Document:

<PAGE>

                                                                    Exhibit 10.2

                        CONTROL DELIVERY SYSTEMS, INC.
                            1997 STOCK OPTION PLAN

1.  PURPOSE

     The purpose of this 1997 Stock Option Plan (the "Plan") is to advance the
interests of  Control Delivery Systems, Inc. (the "Company") by enhancing the
ability of the Company and its subsidiaries to attract and retain directors,
employees, consultants or advisers who are in a position to make significant
contributions to the success of the Company, to reward them for their
contributions and to encourage them to take into account the long-term interests
of the Company.

     The Plan provides for the award of options to purchase shares of the
Company's common stock ("Stock") and for the award of stock appreciation rights
("SARs") based on Stock.  Options granted pursuant to the Plan may be incentive
stock options as defined in section 422 of the Internal Revenue Code of 1986 (as
from time to time amended, the "Code") (any option that is intended to qualify
as an incentive stock option being referred to herein as an "incentive option"),
or options that are not incentive options, or both.  Options granted pursuant to
the Plan shall be presumed to be non-incentive options unless expressly
designated as incentive options.

2.  ELIGIBILITY FOR AWARDS

     Persons eligible to receive awards under the Plan shall be all directors,
including directors who are not employees, of the Company and all executive
officers of the Company and its subsidiaries and other employees, consultants
and advisers who, in the opinion of the Board, are in a position to make a
significant contribution to the success of the Company and its subsidiaries.
Incentive options shall be granted only to "employees" as defined in the
provisions of the Code or regulations thereunder applicable to incentive stock
options.  A subsidiary for purposes of the Plan shall be a corporation in which
the Company owns, directly or indirectly, stock possessing 50% or more of the
total combined voting power of all classes of stock.  Persons selected for
awards under the Plan are referred to herein as "participants."

3.  ADMINISTRATION

     The Plan shall be administered by the Board of Directors (the "Board") of
the Company.  The Board shall have authority, not inconsistent with the express
provisions of the Plan, (a) to grant awards consisting of options or SARs, or
both, to such participants as the Board may select; (b) to determine the time or
times when awards shall be granted and the number of shares of Stock subject to
each award; (c) to determine which options are, and which options are not,
incentive options; (d) to determine the terms and conditions of each award; (e)
to prescribe the form or forms of any instruments evidencing awards and any
other instruments required under the Plan and to change such forms from time to
time; (f) to adopt, amend and rescind rules and

                                      -1-
<PAGE>

regulations for the administration of the Plan; and (g) to interpret the Plan
and to decide any questions and settle all controversies and disputes that may
arise in connection with the Plan. Such determinations of the Board shall be
conclusive and shall bind all parties. Subject to Section 8 the Board shall also
have the authority, both generally and in particular instances, to waive
compliance by a participant with any obligation to be performed by the
participant under an award, to waive any condition or provision of an award, and
to amend or cancel any award (and if an award is canceled, to grant a new award
on such terms as the Board shall specify) except that the Board may not take any
action with respect to an outstanding award that would adversely affect the
rights of the participant under such award without such participant's consent.
Nothing in the preceding sentence shall be construed as limiting the power of
the Board to make adjustments required by Section 5(c) and Section 6(j).

     The Board may, in its discretion, delegate some or all of its powers with
respect to the Plan to a committee (the "Committee"), in which event all
references in this Plan (as appropriate) to the Board shall be deemed to refer
to the Committee.  The Committee, if one is appointed, shall consist of at least
two directors.  A majority of the members of the Committee shall constitute a
quorum, and all determinations of the Committee shall be made by a majority of
its members.  Any determination of the Committee under the Plan may be made
without notice or meeting of the Committee by a writing signed by a majority of
the Committee members.

4.  EFFECTIVE DATE AND TERM OF PLAN

     The Plan shall become effective on the date on which it is approved by the
shareholders of the Company.  Grants of awards under the Plan may be made prior
to that date (but contemporaneous with or after Board adoption of the Plan),
subject to approval of the Plan by such shareholders.

     No awards shall be granted under the Plan after the completion of ten years
from the date on which the Plan was adopted by the Board, but awards previously
granted may extend beyond that date.

5.  SHARES SUBJECT TO THE PLAN

     (a)  Number of Shares. Subject to adjustment as provided in Section 5(c),
the aggregate number of shares of Stock that may be delivered upon the exercise
of awards granted under the Plan shall be 15,000. If any award granted under the
Plan terminates without having been exercised in full, or upon exercise is
satisfied other than by delivery of Stock, the number of shares of Stock as to
which such award was not exercised shall be available for future grants within
the limits set forth in this Section 5(a).

     The maximum number of shares for which options may be granted to any
individual over the life of the Plan shall be 7,500.  The maximum number of
shares subject to SARs granted to any individual over the life of the Plan shall
likewise be 7,500.  The per-individual limitations described in this paragraph
shall be construed and applied consistent with the rules and regulations under
Section 162(m) of the Code.

                                      -2-
<PAGE>

     (b)  Shares to be Delivered. Shares delivered under the Plan shall be
authorized but unissued Stock or, if the Board so decides in its sole
discretion, previously issued Stock acquired by the Company and held in its
treasury. No fractional shares of Stock shall be delivered under the Plan.

     (c)  Changes in Stock. In the event of a stock dividend, stock split or
combination of shares, recapitalization or other change in the Company's capital
stock, the number and kind of shares of Stock subject to awards then outstanding
or subsequently granted under the Plan, the exercise price of such awards, the
maximum number of shares of Stock that may be delivered under the Plan, and
other relevant provisions shall be appropriately adjusted by the Board, whose
determination shall be binding on all persons.

     The Board may also adjust the number of shares subject to outstanding
awards and the exercise price and the terms of outstanding awards to take into
consideration material changes in accounting practices or principles,
extraordinary dividends, consolidations or mergers (except those described in
Section 6(j)), acquisitions or dispositions of stock or property or any other
event if it is determined by the Board that such adjustment is appropriate to
avoid distortion in the operation of the Plan, provided that no such adjustment
shall be made in the case of an incentive option, without the consent of the
participant, if it would constitute a modification, extension or renewal of the
option within the meaning of section 424(h) of the Code.

6.  TERMS AND CONDITIONS OF OPTIONS AND SARS

     (a)  Exercise Price of Options and SARs. The exercise price of each option
or SAR shall be determined by the Board but in the case of an incentive option
shall not be less than 100% (110%, in the case of an incentive option granted to
a ten-percent shareholder) of the fair market value of the Stock at the time the
option is granted; nor shall the exercise price be less, in the case of an
original issue of authorized stock, than par value. For this purpose, "fair
market value" in the case of incentive options shall have the same meaning as it
does in the provisions of the Code and the regulations thereunder applicable to
incentive options; and "ten-percent shareholder" shall mean any participant who
at the time of grant owns directly, or by reason of the attribution rules set
forth in section 424(d) of the Code, is deemed to own stock possessing more than
10% of the total combined voting power of all classes of stock of the Company or
of any of its parent or subsidiary corporations.

     (b)  Duration of Options and SARs. Options and SARs shall be exercisable
during such period or periods as the Board may specify. The latest date on which
an option or SAR may be exercised (the "Final Exercise Date") shall be the date
that is ten years (five years, in the case of an incentive option granted to a
"ten-percent shareholder" as defined in (a) above) from the date the option or
SAR was granted or such earlier date as the Board may specify at the time the
option or SAR is granted.

     (c)  Exercise of Options and SARs.

     (1)  Options and SARs shall become exercisable at such time or times and
          upon such conditions as the Board shall specify. In the case of an
          option or an SAR not immediately exercisable in full, the Board may at
          any time accelerate the time at which all or any part of the option or
          SAR may be exercised.

                                      -3-
<PAGE>

     (2)  Options and SARs may be exercised only in writing. Written notice of
          exercise must be signed by the proper person and furnished to the
          Company, together with (i) such documents as the Board may require and
          (ii) in the case of options, payment in full as specified below in
          Section 6(d) for the number of shares for which the option is
          exercised.

     (3)  The delivery of Stock upon the exercise of an option or an SAR shall
          be subject to compliance with (i) applicable federal and state laws
          and regulations, (ii) if the outstanding Stock is at the time listed
          on any stock exchange, the listing requirements of such exchange, and
          (iii) Company counsel's approval of all other legal matters in
          connection with the issuance and delivery of such Stock. If the sale
          of Stock has not been registered under the Securities Act of 1933, as
          amended, the Company may require, as a condition to exercise of the
          option or SAR, such representations or agreements as counsel for the
          Company may consider appropriate to avoid violation of such Act and
          may require that the certificates evidencing such Stock bear an
          appropriate legend restricting transfer.

     (4)  In the case of an option that is not an incentive option or an SAR,
          the Board shall have the right to require that the participant
          exercising the option remit to the Company an amount sufficient to
          satisfy any federal, state, or local withholding tax requirements (or
          make other arrangements satisfactory to the Company with regard to
          such taxes) prior to the delivery of any Stock pursuant to the
          exercise of the option. If permitted by the Board, either at the time
          of the grant of the option or SAR or the time of exercise, the
          participant may elect, at such time and in such manner as the Board
          may prescribe, to satisfy such withholding obligation by (i)
          delivering to the Company Stock (which in the case of Stock acquired
          from the Company shall have been owned by the participant for at least
          six months prior to the delivery date) having a fair market value
          equal to such withholding obligation, or (ii) requesting that the
          Company withhold from the shares of Stock to be delivered upon the
          exercise a number of shares of Stock having a fair market value equal
          to such withholding obligation.

          In the case of an incentive option, if at the time the option is
          exercised the Board determines that under applicable law and
          regulations the Company could be liable for the withholding of any
          federal or state tax with respect to a disposition of the Stock
          received upon exercise, the Board may require as a condition of
          exercise that the participant exercising the option agree (i) to
          inform the Company promptly of any disposition (within the meaning of
          section 424(c) of the Code and the regulations thereunder) of Stock
          received upon exercise, and (ii) to give such security as the Board
          deems adequate to meet the potential liability of the Company for the
          withholding of tax, and to augment such security from time to time in
          any amount reasonably deemed necessary by the Board to preserve the
          adequacy of such security.

                                      -4-
<PAGE>

     (5)  If an option or an SAR is exercised by the executor or administrator
          of a deceased participant, or by the person or persons to whom the
          option has been transferred by the participant's will or the
          applicable laws of descent and distribution, the Company shall be
          under no obligation to deliver Stock pursuant to such exercise until
          the Company is satisfied as to the authority of the person or persons
          exercising the option or SAR.

     (d)  Payment for and Delivery of Stock. Stock purchased upon exercise of an
          option under the Plan shall be paid for as follows:

     (i)  in cash or by personal check, certified check, bank draft or money
          order payable to the order of the Company; or

     (ii) if so permitted by the Board (which, in the case of an incentive
          option, shall specify the method of payment at the time of grant), (A)
          through the delivery of shares of Stock (which, in the case of Stock
          acquired from the Company, shall have been held for at least six
          months prior to delivery) having a fair market value on the last
          business day preceding the date of exercise equal to the purchase
          price or (B) by delivery of a promissory note of the participant to
          the Company, such note to be payable on such terms as are specified by
          the Board or (C) by delivery of an unconditional and irrevocable
          undertaking by a broker to deliver promptly to the Company sufficient
          funds to pay the exercise price or (D) by any combination of the
          permissible forms of payment; provided, that if the Stock delivered
          upon exercise of the option is an original issue of authorized Stock,
          at least so much of the exercise price as represents the par value of
          such Stock shall be paid other than by a personal check or promissory
          note of the person exercising the option.

     (e)  Stock Appreciation Rights. The Board in its discretion may grant SARs
either in tandem with or independent of options awarded under the Plan. Except
as hereinafter provided, each SAR shall entitle the participant to receive upon
exercise, with respect to each share of Stock to which the SAR relates, the
excess of (i) the share's value on the date of exercise over (ii) the share's
fair market value on the date the SAR was granted. For purposes of clause (i),
"value" shall mean fair market value; provided, that the Board may adjust such
value to take into account dividends on the Stock and may also grant SARs that
provide, in such limited circumstances following a change in control of the
Company (as determined by the Board) as the Board may specify, that "value" for
purposes of clause (i) is to be determined by reference to an average value for
the Stock during a period immediately preceding the change in control, all as
determined by the Board. The amount payable to a participant upon exercise of an
SAR shall be paid either in cash or in shares of Stock, as the Board determines.
Each SAR shall be exercisable during such period or periods and on such terms as
the Board may specify. In no event, however, shall an SAR be exercisable after
the date that is ten years from the date of grant.

(f)  Rights as Shareholder.  A participant shall not have the rights of a
shareholder with regard to awards under the Plan except as to Stock actually
received by the participant under the Plan.

                                      -5-
<PAGE>

     (g)  Nontransferability of Awards. Except as the Board may otherwise
determine, no award may be transferred other than by will or by the laws of
descent and distribution, and during a participant's lifetime an award may be
exercised only by the participant.

     (h)  Death. If a participant dies, each option and SAR held by the
participant immediately prior to death may be exercised, to the extent it was
exercisable immediately prior to death, by the participant's executor or
administrator or by the person or persons to whom the option or SAR is
transferred by will or the applicable laws of descent and distribution, at any
time within the one-year period (or such longer or shorter period as the Board
may determine) beginning with the date of the participant's death but in no
event beyond the Final Exercise Date. All options and SARs held by a participant
immediately prior to death that are not then exercisable shall terminate on the
date of death.

     (i)  Termination of Service Other Than By Death. If an employee's
employment with the Company and its subsidiaries terminates for any reason other
than by death, all options and SARs held by the employee that are not then
exercisable shall terminate. Options and SARs that are exercisable on the date
employment terminates shall continue to be exercisable for a period of three
months (or such longer period as the Board may determine, but in no event beyond
the Final Exercise Date) unless the employee was discharged for cause that in
the opinion of the Board casts such discredit on the employee as to justify
termination of the employee's options and SARs. After completion of the post-
termination exercise period, such options and SARs shall terminate to the extent
not previously exercised, expired or terminated. For purposes of this Section
6(i), employment shall not be considered terminated (i) in the case of sick
leave or other bona fide leave of absence approved for purposes of the Plan by
the Board, so long as the employee's right to reemployment is guaranteed either
by statute or by contract, or (ii) in the case of a transfer of employment
between the Company and a subsidiary or between subsidiaries, or to the
employment of a corporation (or a parent or subsidiary corporation of such
corporation) issuing or assuming an option or SAR in a transaction to which
section 424(a) of the Code applies, or (iii) if the Board of Directors shall
consent to the continuation of such award and such award shall not be an
incentive stock option, in the case of the employee's continued service to the
Company as a consultant, adviser or director.

     In the case of a participant who is not an employee, provisions relating to
the exercisability of options and SARs following termination of service shall be
specified in the award.  If not so specified, all options and SARs held by such
participant that are not then exercisable shall terminate upon termination of
service.  Options and SARs that are exercisable on the date the participant's
service as a director, consultant or adviser terminates shall continue to be
exercisable for a period of three months (or such longer period as the Board may
determine, but in no event beyond the Final Exercise Date) unless the director,
consultant or adviser was terminated for cause that in the opinion of the Board
casts such discredit on him or her as to justify termination of his or her
options and SARs.  After completion of the post-termination exercise period,
such options and SARs shall terminate to the extent not previously exercised,
expired or terminated.

     (j)  Mergers, etc. In the event of a consolidation or merger in which the
Company is not the surviving corporation or which results in the acquisition of
substantially all the

                                      -6-
<PAGE>

Company's outstanding Stock by a single person or entity or by a group of
persons and/or entities acting in concert, or in the event of the sale or
transfer of substantially all the Company's assets, all outstanding awards shall
thereupon terminate, provided that all outstanding awards shall become
exercisable immediately prior to consummation of such merger, consolidation or
sale of assets unless, if there is a surviving or acquiring corporation, the
Board has arranged, subject to consummation of the merger, consolidation or sale
of assets, for the assumption of the awards or the grant to participants of
replacement awards by that corporation or an affiliate of that corporation,
which awards in the case of incentive options shall satisfy the requirements of
section 424(a) of the Code.

     The Board may grant awards under the Plan in substitution for awards held
by directors, employees, consultants or advisers of another corporation who
concurrently become directors, employees, consultants or advisers of the Company
or a subsidiary of the Company as the result of a merger or consolidation of
that corporation with the Company or a subsidiary of the Company, or as the
result of the acquisition by the Company or a subsidiary of the Company of
property or stock of that corporation.  The Company may direct that substitute
awards be granted on such terms and conditions as the Board considers
appropriate in the circumstances.

     Notwithstanding any provision of this Plan to the contrary, except as
otherwise specifically provided by the Board at the time of grant all of a
participant's outstanding awards shall vest and become exercisable if (i) such
participant is an employee, director, consultant or advisor immediately prior to
a Change in Control, and (ii) within the twelve-month period immediately
following the Change of Control either (a) such participant's employment,
directorship, or provision of services is terminated by the Company without
Cause, or (b) if participant is an employee, participant's principal place of
work is relocated to a location more than 50 miles from its current location
without participant's consent.  For purposes of this Section 6.a., "Cause" means
(i) failure of the recipient to perform (other than by reason of disability), or
material negligence in the performance of, his or her duties and
responsibilities to the Company or any of its subsidiaries or affiliates;
(ii) fraud, embezzlement or other dishonesty by the recipient with respect to
the Company or any of its subsidiaries or affiliates; (iii) commission by the
recipient of a felony or a crime involving moral turpitude; or (iv) other
conduct by the recipient that is harmful in any material respect to the
business, interests or reputation of the Company or any of its subsidiaries or
affiliates.

7.  NO EMPLOYMENT OR OTHER RIGHTS

     Neither the adoption of the Plan nor the grant of awards shall confer upon
any participant any right to continue as an employee or director of, or
consultant or adviser to, the Company or any parent or subsidiary or affect in
any way the right of the Company or parent or subsidiary to terminate them at
any time.  Except as specifically provided by the Board in any particular case,
the loss of existing or potential profit in awards granted under this Plan shall
not constitute an element of damages in the event of termination of the
relationship of a participant even if the termination is in violation of an
obligation of the Company to the participant by contract or otherwise.

                                      -7-
<PAGE>

8.  EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION

     Neither adoption of the Plan nor the grant of awards to a participant shall
affect the Company's right to make awards to such participant that are not
subject to the Plan, to issue to such participant Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock may be issued.

     The Board may at any time discontinue granting awards under the Plan.  With
the consent of the participant, the Board may at any time cancel an existing
award in whole or in part and grant another award for such number of shares as
the Board specifies.  The Board may at any time or times amend the Plan or any
outstanding award for the purpose of satisfying the requirements of section 422
of the Code or of any changes in applicable laws or regulations or for any other
purpose that may at the time be permitted by law, or may at any time terminate
the Plan as to further grants of awards, but no such amendment shall adversely
affect the rights of any participant (without the participant's consent) under
any award previously granted.

                                      -8-<PAGE>

                                                                   Exhibit 10.13

                        CONTROL DELIVERY SYSTEMS, INC.

                              2001 INCENTIVE PLAN

1.  GENERAL

     The Plan has been established to advance the interests of the Company by
giving selected Employees, Eligible Directors and other persons (including both
individuals and entities) who provide services to the Company or its Affiliates
Stock-based incentives or incentives based on Performance Criteria.

2.  ADMINISTRATION

     The Administrator has discretionary authority, subject only to the express
provisions of the Plan, to interpret the Plan; determine eligibility for and
grant Awards; determine, modify or waive the terms and conditions of any Award;
prescribe forms, rules and procedures (which it may modify or waive); and
otherwise do all things necessary to carry out the purposes of the Plan.  Once
an Award has been communicated in writing to a Participant, the Administrator
may not, without the Participant's consent, alter the terms of the Award so as
to affect adversely the Participant's rights under the Award, unless the
Administrator expressly reserved the right to do so in writing at the time of
such communication.  In the case of any Award intended to be eligible for the
performance-based compensation exception under Section 162(m), the Administrator
shall exercise its discretion consistent with qualifying the Award for such
exception.

3.  LIMITS ON AWARD UNDER THE PLAN

     A. Number of Shares. Subject to adjustment pursuant to Section 6.b. of this
Plan, the maximum aggregate number of shares of Stock which may be delivered in
satisfaction of Awards under the Plan is 300,000 shares, plus, effective as of
the beginning of each fiscal year, an additional number of shares equal to the
least of (i) 3% of the number of shares of Stock outstanding as of the end of
the immediately preceding fiscal year, (ii) 130,000 shares, or (iii) such other
amount as may be determined by the Administrator; provided, however, that,
subject to adjustment pursuant to Section 6.b. of this Plan, the aggregate
number of shares of Stock which may be delivered upon the exercise of Stock
Options under the Plan shall not exceed 1,600,000. For purposes of the preceding
sentence, shares that have been forfeited in accordance with the terms of the
applicable Award and shares held back in satisfaction of the exercise price or
tax withholding requirements from shares that would otherwise have been
delivered pursuant to an Award shall not be considered to have been delivered
under the Plan. Also, the number of shares of Stock delivered under an Award
shall be determined net of any previously acquired Shares tendered by the
Participant in payment of the exercise price or of withholding taxes.

                                      -1-
<PAGE>

     B. Type of Shares. Stock delivered by the Company under the Plan may be
authorized but unissued Stock or previously issued Stock acquired by the Company
and held in treasury. No fractional shares of Stock will be delivered under the
Plan.

     C. Option & SAR Limits. The maximum number of shares of Stock for which
Stock Options may be granted to any person in any calendar year, the maximum
number of shares of Stock subject to SARs granted to any person in any calendar
year and the aggregate maximum number of shares of Stock subject to other Awards
that may be delivered to any person in any calendar year shall each be 200,000
shares. For purposes of the preceding sentence, the repricing of a Stock Option
or SAR shall be treated as a new grant to the extent required under Section
162(m). Subject to these limitations, each person eligible to participate in the
Plan shall be eligible in any year to receive Awards covering up to the full
number of shares of Stock then available for Awards under the Plan.

     D. Other Award Limits. No more than $2,000,000 may be paid to any
individual with respect to any Cash Performance Award in any calendar year. With
respect to any Performance Award other than a Cash Performance Award or a Stock
Option or SAR, the maximum number of shares of Stock or their equivalent value
in cash for any Award shall be 200,000 shares per calendar year.

4.  ELIGIBILITY AND PARTICIPATION

     The Administrator will select Participants from among those key Employees,
Eligible Directors and other individuals or entities providing services to the
Company or its Affiliates who, in the opinion of the Administrator, are in a
position to make a significant contribution to the success of the Company and
its Affiliates.  Eligibility for ISOs is further limited to those individuals
whose employment status would qualify them for the tax treatment described in
Sections 421 and 422 of the Code.

5.  RULES APPLICABLE TO AWARDS

A.  All Awards.

     (1)  Terms of Awards. The Administrator shall determine the terms of all
Awards subject to the limitations provided herein.

     (2)  Transferability Of Awards. Except as the Administrator otherwise
provides, Awards may not be transferred (including by sale, assignment, pledge,
hypothecation or other disposition or encumbrance) other than by will or by the
laws of descent and distribution, and during a Participant's lifetime an Award
requiring exercise may be exercised only by the Participant (or in the event of
the Participant's incapacity, the person or persons legally appointed to act on
the Participant's behalf).

     (3)  Vesting, Etc. Without limiting the generality of Section 2, and except
as provided in Section 5.d. with respect to Stock Options granted to Eligible
Directors, the Administrator may determine the time or times at which an Award
will become free of forfeiture

                                      -2-
<PAGE>

       restrictions or become exercisable and the terms on which an Award
       requiring exercise will remain exercisable. Unless the Administrator
       provides otherwise, immediately upon the termination of the Participant's
       employment or other service relationship with the Company and its
       Affiliates, an Award requiring exercise will cease to be exercisable, and
       all Awards to the extent not already fully vested will be forfeited,
       except that:

              (A)  subject to (B) and (C) below, all Stock Options and SARs held
          by the Participant immediately prior to the termination of the
          Participant's employment or other service relationship, to the extent
          then exercisable, will remain exercisable for the lesser of (i) a
          period of three months or (ii) the period ending on the latest date on
          which such Stock Option or SAR could have been exercised without
          regard to this Section 5.a.(3), and shall thereupon terminate;

              (B)  all Stock Options and SARs held by a Participant immediately
          prior to his or her death, to the extent then exercisable, will remain
          exercisable by such Participant's executor or administrator or the
          person or persons to whom the Stock Option or SAR is transferred by
          will or the applicable laws of descent and distribution, for the
          lesser of (i) a one year period ending with the first anniversary of
          the Participant's death or (ii) the period ending on the latest date
          on which such Stock Option or SAR could have been exercised without
          regard to this Section 5.a.(3) and shall thereupon terminate; and

              (C)  all Stock Options and SARs (including those vested and
          unvested Awards) held by a Participant whose employment or other
          service relationship has been terminated for cause (as defined below)
          may be immediately terminated by the Administrator.

Unless the Administrator expressly provides otherwise, a Participant's
"employment or other service relationship with the Company and its Affiliates"
will be deemed to have terminated, in the case of an employee Participant, upon
termination of the Participant's employment with the Company and its Affiliates
(whether or not the Participant continues in the service of the Company or its
Affiliates in some capacity other than that of an employee of the Company or its
Affiliates), and in the case of any other Participant, when the service
relationship in respect of which the Award was granted terminates (whether or
not the Participant continues in the service of the Company or its Affiliates in
some other capacity).  For the purposes of Section 5.a.(3)(C) of this Plan,
cause shall mean cause as determined in the discretion of the Administrator,
including, but not limited to (a) conduct by a Participant that is harmful to
the business, interests or reputation of the Company or any of its Affiliates,
(b) fraud or dishonesty by the Participant or (c) the commission by the
Participant of a crime, other than a misdemeanor that does not involve fraud,
dishonesty or moral turpitude.

     (4)  Taxes.  The Administrator will make such provision for the withholding
of taxes as it deems necessary. The Administrator may, but need not, hold back
shares of Stock from an Award or permit a Participant to tender previously owned
shares of Stock in satisfaction of tax withholding requirements.

                                      -3-
<PAGE>

     (5)  Dividend Equivalents, Etc.  The Administrator may provide for the
payment of amounts in lieu of cash dividends or other cash distributions with
respect to Stock subject to an Award.

     (6)  Rights Limited.  Nothing in the Plan shall be construed as giving any
person the right to continued employment or service with the Company or its
Affiliates, or any rights as a shareholder except as to shares of Stock actually
issued under the Plan. The loss of existing or potential profit in Awards will
not constitute an element of damages in the event of termination of employment
or service for any reason, even if the termination is in violation of an
obligation of the Company or Affiliate to the Participant.

     (7)  Section 162(m).  In the case of an Award intended to be eligible for
the performance-based compensation exception under Section 162(m), the Plan and
such Award shall be construed to the maximum extent permitted by law in a manner
consistent with qualifying the Award for such exception. In the case of a
Performance Award intended to qualify as performance-based for the purposes of
Section 162(m) (other than a Stock Option or SAR with an exercise price at least
equal to the fair market value of the underlying Stock on the date of grant),
the Committee shall in writing preestablish one or more specific Performance
Criteria no later than 90 days after the commencement of the period of service
to which the performance relates (or at such earlier time as is required to
qualify the Award as performance-based under Section 162(m)). Prior to payment
of any Performance Award (other than a Stock Option or SAR with an exercise
price at least equal to the fair market value of the underlying Stock on the
date of grant) intended to qualify as performance-based under Section 162(m),
the Committee shall certify whether the Performance Criteria have been attained
and such determination shall be final and conclusive. If the Performance
Criteria with respect to any such Award are not attained, no other Award shall
be provided in substitution of the Performance Award. The provisions of this
Section 5.a.(7) shall be construed in a manner that is consistent with the
Regulations under Section 162(m).

B.  Awards Requiring Exercise.

     (1)  Time And Manner Of Exercise. Unless the Administrator expressly
provides otherwise, (a) an Award requiring exercise by the holder will not be
deemed to have been exercised until the Administrator receives a written notice
of exercise (in form acceptable to the Administrator) signed by the appropriate
person and accompanied by any payment required under the Award; and (b) if the
Award is exercised by any person other than the Participant, the Administrator
may require satisfactory evidence that the person exercising the Award has the
right to do so.

     (2)  Exercise Price. The Administrator shall determine the exercise price
of each Stock Option, provided that each Stock Option intended to qualify for
the performance-based exception under Section 162(m) of the Code and each ISO
must have an exercise price that is not less than the Fair Market Value of the
Stock subject to the Stock Option. An ISO granted to an Employee described in
Section 422(b)(6) of the Code must have an exercise price that is not less than
110% of such Fair Market Value.

                                      -4-
<PAGE>

     (3)  Payment Of Exercise Price, If Any. Where the exercise of an Award is
to be accompanied by payment, the Administrator may determine the required or
permitted forms of payment, subject to the following: (a) all payments will be
by cash or check acceptable to the Administrator, or, if so permitted by the
Administrator (with the consent of the optionee of an ISO if permitted after the
grant), (i) through the delivery of shares of Stock which have been outstanding
for at least six months (unless the Administrator approves a shorter period) and
which have a fair market value equal to the exercise price, (ii) by delivery of
a promissory note of the person exercising the Award to the Company, payable on
such terms as are specified by the Administrator, (iii) by delivery of an
unconditional and irrevocable undertaking by a broker to deliver promptly to the
Company sufficient funds to pay the exercise price, or (iv) by any combination
of the foregoing permissible forms of payment; and (b) where shares of Stock
issued under an Award are part of an original issue of shares, the Award shall
require that at least so much of the exercise price as equals the par value of
such shares to be paid other than by delivery of a personal check or promissory
note of the person exercising the Award.

     (4)  ISOs. No ISO may be granted under the Plan after June 30, 2011, but
ISOs previously granted may extend beyond that date.

C.  Awards Not Requiring Exercise.  Awards of Restricted Stock and Unrestricted
Stock may be made in return for either (i) services determined by the
Administrator to have a value not less than the par value of the Awarded shares
of Stock, or (ii) cash or other property having a value not less than the par
value of the Awarded shares of Stock plus such additional amounts (if any) as
the Administrator may determine payable in such combination and type of cash,
other property (of any kind) or services as the Administrator may determine.

D.  Grants of Stock Options to Eligible Directors.

     (1)  Automatic Grants. Beginning on the date on which this Plan is adopted,
each Eligible Director, upon his or her initial election to the Board, shall be
awarded Stock Options covering 2,000 shares of Stock (subject to adjustment
pursuant to Section 6.b. of this Plan) (the "Initial Director Grant").
Thereafter, on the date of each regular annual meeting of stockholders of the
Company, each Eligible Director who is reelected or is continuing as a Director
shall be awarded Stock Options covering 550 shares of Stock (subject to
adjustment pursuant to Section 6.b of this Plan) (the "Annual Director Grant").
The exercise price of each Stock Option granted to an Eligible Director shall be
100% of the Fair Market Value of a share of Stock. The grant of Stock Options
awarded under this Section 5.d.(1) shall not require any action by the
Administrator.

     (2)  Duration. The latest date on which a Stock Option granted to an
Eligible Director pursuant to Section 5.d.(1) may be exercised is on the fifth
anniversary of the date on which such option was granted.

     (3)  Vesting. Stock Options granted in an Initial Director Grant shall
become exercisable to the extent of one-third of the shares covered thereby on
the day before each of the first, second and third annual meeting of the
stockholders following the date of the grant. All

                                      -5-
<PAGE>

Stock Options granted in an Annual Director Grant shall become exercisable on
the day before the first annual meeting of stockholders following the date of
the grant.

     (4)  Other Awards. Notwithstanding any grant of Stock Options that may be
made to Eligible Directors pursuant to Section 5.d.(1), the Administrator shall
also have the authority under this Plan to make Awards to Eligible Directors in
such amounts and on such terms as it shall determine, subject to the limits of
Sections 3.c. and 3.d. Such Awards, as well as Awards made pursuant to Section
5.d.(1) to the extent provisions therefor are not specified in Section 5.d., are
subject to all of the relevant provisions of this Plan.

6.  EFFECT OF CERTAIN TRANSACTIONS

a.  Mergers, Etc.  Immediately prior to a Change in Control (other than a
transaction in which the outstanding Awards have been assumed or substituted for
as provided in the immediately following paragraph), all outstanding Awards
shall vest and, if relevant, become exercisable, all Performance Criteria and
other conditions to any Award shall be deemed satisfied, and all deferrals
measured by reference to or payable in shares of Stock shall be accelerated.
With respect to Awards requiring exercise, holders of such Awards will be given
adequate notice prior to the Change in Control in order that they may have a
reasonable time to exercise such Awards.  Upon consummation of a Change in
Control, all Awards then outstanding and requiring exercise or delivery shall
terminate unless assumed by an acquiring or surviving entity or its affiliate as
provided below.

     To the extent that the Administrator provides, in the context of a Change
in Control, for substitute or replacement Awards from, or the assumption of
Awards by, the acquiring or surviving entity or its affiliates, it may do so on
such terms as the Administrator determines, provided that, in the case of
incentive options, such awards shall satisfy the requirements of Section 424(a)
of the Code.

     Notwithstanding any provision of this Plan to the contrary, except as
otherwise specifically provided by the Administrator at the time of grant, all
of a Participant's outstanding Awards shall vest and, if relevant, become
exercisable, all Performance Criteria and other conditions to any Award shall be
deemed satisfied, and all deferrals measured by reference to or payable in
shares of Stock shall be accelerated if (i) Participant is an Employee, Eligible
Director or other person providing services to the Company or its Affiliates
immediately prior to a Change in Control, and (ii) within the twelve-month
period immediately following the Change of Control either (a) Participant's
employment, directorship or provision of services is terminated by the Company
without Cause, or (b) if Participant is an Employee, Participant's principal
place of work is relocated to a location more than 50 miles from its current
location without Participant's consent.  For purposes of this Section 6.a.,
"Cause" means (i) failure of the recipient to perform (other than by reason of
disability), or material negligence in the performance of his or her duties and
responsibilities to the Company or any of its subsidiaries or affiliates;
(ii) fraud, embezzlement or other dishonesty by the recipient with respect to
the Company or any of its subsidiaries or affiliates; (iii) commission by the
recipient of a felony or a crime involving moral turpitude; or (iv) other
conduct by the recipient that is harmful in any material respect to the
business, interests or reputation of the Company or any of its subsidiaries or
affiliates.

                                      -6-
<PAGE>

B.  Changes in and Distributions With Respect to the Stock.

     (1)  Basic Adjustment Provisions. In the event of a stock dividend, stock
split or combination of shares, recapitalization or other change in the
Company's capital structure, the Administrator will make appropriate
adjustments: (i) to the maximum number of shares that may be delivered under the
Plan under Section 3.a. and to the maximum share limits described in Sections
3.c. and 3.d.; (ii) to the number and kind of shares of stock or securities
subject to Awards then outstanding or subsequently granted; (iii) to any
exercise prices relating to Awards; (iv) to any eligible Director's Deferred
Stock Account; and (v) to any other provision of Awards affected by such change.

     (2)  Certain Other Adjustments. The Administrator may also make adjustments
of the type described in paragraph (1) above to take into account distributions
to common stockholders other than those provided for in Section 6.a. and
6.b.(1), or any other event, if the Administrator determines that adjustments
are appropriate to avoid distortion in the operation of the Plan and to preserve
the value of Awards made hereunder; provided, that no such adjustment shall be
made to the maximum share limits described in Section 3.c. or 3.d., or otherwise
to an Award intended to be eligible for the performance-based exception under
Section 162(m), except to the extent consistent with that exception, nor shall
any change be made to ISOs except to the extent consistent with their continued
qualification under Section 422 of the Code.

     (3)  Continuing Application of Plan Terms. References in the Plan to shares
of Stock shall be construed to include any stock or securities resulting from an
adjustment pursuant to this Section 6.

7.  LEGAL CONDITIONS ON DELIVERY OF STOCK

     The Company will not be obligated to deliver any shares of Stock pursuant
to the Plan or to remove any restriction from shares of Stock previously
delivered under the Plan until the Company's counsel has approved all legal
matters in connection with the issuance and delivery of such shares; if the
outstanding Stock is at the time of delivery listed on any stock exchange or
national market system, the shares to be delivered have been listed or
authorized to be listed on such exchange or system upon official notice of
issuance; and all conditions of the Award have been satisfied or waived.  If the
sale of Stock has not been registered under the Securities Act of 1933, as
amended, the Company may require, as a condition to exercise of the Award, such
representations or agreements as counsel for the Company may consider
appropriate to avoid violation of such Act.  The Company may require that
certificates evidencing Stock issued under the Plan bear an appropriate legend
reflecting any restriction on transfer applicable to such Stock.

                                      -7-
<PAGE>

8.  AMENDMENT AND TERMINATION

     The Administrator may at any time or times amend the Plan or any
outstanding Award for any purpose which may at the time be permitted by law, or
may at any time terminate the Plan as to any further grants of Awards; provided,
that (except to the extent expressly required or permitted by the Plan) no such
amendment will, without the approval of the stockholders of the Company,
effectuate a change for which stockholder approval is required in order for the
Plan to continue to qualify under Section 422 of the Code and for Awards to be
eligible for the performance-based exception under Section 162(m).

9.  NON-LIMITATION OF THE COMPANY'S RIGHTS

     The existence of the Plan or the grant of any Award shall not in any way
affect the Company's right to Award a person bonuses or other compensation in
addition to Awards under the Plan.

10.  GOVERNING LAW

     The Plan shall be construed in accordance with the laws of the State of
Delaware.

11.  DEFINITIONS

     The following terms, when used in the Plan, shall have the meanings and be
subject to the provisions set forth below:

     "ADMINISTRATOR":  The Board or, if one or more has been appointed, the
Committee. The Administrator may delegate ministerial tasks to such persons
(including Employees) as it deems appropriate.

     "AFFILIATE":  Any corporation or other entity owning, directly or
indirectly, 50% or more of the outstanding Stock of the Company, or in which the
Company or any such corporation or other entity owns, directly or indirectly,
50% of the outstanding capital stock (determined by aggregate voting rights) or
other voting interests.

     "AWARD":  Any or a combination of the following:

     (i) Stock Options.

     (ii) SARs.

     (iii) Restricted Stock.

     (iv) Unrestricted Stock.

     (v)  Deferred Stock.

                                      -8-
<PAGE>

     (vi)  Securities (other than Stock Options) that are convertible into or
exchangeable for Stock on such terms and conditions as the Administrator
determines.

     (vii) Cash Performance Awards.

     (viii)  Performance Awards.

     (ix)  Grants of cash, or loans, made in connection with other Awards in
order to help defray in whole or in part the economic cost (including tax cost)
of the Award to the Participant.

     "BOARD":  The Board of Directors of the Company.

     "CASH PERFORMANCE AWARD":  A Performance Award payable in cash.  The right
of the Company under the Plan to extinguish an Award in exchange for cash or the
exercise by the Company of such right shall not make an Award otherwise not
payable in cash a Cash Performance Award.

     "CHANGE IN CONTROL":  Any of the following events shall constitute a Change
in Control:

     (i)  the acquisition by any Person or group of the ultimate beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) of more than 50% of the
then outstanding securities of the Company entitled to vote generally in the
election of directors; excluding, however, the following: (A) any acquisition
directly from the Company (excluding any acquisition by virtue of the exercise
of an exercise, conversion or exchange privilege unless the security being so
exercised, converted or exchanged was itself acquired directly from the
Company), (B) any acquisition by the Company, or (C) any acquisition by an
employee benefit plan (or related trust) sponsored or maintained by the Company
or by any corporation controlled by the Company; or

     (ii)  a reorganization, recapitalization, merger or consolidation (a
"Corporate Transaction") of the Company, unless securities representing more
than 50% of the then outstanding securities entitled to vote generally in the
election of directors of the Company or the corporation resulting from or
surviving such Corporate Transaction (or the ultimate parent of the Company or
such corporation after such Corporate Transaction) are beneficially owned
subsequent to such Corporate Transaction by the Person or Persons who were the
beneficial owners of the outstanding securities of the Company entitled to vote
generally in the election of directors immediately prior to such Corporate
Transaction, in substantially the same proportions as their ownership
immediately prior to such Corporate Transaction; or

     (iii)  the sale, transfer or other disposition of all or substantially all
of the assets of the Company; or

     (iv)  the dissolution or liquidation of the Company.

     For purposes of this definition, securities entitled to vote generally in
the election of directors that are issuable upon exercise of an exercise,
conversion or exchange privilege shall be

                                      -9-
<PAGE>

deemed to be outstanding. In addition, for purposes of this definition the
following terms have the meanings set forth below:

     A Person will be deemed to be the "owner" of any securities of which such
Person would be the "beneficial owner," as such term is defined in Rule 13d-3
promulgated by the Securities and Exchange Commission under the Exchange Act.

     "Person" has the meaning used in Section 13(d) of the Exchange Act, except
that "Person" does not include the Company or a wholly owned subsidiary of the
Company or an employee benefit plan (or related trust) of the Company or of a
wholly owned subsidiary.

     "CODE":  The U.S. Internal Revenue Code of 1986 as from time to time
amended and in effect, or any successor statute as from time to time in effect.

     "COMMITTEE":  One or more committees of the Board which, in the case of
Awards granted to officers of the Company, shall be comprised solely of two or
more outside directors within the meaning of Section 162(m).

     "COMPANY":  Control Delivery Systems, Inc. or any successor thereto.

     "DEFERRED STOCK":  A promise to deliver Stock or other securities in the
future on specified terms.

     "ELIGIBLE DIRECTORS":  Directors who are not officers or employees of the
Company and who are not beneficial owners of more than 5% of the outstanding
capital stock of the Company, including for such purposes persons who control or
share control of any such 5% beneficial owner.

     "EMPLOYEE":  Any person who is employed by the Company or an Affiliate.

     "FAIR MARKET VALUE":  In the event that, on the date of a grant, the Stock
is traded on a recognized national stock exchange (an "Exchange") or listed for
quotation on NASDAQ, Fair Market Value shall mean, except as provided below, the
average intraday high and low of a share of Stock as reported on the Exchange or
NASDAQ on the day of the grant (based on The Wall Street Journal report of
composite transactions) or, if the Exchange or NASDAQ was closed on such date,
the next preceding date on which it was open.  If the Stock is not listed on an
Exchange or is not listed for quotation on NASDAQ, Fair Market Value shall have
the same meaning as it does in the provisions of the Code and the regulations
thereunder applicable to ISOs.

     "ISO":  A Stock Option intended to be an "incentive stock option" within
the meaning of Section 422 of the Code.  No Stock Option Awarded under the Plan
will be an ISO unless the Administrator expressly provides for ISO treatment.

     "PARTICIPANT":  An Employee, Eligible Director or other person providing
services to the Company or its Affiliates who is granted an Award under the
Plan.

                                      -10-
<PAGE>

     "PERFORMANCE AWARD":  An Award subject to Performance Criteria.  The
Committee in its discretion may grant Performance Awards that are intended to
qualify for the performance-based compensation exception under Section 162(m)
and Performance Awards that are not intended so to qualify.

     "PERFORMANCE CRITERIA":  Specified criteria the satisfaction of which is a
condition for  the exercisability, vesting or full enjoyment of an Award.  For
purposes of Performance Awards that are intended to qualify for the performance-
based compensation exception under Section 162(m), a Performance Criterion shall
mean an objectively determinable measure of performance relating to any of the
following (determined either on a consolidated basis or, as the context permits,
on a divisional, subsidiary, line of business, project or geographical basis or
in combinations thereof):  (i) sales; revenues; earnings before or after
deduction for all or any portion of interest, taxes, depreciation, amortization
or other items, whether or not on a continuing operations or an aggregate or per
share basis; market share; stock price; stockholder return; development or sale
of particular products or services; regulatory approval of new products; or any
combination of the foregoing; or (ii) joint ventures and strategic alliances;
financings (issuance of debt or equity) and refinancings; transactions that
would constitute a change of control; or any combination of the foregoing.  A
Performance Criterion measure and targets with respect thereto determined by the
Administrator need not be based upon an increase, a positive or improved result
or avoidance of loss.

     "PLAN":  The Control Delivery System, Inc. 2001 Incentive Plan as from time
to time amended and in effect.

     "RESTRICTED STOCK":  An Award of Stock subject to restrictions requiring
that such Stock be redelivered to the Company if specified conditions are not
satisfied.

     "SECTION 162(M)":  Section 162(m) of the Code.

     "SARS":  Rights entitling the holder upon exercise to receive cash or
Stock, as the Administrator determines, equal to a function (determined by the
Administrator using such factors as it deems appropriate) of the amount by which
the Stock has appreciated in value since the date of the Award.

     "STOCK":  Common Stock of the Company, par value $ 0.01 per share.

     "STOCK OPTIONS":  Options entitling the recipient to acquire shares of
Stock upon payment of the exercise price.  Stock Options may either be ISOs or
non-statutory/nonqualified options.

     "UNRESTRICTED STOCK":  An Award of Stock not subject to any restrictions
under the Plan.

                                      -11-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}]]