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                                                                    EXHIBIT 10.1

                               MICRUS CORPORATION

                             1996 STOCK OPTION PLAN

      1.    PURPOSE. The purpose of the Micrus Corporation 1996 Stock Option
Plan is to provide an incentive to Employees, consultants and directors of the
Company who are in a position to contribute materially to the long-term success
of the Company, to increase their interest in the Company's welfare, and to aid
in gaining the services of Employees, consultants and directors of outstanding
ability who will contribute to the Company's success.

      2.    DEFINITIONS.

            2.1.  "AFFILIATE" means any entity other than a Subsidiary in which
the Company has a substantial direct or indirect equity interest, as determined
by the Board.

            2.2.  "BOARD" means the Board of Directors of the Company.

            2.3.  "CODE" means the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code shall include any successor to such
section.

            2.4.  "COMMITTEE" means the committee designated by the Board to
administer the Plan under Section 5.

            2.5.  "COMPANY" means Micrus Corporation and any successor thereof.

            2.6.  "DISINTERESTED PERSON" means a person defined in Rule
16b-3(c)(2)(i) promulgated by the SEC under the 1934 Act, or any successor
definition adopted by the SEC.

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            2.7.  "ELIGIBLE CONSULTANT" means a consultant providing services
to, and who is not an employee of, the Company or any of its Subsidiaries.

            2.8.  "ELIGIBLE DIRECTOR" means each director of the Company who is
not an employee of the Company or any of its Subsidiaries.

            2.9.  "EMPLOYEE" means an officer or employee of the Company or a
Subsidiary or Affiliate, including a director who is such an employee.

            2.10. "FAIR MARKET VALUE" means, on any given date, the fair market
value of the Stock as determined by the Committee on the basis of a review of
the facts and circumstances presented to and reviewed by the Committee.

            2.11. "GRANT DATE" means the date on which an Option is granted.

            2.12. "HOLDER" means an Employee, Eligible Director or Eligible
Consultant to whom an Option is granted.

            2.13. "INCENTIVE STOCK OPTION" OR "ISO" means a stock option
intended to meet the requirements of an incentive stock option as defined in
Section 422 of the Code and designated as such.

            2.14. "1934 ACT" means the Securities Exchange Act of 1934, as
amended.

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            2.15. "NON-QUALIFIED OPTION" OR "NQO" means a stock option not
intended to be an Incentive Stock Option, and Designated as a Non-Qualified
Option.

            2.16. "OPTION" means any stock option granted by the Committee
pursuant to this Plan.

            2.17. "PLAN" means the Micrus Corporation 1996 Stock Option Plan
herein set forth, as amended from time to time.

            2.18. "RETIREMENT" means retirement from the active employment of
the Company or an Affiliate pursuant to the relevant provisions of the
applicable retirement plan of the employing entity or as otherwise determined by
the Board.

            2.19. "SEC" means the United States Securities and Exchange
Commission.

            2.20. "STOCK" means the Company's common stock, par value $.01 per
share, or such other class or kind of shares of capital stock or other
securities as may result from the application of Section 8 hereof.

            2.21. "SUBSIDIARY" means any corporation that, at the time in
question, is a subsidiary corporation of the Company within the meaning of
section 424(f) of the Code.

            2.22. "TEN PERCENT SHAREHOLDER" means a person who on any given date
owns, either directly or within the meaning of the attribution rules contained
in section 424(d) of the Code, stock possessing more than ten percent of the
total combined voting

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power of all classes of stock of the Company, a Subsidiary or Affiliate.

      3.    AWARDS.

            3.1.  Options that may be granted under the Plan are either
Incentive Stock Options or Non-Qualified Options, both of which give the Holder
the right for a specified time period to purchase a specified number of shares
of Stock for a specified price per share.

            3.2.  Each Option shall be evidenced by an agreement with the
Holder, the form of which shall have been approved by the Board, which shall
conform to the requirements of the Plan and may contain such other provisions as
the Committee shall deem advisable.

      4.    ELIGIBILITY. Any Employee, Eligible Director and Eligible Consultant
is eligible to receive an Option, provided, that an Incentive Stock Option shall
not be granted to (a) a Ten Percent Shareholder except on such terms concerning
the option price and period of exercise as are provided in subsections 7.1 and
7.2 hereof, or (b) an employee of an Affiliate or to an Eligible Director or
Eligible Consultant.

      5.    ADMINISTRATION OF PLAN.

            5.1.  The Plan shall be administered and interpreted by
the Committee, which shall have full authority to act in selecting Employees,
Eligible Directors and Eligible Consultants

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to whom Options will be granted, in determining the type and amount of Options
to be granted to each such Holder, the terms and conditions of Options and the
terms of agreements which will be entered into with Holders in connection with
Options. The Committee shall be appointed by the Board and shall have at least
two members. At such time as the Company registers under the 1934 Act, each
member of the Committee appointed by the Board shall be a Disinterested Person.

            5.2.  The Committee's powers shall include, but not be limited to,
the power to condition the exercise of an Option upon the attainment of
specified performance goals.

            5.3.  The Committee shall have the power to adopt regulations for
carrying out the Plan and to make such changes in such regulations as it shall
from time to time deem advisable. The Committee shall have the power
unilaterally and without approval of a Holder to amend any existing Options in
order to carry out the purposes of the Plan so long as such amendment does not
deprive the Holder of any benefit granted by the Option and so long as the
amended Option comports with the terms of the Plan. Amendments adverse to the
interests of the Holder must be approved by the Holder. Any interpretation by
the Committee of the terms and provisions of the Plan and the administration
thereof, and all action taken by the Committee, shall be final and binding on
Plan participants.

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      6.    SHARES OF STOCK SUBJECT TO THE PLAN.

            6.1.  Subject to adjustment as provided in Section 8 hereof, the
total number of shares of Stock available for Options under the Plan shall be
119,000 shares.

            6.2.  If any shares subject to any Option granted hereunder are
forfeited or such award otherwise terminates without the issuance of such shares
or the payment of other consideration in lieu of such shares, the shares subject
to such Option, to the extent of any such forfeiture or termination, shall again
be available for Options under the Plan.

      7.    TERMS OF OPTIONS. All Options shall be subject to the following
terms and conditions:

            7.1.  OPTION PRICE: The price per share at which Stock may be
purchased upon exercise of an Option shall be determined by the Committee, but
shall, in no case, be less than 100% of the Fair Market Value on the Grant Date.
In the case of any ISO granted to a Ten Percent Shareholder, the option price
per share shall not be less than 110% of the Fair Market Value on the Grant
Date.

            7.2.  TERM OF OPTIONS: The Option agreement shall specify when an
Option may be exercisable and the terms and conditions applicable thereto and
whether the Option is an ISO or an NQO. The term of an Option shall in no event
be longer than ten years (five years in the case of an ISO granted to a Ten

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Percent Shareholder) and no Option may be exercisable sooner than six months
from the date of grant.

            7.3.  INCENTIVE STOCK OPTIONS: Each provision of the Plan and each
Option agreement relating to an ISO shall be construed so that each ISO shall be
an incentive stock option as defined in Section 422 of the Code, and any
provisions of the Option agreement thereof that cannot be so construed shall be
disregarded. In no event may an ISO be granted after 10 years from Plan
adoption. ISOs may not be granted to employees of Affiliates or to an Eligible.
Director or Eligible Consultant.

            7.4.  RESTRICTION ON TRANSFERABILITY: No Option shall be
transferable otherwise than by will or the laws of descent and distribution and,
during the lifetime of the Holder, shall be exercisable only by the Holder. Upon
the death of a Holder, the person to whom the rights have passed by will or by
the laws of descent and distribution may exercise an Option only in accordance
with this Section 7.

            7.5.  PAYMENT OF OPTION PRICE: The Option price of the shares of
Stock payable upon the exercise of an Option shall be paid in full in cash at
the time of the exercise or, with the consent of the Committee, in whole or in
part in shares of Stock valued at Fair Market Value on the date of exercise,
provided that such shares have been held of record, beneficially and without
restriction by the Holder for at least six months at the

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time of exercise. The Committee's determination of Fair Market Value shall be
final and binding on the Holder.

            7.6.  TERMINATION BY DEATH: If a Holder's employment by the Company
or an Affiliate terminates, or if a Holder who is an Eligible Director or an
Eligible Consultant ceases to be such a director or a consultant (as the case
may be), by reason of death, any Option held by such Holder may thereafter be
exercised, to the extent exercisable at the time of death or on such accelerated
basis as the Committee may determine at or after grant, by the legal
representative of the Holder until the earlier to occur of the expiration of (a)
the period of six months from the date of death or (b) the stated term of such
Option.

            7.7.  TERMINATION BY REASON OF RETIREMENT OR DISABILITY: If a
Holder's employment by the Company or an Affiliate terminates, or if a Holder
who is an Eligible Director or an Eligible Consultant ceases to be such a
director or a consultant (as the case may be), by reason of disability (as
determined by the Committee) or Retirement, any Option held by such Holder may
thereafter be exercised by the Holder (or, where appropriate, the Holder's legal
representative), to the extent exercisable at the time of termination or on such
accelerated basis as the Committee may determine at or after grant, until the
earlier to occur of the expiration of (a) the period of three

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months from the date of termination; provided, however. if such termination is
by reason of Holder's permanent and total disability, such period of three
months shall be extended to six months or (b) the stated term of such Option;
provided, however, that if the Holder dies during the three-month period after
Retirement, the Option may be exercised only until the end of such three-month
period.

            7.8.  OTHER TERMINATION: If a Holder's employment by the Company, a
Subsidiary or an Affiliate terminates, or if a Holder who is an Eligible
Director or an Eligible Consultant ceases to be such a director or a consultant
(as the case may be), for any reason other than death, disability or Retirement,
the Option shall terminate on the earlier to occur of the expiration of (a) the
period of three months from the date of termination or (b) the stated term of
such option.

            7.9.  LIMIT ON ISOS: Notwithstanding any other provisions hereof,
the aggregate fair market value (determined on the Grant Date), of the stock
with respect to which ISOs are exercisable for the first time by the Employee
during any calendar year (under all such plans of the Company) shall not exceed
$100,000.

      8.    ADJUSTMENT PROVISIONS

      8.1.  RECAPITALIZATIONS. If, through or as a result of any merger,
consolidation, sale of all or substantially all of the

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assets of the Company, reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split or other similar transaction, (i) the
outstanding shares of Stock are increased or decreased or are exchanged for a
different number or kind of shares or other securities of the Company, or (ii)
additional shares or new or different shares or other securities of the Company
or other non-cash assets are distributed with respect to such shares of Stock
or other securities, an appropriate and proportionate adjustment may be made in
(x) the maximum number and kind of shares reserved for issuance under the Plan,
(y) the number and kind of shares or other securities subject to then
outstanding options under the Plan, and (z) the price for each share subject to
any then outstanding options under the Plan, without changing the aggregate
purchase price as to which such options remain exercisable, provided that no
adjustment shall be made pursuant to this Section 8 if such adjustment would
cause the Plan to fail to comply with Rule 16b-3 under the 1934 Act or any
successor rule. No fractional shares of Stock shall be issued pursuant to such
an adjustment, but an amount equivalent to the portion of Fair Market Value on
the effective date of such transaction attributable to any such fractional
shares shall, where appropriate, be paid in cash to the Holder. Adjustments
hereunder shall not be made as a result of an increase in the

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number of shares of common stock outstanding resulting solely from conversion of
shares of Preferred Stock outstanding on the date hereof.

*SEE AMENDMENT* 8.2. REORGANIZATIONS.

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      9.    TERMINATION AND AMENDMENT. The Plan shall remain in full force and
effect until terminated by the Board. The Board shall have the power to amend,
suspend or terminate the Plan at any time, provided that no such amendment shall
be made without shareholder approval which shall:

            9.1.  Increase (except as provided in Section 8) the total number of
shares available for issuance pursuant to the Plan;

            9.2.  Change the class of persons eligible to be Holders or
materially modify the eligibility requirements for participation in the Plan;

            9.3.  Change the provisions of this Section 10; or

            9.4.  Effect other changes for which shareholder approval would be
required under Rule 16b-3 under the 1934 Act or any successor rule.

            Termination of the Plan pursuant to this Section 10 shall not affect
Options outstanding under the Plan at the time of termination.

      10.   NON-ASSIGNABILITY. Options may not be pledged, assigned or
transferred for any reason during the Holder's

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lifetime, and any attempt to do so shall be void and the relevant Option shall
be forfeited.

      11.   GENERAL PROVISIONS.

            11.1. The Plan shall become effective upon its approval by the Board
and subsequent approval by the shareholders of the Company.

            11.2. Nothing contained in the Plan, or an Option granted pursuant
to the Plan, shall confer upon an Employee any right with respect to continuance
of employment by the Company, a Subsidiary or an Affiliate or upon any Eligible
Director or Eligible Consultant any right with respect to continuance of Board
service or the consulting arrangement (as the case may be), nor interfere in any
way with the right of the Company, Subsidiary or an Affiliate, as appropriate,
to terminate such relationships at any time.

            11.3. For purposes of this Plan, transfer of employment between the
Company and any Subsidiary shall not be deemed termination of employment.

            11.4. Holders shall be responsible to make appropriate provision for
all taxes required to be withheld in connection with any Option, the exercise
thereof and the transfer of shares of Stock pursuant to this Plan. Such
responsibility shall extend to all applicable federal, state, local or foreign
withholding taxes. In the case of exercise of Options, the Company shall, at

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the election of the Holder, have the right to retain the number of shares of
Stock whose aggregate Fair Market Value equals the amount to be withheld in
satisfaction of the applicable withholding taxes. Agreements evidencing such
Options shall contain appropriate provisions to effect withholding in this
manner.

            11.5. Without amending the plan, Options may be granted to Employees
who are foreign nationals or employed outside the United States or both, on such
terms and conditions different from those specified in the plan as may, in the
judgment of the Committee, be necessary or desirable to further the purpose of
the Plan.

            11.6. To the extent that federal laws (such as the 1934 Act, the
Code or the Employee Retirement Income Security Act of 1974) do not otherwise
control, the Plan and all determinations made and actions taken pursuant hereto
shall be governed by the law of the State of New Jersey and construed
accordingly.


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                             1996 STOCK OPTION PLAN

                                    AMENDMENT

Section 8.2 of the 1996 Stock Option Plan shall be amended in its entirety as
follows:

      "REORGANIZATIONS. In the event of a merger of the Company with or into
      another corporation, or the sale of substantially all of the assets of the
      Company, the Optionee shall fully vest in and have the right to exercise
      the Option as to all of the Optioned Stock, including Shares as to which
      it would not otherwise be vested or exercisable. If an Option becomes
      fully vested and exercisable in the event of a merger or sale of assets,
      the Administrator shall notify the Optionee in writing or electronically
      that the Option shall be fully exercisable for a period of fifteen (15)
      days from the date of such notice, and the Option shall terminate upon the
      expiration of such period."