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EXHIBIT 10.2




DIGENE CORPORATION

AMENDED AND RESTATED 1997 STOCK OPTION PLAN




ARTICLE I

PURPOSE; EFFECTIVE DATE; DEFINITIONS




     1.1 Purpose. This Digene Corporation 1997 Stock Option Plan (the “Plan”) is
intended to secure for Digene Corporation (the “Company”) and its stockholders the benefits
of the incentive inherent in common stock ownership by consultants providing services to the
Company and to afford such persons the opportunity to obtain or increase their proprietary interest
in the Company on a favorable basis and thereby have an opportunity to share in its success.



     1.2 Effective Date. This Plan shall be effective on and after September 9, 1997.



     1.3 Definitions. Throughout this Plan, the following terms shall have the meanings
indicated:



          (a) “Board” shall mean the Board of Directors of the Company.




          (b) “Change of Control” shall mean (a) the reorganization, consolidation or merger of
the Company or any of its subsidiaries holding or controlling a majority of the assets relating to
the business of the Company, with or into any third party (other than a subsidiary); (b) the
assignment, sale, transfer, lease or other disposition of all or substantially all of the assets of
the Company and its subsidiaries taken as a whole; or (c) the acquisition by any third party or
group of third parties acting in concert, of beneficial ownership (within the meaning of Rule 13d-3
of the Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934, as
amended) of shares of voting stock of the Company, the result of which in the case of any
transaction described in clauses (a), (b) and (c) above is that immediately after the transaction
the stockholders of the Company immediately before the transaction, other than the acquiror, own
less than fifty percent (50%) of the combined voting power of the outstanding voting securities
entitled to vote generally in the election of directors of the surviving or resulting corporation
in a transaction specified in clause (a) above, the acquiror in a transaction specified in clause
(b) above, or the Company or the acquiror in a transaction specified in clause (c) above.




          (c) “Code” shall mean the Internal Revenue Code of 1986, as amended, any
successor revenue laws of the United States, and the rules and regulations promulgated thereunder.




          (d) “Committee” shall mean any committee of the Board designated by the
Board to administer this Plan.














 








          (e) “Common Stock” shall mean the common stock, par value $.01 per share, of the
Company.




          (f) “Company” shall mean Digene Corporation, a Delaware corporation.




          (g) “Consultant” shall mean a person that has entered into an agreement or arrangement
(written or otherwise) to provide, or is currently engaged in providing, bona fide services (other
than services in connection with the offer or sale of securities in a capital-raising transaction)
to or for the benefit of the Company and is not an employee, officer or director of the Company or
any of its subsidiaries on the date of grant of the Option; provided, that the Committee shall have
sole discretion in the determination of whether a person is a Consultant to the Company for the
purposes of this Plan.




          (h) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.




          (i) “Fair Market Value” shall mean with respect to the Common Stock on any day, (i)
the closing sales price of a share of Common Stock as reported on the principal securities exchange
on which shares of Common Stock are then listed or admitted to trading, or (ii) if not so reported,
the closing sales price of a share of Common Stock as published in the NASDAQ National Market
Issues report in the Eastern Edition of The Wall Street Journal, or (iii) if not so reported, the
average of the closing bid and asked prices of a share of Common Stock as reported on the NASDAQ
National Market System, or (iv) if not so reported, as furnished by any member of the National
Association of Securities Dealers, Inc. selected by the Committee. In the event that the price of
a share of Common Stock shall not be so reported or furnished, the Fair Market Value of a share of
Common Stock shall be determined by the Committee in good faith. The market value of an Option
granted under the Plan on any day shall be the market value of the underlying Common Stock,
determined as aforesaid, less the exercise price of the Option. A “business day” is any day on
which the relevant market is open for trading.




          (j) “Option” shall mean an option to purchase shares of Common Stock granted by the
Committee under this Plan.




          (k) “Option Agreement” shall mean the certificate evidencing an Option grant.




          (l) “Option Shares” shall mean the shares of Common Stock issuable upon exercise of an
Option.




          (m) “Plan” shall mean this Digene Corporation 1997 Stock Option Plan, as the same may
be amended from time to time.




          (n) “Termination of Engagement” shall mean the termination of a Consultant’s
consulting engagement with the Company such that from and after such date the Consultant is no
longer expected, in the sole discretion of the Committee, to be engaged in



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providing bona fide services to or for the benefit of the Company; provided, however, that a
Termination of Engagement shall not be deemed to have occurred if the Consultant has become an
employee, officer or director of the Company in which event a Termination of Engagement shall occur
only upon the termination (whether voluntary or involuntary) of all positions with the Company.




ARTICLE II

ADMINISTRATION




     2.1 Committee Administration. This Plan and the Options granted hereunder shall be
interpreted, construed and administered by the Committee in its sole discretion. A person who has
been granted Options under the Plan may appeal to the Committee in writing any decision or action
of the Committee with respect to the Plan that adversely affects such person. Upon review of such
appeal and in any other case where the Committee has acted with respect to the Plan, the
interpretation and construction by the Committee of any provisions of this Plan or of any Option
shall be conclusive and binding on all parties.



     2.2 Committee Composition. The Committee shall consist of not less than two persons
who shall be members of the Board and shall be subject to such terms and conditions as the Board
may prescribe. Each Committee member shall be a “Non-Employee Director” within the meaning of Rule
16b-3 promulgated under the Exchange Act. Once designated, the Committee shall continue to serve
until otherwise directed by the Board. From time to time, the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies however caused and remove all members
of the Committee.



     A majority of the entire Committee shall constitute a quorum, and the action of a majority of
the members present at any meeting at which a quorum is present shall be deemed the action of the
Committee. In addition, any decision or determination reduced to writing and signed by all of the
members of the Committee shall be fully as effective as if it had been made by a majority vote at a
meeting duly called and held. Subject to the provisions of this Plan and the Company’s bylaws, and
to any terms and conditions prescribed by the Board, the Committee may make such additional rules
and regulations for the conduct of its business as it shall deem advisable. The Committee shall
hold meetings at such times and places as it may determine.



     2.3 Committee Powers. The Committee shall have authority to grant Options pursuant to
an Option Agreement providing for such terms (not inconsistent with the provisions of this Plan) as
the Committee may consider appropriate. Such terms shall include, without limitation, as
applicable, the number of shares, the Option price, the medium and time of payment, the term of
each grant and any vesting requirements and may include conditions (in addition to those contained
in this Plan) on the exercisability of all or any part of an Option. Notwithstanding any such
conditions, the Committee may, in its discretion, at any time on or after the date of grant,
accelerate the time at which any Option may be exercised. In addition, the Committee shall have
complete discretionary authority to prescribe the form of Option Agreements; to adopt, amend and
rescind rules and regulations pertaining to the administration



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of the Plan; and to make all other determinations necessary or advisable for the administration of
this Plan. The express grant in the Plan of any specific power to the Committee shall not be
construed as limiting any power or authority of the Committee. All expenses of administering this
Plan shall be borne by the Company.



     2.4 Limitation on Receipt of Options by Committee Members. No person while a member
of the Committee shall be eligible to be granted Options under this Plan, but a member of the
Committee may be granted and may exercise options to purchase stock granted under other plans of
the Company, and a member of the Committee may exercise Options granted under this Plan prior to
his or her becoming a member of the Committee.



     2.5 Good Faith Determinations. No member of the Committee or other member of the
Board shall be liable for any action or determination made in good faith with respect to this Plan
or any Option granted hereunder.



ARTICLE III

ELIGIBILITY; SHARES SUBJECT TO PLAN




     3.1 Eligibility. The Committee shall from time to time determine and designate
Consultants to receive Options under this Plan, the number of Options to be granted to each such
Consultant, the formula or other basis on which such Options shall be granted to Consultants and
any condition or conditions to the exercise of such Options consistent with the terms of this Plan.
In making any such grant, the Committee may take into account the nature of services rendered by a
Consultant, commissions, fees or other compensation paid by the Company to the Consultant, the
capacity of the Consultant to contribute to the success of the Company and other factors that the
Committee may consider relevant.



     3.2 Shares Subject to this Plan. Subject to the provisions of Section 4.1(e)
(relating to adjustment for changes in Common Stock), the maximum number of shares that may be
issued under this Plan shall not exceed in the aggregate 500,000 shares of Common Stock. Such
shares may be authorized and unissued shares or authorized and issued shares that have been
reacquired by the Company. If any Options granted under this Plan shall for any reason terminate
or expire or be surrendered without having been exercised in full, then the shares not purchased
under such Options shall be available again for grant hereunder.



     3.3 Changes. In the event of any increase or decrease in the number of issued shares
of Common Stock resulting from a merger, reorganization, consolidation, recapitalization, stock
dividend, stock split or subdivision, such automatic substitution or adjustment shall be made in
the maximum aggregate number of shares which may be issued under this Plan, the maximum number of
shares with respect to which Options may be granted to any individual during any year, and the
number and exercise price of shares subject to outstanding Options, as the Committee determines
shall cause an equitable adjustment under this Plan, in proportion to the effect of such change to
the Common Stock generally; provided that the number of shares subject to any Option shall be
rounded down to the nearest whole number so that the number of shares subject to any Option shall
always be a whole number. In the event of a change in the



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Common Stock as presently constituted, which change is limited to a change of all of the authorized
shares with par value into the same number of shares with a different par value or without par
value, the shares resulting from any such change shall be deemed to be the Common Stock within the
meaning of this Plan.



ARTICLE IV

STOCK OPTIONS




     4.1 Grant; Terms and Conditions. The Committee, in its discretion, may from time to
time grant Options to any Consultant eligible to receive Options under this Plan. Each Consultant
who is granted an Option shall receive an Option Agreement from the Company in a form specified by
the Committee and containing such provisions, consistent with this Plan, as the Committee, in its
sole discretion, shall determine at the time the Option is granted.



          (a) Number of Shares. Each Option Agreement shall state the number of shares of
Common Stock to which it pertains.




          (b) Option Price. Each Option Agreement shall state the Option exercise price, which
shall be the price determined by the Committee, in its absolute discretion, to be suitable to
attain the purposes of this Plan; provided that the exercise price of an Option shall not be lower
than the Fair Market Value of the Common Stock as of the date of the grant.




          (c) Medium and Time of Payment. Upon the exercise of an Option, the Option exercise
price shall be payable in United States dollars, in cash (including by check) or (unless the
Committee otherwise prescribes) in shares of Common Stock owned by the optionee, in Options granted
to the optionee under the Plan which are then exercisable, or in a combination of cash, Common
Stock and Options. If all or any portion of the Option exercise price is paid in Common Stock
owned by the optionee, then that Common Stock shall be valued at its Fair Market Value as of the
date the Option is exercised. If all or any portion of the Option exercise price is paid in
Options granted to the optionee under the Plan, then such Options shall be valued at their Fair
Market Value as of the date the Option is exercised. For the purpose of assisting an optionee to
exercise an Option, the Company may, in the discretion of the Board, make loans to the optionee or
guarantee loans made by third parties to the optionee, in either case on such terms and conditions
as the Board may authorize.




          (d) Term and Exercise of Options. The term of each Option shall be determined by the
Committee at the time the Option is granted; provided that the term of an Option shall in no event
be more than ten years from the date of grant. Not less than one hundred shares may be purchased
at any one time unless the number purchased is the total number at the time purchasable under the
Option. During the lifetime of an optionee, the Option shall be exercisable only by him or her and
shall not be assignable or transferable by him or her and no person shall acquire any rights
therein. Following an optionee’s death, the Option may be exercised (to the extent permitted under
the Plan) by the person designated by the optionee as a beneficiary in a written notification
delivered to the Committee prior to the optionee’s death, or if there is no such written
designation, by the executor or administrator of the optionee’s estate

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or by the person or persons to whom such rights pass by will or by the laws of descent or
distribution.




          (e) Recapitalization; Reorganization. Subject to any action that may be required on
the part of the stockholders of the Company, if the Company is the surviving corporation in any
merger, consolidation, sale, transfer, acquisition, tender offer or exchange offer which does not
result in a Change of Control, then each outstanding Option shall pertain to and apply to the
securities or other consideration that a holder of the number of shares of Common Stock subject to
the Option would have been entitled to receive in such transaction.




          If the Company is the surviving corporation in any merger, consolidation, sale transfer,
acquisition, tender offer or exchange offer which results in a Change of Control, each optionee
shall, in such event, have the right immediately prior to such transaction to exercise his or her
Option in whole or in part without regard to any installment provision contained in his or her
Agreement; provided, however, that the exercisability of any Option shall not be accelerated if, in
the opinion of the Board, such acceleration would prevent pooling of interests accounting treatment
for the Change of Control transaction and such accounting treatment is desired by the parties to
such transaction. Any Option not exercised immediately prior to such transaction shall pertain to
and apply to the securities or other consideration that a holder of the number of shares of Common
Stock subject to the Option would have been entitled to receive in the transaction.




          A merger, consolidation, sale, transfer, acquisition, tender offer or exchange offer in which
the Company is not the surviving corporation, other than such a transaction effected for the
purpose of changing the Company’s domicile, shall cause each holder of an outstanding Option to
have the right immediately prior to such transaction to exercise his or her Option in whole or in
part without regard to any installment provision contained in his or her Agreement. Any Option not
exercised immediately prior to such transaction shall pertain to and apply to the securities or
other consideration that a holder of the number of shares of Common Stock subject to the Option
would have been entitled to receive in the transaction.




          A dissolution or liquidation of the Company shall cause each outstanding Option to terminate,
provided that each holder shall, in such event, have the right immediately prior to such
dissolution or liquidation to exercise his or her Option in whole or in part without regard to any
installment provision contained in his or her Agreement.




          Notwithstanding the foregoing, in no event shall any Option be exercisable after the date of
termination of the exercise period of such Option.




          In the case of a merger, consolidation, sale, transfer, acquisition, tender offer or exchange
offer effected for the purpose of changing the Company’s domicile, each outstanding Option shall
continue in effect in accordance with its terms and shall apply or relate to the same number of
shares of common stock of such surviving corporation as the number of shares of Common Stock to
which it applied or related immediately prior to such transaction, adjusted for any increase or
decrease in the number of outstanding shares of common stock of the surviving corporation effected
without receipt of consideration.




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          In the event of a change in the Common Stock as presently constituted, which change is limited
to a change of all of the authorized shares with par value into the same number of shares with a
different par value or without par value, the shares resulting from any such change shall be deemed
to be the Common Stock within the meaning of this Plan.




          The foregoing adjustments shall be made by the Committee, whose determination shall be final,
binding and conclusive.




          Except as expressly provided in this subsection, the holder of an Option shall have no rights
by reason of (i) any subdivision or consolidation of shares of any class, (ii) any stock dividend,
(iii) any other increase or decrease in the number of shares of stock of any class, (iv) any
dissolution, liquidation, merger or consolidation or spin-off, split-off or split-up of assets of
the Company or stock of another corporation or (v) any issuance by the Company of shares of stock
of any class or securities convertible into shares of stock of any class. Moreover, except as
expressly provided in this subsection, the occurrence of one or more of such events shall not
affect, and no adjustment by reason thereof shall be made with respect to, the number or price of
shares of Common Stock subject to the Option.




          The grant of an Option pursuant to this Plan shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve, liquidate, sell or otherwise
transfer all or any part of its business or assets.




          (f) Rights as a Stockholder. Subject to Section 5.9 of this Plan regarding
uncertificated shares, an optionee or a transferee of an Option shall have no rights as a
stockholder with respect to any shares covered by his or her Option until the date of the issuance
of a stock certificate to him or her for those shares upon payment of the exercise price. No
adjustments shall be made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in subsection 4.1(e).




          (g) Modification, Extension and Renewal of Options. Subject to the terms and
conditions and within the limitations of this Plan, the Committee may, on or after the date of
grant, modify, extend or renew outstanding Options granted under this Plan or accept the surrender
of outstanding Options (to the extent not theretofore exercised) and authorize the granting of new
Options in substitution therefor (to the extent not theretofore exercised). No modification of an
Option shall, without the consent of the holder thereof, alter or impair any rights or obligations
under any Option theretofore granted under this Plan.




          (h) Exercisability and Term of Options. Unless earlier terminated, Options granted
pursuant to this Plan shall be exercisable at any time on or after the dates of exercisability and
before the expiration date set forth in the Option Agreement. Notwithstanding the foregoing,
unless otherwise determined by the Committee on or after the date of grant, an Option shall
terminate and may not be exercised after the date of a Termination of Engagement, except that: (1)
unless the Committee shall determine that the Consultant’s engagement was terminated for conduct
that in the judgment of the Committee involves dishonesty or action by

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the Consultant that is detrimental to the best interest of the Company, the Consultant may at any
time within three months after Termination of Engagement exercise his or her Option but only to the
extent the Option was exercisable on the date of Termination of Engagement; (2) if such
Consultant’s engagement terminates on account of total and permanent disability, then the
Consultant may at any time within one year after Termination of Engagement exercise the Option but
only to the extent that the Option was exercisable on the date of Termination of Engagement; and
(3) if such Consultant dies while engaged as a consultant to the Company, or within the three or
twelve month period following Termination of Engagement as described in clause (1) or (2) above,
then his or her Option may be exercised at any time within twelve months following his or her death
by the person specified in Section 4.1(d), but only to the extent that such Option was exercisable
by him or her on the date of Termination of Engagement. The Committee may, in its discretion,
provide in any Option Agreement or determine at any time after the date of grant that the
exercisability of an Option will be accelerated, in whole or in part, in the event of a
Consultant’s death or disability. The Committee may, in its discretion, extend the
post-termination exercise periods set forth in this subsection, but not beyond the expiration date
of the Option. Notwithstanding anything to the contrary in this subsection, an Option may not be
exercised by anyone after the expiration of its term.




          4.2 Other Terms and Conditions. Through the Option Agreements authorized under this
Plan, the Committee may impose such other terms and conditions, not inconsistent with the terms
hereof, on the grant or exercise of Options, as it deems advisable.




          4.3 Inclusion of Prior Grants. From and after the Effective Date of this Plan, the
grants of rights to purchase shares of Common Stock listed below shall, for the purposes of this
Plan, be deemed to be Options granted under the terms of, and in accordance with, this Plan, such
Options shall be governed by the terms of this Plan, and the terms of such Options shall include
the terms and provisions of this Plan, the terms and conditions theretofore adopted by the
Committee in connection with the grant of such Options and the terms and conditions set forth in
the Option Agreements relating to such Options:




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Number of Shares
	Name of Consultant	 	Date of Grant	 	Subject to Options
	Robert McG. Lilley
	 	 	4/18/97	 	 	 	125,000	 
	 
	 	 	 	 	 	 	 	 
	Gerson Dores
	 	 	7/18/97	 	 	 	25,000	 
	 
	 	 	 	 	 	 	 	 
	Mark Van Asten
	 	 	7/18/97	 	 	 	25,000	 
	 
	 	 	 	 	 	 	 	 
	Greg Brown
	 	 	7/18/97	 	 	 	25,000	 






ARTICLE V

MISCELLANEOUS




          5.1 Withholding Taxes. A Consultant granted Options under this Plan shall be
conclusively deemed to have authorized the Company to withhold from the commissions, fees or other
compensation of such Consultant funds in amounts or property (including Common Stock

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or Options) in value equal to any federal, state and local income, employment or other withholding
taxes applicable to the income recognized by such Consultant and attributable to the Options or
Option Shares as, when and to the extent, if any, required by law; provided, however, that, in lieu
of the withholding of federal, state and local taxes as herein provided, the Company may require
that the Consultant (or other person exercising such Option) pay the Company an amount equal to the
federal, state and local withholding taxes on such income at the time such withholding is required
or such other time as shall be satisfactory to the Company.




          5.2 Amendment, Suspension, Discontinuance or Termination of Plan. The Board or
Committee may at any time amend, discontinue or terminate the Plan or any part thereof (including
any amendment deemed necessary to ensure that the Company may comply with any regulatory
requirement or any change in applicable law) or for any other purpose permitted by law, or amend
any Option previously granted, prospectively or retroactively (subject to Article III); provided,
however, that, (i) unless otherwise required by law, the rights of a Consultant with respect to
Options granted prior to such amendment, discontinuance or termination may not be impaired without
the consent of such Consultant; (ii) except as otherwise provided in Section 4.1(d) hereof, the
Committee or the Board shall not reduce the exercise price of Options previously awarded to any
Consultant, whether through amendment, cancellation and replacement grant, or any other means,
without prior stockholder approval; and (iii) the Company will seek the approval of the Company’s
stockholders for any amendment if such approval is necessary to comply with the Code, Federal or
state securities laws or any other applicable laws or regulations, including the Marketplace Rules
of the National Association of Securities Dealers, Inc. Unless sooner terminated by the Committee,
this Plan will terminate on September 9, 2007.




          5.3 Governing Law. This Plan shall be governed by, and construed in accordance with,
the laws of the State of Maryland (without giving effect to principles of conflict of laws).




          5.4 Designation. This Plan may be referred to in other documents and instruments as
the “Digene Corporation 1997 Stock Option Plan.”




          5.5 Indemnification of Committee. 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 Company against the reasonable expenses, including attorneys’ fees, actually and
necessarily incurred in connection with the defense of any investigation, action, suit or
proceeding, or in connection with any appeal therefrom, 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 this Plan or any
Option, and against all amounts paid by them in settlement thereof (provided such settlement is
approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a
judgment in or dismissal or other discontinuance of any such investigation, action, suit or
proceeding, except in relation to matters as to which it shall be adjudged in such investigation,
action, suit or proceeding that such Committee member is liable for negligence or misconduct in the
performance of his or her duties; provided that, within 60 days after institution of any such
investigation, action, suit or proceeding, a Committee member shall in writing offer the Company
the opportunity, at its own expense, to handle and defend the same.




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          5.6 Reservation of Shares. The Company shall at all times during the term of this
Plan, and so long as any Option shall be outstanding, reserve and keep available (and will seek or
obtain from any regulatory body having jurisdiction any requisite authority in order to issue) such
number of shares of its Common Stock as shall be sufficient to satisfy the requirements of this
Plan. Inability of the Company to obtain from any regulatory body of appropriate jurisdiction
authority considered by the Company to be necessary or desirable to the lawful issuance of any
shares of its Common Stock hereunder shall relieve the Company of any liability in respect of the
nonissuance or sale of such Common Stock as to which such requisite authority shall not have been
obtained.




          5.7 Application of Funds. The proceeds received by the Company from the sale of
Common Stock pursuant to the exercise of Options will be used for general corporate purposes.




          5.8 No Obligation to Exercise. The granting of an Option shall impose no obligation
upon the holder to exercise or otherwise realize the value of that Option.




          5.9 Uncertificated Shares. A Consultant who exercises an Option to acquire Common
Stock may, but need not, be issued a stock certificate in respect of the Common Stock so acquired.
A “book entry” (i.e., a computerized or manual entry) shall be made in the records of the
Company to evidence the issuance of shares of Common Stock to a Consultant where no certificate is
issued in the name of the Consultant. Such Company records, absent manifest error, shall be
binding on Consultants. In all instances where the date of issuance of shares may be deemed
significant but no certificate is issued in accordance with this Section 5.9, the date of the book
entry shall be the relevant date for such purposes.




          5.10 Forfeiture for Competition. If a participant in this Plan provides services to a
competitor of the Company or any of its subsidiaries, whether as an employee, officer, director,
independent contractor, consultant, agent or otherwise, such services being of a nature that can
reasonably be expected to involve the skills and experience used or developed by the participant
while a Consultant, then that participant’s rights to any Options hereunder shall automatically be
forfeited, subject to a determination to the contrary by the Committee.




          5.11 Successors. This Plan shall be binding upon any and all successors of the
Company.




          5.12 Engagement Rights. Nothing in this Plan or in any Option Agreement shall confer
on any Consultant any right to continue as a Consultant of the Company or any of its subsidiaries
or shall interfere in any way with the right of the Company or any of its subsidiaries to terminate
such person’s engagement at any time.




          5.13 Other Actions. Nothing contained in the Plan shall be construed to limit the
authority of the Company to exercise its corporate rights and powers, including, but not by way of
limitation, the right of the Company to grant options for proper corporate purposes other than
under the Plan with respect to any employee or other person, firm, corporation or association.




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          5.14 Tax Treatment and Characterization. The Options granted hereunder shall not be
considered incentive stock options that qualify under Code Section 422.




          5.15 Legend. The Committee may require each person exercising an Option to represent
to and agree with the Company in writing that he or she is acquiring the Option Shares without a
view to distribution thereof. In addition to any legend required by this Plan, the stock
certificates representing such Option Shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer.




          All certificates for Option Shares shall be subject to such stock 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 upon which the Common
Stock is then listed, any applicable federal or state securities law, and any applicable corporate
law, and the Committee may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.




          5.16 Unfunded Status of Plan. The Plan is intended to constitute an “unfunded plan
for incentive compensation. With respect to any payment not yet made to a participant in this Plan
by the Company, nothing contained herein shall give any such participant any rights that are
greater than those of a general creditor of the Company.




          5.17 Listing and Other Conditions.




          (a) If the Common Stock is listed on a national securities exchange, the issuance of any
shares of Common Stock upon exercise of an Option shall be conditioned upon such shares being
listed on such exchange. The Company shall have no obligation to issue such shares unless and
until such shares are so listed, and the right to exercise any Option shall be suspended until such
listing has been effected.




          (b) If at any time counsel to the Company shall be of the opinion that any sale or delivery of
shares of Common Stock upon exercise of an Option is or may in the circumstances be unlawful or
result in the imposition of excise taxes under the statutes, rules or regulations of any applicable
jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any
application or to effect or to maintain any qualification or registration under the Securities Act
of 1933, as amended, or otherwise with respect to shares of Common Stock, and the right to exercise
any Option shall be suspended until, in the opinion of such counsel, such sale or delivery shall be
lawful or shall not result in the imposition of excise taxes.




          (c) Upon termination of any period of suspension under this Section 5.17, any Option affected
by such suspension which shall not then have expired or terminated shall be reinstated as to all
shares available before such suspension and as to shares which would otherwise have become
available during the period of such suspension, but no such suspension shall extend the term of any
Option.




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          5.18 Construction. Wherever any words are used in the Plan in the masculine gender
they shall be construed as though they were also used in the feminine gender in all cases where
they would so apply, and wherever any words are used herein in the singular form they shall be
construed as though they were also used in the plural form in all cases where they would so apply.




          5.19 Severability. If any part of the Plan shall be determined to be invalid or void
in any respect, such determination shall not affect, impair, invalidate or nullify the remaining
provisions of the Plan which shall continue in full force and effect.




          5.20 Headings. Article and section headings contained in the Plan are included for
convenience only and are not to be used in construing or interpreting the Plan.



As revised by the Board at its meeting held September 10, 1998 — the last sentence of Section
4.1(d) amended regarding designation of a beneficiary and subsection (3) of the second sentence of
Section 4.1(h) amended regarding exercise by designated beneficiary.



As amended and restated by the Board at its meeting held October 26, 2000 — adding and clarifying
the definition “Change of Control” to Section 1.3(b) and replacing Section 4.1(e) to provide
amended provisions regarding the treatment of Options in the event of a Change of Control
transaction.



As revised by the Committee at its meeting held July 26, 2006 to require stockholder approval of
any reduction of the exercise price of outstanding Options.



As revised by the Board by unanimous written consent dated November 2, 2006, to delete the prior
first paragraph of Section 4.1(e) and to add new Section 3.3 to require automatic anti-dilution
adjustment in the event of a reorganization or recapitalization.





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