<PAGE>

                                                                   EXHIBIT 10.48
                                                                   -------------
                         PARADIGM GENETICS, INC.

           2000 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN


1. DEFINITIONS.
   -----------

   Unless otherwise specified or unless the context otherwise requires, the
   following terms, as used in this PARADIGM GENETICS, INC. 2000 EMPLOYEE,
   DIRECTOR AND CONSULTANT STOCK OPTION PLAN, have the following meanings:

     Administrator means the Board of Directors, unless it has delegated
     -------------
     power to act on its behalf to the Committee, in which case the
     Administrator means the Committee.

     Affiliate means a corporation which, for purposes of Section 424 of the
     ---------
     Code, is a parent or subsidiary of the Company, direct or indirect.

     Board of Directors means the Board of Directors of the Company.
     ------------------

     Code means the United States Internal Revenue Code of 1986, as amended.
     ----

     Committee means the committee of the Board of Directors to which the Board
     ---------
     of Directors has delegated power to act under or pursuant to the provisions
     of the Plan.

     Common Stock means shares of the Company's common stock, $.01 par value per
     ------------
     share.

     Company means PARADIGM GENETICS, INC., a North Carolina corporation.
     -------

     Disability or Disabled means permanent and total disability as defined in
     ----------    --------
     Section 22(e)(3) of the Code.

     Fair Market Value of a Share of Common Stock means:
     -----------------

     (1)  If the Common Stock is listed on a national securities exchange or
     traded in the over-the-counter market and sales prices are regularly
     reported for the Common Stock, the closing or last price of the Common
     Stock on the Composite Tape or other comparable reporting system for
     the trading day immediately preceding the applicable date;

     (2)  If the Common Stock is not traded on a national securities exchange
     but is traded on the over-the-counter market, if sales prices are not
     regularly reported for the Common Stock for the trading day referred
     to in clause (1), and if bid and asked prices for the Common Stock are
     regularly reported, the mean between the
<PAGE>

     bid and the asked price for the Common Stock at the close of trading in the
     over-the-counter market for the trading day on which Common Stock was
     traded immediately preceding the applicable date; and

     (3)  If the Common Stock is neither listed on a national securities
     exchange nor traded in the over-the-counter market, such value as the
     Administrator, in good faith, shall determine.

     ISO means an option meant to qualify as an incentive stock option under
     ---
     Section 422 of the Code.

     Key Employee means an employee of the Company or of an Affiliate
     ------------
     (including, without limitation, an employee who is also serving as an
     officer or director of the Company or of an Affiliate), designated by
     the Administrator to be eligible to be granted one or more Options
     under the Plan.

     Non-Qualified Option means an option which is not intended to qualify as an
     --------------------
     ISO.

     Option means an ISO or Non-Qualified Option granted under the Plan.
     ------

     Option Agreement means an agreement between the Company and a Participant
     ----------------
     delivered pursuant to the Plan, in such form as the Administrator shall
     approve.

     Participant means a Key Employee, director or consultant to whom one or
     -----------
     more Options are granted under the Plan. As used herein, "Participant"
     shall include "Participant's Survivors" where the context requires.

     Plan means this PARADIGM GENETICS, INC. 2000 Employee, Director and
     ----
     Consultant Stock Option Plan.

     Shares means shares of the Common Stock as to which Options have been or
     ------
     may be granted under the Plan or any shares of capital stock into which the
     Shares are changed or for which they are exchanged within the provisions of
     Paragraph 3 of the Plan. The Shares issued upon exercise of Options granted
     under the Plan may be authorized and unissued shares or shares held by the
     Company in its treasury, or both.

     Survivors means a deceased Participant's legal representatives and/or any
     ---------
     person or persons who acquired the Participant's rights to an Option by
     will or by the laws of descent and distribution.


2. PURPOSES OF THE PLAN.
   --------------------

   The Plan is intended to encourage ownership of Shares by Key Employees and
directors of and certain consultants to the Company in order to attract such
people, to induce them to work

                                       2
<PAGE>

for the benefit of the Company or of an Affiliate and to provide additional
incentive for them to promote the success of the Company or of an Affiliate. The
Plan provides for the granting of ISOs and Non-Qualified Options.


3. SHARES SUBJECT TO THE PLAN.
   --------------------------

   The number of Shares which may be issued from time to time pursuant to this
Plan shall be 1,800,000, or the equivalent of such number of Shares after the
Administrator, in its sole discretion, has interpreted the effect of any stock
split, stock dividend, combination, recapitalization or similar transaction in
accordance with Paragraph 16 of the Plan.

   If an Option ceases to be "outstanding", in whole or in part, the Shares
which were subject to such Option shall be available for the granting of other
Options under the Plan. Any Option shall be treated as "outstanding" until such
Option is exercised in full, or terminates or expires under the provisions of
the Plan, or by agreement of the parties to the pertinent Option Agreement.


4. ADMINISTRATION OF THE PLAN.
   --------------------------

   The Administrator of the Plan will be the Board of Directors, except to the
extent the Board of Directors delegates its authority to the Committee, in which
case the Committee shall be the Administrator.  Subject to the provisions of the
Plan, the Administrator is authorized to:

   a.   Interpret the provisions of the Plan or of any Option or Option
        Agreement and to make all rules and determinations which it deems
        necessary or advisable for the administration of the Plan;

   b.   Determine which employees of the Company or of an Affiliate shall be
        designated as Key Employees and which of the Key Employees, directors
        and consultants shall be granted Options;

   c.   Determine the number of Shares for which an Option or Options shall be
        granted, provided, however, that in no event shall Options to purchase
        more than 500,000 Shares be granted to any Participant in any fiscal
        year; and

   d.   Specify the terms and conditions upon which an Option or Options may
        be granted;

provided, however, that all such interpretations, rules, determinations, terms
and conditions shall be made and prescribed in the context of preserving the tax
status under Section 422 of the Code of those Options which are designated as
ISOs.  Subject to the foregoing, the interpretation and construction by the
Administrator of any provisions of the Plan or of any Option granted under it
shall be final, unless otherwise determined by the Board of Directors, if the
Administrator is the Committee.

                                       3
<PAGE>

5. ELIGIBILITY FOR PARTICIPATION.
   -----------------------------

   The Administrator will, in its sole discretion, name the Participants in the
Plan, provided, however, that each Participant must be a Key Employee, director
or consultant of the Company or of an Affiliate at the time an Option is
granted.  Notwithstanding the foregoing, the Administrator may authorize the
grant of an Option to a person not then an employee, director or consultant of
the Company or of an Affiliate; provided, however, that the actual grant of such
Option shall be conditioned upon such person becoming eligible to become a
Participant at or prior to the time of the delivery of the Option Agreement
evidencing such Option.  ISOs may be granted only to Key Employees.  Non-
Qualified Options may be granted to any Key Employee, director or consultant of
the Company or an Affiliate.  The granting of any Option to any individual shall
neither entitle that individual to, nor disqualify him or her from,
participation in any other grant of Options.


6. TERMS AND CONDITIONS OF OPTIONS.
   -------------------------------

   Each Option shall be set forth in writing in an Option Agreement, duly
executed by the Company and, to the extent required by law or requested by the
Company, by the Participant.  The Administrator may provide that Options be
granted subject to such terms and conditions, consistent with the terms and
conditions specifically required under this Plan, as the Administrator may deem
appropriate including, without limitation, subsequent approval by the
shareholders of the Company of this Plan or any amendments thereto.

   A.   Non-Qualified Options:  Each Option intended to be a Non-Qualified
        ---------------------
        Option shall be subject to the terms and conditions which the
        Administrator determines to be appropriate and in the best interest of
        the Company, subject to the following minimum standards for any such
        Non-Qualified Option:

        a.   Option Price: Each Option Agreement shall state the option price
             (per share) of the Shares covered by each Option, which option
             price shall be determined by the Administrator but shall not be
             less than the par value per share of Common Stock;

        b.   Each Option Agreement shall state the number of Shares to which
             it pertains;

        c.   Each Option Agreement shall state the date or dates on which it
             first is exercisable and the date after which it may no longer be
             exercised, and may provide that the Option rights accrue or
             become exercisable in installments over a period of months or
             years, or upon the occurrence of certain conditions or the
             attainment of stated goals or events; and

                                       4
<PAGE>

        d.   Exercise of any Option may be conditioned upon the Participant's
             execution of a Share purchase agreement in form satisfactory to
             the Administrator providing for certain protections for the
             Company and its other shareholders, including requirements that:

             i.   The Participant's or the Participant's Survivors' right to
                  sell or transfer the Shares may be restricted; and

             ii.  The Participant or the Participant's Survivors may be
                  required to execute letters of investment intent and must
                  also acknowledge that the Shares will bear legends noting
                  any applicable restrictions.

     B. ISOs:  Each Option intended to be an ISO shall be issued only to a Key
        ----
        Employee and be subject to the following terms and conditions, with
        such additional restrictions or changes as the Administrator
        determines are appropriate but not in conflict with Section 422 of the
        Code and relevant regulations and rulings of the Internal Revenue
        Service:

        a.   Minimum standards:  The ISO shall meet the minimum standards
             required of Non-Qualified Options, as described in Paragraph 6(A)
             above, except clause (a) thereunder.

        b.   Option Price:  Immediately before the Option is granted, if the
             Participant owns, directly or by reason of the applicable
             attribution rules in Section 424(d) of the Code:

             i.   Ten percent (10%) or less of the total combined voting power
                                    -------
                  of all classes of share capital of the Company or an
                  Affiliate, the Option price per share of the Shares covered
                  by each Option shall not be less than one hundred percent
                  (100%) of the Fair Market Value per share of the Shares on
                  the date of the grant of the Option.

             ii.  More than ten percent (10%) of the total combined voting
                  power of all classes of stock of the Company or an
                  Affiliate, the Option price per share of the Shares covered
                  by each Option shall not be less than one hundred ten
                  percent (110%) of the said Fair Market Value on the date of
                  grant.

        c.   Term of Option:  For Participants who own

             i.   Ten percent (10%) or less of the total combined voting power
                                    -------
                  of all classes of share capital of the Company or an
                  Affiliate, each Option shall terminate not more than ten
                  (10) years from the date of the grant or at such earlier
                  time as the Option Agreement may provide.

                                       5
<PAGE>

             ii.  More than ten percent (10%) of the total combined voting
                  power of all classes of stock of the Company or an
                  Affiliate, each Option shall terminate not more than five
                  (5) years from the date of the grant or at such earlier time
                  as the Option Agreement may provide.

        d.   Limitation on Yearly Exercise:  The Option Agreements shall
             restrict the amount of Options which may be exercisable in any
             calendar year (under this or any other ISO plan of the Company or
             an Affiliate) so that the aggregate Fair Market Value (determined
             at the time each ISO is granted) of the stock with respect to
             which ISOs are exercisable for the first time by the Participant
             in any calendar year does not exceed one hundred thousand dollars
             ($100,000), provided that this subparagraph (d) shall have no
             force or effect if its inclusion in the Plan is not necessary for
             Options issued as ISOs to qualify as ISOs pursuant to Section
             422(d) of the Code.


7. EXERCISE OF OPTIONS AND ISSUE OF SHARES.
   ---------------------------------------

   An Option (or any part or installment thereof) shall be exercised by giving
written notice to the Company at its principal executive office address,
together with provision for payment of the full purchase price in accordance
with this Paragraph for the Shares as to which the Option is being exercised,
and upon compliance with any other condition(s) set forth in the Option
Agreement.  Such written notice shall be signed by the person exercising the
Option, shall state the number of Shares with respect to which the Option is
being exercised and shall contain any representation required by the Plan or the
Option Agreement.  Payment of the purchase price for the Shares as to which such
Option is being exercised shall be made (a) in United States dollars in cash or
by check, or (b) at the discretion of the Administrator, through delivery of
shares of Common Stock having a Fair Market Value equal as of the date of the
exercise to the cash exercise price of the Option, or (c) at the discretion of
the Administrator, by having the Company retain from the shares otherwise
issuable upon exercise of the Option, a number of shares having a Fair Market
Value equal as of the date of exercise to the exercise price of the Option, or
(d) at the discretion of the Administrator, by delivery of the grantee's
personal recourse note bearing interest payable not less than annually at no
less than 100% of the applicable Federal rate, as defined in Section 1274(d) of
the Code, or (e) at the discretion of the Administrator, in accordance with a
cashless exercise program established with a securities brokerage firm, and
approved by the Administrator, or (f) at the discretion of the Administrator, by
any combination of (a), (b), (c), (d) and (e) above.  Notwithstanding the
foregoing, the Administrator shall accept only such payment on exercise of an
ISO as is permitted by Section 422 of the Code.

   The Company shall then reasonably promptly deliver the Shares as to which
such Option was exercised to the Participant (or to the Participant's Survivors,
as the case may be). In determining what constitutes "reasonably promptly," it
is expressly understood that the delivery of the Shares may be delayed by the
Company in order to comply with any law or regulation (including, without
limitation, state securities or "blue sky" laws) which requires the Company to
take any action with respect to the Shares prior to their issuance. The Shares
shall, upon

                                       6
<PAGE>

delivery, be evidenced by an appropriate certificate or certificates for fully
paid, non-assessable Shares.

   The Administrator shall have the right to accelerate the date of exercise of
any installment of any Option; provided that the Administrator shall not
accelerate the exercise date of any installment of any Option granted to any Key
Employee as an ISO (and not previously converted into a Non-Qualified Option
pursuant to Paragraph 19) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as described in Paragraph
6.B.d.

   The Administrator may, in its discretion, amend any term or condition of an
outstanding Option provided (i) such term or condition as amended is permitted
by the Plan, (ii) any such amendment shall be made only with the consent of the
Participant to whom the Option was granted, or in the event of the death of the
Participant, the Participant's Survivors, if the amendment is adverse to the
Participant, and (iii) any such amendment of any ISO shall be made only after
the Administrator, after consulting the counsel for the Company, determines
whether such amendment would constitute a "modification" of any Option which is
an ISO (as that term is defined in Section 424(h) of the Code) or would cause
any adverse tax consequences for the holder of such ISO.


8. RIGHTS AS A SHAREHOLDER.
   -----------------------

   No Participant to whom an Option has been granted shall have rights as a
shareholder with respect to any Shares covered by such Option, except after due
exercise of the Option and tender of the full purchase price for the Shares
being purchased pursuant to such exercise and registration of the Shares in the
Company's share register in the name of the Participant.


9. ASSIGNABILITY AND TRANSFERABILITY OF OPTIONS.
   --------------------------------------------

   By its terms, an Option granted to a Participant shall not be transferable by
the Participant other than (i) by will or by the laws of descent and
distribution, or (ii) as otherwise determined by the Administrator and set forth
in the applicable Option Agreement.  The designation of a beneficiary of an
Option by a Participant shall not be deemed a transfer prohibited by this
Paragraph.  Except as provided above, an Option shall be exercisable, during the
Participant's lifetime, only by such Participant (or by his or her legal
representative) and shall not be assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process.  Any attempted transfer, assignment,
pledge, hypothecation or other disposition of any Option or of any rights
granted thereunder contrary to the provisions of this Plan, or the levy of any
attachment or similar process upon an Option, shall be null and void.

                                       7
<PAGE>

10.  EFFECT OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR DEATH OR
     -------------------------------------------------------------------
     DISABILITY.
     ----------

     Except as otherwise provided in the pertinent Option Agreement, in the
event of a termination of service (whether as an employee, director or
consultant) with the Company or an Affiliate before the Participant has
exercised all Options, the following rules apply:

     a.   A Participant who ceases to be an employee, director or consultant of
          the Company or of an Affiliate (for any reason other than termination
          "for cause", Disability, or death for which events there are special
          rules in Paragraphs 11, 12, and 13, respectively), may exercise any
          Option granted to him or her to the extent that the Option is
          exercisable on the date of such termination of service, but only
          within such term as the Administrator has designated in the pertinent
          Option Agreement.

     b.   Except as provided in Subparagraph (c) below, or Paragraph 12 or 13,
          in no event may an Option Agreement provide, if the Option is intended
          to be an ISO, that the time for exercise be later than three (3)
          months after the Participant's termination of employment.

     c.   The provisions of this Paragraph, and not the provisions of Paragraph
          12 or 13, shall apply to a Participant who subsequently becomes
          Disabled or dies after the termination of employment, director status
          or consultancy, provided, however, in the case of a Participant's
          Disability or death within three (3) months after the termination of
          employment, director status or consultancy, the Participant or the
          Participant's Survivors may exercise the Option within one (1) year
          after the date of the Participant's termination of employment, but in
          no event after the date of expiration of the term of the Option.

     d.   Notwithstanding anything herein to the contrary, if subsequent to a
          Participant's termination of employment, termination of director
          status or termination of consultancy, but prior to the exercise of an
          Option, the Board of Directors determines that, either prior or
          subsequent to the Participant's termination, the Participant engaged
          in conduct which would constitute "cause", then such Participant shall
          forthwith cease to have any right to exercise any Option.

     e.   A Participant to whom an Option has been granted under the Plan who is
          absent from work with the Company or with an Affiliate because of
          temporary disability (any disability other than a permanent and total
          Disability as defined in Paragraph 1 hereof), or who is on leave of
          absence for any purpose, shall not, during the period of any such
          absence, be deemed, by virtue of such absence alone, to have
          terminated such Participant's employment, director status or
          consultancy with the Company or with an Affiliate, except as the
          Administrator may otherwise expressly provide.

                                       8
<PAGE>

     f.   Except as required by law or as set forth in the pertinent Option
          Agreement, Options granted under the Plan shall not be affected by any
          change of a Participant's status within or among the Company and any
          Affiliates, so long as the Participant continues to be an employee,
          director or consultant of the Company or any Affiliate.


11.  EFFECT OF TERMINATION OF SERVICE "FOR CAUSE".
     --------------------------------------------

     Except as otherwise provided in the pertinent Option Agreement, the
following rules apply if the Participant's service (whether as an employee,
director or consultant) with the Company or an Affiliate is terminated "for
cause" prior to the time that all his or her outstanding Options have been
exercised:

     a.   All outstanding and unexercised Options as of the time the Participant
          is notified his or her service is terminated "for cause" will
          immediately be forfeited.

     b.   For purposes of this Plan, "cause" shall include (and is not limited
          to) dishonesty with respect to the Company or any Affiliate,
          insubordination, substantial malfeasance or non-feasance of duty,
          unauthorized disclosure of confidential information, and conduct
          substantially prejudicial to the business of the Company or any
          Affiliate.  The determination of the Administrator as to the existence
          of "cause" will be conclusive on the Participant and the Company.

     c.   "Cause" is not limited to events which have occurred prior to a
          Participant's termination of service, nor is it necessary that the
          Administrator's finding of "cause" occur prior to termination.  If the
          Administrator determines, subsequent to a Participant's termination of
          service but prior to the exercise of an Option, that either prior or
          subsequent to the Participant's termination the Participant engaged in
          conduct which would constitute "cause," then the right to exercise any
          Option is forfeited.

     d.   Any definition in an agreement between the Participant and the Company
          or an Affiliate, which contains a conflicting definition of "cause"
          for termination and which is in effect at the time of such
          termination, shall supersede the definition in this Plan with respect
          to such Participant.


12.  EFFECT OF TERMINATION OF SERVICE FOR DISABILITY.
     -----------------------------------------------

     Except as otherwise provided in the pertinent Option Agreement, a
Participant who ceases to be an employee, director or consultant of the Company
or of an Affiliate by reason of Disability may exercise any Option granted to
such Participant:

     a.   To the extent exercisable but not exercised on the date of Disability;
          and

                                       9
<PAGE>

     b.   In the event rights to exercise the Option accrue periodically, to the
          extent of a pro rata portion of any additional rights as would have
          accrued had the Participant not become Disabled prior to the end of
          the accrual period which next ends following the date of Disability.
          The proration shall be based upon the number of days of such accrual
          period prior to the date of Disability.

     A Disabled Participant may exercise such rights only within the period
ending one (1) year after the date of the Participant's termination of
employment, directorship or consultancy, as the case may be, notwithstanding
that the Participant might have been able to exercise the Option as to some or
all of the Shares on a later date if the Participant had not become disabled and
had continued to be an employee, director or consultant or, if earlier, within
the originally prescribed term of the Option.

     The Administrator shall make the determination both of whether Disability
has occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such determination).
If requested, the Participant shall be examined by a physician selected or
approved by the Administrator, the cost of which examination shall be paid for
by the Company.


13.  EFFECT OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.
     ---------------------------------------------------------

     Except as otherwise provided in the pertinent Option Agreement, in the
event of the death of a Participant while the Participant is an employee,
director or consultant of the Company or of an Affiliate, such Option may be
exercised by the Participant's Survivors:

     a.   To the extent exercisable but not exercised on the date of death; and

     b.   In the event rights to exercise the Option accrue periodically, to the
          extent of a pro rata portion of any additional rights which would have
          accrued had the Participant not died prior to the end of the accrual
          period which next ends following the date of death.  The proration
          shall be based upon the number of days of such accrual period prior to
          the Participant's death.

     If the Participant's Survivors wish to exercise the Option, they must take
all necessary steps to exercise the Option within one (1) year after the date of
death of such Participant, notwithstanding that the decedent might have been
able to exercise the Option as to some or all of the Shares on a later date if
he or she had not died and had continued to be an employee, director or
consultant or, if earlier, within the originally prescribed term of the Option.


14.  PURCHASE FOR INVESTMENT.
     -----------------------

     Unless the offering and sale of the Shares to be issued upon the particular
exercise of an Option shall have been effectively registered under the
Securities Act of 1933, as now in force or

                                       10
<PAGE>

hereafter amended (the "1933 Act"), the Company shall be under no obligation to
issue the Shares covered by such exercise unless and until the following
conditions have been fulfilled:

     a.   The person(s) who exercise(s) such Option shall warrant to the
          Company, prior to the receipt of such Shares, that such person(s) are
          acquiring such Shares for their own respective accounts, for
          investment, and not with a view to, or for sale in connection with,
          the distribution of any such Shares, in which event the person(s)
          acquiring such Shares shall be bound by the provisions of the
          following legend which shall be endorsed upon the certificate(s)
          evidencing their Shares issued pursuant to such exercise or such
          grant:

               "The shares represented by this certificate have been taken for
               investment and they may not be sold or otherwise transferred by
               any person, including a pledgee, unless (1) either (a) a
               Registration Statement with respect to such shares shall be
               effective under the Securities Act of 1933, as amended, or (b)
               the Company shall have received an opinion of counsel
               satisfactory to it that an exemption from registration under such
               Act is then available, and (2) there shall have been compliance
               with all applicable state securities laws."

     b.   At the discretion of the Administrator, the Company shall have
          received an opinion of its counsel that the Shares may be issued upon
          such particular exercise in compliance with the 1933 Act without
          registration thereunder.


15.  DISSOLUTION OR LIQUIDATION OF THE COMPANY.
     -----------------------------------------

     Upon the dissolution or liquidation of the Company, all Options granted
under this Plan which as of such date shall not have been exercised will
terminate and become null and void; provided, however, that if the rights of a
Participant or a Participant's Survivors have not otherwise terminated and
expired, the Participant or the Participant's Survivors will have the right
immediately prior to such dissolution or liquidation to exercise any Option to
the extent that the Option is exercisable as of the date immediately prior to
such dissolution or liquidation.


16.  ADJUSTMENTS.
     -----------

     Upon the occurrence of any of the following events, a Participant's rights
with respect to any Option granted to him or her hereunder which has not
previously been exercised in full shall be adjusted as hereinafter provided,
unless otherwise specifically provided in the pertinent Option Agreement:

     A.  Stock Dividends and Stock Splits. If (i) the shares of Common Stock
         --------------------------------
shall be subdivided or combined into a greater or smaller number of shares or if
the Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, or (ii) additional shares or new or different shares
or other securities of the Company or other

                                       11
<PAGE>

non-cash assets are distributed with respect to such shares of Common Stock, the
number of shares of Common Stock deliverable upon the exercise of such Option
may be appropriately increased or decreased proportionately, and appropriate
adjustments may be made in the purchase price per share to reflect such events.
The number of Shares subject to the limitation in Paragraph 4(c) shall also be
proportionately adjusted upon the occurrence of such events.

     B.  Consolidations or Mergers. If the Company is to be consolidated with or
         -------------------------
acquired by another entity in a merger, sale of all or substantially all of the
Company's assets or otherwise (an "Acquisition"), the Administrator or the board
of directors of any entity assuming the obligations of the Company hereunder
(the "Successor Board"), shall, as to outstanding Options, either (i) make
appropriate provision for the continuation of such Options by substituting on an
equitable basis for the Shares then subject to such Options either the
consideration payable with respect to the outstanding shares of Common Stock in
connection with the Acquisition or securities of any successor or acquiring
entity; or (ii) upon written notice to the Participants, provide that all
Options must be exercised (either to the extent then exercisable or, at the
discretion of the Administrator, all Options being made fully exercisable for
purposes of this Subparagraph), within a specified number of days of the date of
such notice, at the end of which period the Options shall terminate; or (iii)
terminate all Options in exchange for a cash payment equal to the excess of the
Fair Market Value of the shares subject to such Options (either to the extent
then exercisable or, at the discretion of the Administrator, all Options being
made fully exercisable for purposes of this Subparagraph) over the exercise
price thereof.

     C.  Recapitalization or Reorganization.  In the event of a recapitalization
         ----------------------------------
or reorganization of the Company (other than a transaction described in
Subparagraph B above) pursuant to which securities of the Company or of another
corporation are issued with respect to the outstanding shares of Common Stock, a
Participant upon exercising an Option shall be entitled to receive for the
purchase price paid upon such exercise the securities which would have been
received if such Option had been exercised prior to such recapitalization or
reorganization.

     D.  Modification of ISOs.  Notwithstanding the foregoing, any adjustments
         --------------------
made pursuant to Subparagraph A, B or C with respect to ISOs shall be made only
after the Administrator, after consulting with counsel for the Company,
determines whether such adjustments would constitute a "modification" of such
ISOs (as that term is defined in Section 424(h) of the Code) or would cause any
adverse tax consequences for the holders of such ISOs. If the Administrator
determines that such adjustments made with respect to ISOs would constitute a
modification of such ISOs, it may refrain from making such adjustments, unless
the holder of an ISO specifically requests in writing that such adjustment be
made and such writing indicates that the holder has full knowledge of the
consequences of such "modification" on his or her income tax treatment with
respect to the ISO.


17.  ISSUANCES OF SECURITIES.
     -----------------------

     Except as expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no

                                       12
<PAGE>

adjustment by reason thereof shall be made with respect to, the number or price
of shares subject to Options. Except as expressly provided herein, no
adjustments shall be made for dividends paid in cash or in property (including
without limitation, securities) of the Company.

18.  FRACTIONAL SHARES.
     -----------------

     No fractional shares shall be issued under the Plan and the person
exercising such right shall receive from the Company cash in lieu of such
fractional shares equal to the Fair Market Value thereof.


19.  CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.
     ------------------------------------------------------------------

     The Administrator, at the written request of any Participant, may in its
discretion take such actions as may be necessary to convert such Participant's
ISOs (or any portions thereof) that have not been exercised on the date of
conversion into Non-Qualified Options at any time prior to the expiration of
such ISOs, regardless of whether the Participant is an employee of the Company
or an Affiliate at the time of such conversion.  Such actions may include, but
not be limited to, extending the exercise period or reducing the exercise price
of the appropriate installments of such Options.  At the time of such
conversion, the Administrator (with the consent of the Participant) may impose
such conditions on the exercise of the resulting Non-Qualified Options as the
Administrator in its discretion may determine, provided that such conditions
shall not be inconsistent with this Plan.  Nothing in the Plan shall be deemed
to give any Participant the right to have such Participant's ISOs converted into
Non-Qualified Options, and no such conversion shall occur until and unless the
Administrator takes appropriate action.  The Administrator, with the consent of
the Participant, may also terminate any portion of any ISO that has not been
exercised at the time of such conversion.


20.  WITHHOLDING.
     -----------

     In the event that any federal, state, or local income taxes, employment
taxes, Federal Insurance Contributions Act ("F.I.C.A.") withholdings or other
amounts are required by applicable law or governmental regulation to be withheld
from the Participant's salary, wages or other remuneration in connection with
the exercise of an Option or a Disqualifying Disposition (as defined in
Paragraph 21), the Company may withhold from the Participant's compensation, if
any, or may require that the Participant advance in cash to the Company, or to
any Affiliate of the Company which employs or employed the Participant, the
statutory minimum amount of such withholdings unless a different withholding
arrangement, including the use of shares of the Company's Common Stock or a
promissory note, is authorized by the Administrator (and permitted by law). For
purposes hereof, the fair market value of the shares withheld for purposes of
payroll withholding shall be determined in the manner provided in Paragraph 1
above, as of the most recent practicable date prior to the date of exercise. If
the fair market value of the shares withheld is less than the amount of payroll
withholdings required, the Participant may be

                                       13
<PAGE>

required to advance the difference in cash to the Company or the Affiliate
employer. The Administrator in its discretion may condition the exercise of an
Option for less than the then Fair Market Value on the Participant's payment of
such additional withholding.


21.  NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.
     ----------------------------------------------

     Each Key Employee who receives an ISO must agree to notify the Company in
writing immediately after the Key Employee makes a Disqualifying Disposition of
any shares acquired pursuant to the exercise of an ISO.  A Disqualifying
Disposition is any disposition (including any sale) of such shares before the
later of (a) two years after the date the Key Employee was granted the ISO, or
(b) one year after the date the Key Employee acquired Shares by exercising the
ISO.  If the Key Employee has died before such stock is sold, these holding
period requirements do not apply and no Disqualifying Disposition can occur
thereafter.


22.  TERMINATION OF THE PLAN.
     -----------------------

     The Plan will terminate on February 28, 2010, the date which is ten (10)
years from the earlier of the date of its adoption and the date of its approval
               -------
by the shareholders of the Company. The Plan may be terminated at an earlier
date by vote of the shareholders of the Company; provided, however, that any
such earlier termination shall not affect any Option Agreements executed prior
to the effective date of such termination.


23.  AMENDMENT OF THE PLAN AND AGREEMENTS.
     ------------------------------------

     The Plan may be amended by the shareholders of the Company. The Plan may
also be amended by the Administrator, including, without limitation, to the
extent necessary to qualify any or all outstanding Options granted under the
Plan or Options to be granted under the Plan for favorable federal income tax
treatment (including deferral of taxation upon exercise) as may be afforded
incentive stock options under Section 422 of the Code, and to the extent
necessary to qualify the shares issuable upon exercise of any outstanding
Options granted, or Options to be granted, under the Plan for listing on any
national securities exchange or quotation in any national automated quotation
system of securities dealers. Any amendment approved by the Administrator which
the Administrator determines is of a scope that requires shareholder approval
shall be subject to obtaining such shareholder approval. Any modification or
amendment of the Plan shall not, without the consent of a Participant, adversely
affect his or her rights under an Option previously granted to him or her. With
the consent of the Participant affected, the Administrator may amend outstanding
Option Agreements in a manner which may be adverse to the Participant but which
is not inconsistent with the Plan. In the discretion of the Administrator,
outstanding Option Agreements may be amended by the Administrator in a manner
which is not adverse to the Participant.

                                       14
<PAGE>

24.  EMPLOYMENT OR OTHER RELATIONSHIP.
     --------------------------------

     Nothing in this Plan or any Option Agreement shall be deemed to prevent the
Company or an Affiliate from terminating the employment, consultancy or director
status of a Participant, nor to prevent a Participant from terminating his or
her own employment, consultancy or director status or to give any Participant a
right to be retained in employment or other service by the Company or any
Affiliate for any period of time.


25.  GOVERNING LAW.
     -------------

     This Plan shall be construed and enforced in accordance with the law of the
State of North Carolina.

                                       15