<PAGE>

                                                                     Exhibit 4.5

                              dj ORTHOPEDICS, INC.

                 2001 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

       (As Adopted By the Board of Directors on November 6, 2001 and the
           Sole Stockholder of the Corporation on November 6, 2001)


      1. PURPOSE OF THE PLAN.


      The purpose of this dj Orthopedics, Inc. 2001 Non-Employee Directors Stock
Option Plan (the "PLAN"), is to make available shares of the Common Stock, par
value $0.01 per share, of the Corporation (the "COMMON STOCK") of dj
Orthopedics, Inc., a Delaware corporation (the "CORPORATION") for purchase by
Non-Employee Directors (as defined in SECTION 4 below) of the Corporation. The
Plan permits the Corporation to attract and retain the services of experienced
and knowledgeable Non-Employee Directors for the benefit of the Corporation and
its stockholders and to provide additional incentive for such Non-Employee
Directors to continue to work for the best interests of the Corporation and its
stockholders through continuing ownership of its Common Stock. All stock options
granted under the Plan (each, an "OPTION") shall be non-qualified stock options
(each, a "NSO") NOT intended to qualify under Section 422 of the Internal
Revenue Code of 1986, as amended (the "CODE").


      2. ADMINISTRATION OF THIS PLAN.

      The Plan shall be self-executing. However, to the extent permitted herein,
the Plan shall be administered by either the Board of Directors of the
Corporation (the "BOARD") or the Compensation Committee of the Board (the
"COMMITTEE"). The Board or the Committee shall, subject to the express
provisions of the Plan, any Option Agreement (as defined in SECTION 5(c)) or
other document executed pursuant to the Plan; resolve any questions arising
under this Plan, any Option Agreement or any such other document; correct any
defect, supply any omission or reconcile any inconsistency in the Plan, any
Option or Option Agreement; prescribe, amend and rescind rules and regulations
relating to the Plan; grant waivers of Plan or Option conditions; and make all
other determinations necessary or advisable for the administration of the Plan.
The determination of the Board or the Committee on the matters referred to in
this Article 2 shall be conclusive.

      3. SHARES OF STOCK SUBJECT TO THE PLAN.

      (a) NUMBER OF AVAILABLE SHARES. Subject to the provisions of SECTION 9
(relating to adjustments upon changes in capital structure and other corporate
transactions) and the further provisions of this SECTION 3(a), the number of
shares of Common Stock available at any one time for issuance upon the exercise
of Options granted under the Plan shall not exceed 1,500,000 shares of Common
Stock (without making any adjustment under the Plan or ofference for any stock
split, stock dividend or similar recapitalization event occurring on or prior to
the Effective Date (as defined in SECTION 11)). If, and to the extent that, (i)
Options granted under the Plan terminate, expire or are canceled without having
been fully exercised, new Options may be granted under the Plan for the shares
of Common Stock constituting the unexercised portion of



                                                                               1
<PAGE>


such terminated, expired or canceled Options, and (ii) any shares of Common
Stock issued upon the exercise of Options granted under the Plan are forfeited
to or repurchased by the Corporation, new Options may be granted under the Plan
for up to an equivalent number of shares of Common Stock (but, in the case of
any such repurchased share, only if such share is repurchased for consideration
not greater than the purchase price for such share specified in the applicable
Option).

      (b) CHARACTER OF SHARES. The shares of Common Stock issuable upon the
exercise of an Option granted under the Plan shall be (i) authorized but
unissued shares of Common Stock, (ii) shares of Common Stock held in the
Corporation's treasury or (iii) a combination of the foregoing.

      (c) RESERVATION OF SHARES. The number of shares of Common Stock reserved
for issuance under the Plan shall at no time be less than the maximum number of
shares of Common Stock which may be purchased at any time pursuant to
outstanding Options.

      4. ELIGIBILITY.

      An Option shall be granted pursuant to SECTION 5 of the Plan only to each
director of the Corporation (each, a "NON-EMPLOYEE DIRECTOR") who, as of the
date of the grant of such Option pursuant to such Section, is not an employee of
the Corporation or any of its Subsidiaries (as such term is defined below) and
has not been such an employee at any time during the 12-month period immediately
prior to such date. For purposes of this Plan, the term "SUBSIDIARY" means
"SUBSIDIARY CORPORATION" as defined in Section 424(f) of the Code.

      5. GRANT OF OPTIONS.

      (a) AUTOMATIC, NONDISCRETIONARY GRANTS. Subject to the provisions of
SECTION 5(b), all grants of Options hereunder shall be automatic and
nondiscretionary and shall be made to Non-Employee Directors (each, an
"OPTIONEE" and collectively, the "OPTIONEES") as follows:

        (i) Each person who, on or after the Effective Date, is elected or
appointed a director of the Corporation for the first time, whether by reason
of his or her election or appointment to such position by the stockholders of
the Corporation or the Board, and who qualifies as a Non-Employee Director on
the date of such election or appointment (after giving effect to such
election or appointment) shall, except as provided below, be automatically
granted an Option pursuant to this SECTION 5(a) on the date of such election
or appointment to purchase up to 15,000 shares (without making any adjustment
under the Plan or otherwise for any stock split, stock dividend or similar
recapitalization event occurring on or prior to the Effective Date) of Common
Stock, subject to the terms and conditions set forth in the Plan; PROVIDED
that any Non-Employee Director appointed to the Board within one (1) year of
the date of the Corporation's Registration Statement on Form S-1 (No.
333-68358) (the "REGISTRATION STATEMENT ON FORM S-1") relating to the
Corporation's initial public offering of Common Stock is declared effective
by the Securities and Exchange Commission (the "COMMISSION") shall be
automatically granted an Option  pursuant to this SECTION 5(a)(i) to purchase
up to 30,000 shares of Commons Stock; and, PROVIDED, FURTHER, no person who
is listed in the Registration Statement on

                                                                               2
<PAGE>


Form S-1 as declared effective by the Commission as a person who will become a
director of the Corporation upon consummation of the Corporation's initial
public offering shall receive a grant of any Option pursuant to this SECTION
5(a)(i) even if such person qualifies as a Non-Employee Director.


        (ii) On the date of each annual meeting of the stockholders of the
Corporation, commencing with the year 2003, each Non-Employee Director (as
determined immediately after the consummation of such annual meeting) who was
not elected or appointed to the position of director of the Corporation at any
time during the 12-month period immediately prior to such date shall be
automatically granted an Option pursuant to this SECTION 5(b) on the date of
such meeting to purchase up to 15,000 shares (without making any adjustment
under the Plan or otherwise for any stock split, stock dividend or similar
recapitalization event occurring on or prior to the Effective Date) of Common
Stock, subject to the terms and conditions set forth in the Plan.

      (b) REDUCTION OF GRANTS. Notwithstanding anything to the contrary
contained in the Plan, if the grant on any single date of one or more Options
pursuant to any provision of SECTION 5 (collectively, the "ADDITIONAL
OPTIONS") would result in the number of shares of Common Stock issuable upon
the exercise of outstanding Options granted under the Plan to exceed the
aggregate number of shares of Common Stock available at any one time for
issuance pursuant to SECTION 3(a) upon the exercise of Options granted under
the Plan, then the number of shares of Common Stock subject to each such
Additional Option shall be permanently reduced to such number which equals
the quotient (rounded down to the nearest integer) obtained by dividing (i)
the aggregate number of shares of Common Stock available at any one time for
issuance pursuant to SECTION 3(a) which are not already subject to issuance
upon the exercise of outstanding Options (before giving effect to the grant
of the Additional Options on such date), by (ii) the number of Additional
Options to be granted on such date. In such case, each Optionee to whom such
an Additional Option was granted shall NOT be entitled to any additional
Options under the Plan to take into account the reduction pursuant to this
SECTION 5(b) in the number of shares of Common Stock subject to such
Additional Option and any further grants of Options pursuant to SECTION 5 to
Non-Employee Directors shall be deferred until such time, if any, as
additional shares of Common Stock become available for issuance pursuant to
SECTION 3(a).

      (c) OPTION AGREEMENTS. Each Option granted under the Plan shall be a NSO.
In addition, each Option shall be evidenced by a written agreement (each, an
"OPTION AGREEMENT") containing such terms and conditions and in such form, not
inconsistent with this Plan, as the Board or the Committee shall, in its
discretion, provide. Each Option Agreement shall be executed by the Corporation
and the Optionee.

      (d) NO EVIDENCE OF CONTINUED SERVICE. Nothing contained in the Plan or in
any Option Agreement shall confer upon any Optionee any right with respect to
the continuation of such Optionee's service as a director of the Corporation or
the nomination of such Optionee as a director of the Corporation or interfere in
any way with any rights which such Optionee or the Corporation may have to
terminate such Optionee's service as a director of the Corporation at any time.




                                                                               3
<PAGE>

      (e) DATE OF GRANT. The date of grant of an Option under the Plan shall be
the date specified in SECTION 5 for the grant of such Option.

      (f) ELECTION TO RECEIVE OPTIONS IN LIEU OF CASH RETAINER. In lieu of
annual cash retainers for each Non-Employee Director, Non-Employee Directors may
elect, by written notice to the Corporation (attention: Secretary), at their
discretion to receive up to 100% of their cash retainer fees in the form of an
Option granted under the Plan. The number of shares subject to an Option
received in lieu of the annual retainer fee (or the method of computing the
number of such shares) and the terms and conditions of such Option shall be
determined from time to time by the Compensation Committee.

      6. OPTION PRICE.

      (a) GENERAL. Subject to SECTION 9, the price (the "OPTION PRICE") at which
each share of Common Stock subject to an Option granted under the Plan (each, an
"OPTION SHARE") may be purchased shall be the Fair Market Value (as determined
in accordance with SECTION 6(b)) of a share of Common Stock on the date of grant
of such Option under the Plan.

      (b) DETERMINATION OF FAIR MARKET VALUE. For purposes of the Plan, the
"FAIR MARKET VALUE" of a share of Common Stock, as of any date, shall be
determined as follows:

        (i) if the Common Stock is a class of securities then listed or admitted
to trading on any national securities exchange or traded on any national market
system (including, but not limited to, The Nasdaq National Market), the closing
sale price of the Common Stock on such date or, if no such sale takes place on
such date, the average of the closing bid and ask prices for Common Stock on
such date, in each case as officially reported on the principal national
securities exchange or national market system on which such securities are then
listed, admitted to trading or traded;

        (ii) if the Common Stock is not a class of securities then listed or
admitted to trading on any national securities exchange or traded on any
national market system, or if no closing sale price or closing bid and ask
prices thereof are then so reported by any such exchange or system, the average
of the reported closing bid and ask prices for the Common Stock in the
over-the-counter market on such date as shown by the National Association of
Securities Dealers, Inc. Automated Quotation System, or if the Common Stock is
not a class of securities then quoted on such system, as published by the
National Quotation Bureau, Incorporated or any similar successor organization,
and in either case as reported by any member firm of the New York Stock Exchange
selected by the Corporation; and

        (iii) if the Common Stock is not of a class of securities then listed or
admitted to trading on any national securities exchange or traded on any
national market system, or if no closing sale price or closing bid and ask
prices for the Common Stock are then so reported by such exchange or system, or
if no closing bid and ask prices for the Common Stock are then so quoted or
published in the over-the-counter market, the fair value of such share of Common
Stock on such date, shall be the fair market value per share as determined in
good faith by the Board.



                                                                               4
<PAGE>

      7. EXERCISABILITY OF OPTIONS.

      (a) VESTING OF THE OPTIONS.

        (i) Each Option granted under the Plan shall vest and become exercisable
on a cumulative basis as to one-third of the related Option Shares upon each of
the first, second and third 12-month anniversaries of the date of grant of such
Option pursuant to the Plan. Unless otherwise provided by the Board or the
Committee pursuant to SECTION 7(a)(ii), (i) only the vested portion of an Option
granted under the Plan shall be exercisable as to any related Option Shares and
(ii) an Optionee shall be vested as to any Option Shares issued upon the
exercise of an Option granted to such Optionee under the Plan.

        (ii) With respect to any Option, the Board or the Committee may, at any
time prior to the termination of such Option, accelerate the vesting and
exercise date(s) of such Option (subject, in the sole discretion of the Board or
the Committee, to the continuation of the vesting of the related Option Shares)
or continue the vesting and exercisability (whether before, on or after the date
of Termination (as defined in SECTION 7(b)(ii) below) of the Optionee to whom
such Option is granted) of all or a portion of such Option and/or the related
Option Shares.

        (iii) The Board or Committee may, in its discretion, amend any term or
condition of an outstanding Option, provided that (i) such term or condition as
amended is permitted by the Plan and (ii) any such amendment shall be made only
with the consent of the Optionee to whom the Option was granted, or in the event
of the death of the Optionee, the Optionee's Representatives (as defined in
SECTION 10(d)), if the amendment is materially adverse to the Optionee.

      (b) TERM OF OPTION. The unexercised portion of any Option granted under
the Plan shall automatically terminate and shall become null and void and be of
no further force or effect upon the first to occur of the following:

        (i) the ten-year anniversary of the date on which such Option is
granted;

        (ii) the three-month anniversary of the date on which the Optionee to
whom such Option was granted ceases to be a Non-Employee Director (such event, a
"TERMINATION"), unless such Termination occurs by reason of such Optionee's
death or Disability (as defined in SUBPARAGRAPH (iii) below) or is a Termination
for Cause (as defined in SUBPARAGRAPH (iv) below); PROVIDED, HOWEVER, that if
such Optionee shall die after the date of Termination but before the three-month
anniversary of such Optionee's date of Termination, the unexercised portion of
such Option shall automatically terminate and become null and void and be of no
further force or effect upon the 12-month anniversary of such date of
Termination;

        (iii) the 12-month anniversary of the date of Termination of the
Optionee to whom such Option was granted, if such Termination occurs by reason
of such Optionee's (x) death or (y) permanent and total disability (within the
meaning of Section 22(e)(3) of the Code) (a "DISABILITY");



                                                                               5
<PAGE>

        (iv) the date of Termination of the Optionee to whom such Option was
granted, if such Termination is for "CAUSE" (within the meaning of the General
Corporation Law of the State of Delaware) (a "TERMINATION FOR CAUSE");

        (v) the effective date of a Corporate Transaction (as defined in SECTION
9(B)) to which SECTION 9(b)(ii) (relating to assumptions and substitutions of
Options) does not apply; PROVIDED, HOWEVER, that an Optionee's right to exercise
any Option outstanding prior to such effective date shall in all events be
suspended during the period beginning ten days prior to the proposed effective
date of such Corporate Transaction and ending on either the actual effective
date of such Corporate Transaction or upon receipt of notice from the
Corporation that such Corporate Transaction will not in fact occur; and

        (vi) except to the extent permitted by SECTION 10(d), the date on which
such Option or any part thereof or right or privilege relating thereto is
transferred (other than by will or the laws of descent and distribution),
assigned, pledged, hypothecated, attached or otherwise disposed of by the
Optionee to whom such Option was granted.

      8. PROCEDURE FOR EXERCISE.

      (a) PAYMENT. The purchase price for the shares of Common Stock as to which
an Option is exercised shall (unless otherwise provided in the applicable Option
Agreement) be paid to the Corporation at the election of the Optionee (but only
to the extent permitted by applicable law):

        (i) in cash (by wire transfer of immediately available funds to a bank
account held by the Corporation designated by the Board or a personal or
certified check payable to the Corporation);

        (ii) in shares of Common Stock which either (A) have been owned by the
Optionee for more than six months and have been paid for within the meaning of
Rule 144 under the Securities Act of 1933, as amended (the "SECURITIES ACT")
(and, if such shares of Common Stock were purchased from the Corporation or any
Subsidiary thereof by means of a promissory note, such note has been fully paid
with respect to such shares); or (B) were obtained by the Optionee in the public
market (but, subject in any case, to the applicable limitations of Rule 16b-3
("RULE 16b-3") under Section 16 of the Securities Exchange Act of 1934); or

        (iii) a combination of the methods set forth in CLAUSES (i) and (ii).


      (b) NOTICE. An Optionee (or other person, as provided in SECTION 10(d))
may exercise an Option granted under the Plan in whole or in part, as provided
in the Option Agreement evidencing his or her Option, by delivering a written
notice (the "NOTICE") to the Board (or such other person or entity designated by
the Board from time to time).

      (c) CONTENT OF THE NOTICE. The Notice shall:


        (i) state that the Optionee elects to exercise the Option;



                                                                               6
<PAGE>


        (ii) state the number of shares with respect to which the Option is
being exercised (the "OPTIONED SHARES");


        (iii) state the method of payment for the Optioned Shares (which method
must be available to the Optionee under the terms of his or her Option
Agreement);

        (iv) state the date upon which the Optionee desires to consummate the
purchase of the Optioned Shares (which date must be prior to the termination of
such Option, be no later than 30 days from delivery of such Notice and be not
otherwise prohibited under the terms of his or her Option Agreement);

        (v) include any representations and warranties of the Optionee required
pursuant to SECTION 10(b);


        (vi) if the Option is exercised pursuant to SECTION 10(d) by any person
other than the Optionee, include evidence to the satisfaction of the Corporation
(or such other person or entity designated by the Board from time to time) of
the right of such person to exercise the Option; and

        (vii) include such further provisions consistent with the Plan as the
Board (or such other person or entity designated by the Board from time to time)
may from time to time require.

      (d) ISSUANCE OF STOCK CERTIFICATES. The Corporation shall issue a stock
certificate in the name of the Optionee (or such other person exercising the
Option in accordance with the provisions of SECTION 10(d)) for the Optioned
Shares with respect to which such Option is being exercised as soon as
practicable after receipt of the Notice and payment of the aggregate Option
Price for such shares. Neither the Optionee nor any person exercising an Option
in accordance with the provisions of SECTION 10(d) shall have any privileges as
a stockholder of the Corporation with respect to any shares of stock subject to
an Option granted under the Plan until the date of issuance of a stock
certificate pursuant to this SECTION 8(d).

      9. ADJUSTMENTS.

      (a) CHANGES IN CAPITAL STRUCTURE. Subject to SECTION 9(b), if after the
Effective Date the Common Stock is changed by reason of a stock split, reverse
stock split, stock dividend or recapitalization, or converted into or exchanged
for other securities as a result of a merger, consolidation or reorganization,
the Board shall make such adjustments in the number and class of shares of stock
with respect to which Options may be granted under the Plan as shall be
equitable and appropriate in order to make such Options, as nearly as may be
practicable, equivalent to such Options immediately prior to such change. A
corresponding adjustment changing the number and class of shares allocated to,
and the Option Price of, each Option or portion thereof outstanding at the time
of such change shall likewise be made.

      (b) CORPORATE TRANSACTIONS. The following rules shall apply in connection
with the dissolution or liquidation of the Corporation, a reorganization, merger
or consolidation in which the Corporation is not the surviving corporation, or a
sale of all or substantially all of the capital stock or assets of the
Corporation to another person or entity (a "CORPORATE TRANSACTION"):



                                                                               7
<PAGE>

        (i) each holder of an Option outstanding at such time shall be given (A)
written notice of such Corporate Transaction at least 20 days prior to its
proposed effective date (as specified in such notice) and (B) an opportunity,
during the period commencing with delivery of such notice and ending 10 days
prior to such proposed effective date, to exercise the Option to the full extent
to which such Option would have been exercisable by the Optionee at the
expiration of such 20-day period; PROVIDED, HOWEVER, that upon the occurrence of
a merger or consolidation in which the Corporation is not the surviving
corporation and the stockholders of the Corporation receive distributions of
cash, securities or other property of a third party in complete exchange for
their equity interests in the Corporation, or a sale of all of the capital stock
or all or substantially all of the assets of the Corporation to another person
or entity, under circumstances in which provision for assumption or substitution
of options in accordance with SECTION 9(b)(ii) is not made, the vesting and
exercise dates of all Options granted under this Plan shall accelerate, and such
Options shall become fully vested and exercisable with respect to all of the
shares of Common Stock covered thereby, and if and to the extent not so
exercised as provided in this SECTION 9(b)(i), such Options shall automatically
terminate; and

        (ii) anything contained in the Plan to the contrary notwithstanding,
SECTION 9(b)(i) shall not be applicable if provision shall be made in connection
with such Corporate Transaction for the assumption of outstanding Options by, or
the substitution for such Options of new options covering the stock of, the
surviving, successor or purchasing entity, or an entity of which such surviving,
successor or purchasing entity is a Subsidiary, or any Subsidiary thereof, with
appropriate adjustments as to the number, kind and option prices of the stock
subject to such options.

      (c) SPECIAL RULES. The following rules shall apply in connection with
SECTIONS 9(a) AND (b):


        (i) no fractional shares shall be issued as a result of any such
adjustment, and any fractional shares resulting from the computations pursuant
to SECTIONS 9(a) or (b) shall be eliminated without any consideration due to any
Optionees;

        (ii) no adjustment shall be made for cash dividends or the issuance to
stockholders of rights to subscribe for additional shares of Common Stock or
other securities; and

        (iii) any adjustments referred to in SECTIONS 9(a) or (b) shall be made
by the Board in its sole discretion and shall be conclusive and binding on all
persons holding Options granted under the Plan.

      10. RESTRICTIONS ON OPTIONS AND OPTIONED SHARES.

      (a) COMPLIANCE WITH SECURITIES LAWS. No Options shall be granted under the
Plan, and no shares of Common Stock shall be issued and delivered upon the
exercise of Options granted under the Plan, unless and until the Corporation
and/or the Optionees to whom such Options shall be granted shall have complied
with all applicable federal or state registration,




                                                                               8
<PAGE>

listing and/or qualification requirements and all other requirements of law or
of any regulatory agencies having jurisdiction. The Corporation may delay the
issuance of shares of Common Stock upon the exercise of Options granted under
the Plan until completion of any action or the receipt of any consent which the
Corporation deems necessary under any applicable law (including, without
limitation, state securities or "BLUE SKY" laws).

      (b) REPRESENTATIONS AND WARRANTIES. The Board in its discretion may, as a
condition to the exercise of any Option granted under the Plan, require the
Optionee to whom such Option shall be granted (i) to represent and warrant in
writing that the shares of Common Stock to be received upon exercise of such
Option are being acquired for investment and not with a view to distribution and
(ii) to make such other representations and warranties as are deemed appropriate
by the Corporation.

      (c) LEGENDS. Each certificate issued by the Corporation (or its transfer
agent) that represents shares of Common Stock acquired upon the exercise of an
Option that have not been registered under the Securities Act shall, unless
otherwise directed by the Board, be stamped or otherwise imprinted with a legend
in substantially the following form (in addition to any other legends and other
restrictions as the Board may deem necessary or advisable, including
restrictions under any applicable federal, state or foreign securities laws, or
any rules, regulations and other requirements promulgated by the Securities and
Exchange Commission or any securities exchange or automated quotation system on
which the Common Stock may be listed, admitted for trading or traded, or any
applicable agreement):

          "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
          REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). THESE
          SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
          DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
          OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
          FOR SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
          SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED."

      (d) NONASSIGNABILITY OF OPTION RIGHTS. No Option granted under the Plan
shall be assignable or otherwise transferable by the Optionee except by will or
by the laws of descent and distribution. An Option may be exercised during the
lifetime of the Optionee only by the Optionee. If an Optionee dies, his or her
Option shall thereafter be exercisable during the period specified in SECTION
7(b)(ii) or (iii), as applicable, by his or her executors or administrators
(collectively, the "REPRESENTATIVES") to the full extent to which such Option
was exercisable by the Optionee at the time of his or her death.

      11. ADOPTION AND STOCKHOLDER APPROVAL.

          The Plan shall become effective on the date (the "EFFECTIVE DATE")
which is the later of (i) the date of its adoption by the Board and (ii) the
first date on which price quotations for the Common Stock are reported on the
national securities exchange or national market



                                                                               9
<PAGE>

system on which the Common Stock shall first be listed, admitted to trading or
traded. This Plan shall be approved by the stockholders of the Corporation,
consistent with applicable laws, within 12 months of the date of the adoption of
the Plan by the Board. Upon the Effective Date, Options may be granted pursuant
to the Plan; PROVIDED, HOWEVER, that (i) no Option may be exercised prior to
initial stockholder approval of this Plan, (ii) no Option granted pursuant to an
increase in the number of shares of Common Stock available under the Plan by the
Board's amendment of the Plan may be exercised prior to the time such increase
has been approved by the stockholders of the Corporation, consistent with
applicable laws; (iii) in the event that initial stockholder approval of the
Plan is not obtained within the time period provided herein, all Options granted
under the Plan shall be canceled; and (iv) in the event that stockholder
approval of any increase in the number of shares of Common Stock available under
the Plan is not obtained within the time period provided herein, all Options
granted under the Plan pursuant to such increase shall be canceled.

      12. EXPIRATION AND TERMINATION OF THE PLAN.

          Except with respect to Options then outstanding, the Plan shall expire
on the first to occur of (i) the tenth anniversary of the date on which the Plan
is adopted by the Board, (ii) the tenth anniversary of the date on which the
Plan is approved by the stockholders of the Corporation in accordance with
applicable laws and (iii) the date as of which the Board, in its sole
discretion, determines that the Plan shall terminate (the "EXPIRATION DATE").
Any Options outstanding as of the Expiration Date shall remain in effect until
they have been exercised or terminated or have expired by their respective
terms.

      13. AMENDMENT OF THE PLAN.

          The Plan may be amended by the stockholders of the Corporation. The
Plan may also be amended by the Board. Any modification or amendment of the Plan
shall not, without the consent of an Optionee, adversely affect his or her
rights under an Option previously granted to him or her. With the consent of the
Optionee affected, the Board may amend such Optionee's outstanding Option
Agreements in a manner which may be materially adverse to such Optionee but
which is not inconsistent with the Plan. In the discretion of the Board,
outstanding Option Agreements may be amended by the Board in a manner which is
not materially adverse to the Optionee.

      14. CAPTIONS.

          The use of captions in the Plan is for convenience. The captions are
not intended to provide substantive rights or to affect the construction or
interpretation of the provisions of the Plan.

      15. WITHHOLDING TAXES.

          In the event that any federal, state, or local income taxes,
employment taxes, Federal Insurance Contributions Act withholdings or other
amounts are required by applicable law or governmental regulation to be withheld
from the Optionee's remuneration in connection with the exercise of an Option,
the Corporation may withhold from such Optionee's remuneration, or may require
the Optionee to advance in cash to the Corporation, the amount of




                                                                              10
<PAGE>


such withholdings, unless a different withholding arrangement is authorized by
the Board; PROVIDED, HOWEVER, that any such withholding arrangement shall be in
compliance with any applicable provisions of Rule 16b-3. The Board may condition
the transfer of any shares of Common Stock or the removal of any restrictions on
any Option on the satisfaction by the Optionee of the foregoing withholding
obligations.

      16. NUMBER AND GENDER.

          With respect to words used in the Plan, the singular form shall
include the plural form, the masculine gender shall include the feminine gender,
and vice-versa, as the context requires.

      17. NONEXCLUSIVITY OF THE PLAN.

          Neither the adoption of the Plan by the Board, the submission of the
Plan to the stockholders of the Corporation for approval, nor any provision of
this Plan shall be construed as creating any limitations on the power of the
Board to adopt such additional compensation arrangements as it may deem
desirable, including, without limitation, the granting of stock options
otherwise than under the Plan, and such arrangements may be either generally
available or applicable only in specific cases.

      18. GOVERNING LAW.

          The validity and construction of the Plan and the instruments
evidencing the Options granted hereunder shall be governed by the laws of the
State of Delaware without regard to conflict of laws provisions thereunder.