to, such terms and conditions as may be
       necessary to meet the applicable provisions of Section 162(m) of the
       Code.

              (b) Upon the selection of an Employee or Consultant to be granted
an Option, the Committee shall instruct the Secretary of the Company to issue
the Option and may impose such conditions on the grant of the Option as it deems
appropriate, and the Committee shall authorize one or more of the officers of
the Company to prepare, execute and deliver the Option Agreement with respect to
such Option.

              (c) Any Incentive Stock Option granted under the Plan may be
modified by the Committee, with the consent of the Holder, to disqualify such
Option from treatment as an "incentive stock option" under Section 422 of the
Code.


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              4.5. Granting of Options to Non-Employee Directors.

              (a) Subject to Section 4.5(b), the Board shall from time to time,
in its absolute discretion, and subject to applicable limitations of the Plan:

                     (i) Determine whether to grant Options to Non-Employee
       Directors, and, in the event Options are so granted, select from among
       the Non-Employee Directors (including Non-Employee Directors who have
       previously been granted Options under the Plan) such of them as in its
       opinion should be granted Options;

                     (ii) Subject to the Option Limit, determine the number of
       shares of Common Stock to be subject to such Options granted to the
       selected Non-Employee Directors; and

                     (iii) Determine the terms and conditions of such Options,
       consistent with the Plan.

              (b) Upon the selection of a Non-Employee Director to be granted an
Option, and the grant of an Option to a Non-Employee Director, the Board shall
instruct the Secretary of the Company to issue the Option and may impose such
conditions on the grant of the Option as it deems appropriate, and the Board
shall authorize one or more officers of the Company to prepare, execute and
deliver the Option Agreement with respect to such Option.

              4.6. Options in Lieu of Cash Compensation. Options may be granted
under the Plan to Employees and Consultants in lieu of cash bonuses which would
otherwise be payable to such Employees and Consultants and to Non-Employee
Directors in lieu of directors' fees which would otherwise be payable to such
Non-Employee Directors, pursuant to such policies which may be adopted by the
Administrator from time to time.

                                   ARTICLE V.

                                TERMS OF OPTIONS

              5.1. Option Price. The price per share of the shares of Common
Stock subject to each Option granted to Employees and Consultants shall be set
by the Committee; provided, however, that such price shall be no less than 100%
of the Fair Market Value of a share of Common Stock on the date the Option is
granted, and:

                     (a) in the case of Incentive Stock Options, such price
       shall not be less than 100% of the Fair Market Value of a share of Common
       Stock on the date the Option is modified, extended or renewed for
       purposes of Section 424(h) of the Code;

                     (b) in the case of Incentive Stock Options granted to an
       individual then owning (within the meaning of Section 424(d) of the Code)
       more than 10% of the total combined voting power of all classes of stock
       of the Company or any Subsidiary or parent corporation thereof (within
       the meaning of Section 422 of the Code), such price shall not


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       be less than 110% of the Fair Market Value of a share of Common Stock on
       the date the Option is granted (or the date the Option is modified,
       extended or renewed for purposes of Section 424(h) of the Code); and

                     (c) To the extent required by Section 25102(o) of the
       California Corporations Code and the regulations thereunder, in the case
       of Options granted to an individual then owning more than 10% of the
       total combined voting power of all classes of stock of the Company or any
       subsidiary or parent corporation thereof (within the meaning of Section
       260.140.41 of Title 10 of the California Code of Regulations), such price
       shall not be less than 110% of the Fair Market Value of a share of Common
       Stock on the date the Option is granted.

              5.2. Option Term. The term of an Option granted to an Employee or
Consultant shall be set by the Committee in its absolute discretion; provided,
however, that the term shall not be more than ten (10) years from the date the
Option is granted; and, provided, further, that, in the case of Incentive Stock
Options, the term shall not be more than five (5) years from the date the
Incentive Stock Option is granted if the Incentive Stock Option is granted to an
individual then owning (within the meaning of Section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary or parent corporation thereof (within the meaning of
Section 422 of the Code). Except as limited by requirements of Section 422 of
the Code and regulations and rulings thereunder applicable to Incentive Stock
Options, or the requirements of Section 25102(o) of the California Corporations
Code and the regulations thereunder, the Committee may extend the term of any
outstanding Option in connection with any Termination of Employment or
Termination of Consultancy of the Holder, or amend any other term or condition
of such Option relating to such a termination.

              5.3. Option Vesting

              (a) The period during which the right to exercise, in whole or in
part, an Option granted to an Employee or a Consultant vests in the Holder shall
be set by the Committee and the Committee may determine that an Option may not
be exercised in whole or in part for a specified period after it is granted;
provided, however, that, to the extent required by Section 25102(o) of the
California Corporations Code and the regulations thereunder, except with regard
to Options granted to officers of the Company or any Subsidiary, Directors or
Consultants, in no event shall an Option granted hereunder become vested and
exercisable at a rate of less than twenty percent (20%) per year over five (5)
years from the date the Option is granted, subject to the continued employment
of the Holder with the Company or the Subsidiaries or other reasonable
conditions established by the Committee. At any time after grant of an Option,
the Committee may, in its absolute discretion and subject to whatever terms and
conditions it selects, accelerate the period during which an Option granted to
an Employee or Consultant vests and becomes exercisable.

              (b) No portion of an Option granted to an Employee or Consultant
which is unexercisable at Termination of Employment or Termination of
Consultancy, as applicable, shall thereafter become exercisable, except as may
be otherwise provided by the Committee either in the Option Agreement or by
action of the Committee following the grant of the Option.


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              (c) To the extent that the aggregate Fair Market Value of stock
with respect to which "incentive stock options" (within the meaning of Section
422 of the Code, but without regard to Section 422(d) of the Code) are
exercisable for the first time by a Holder during any calendar year (under the
Plan and all other incentive stock option plans of the Company and any parent or
subsidiary corporation (within the meaning of Section 422 of the Code) of the
Company), exceeds $100,000, such Options or other options shall be treated as
non-qualified stock options to the extent required by Section 422 of the Code.
The rule set forth in the preceding sentence shall be applied by taking Options
or other options into account in the order in which they were granted. For
purposes of this Section 5.3(c), the Fair Market Value of stock shall be
determined as of the time the Option or other options with respect to such stock
is granted.

              5.4. Terms of Options Granted to Non-Employee Directors. The price
per share of the shares subject to each Option granted to a Non-Employee
Director shall equal 100% of the Fair Market Value of a share of Common Stock on
the date the Option is granted; provided, however, that, to the extent required
by Section 25102(o) of the California Corporations Code and the regulations
thereunder, in the case of Options granted to a Non-Employee Director then
owning more than 10% of the total combined voting power of all classes of stock
of the Company or any subsidiary or parent corporation thereof (within the
meaning of Section 260.140.41 of Title 10 of the California Code of
Regulations), such price shall be not less than 110% of the Fair Market Value of
a share of Common Stock on the date the Option is granted. The period during
which the right to exercise, in whole or in part, an Option granted to a
Non-Employee Director vests in the Holder shall be set by the Administrator and
the Administrator may determine that an Option may not be exercised in whole or
in part for a specified period after it is granted. The term of each Option
granted to a Non-Employee Director shall be determined by the Administrator and
shall be no greater than ten (10) years from the date the Option is granted. No
portion of an Option which is unexercisable at Termination of Directorship shall
thereafter become exercisable. Options granted to Non-Employee Directors under
Section 4.5 shall be subject to such other terms and conditions as are
determined by the Administrator.

              5.5. Substitute Awards. Notwithstanding the foregoing provisions
of this Article V to the contrary, in the case of an Option that is a Substitute
Award, the price per share of the shares subject to such Option may be less than
the Fair Market Value per share on the date of grant, provided, that the excess
of:

                     (a) the aggregate Fair Market Value (as of the date such
       Substitute Award is granted) of the shares subject to the Substitute
       Award; over

                     (b) the aggregate exercise price thereof; does not exceed
       the excess of;

                     (c) the aggregate fair market value (as of the time
       immediately preceding the transaction giving rise to the Substitute
       Award, such fair market value to be determined by the Administrator) of
       the shares of the predecessor entity that were subject to the grant
       assumed or substituted for by the Company; over


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                     (d) the aggregate exercise price of such shares.

              5.6. Restrictions on Common Stock. The Administrator may, in its
sole discretion, provide under the terms of an Option that shares of Common
Stock purchased upon exercise of such Option shall be subject to repurchase from
the Holder by the Company, or shall be subject to such restrictions as the
Administrator shall provide, which restrictions may include, without limitation,
restrictions concerning voting rights and transferability and restrictions based
on duration of employment with the Company and the Subsidiaries, Company
performance and individual performance; provided, however, that, by action taken
after the Common Stock is purchased upon exercise of the Option, the
Administrator may, on such terms and conditions as it may determine to be
appropriate, terminate the Company's repurchase right or remove any or all of
the restrictions imposed by the terms of the Option Agreement. The Company's
right to repurchase the Common Stock from the Holder then subject to the right
shall provide that immediately upon a Termination of Employment, a Termination
of Consultancy, or a Termination of Directorship, as applicable, and for such
period as the Administrator shall determine, the Company shall have the right to
purchase the Common Stock at a price per share equal to the price paid by the
Holder for such Common Stock, or such other price as is determined by the
Administrator; provided, however, that, in the event of a Change in Control,
such right of repurchase shall terminate immediately prior to the effective date
of such Change in Control. Shares of Common Stock purchased upon the exercise of
an Option may not be sold, transferred or encumbered until any repurchase right
and any and all restrictions are terminated or expire. The Secretary of the
Company or such other escrow holder as the Administrator may appoint shall
retain physical custody of each certificate representing such shares of Common
Stock until the repurchase right and any and all of the restrictions imposed
under the Option Agreement with respect to the shares evidenced by such
certificate terminate, expire or shall have been removed. In order to enforce
the restrictions imposed upon shares of Common Stock hereunder, the
Administrator shall cause a legend or legends to be placed on certificates
representing all shares of Common Stock that are still subject to any repurchase
right or restrictions under Option Agreements, which legend or legends shall
make appropriate reference to the conditions imposed thereby. If a Holder makes
an election under Section 83(b) of the Code, or any successor section thereto,
to be taxed with respect to the Common Stock as of the date of transfer of the
Common Stock rather than as of the date or dates upon which the Holder would
otherwise be taxable under Section 83(a) of the Code, the Holder shall deliver a
copy of such election to the Company immediately after filing such election with
the Internal Revenue Service.

                                   ARTICLE VI.

                               EXERCISE OF OPTIONS

              6.1. Partial Exercise. An exercisable Option may be exercised in
whole or in part. However, an Option shall not be exercisable with respect to
fractional shares and the Administrator may require that, by the terms of the
Option, a partial exercise be with respect to a minimum number of shares.


                                       12
<PAGE>
              6.2. Manner of Exercise. All or a portion of an exercisable Option
shall be deemed exercised upon delivery of all of the following to the Secretary
of the Company or his office:

                     (a) A written notice complying with the applicable rules
       established by the Administrator stating that the Option, or a portion
       thereof, is exercised. The notice shall be signed by the Holder or other
       person then entitled to exercise the Option or such portion of the
       Option;

                     (b) Such representations and documents as the
       Administrator, in its absolute discretion, deems necessary or advisable
       to effect compliance with all applicable provisions of the Securities Act
       and any other federal or state securities laws or regulations. The
       Administrator may, in its absolute discretion, also take whatever
       additional actions it deems appropriate to effect such compliance
       including, without limitation, placing legends on share certificates and
       issuing stop-transfer notices to agents and registrars;

                     (c) In the event that the Option shall be exercised
       pursuant to Section 8.1 by any person or persons other than the Holder,
       appropriate proof of the right of such person or persons to exercise the
       Option; and

                     (d) Full cash payment to the Secretary of the Company for
       the shares with respect to which the Option, or portion thereof, is
       exercised. However, the Administrator, may in its sole and absolute
       discretion (i) allow a delay in payment up to thirty (30) days from the
       date the Option, or portion thereof, is exercised; (ii) allow payment, in
       whole or in part, through the delivery of shares of Common Stock which
       have been owned by the Holder for at least six months, duly endorsed for
       transfer to the Company with a Fair Market Value on the date of delivery
       equal to the aggregate exercise price of the Option or exercised portion
       thereof; (iii) allow payment, in whole or in part, through the surrender
       of shares of Common Stock then issuable upon exercise of the Option
       having a Fair Market Value on the date of Option exercise equal to the
       aggregate exercise price of the Option or exercised portion thereof; (iv)
       allow payment, in whole or in part, through the delivery of a notice that
       the Holder has placed a market sell order with a broker with respect to
       shares of Common Stock then issuable upon exercise of the Option, and
       that the broker has been directed to pay a sufficient portion of the net
       proceeds of the sale to the Company in satisfaction of the Option
       exercise price, provided that payment of such proceeds is then made to
       the Company upon settlement of such sale; or (v) allow payment through
       any combination of the consideration provided in the foregoing
       subparagraphs (ii), (iii) and (iv).

              6.3. Conditions to Issuance of Stock Certificates. The Company
shall not be required to issue or deliver any certificate or certificates for
shares of stock purchased upon the exercise of any Option or portion thereof
prior to fulfillment of all of the following conditions:

                     (a) The admission of such shares to listing on all stock
       exchanges on which such class of stock is then listed;


                                       13
<PAGE>
                     (b) The completion of any registration or other
       qualification of such shares under any state or federal law, or under the
       rulings or regulations of the Securities and Exchange Commission or any
       other governmental regulatory body which the Administrator shall, in its
       absolute discretion, deem necessary or advisable;

                     (c) The obtaining of any approval or other clearance from
       any state or federal governmental agency which the Administrator shall,
       in its absolute discretion, determine to be necessary or advisable;

                     (d) The lapse of such reasonable period of time following
       the exercise of the Option as the Administrator may establish from time
       to time for reasons of administrative convenience; and

                     (e) The receipt by the Company of full payment for such
       shares, including payment of any applicable withholding tax, which in the
       discretion of the Administrator may be in the form of consideration used
       by the Holder to pay for such shares under Section 6.2(d).

              6.4. Rights as Stockholders. Holders shall not be, nor have any of
the rights or privileges of, stockholders of the Company in respect of any
shares purchasable upon the exercise of any part of an Option unless and until
certificates representing such shares have been issued by the Company to such
Holders.

              6.5. Ownership and Transfer Restrictions. The Administrator, in
its absolute discretion, may impose such restrictions on the ownership and
transferability of the shares purchasable upon the exercise of an Option as it
deems appropriate. Any such restriction shall be set forth in the respective
Option Agreement and may be referred to on the certificates evidencing such
shares. The Holder shall give the Company prompt notice of any disposition of
shares of Common Stock acquired by exercise of an Incentive Stock Option within
(a) two years from the date of granting (including the date the Option is
modified, extended or renewed for purposes of Section 424(h) of the Code) such
Option to such Holder or (b) one year after the transfer of such shares to such
Holder.

              6.6. Exercise of Options following Termination. To the extent
required by Section 25102(o) of the California Corporations Code and Section
260.140.41 of Title 10 of the California Code of Regulations (or other
applicable law), an Option may be exercised in the event of Termination of
Consultancy, Termination of Directorship or Termination of Employment (other
than for cause as defined by applicable law, the Option Agreement or a contract
of employment with the Holder), to the extent that such Option is exercisable on
the date of such Termination:

                     (a) for a period of at least six months (or such longer
       period as is required by applicable law) from the date of such
       Termination if such Termination was caused by death or disability, and


                                       14
<PAGE>
                     (b) for a period of at least 30 days (or such longer period
       as is required by applicable law) from the date of such Termination if
       such Termination was caused by reason other than the death or disability
       of the Holder.

              6.7. Additional Limitations on Exercise of Options. Holders may be
required to comply with any timing or other restrictions with respect to the
settlement or exercise of an Option, including a window-period limitation, as
may be imposed in the discretion of the Administrator.

                                  ARTICLE VII.

                                 ADMINISTRATION

              7.1. Committee. Prior to the Company's initial registration of
Common Stock under Section 12 of the Exchange Act, the Committee shall consist
of the entire Board. Following such registration, the Committee shall be the
Compensation Committee of the Board (or another committee or a subcommittee of
the Board assuming the functions of the Committee under the Plan), and the
Compensation Committee (or other committee or subcommittee) shall consist solely
of two or more Non-Employee Directors appointed by and holding office at the
pleasure of the Board, each of whom is both a "non-employee director" as defined
by Rule 16b-3 and an "outside director" for purposes of Section 162(m) of the
Code. Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee may be filled by the Board.

              7.2. Duties and Powers of Committee. It shall be the duty of the
Committee to conduct the general administration of the Plan in accordance with
its provisions. The Committee shall have the power to interpret the Plan and the
Option Agreements, and to adopt such rules for the administration,
interpretation, and application of the Plan as are consistent therewith, to
interpret, amend or revoke any such rules and to amend any Option Agreement
provided that the rights or obligations of the Holder of the Option that is the
subject of any such Option Agreement are not affected adversely. Any such
interpretations and rules with respect to Incentive Stock Options shall be
consistent with the provisions of Section 422 of the Code. In its absolute
discretion, the Board may at any time and from time to time assume any and all
rights and duties of the Committee under the Plan, except with respect to
matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations
or rules issued thereunder, are required to be determined in the sole discretion
of the Committee. Notwithstanding the foregoing, the full Board, acting by a
majority of its members in office, shall conduct the general administration of
the Plan with respect to Options granted to Non-Employee Directors.

              7.3. Majority Rule; Unanimous Written Consent. The Committee shall
act by a majority of its members in attendance at a meeting at which a quorum is
present or by a memorandum or other written instrument signed by all members of
the Committee.

              7.4. Compensation; Professional Assistance; Good Faith Actions.
Members of the Committee shall receive such compensation, if any, for their
services as members as may be


                                       15
<PAGE>
determined by the Board. All expenses and liabilities which members of the
Committee incur in connection with the administration of the Plan shall be borne
by the Company. The Committee may, with the approval of the Board, employ
attorneys, consultants, accountants, appraisers, brokers, or other persons. The
Committee, the Company and the Company's officers and Directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Committee or the Board in good faith shall be final and binding upon all
Holders, the Company and all other interested persons. No members of the
Committee or Board shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or Options, and all
members of the Committee and the Board shall be fully protected by the Company
in respect of any such action, determination or interpretation.

              7.5. Delegation of Authority to Grant Options. The Committee may,
but need not, delegate from time to time some or all of its authority to grant
Options under the Plan to a committee consisting of one or more members of the
Committee or of one or more officers of the Company; provided, however, that the
Committee may not delegate its authority to grant Options to individuals (a) who
are subject on the date of the grant to the reporting rules under Section 16(a)
of the Exchange Act, (b) who are Section 162(m) Employees or (c) who are
officers of the Company who are delegated authority by the Committee hereunder.
Any delegation hereunder shall be subject to the restrictions and limits that
the Committee specifies at the time of such delegation of authority and may be
rescinded at any time by the Committee. At all times, any committee appointed
under this Section 7.5 shall serve in such capacity at the pleasure of the
Committee.

                                  ARTICLE VIII.

                            MISCELLANEOUS PROVISIONS

              8.1. Not Transferable. No Option under the Plan may be sold,
pledged, assigned or transferred in any manner other than by will or the laws of
descent and distribution or, subject to the consent of the Administrator,
pursuant to a DRO, unless and until such Option has been exercised, or the
shares underlying such Option have been issued, and all restrictions applicable
to such shares have lapsed. No Option or interest or right therein shall be
liable for the debts, contracts or engagements of the Holder or his successors
in interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect, except to the extent that such disposition is permitted
by the preceding sentence.

              During the lifetime of the Holder, only he may exercise an Option
(or any portion thereof) granted to him under the Plan, unless it has been
disposed of with the consent of the Administrator pursuant to a DRO. After the
death of the Holder, any exercisable portion of an Option may, prior to the time
when such portion becomes unexercisable under the Plan or the applicable Option
Agreement, be exercised by his personal representative or by any person


                                       16
<PAGE>
empowered to do so under the deceased Holder's will or under the then applicable
laws of descent and distribution.

              Notwithstanding the foregoing provisions of this Section 8.1, and
subject to the requirements of Section 260.140.41 of Title 10 of the California
Code of Regulations (to the extent applicable), the Administrator, in its sole
discretion, may determine to grant a Non-Qualified Stock Option which, by its
terms as set forth in the applicable Option Agreement, may be transferred by the
Holder, in writing and with prior written notice to the Administrator, to any
one or more Permitted Transferees (as defined below), subject to the following
terms and conditions: (a) a Non-Qualified Stock Option transferred to a
Permitted Transferee shall not be assignable or transferable by the Permitted
Transferee other than by will or the laws of descent and distribution; (b) any
Non-Qualified Stock Option which is transferred to a Permitted Transferee shall
continue to be subject to all the terms and conditions of the Non-Qualified
Stock Option as applicable to the original Holder (other than the ability to
further transfer the Non-Qualified Stock Option); and (c) the Holder and the
Permitted Transferee shall execute any and all documents requested by the
Administrator, including, without limitation, documents to: (i) confirm the
status of the transferee as a Permitted Transferee, (ii) satisfy any
requirements for an exemption for the transfer under applicable federal and
state securities laws and (iii) evidence the transfer. For purposes of this
Section, "Permitted Transferee" shall mean, with respect to a Holder, any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, any person
sharing the Holder's household (other than a tenant or employee), a trust in
which these persons (or the Holder) control the management of assets, and any
other entity in which these persons (or the Holder) owns more than fifty percent
(50%) of the voting interests, or any other transferee specifically approved by
the Administrator after taking into account any state or federal tax or
securities laws applicable to transferable Non-Qualified Stock Options.

              8.2. Amendment, Suspension or Termination of the Plan. Except as
otherwise provided in this Section 8.2, the Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Board. However, without approval of the Company's stockholders
given within twelve months before or after the action by the Board, no action of
the Board may, except as provided in Section 8.3, increase the limits imposed in
Section 2.1 on the maximum number of shares which may be issued under the Plan.
No amendment, suspension or termination of the Plan shall, without the consent
of the Holder alter or impair any rights or obligations under any Option
theretofore granted or awarded, unless the Option itself otherwise expressly so
provides. No Options may be granted or awarded during any period of suspension
or after termination of the Plan, and in no event may any Option be granted
under the Plan after the first to occur of the following events:

                     (a) The expiration of ten years from the date the Plan is
       adopted by the Board; or

                     (b) The expiration of ten years from the date the Plan is
       approved by the Company's stockholders under Section 8.4.


                                       17
<PAGE>
              8.3. Changes in Common Stock or Assets of the Company, Acquisition
or Liquidation of the Company and Other Corporate Events.

              (a) Subject to Section 8.3(d), in the event that the Administrator
determines that any dividend or other distribution (whether in the form of cash,
Common Stock, other securities, or other property), recapitalization,
reclassification, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, liquidation,
dissolution, or sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company, or exchange of Common Stock or
other securities of the Company, issuance of warrants or other rights to
purchase Common Stock or other securities of the Company, or other similar
corporate transaction or event, in the Administrator's sole discretion, affects
the Common Stock such that an adjustment is determined by the Administrator to
be appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to an Option, then the Administrator shall, in such manner as it may deem
equitable, adjust any or all of

                     (i) the number and kind of shares of Common Stock (or other
       securities or property) with respect to which Options may be granted
       (including, but not limited to, adjustments of the limitations in Section
       2.1 on the maximum number and kind of shares which may be issued and
       adjustments of the Option Limit),

                     (ii) the number and kind of shares of Common Stock (or
       other securities or property) subject to outstanding Options, and

                     (iii) the exercise price with respect to any Option.

              (b) Subject to Sections 8.3(b)(vii) and 8.3(d), in the event of
any transaction or event described in Section 8.3(a) or any unusual or
nonrecurring transactions or events affecting the Company, any affiliate of the
Company, or the financial statements of the Company or any affiliate, or of
changes in applicable laws, regulations, or accounting principles, the
Administrator, in its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, either by the terms of the Option or by
action taken prior to the occurrence of such transaction or event (any such
action applied to Employees and former Employees to be applied uniformly) and
either automatically or upon the Holder's request, is hereby authorized to take
any one or more of the following actions whenever the Administrator determines
that such action is appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan
or with respect to any Option under the Plan, to facilitate such transactions or
events or to give effect to such changes in laws, regulations or principles:

                     (i) To provide for either the cancellation of any such
       Option for an amount of cash equal to the amount that could have been
       attained upon the exercise of such Option or realization of the Holder's
       rights had such Option been currently exercisable or fully vested, or the
       replacement of such Option with other rights or property selected by the
       Administrator in its sole discretion;


                                       18
<PAGE>
                     (ii) To provide that the Option cannot vest or be exercised
       after such event;

                     (iii) To provide that such Option shall be exercisable as
       to all shares covered thereby, notwithstanding anything to the contrary
       in Section 5.3 or 5.4 or the provisions of such Option;

                     (iv) To provide that such Option be assumed by the
       successor or survivor corporation, or a parent or subsidiary thereof, or
       shall be substituted for by similar options, rights or awards covering
       the stock of the successor or survivor corporation, or a parent or
       subsidiary thereof, with appropriate adjustments as to the number and
       kind of shares and prices; and

                     (v) To make adjustments in the number and type of shares of
       Common Stock (or other securities or property) subject to outstanding
       Options and/or in the terms and conditions of (including the exercise
       price), and the criteria included in, outstanding Options and Options
       which may be granted in the future.

                     (vi) To provide that, for a specified period of time prior
       to such event, the restrictions imposed under an Option Agreement upon
       some or all shares of Common Stock may be terminated and some or all
       shares of such Common Stock may cease to be subject to repurchase after
       such event.

                     (vii) Notwithstanding any other provision of the Plan, in
       the event of a Change in Control, each outstanding Option shall,
       immediately prior to the effective date of the Change in Control,
       automatically become fully exercisable for all of the shares of Common
       Stock at the time subject to such Option and may be exercised for any or
       all of those shares as fully-vested shares of Common Stock.

              (c) Subject to Sections 8.3(d), 3.2 and 3.3, the Administrator
may, in its discretion, include such further provisions and limitations in any
Option, Option Agreement or certificate, as it may deem equitable and in the
best interests of the Company.

              (d) With respect to Options which are granted to Section 162(m)
Employees and are intended to qualify as performance-based compensation under
Section 162(m)(4)(C), no adjustment or action described in this Section 8.3 or
in any other provision of the Plan shall be authorized to the extent that such
adjustment or action would cause such Option to fail to so qualify under Section
162(m)(4)(C), or any successor provisions thereto. No adjustment or action
described in this Section 8.3 or in any other provision of the Plan shall be
authorized to the extent that such adjustment or action would cause the Plan to
violate Section 422(b)(1) of the Code. Furthermore, no such adjustment or action
shall be authorized to the extent such adjustment or action would result in
short-swing profits liability under Section 16 or violate the exemptive
conditions of Rule 16b-3 unless the Administrator determines that the Option is
not to


                                       19
<PAGE>
comply with such exemptive conditions. The number of shares of Common Stock
subject to any Option shall always be rounded to the next whole number.

              (e) Notwithstanding the foregoing, in the event that the Company
becomes a party to a transaction that is intended to qualify for "pooling of
interests" accounting treatment and, but for one or more of the provisions of
this Plan or any Option Agreement would so qualify, then this Plan and any
Option Agreement shall be interpreted so as to preserve such accounting
treatment, and to the extent that any provision of the Plan or any Option
Agreement would disqualify the transaction from pooling of interests accounting
treatment (including, if applicable, an entire Option Agreement), then such
provision shall be null and void. All determinations to be made in connection
with the preceding sentence shall be made by the independent accounting firm
whose opinion with respect to "pooling of interests" treatment is required as a
condition to the Company's consummation of such transaction.

              (f) The existence of the Plan, the Option Agreement and the
Options granted hereunder shall not affect or restrict in any way the right or
power of the Company or the shareholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the Company,
any issue of stock or of options, warrants or rights to purchase stock or of
bonds, debentures, preferred or prior preference stocks whose rights are
superior to or affect the Common Stock or the rights thereof or which are
convertible into or exchangeable for Common Stock, or the dissolution or
liquidation of the company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

              8.4. Approval of Plan by Stockholders. The Plan shall be submitted
for the approval of the Company's stockholders within twelve months after the
date of the Board's initial adoption of the Plan. Options may be granted prior
to such stockholder approval; provided, however, that such Options shall not be
exercisable nor shall such Options vest prior to the time when the Plan is
approved by the stockholders; and provided, further, that if such approval has
not been obtained at the end of said twelve-month period, all Options previously
granted or awarded under the Plan shall thereupon be canceled and become null
and void.

              8.5. Tax Withholding. The Company shall be entitled to require
payment in cash or deduction from other compensation payable to each Holder of
any sums required by federal, state or local tax law to be withheld with respect
to the issuance, vesting, exercise or payment of any Option. The Administrator
may in its discretion and in satisfaction of the foregoing requirement allow
such Holder to elect to have the Company withhold shares of Common Stock
otherwise issuable under such Option (or allow the return of shares of Common
Stock) having a Fair Market Value equal to the sums required to be withheld.
Notwithstanding any other provision of the Plan, the number of shares of Common
Stock which may be withheld with respect to the issuance, vesting, exercise or
payment of any Option (or which may be repurchased from the Holder of such
Option within six months after such shares of Common Stock were acquired by the
Holder from the Company) in order to satisfy the Holder's federal and state
income and payroll tax liabilities with respect to the issuance, vesting,
exercise or payment of the Option shall be limited to the number of shares which
have a Fair Market Value on the


                                       20
<PAGE>
date of withholding or repurchase equal to the aggregate amount of such
liabilities based on the minimum statutory withholding rates for federal and
state tax income and payroll tax purposes that are applicable to such
supplemental taxable income.

              8.6. Forfeiture Provisions. Subject to the limitations of
applicable law, pursuant to its general authority to determine the terms and
conditions applicable to Options under the Plan, the Administrator shall have
the right to provide, in the terms of Options made under the Plan, or to require
a Holder to agree by separate written instrument, that if (a)(i) the Holder at
any time, or during a specified time period, engages in any activity in
competition with the Company, or which is inimical, contrary or harmful to the
interests of the Company, as further defined by the Administrator or (ii) the
Holder incurs a Termination of Employment, Termination of Consultancy or
Termination of Directorship for cause, then (b) (i) any proceeds, gains or other
economic benefit actually or constructively received by the Holder upon any
exercise of the Option, or upon the receipt or resale of any Common Stock
underlying the Option, must be paid to the Company, and (ii) the Option shall
terminate and any unexercised portion of the Option (whether or not vested)
shall be forfeited.

              8.7. Effect of Plan upon Options and Compensation Plans. The
adoption of the Plan shall not affect any other compensation or incentive plans
in effect for the Company or any Subsidiary. Nothing in the Plan shall be
construed to limit the right of the Company (a) to establish any other forms of
incentives or compensation for Employees, Directors or Consultants of the
Company or any Subsidiary or (b) to grant or assume options or other rights or
awards otherwise than under the Plan in connection with any proper corporate
purpose including but not by way of limitation, the grant or assumption of
options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation,
partnership, limited liability company, firm or association.

              8.8. Compliance with Laws. The Plan, the granting and vesting of
Options under the Plan and the issuance and delivery of shares of Common Stock
and the payment of money under the Plan or under Options granted hereunder are
subject to compliance with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal securities law and
federal margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities delivered under
the Plan shall be subject to such restrictions, and the person acquiring such
securities shall, if requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary or desirable to
assure compliance with all applicable legal requirements. To the extent
permitted by applicable law, the Plan and Options granted or awarded hereunder
shall be deemed amended to the extent necessary to conform to such laws, rules
and regulations.

              8.9. Inability to Obtain Authority. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of share of Common Stock hereunder, shall relieve the Company
of any liability in respect of the failure to issue or sell such shares of
Common Stock as to which such requisite authority shall not have been obtained.


                                       21
<PAGE>
              8.10. Reservation of Shares. The Company, during the term of this
Plan, shall at all times reserve and keep available such number of shares of
Common Stock as shall be sufficient to satisfy the requirements of the Plan.

              8.11. Information to Holders and Purchasers. To the extent
required by Section 25102(o) of the California Corporation Code and Section
260.140.46 of Title 10 of the California Code of Regulations (or other
applicable law), the Company shall provide to each Holder of an Option and to
each person who acquires shares of Common Stock pursuant to the Plan, not less
frequently than annually during the period such Holder holds an Option, and, in
the case of a Holder or other person who acquires shares of Common Stock
pursuant to the Plan, during the period such Holder or person owns such shares,
copies of the Company's annual financial statements. Notwithstanding the
preceding sentence, the Company shall not be required to provide such statements
to Employees, Directors and Consultants whose duties in connection with the
Company assure their access to equivalent information.

              8.12. Repurchase Provisions. The Administrator in its discretion
may provide that the Company may repurchase shares of Common Stock acquired upon
exercise of an Option upon a Holder's Termination of Consultancy, Termination of
Directorship or Termination of Employment; provided, however, that any such
repurchase right shall be set forth in the applicable Option Agreement or in
another agreement entered into pursuant to such Option Agreement; and, provided,
further, that, to the extent required by Section 25102(o) of the California
Corporation Code and Section 260.140.41 of Title 10 of the California Code of
Regulations (or other applicable law), any such repurchase of shares of Common
Stock from a person who is not an officer of the Company or any Subsidiary, a
Director or a Consultant shall be upon the following terms: (a) if the
repurchase option gives the Company the right to repurchase the shares upon
Termination of Employment at not less than the Fair Market Value of the shares
to be purchased on the date of Termination of Employment, then (i) the right to
repurchase shall be exercised for cash or cancellation of purchase money
indebtedness for the shares within ninety (90) days of Termination of Employment
(or in the case of shares issued upon exercise of Options after such date of
termination, within ninety (90) days after the date of the exercise) or such
longer period as may be agreed to by the Administrator and the person and (ii)
the right shall terminate when the shares of Common Stock become publicly
traded; and (b) if the repurchase right gives the Company the right to
repurchase the shares upon Termination of Employment at the original purchase
price for such shares, then (i) the right to repurchase at the original purchase
price shall lapse at the rate of at least twenty percent (20%) of the shares per
year over five (5) years from the date the Option is granted (without respect to
the date the Option was exercised or became exercisable) and (ii) the right to
repurchase shall be exercised for cash or cancellation of purchase money
indebtedness for the shares within ninety (90) days of Termination of Employment
(or, in the case of shares issued upon exercise of Options after such date of
Termination of Employment, within ninety (90) days after the date of the
exercise) or such longer period as may be agreed to by the Administrator and the
person.

              8.13. Investment Intent. The Company may require a Holder or other
person purchasing shares of Common Stock, as a condition of exercising or
acquiring Common Stock under any Option, to give written assurances satisfactory
to the Company as to the Holder's or other person's knowledge and experience in
financial and business matters and/or to employ a


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<PAGE>
representative reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters and that such Holder or person is
capable of evaluating, alone or together with the representative, the merits and
risks of exercising the Option; and to give written assurances satisfactory to
the Company stating that the person is acquiring the stock subject to the Option
for such Holder or person's own account and not with any present intention of
selling or otherwise distributing the Common Stock. The foregoing requirements,
and any assurances given pursuant to such requirements, shall be inoperative if
the issuance of the shares upon the exercise or acquisition of Common Stock
under the applicable Option has been registered under a then currently effective
registration statement under the Securities Act, or as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities laws. The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the stock.

              8.14. Titles. Titles are provided herein for convenience only and
are not to serve as a basis for interpretation or construction of the Plan.

              8.15. Governing Law. The Plan and any agreements hereunder shall
be administered, interpreted and enforced under the internal laws of the State
of California without regard to conflicts of laws thereof.

                                      * * *

              I hereby certify that the foregoing Plan was duly adopted by the
Board of Directors of Gen-Probe Incorporated on August 17, 2000.

              Executed on this 30th day of October 2000.


                                               --------------------------
                                               R. William Bowen, Jr.
                                               Assistant Secretary

                                      * * *

                     I hereby certify that the foregoing Plan was duly adopted
by the sole shareholder of Gen-Probe Incorporated on August 17, 2000.

                     Executed on this 30th day of October 2000.


                                               --------------------------
                                               R. William Bowen, Jr.
                                               Assistant Secretary


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