Document:

EXHIBIT 10.5

                               SECOND AMENDMENT TO
                          THE PIPER IMPACT 401(K) PLAN

      THIS AGREEMENT by Piper Impact, Inc., a Delaware corporation, (the
"Sponsor"),

                                 WITNESSETH:

      WHEREAS, on July 13, 1998, the Sponsor executed the amendment and
restatement of the plan agreement known as the "Piper Impact 401(k) Plan" (the
"Plan"); and

      WHEREAS, the Sponsor retained the right in Section 10.01 of the Plan to
amend the Plan from time to time; and

      WHEREAS, the directors of the Sponsor have approved resolutions to amend
the Plan;

      NOW, THEREFORE, effective January 1, 2001, Section 3.1 of the Plan is
amended in its entirety to provide as follows:

            3.1 ELIGIBILITY REQUIREMENTS. Each Employee of an Employer shall be
      eligible to participate in this Plan beginning on the entry date which
      occurs with or next follows the date on which the Employee completes three
      months of Active Service and attains the age of 21. However, all Employees
      who are included in a unit of Employees covered by a collective bargaining
      agreement between the Employees' representative and the Employer shall be
      excluded, even if they have met the requirements for eligibility, if there
      has been good faith bargaining between the Employer and the Employees'
      representative pertaining to retirement benefits and the agreement does
      not require the Employer to include such Employees in this Plan. In
      addition, a Leased Employee shall not be eligible to participate in the
      Plan unless the Plan's qualified status is dependent upon coverage of the
      Leased Employee. Employees of Quanex Corporation who are not working at
      its Piper Impact division are not eligible to participate in the Plan. The
      Plan's entry dates will be January 1, April 1, July 1 and October 1 of
      each Plan Year.

      IN WITNESS WHEREOF, the Sponsor has caused this Agreement to be executed
effective as of the 1ST day of January, 2001.

                                    PIPER IMPACT, INC.

                                    By     TERRY M. MURPHY
                                    Title: VP FINANCE AND CFOTECH LABORATORIES, INC.
                                    FORM OF
                             STOCK OPTION AGREEMENT

     This Stock Option Agreement (this  "Agreement") is made and entered into as
of the Date of Grant set forth below (the "Date of Grant") by and  between  Tech
Laboratories,  Inc., a New Jersey corporation (the "Company"),  and the Optionee
named below  ("Optionee").  Capitalized  terms not defined herein shall have the
meanings ascribed to them in the Company's 1996 Incentive Stock Option Plan (the
"Plan").

Optionee:

Social Security Number:

Optionee's Address:

Total Option Shares:

Exercise Price Per Share:

Date of Grant:

Vesting Start Date:

Expiration Date:
                                      ------------------
                                      (unless earlier terminated
                                      under Section 3 hereof)

Type of Stock Option
(Check one):                          |X|  Incentive Stock Option

                                      |_|  Nonqualified Stock Option

     1. Grant of Option.  The Company  hereby grants to Optionee an option (this
"Option")  to purchase up to the total  number of shares of Common  Stock of the
Company set forth above as Total Option Shares  (collectively,  the "Shares") at
the Exercise Price Per Share set forth above (the "Exercise Price"),  subject to
all of the terms and conditions of this  Agreement and the Plan.  This Option is
intended to qualify as an "incentive stock option" ("ISO") within the meaning of
Section 422 of the Internal  Revenue Code of 1986, as amended (the  "Code"),  to
the extent permitted under Code Section 422.

     2. Vesting; Exercise Period.

     2.1.  Vesting Of Shares.  This  Option  shall be  exercisable  as it vests.
Subject to the terms and conditions of the Plan and this Agreement,  this Option
shall vest and become  exercisable as to portions of the Shares as follows:  (a)
this Option  shall not be  exercisable  with  respect to any of the Shares until
______________  (the "First  Vesting  Date");  (b) if Optionee has  continuously
provided  services to the Company,  or any parent or  Subsidiary of the Company,
then on the First  Vesting  Date,  this Option  shall become  exercisable  as to
________ Shares;  and (c) thereafter this Option shall become  exercisable as to
an additional  ________  Shares on each yearly  anniversary of the First Vesting
Date for  ________  years,  provided  that  Optionee has  continuously  provided
services to the Company, or any Parent or Subsidiary of the Company.

<PAGE>

     2.2.  Vesting of Options.  Shares that are vested  pursuant to the schedule
set forth in Section 2.1 hereof are "Vested  Shares." Shares that are not vested
pursuant to the schedule set forth in Section 2.1 hereof are "Unvested Shares."

     2.3. Expiration.  This Option shall expire on the Expiration Date set forth
above  and  must be  exercised,  if at all,  on or  before  the  earlier  of the
Expiration  Date or the date on which  this  Option  is  earlier  terminated  in
accordance with the provisions of Section 3 hereof.

     3. Termination.

     3.1.  Termination  For Any Reason Except Death,  Disability,  or Cause.  If
Optionee is Terminated for any reason except  Optionee's death,  disability,  or
cause,  then this  Option,  to the extent  (and only to the  extent)  that it is
vested in  accordance  with the  schedule set forth in Section 2.1 hereof on the
Termination  Date,  may be  exercised by Optionee no later than three (3) months
after the Termination Date, but in any event, no later than the Expiration Date.

     3.2. Termination Because of Death or Disability.  If Optionee is Terminated
because of death or  disability  of Optionee (or Optionee  dies within three (3)
months after  Termination  other than for cause or because of disability),  then
this Option, to the extent that it is vested in accordance with the schedule set
forth in  Section  2.1  hereof on the  Termination  Date,  may be  exercised  by
Optionee (or Optionee's legal  representative  or authorized  assignee) no later
than twelve (12) months after the  Termination  Date, but in any event, no later
than the Expiration  Date. Any exercise after three months after the Termination
Date when the  Termination  is for any  reason  other than  Optionee's  death or
disability,  within the meaning of Code Section 22(e)(3),  shall be deemed to be
the exercise of a nonqualified stock option.

     3.3.  Termination  for Cause.  If Optionee is  Terminated  for cause,  this
Option will expire on Optionee's date of Termination.

     4. Manner of Exercise.

     4.1. Stock Option Exercise Agreement. To exercise this Option, Optionee (or
in  the  case  of  exercise  after  Optionee's   death,   Optionee's   executor,
administrator, heir, or legatee, as the case may be) must deliver to the Company
an executed  stock  option  exercise  agreement in the form  attached  hereto as
Exhibit A, or in such other form as may be approved by the Company  from time to
time (the "Exercise  Agreement"),  which shall set forth, inter alia, Optionee's
election to exercise  this  Option,  the number of shares being  purchased,  any
restrictions  imposed  on the Shares and any  representations,  warranties,  and
agreements regarding  Optionee's  investment intent and access to information as
may be required by the Company to comply with  applicable  securities  laws.  If
someone other than Optionee exercises this Option,  then such person must submit
documentation  reasonably  acceptable  to the  Company  that such person has the
right to exercise this Option.

     4.2. Limitations on Exercise.  This Option may not be exercised unless such
exercise is in compliance with all applicable federal and state securities laws,
as they are in effect on the date of exercise.

     4.3. Payment.  The Exercise  Agreement shall be accompanied by full payment
of the  Exercise  Price for the shares  being  purchased  in cash (by check) or,
where permitted by law:

          (a) by cancellation of indebtedness of the Company to Optionee;

                                       -2-
<PAGE>

          (b) provided that a public market for the Company's stock exists:  (1)
     through a "same day sale" commitment from Optionee and a broker-dealer that
     is a member of the National  Association  of Securities  Dealers,  Inc. (an
     "NASD Dealer"), whereby Optionee irrevocably elects to exercise this Option
     and to sell a portion as of the Shares so purchased to pay for the Exercise
     Price, and whereby the NASD Dealer irrevocably commits upon receipt of such
     Shares to forward  the  Exercise  Price  directly  to the  Company;  or (2)
     through a "margin"  commitment  from  Optionee and an NASD Dealer,  whereby
     Optionee  irrevocably  elects to  exercise  this  Option  and to pledge the
     Shares so purchased to the NASD Dealer in a margin  account as security for
     a loan  from the NASD  Dealer  in the  amount of the  Exercise  Price,  and
     whereby the NASD Dealer irrevocably  commits upon receipt of such Shares to
     forward the Exercise Price directly to the Company; or

          (c) by any combination of the foregoing.

     4.4. Tax Withholding.  Prior to the issuance of the Shares upon exercise of
this Option,  Optionee must pay or provide for any  applicable  federal or state
withholding  obligations of the Company.  If the Company  permits,  Optionee may
provide  for  payment of  withholding  taxes  upon  exercise  of this  Option by
requesting  that the Company retain Shares with a Fair Market Value equal to the
minimum amount of taxes required to be withheld. In such case, the Company shall
issue the net number of Shares to Optionee by deducting the Shares retained from
the Shares issuable upon exercise.

     4.5. Issuance of Shares.  Provided that the Exercise  Agreement and payment
are in form and substance  satisfactory to counsel for the Company,  the Company
shall issue Shares  registered  in the name of Optionee,  Optionee's  authorized
assignee,  or Optionee's legal  representative,  and shall deliver  certificates
representing the Shares with the appropriate legends affixed thereto.

     5. Notice of  Disqualifying  Disposition of ISO Shares.  To the extent this
Option is an ISO, if Optionee  sells or otherwise  disposes of any of the Shares
acquired  pursuant  to the ISO on or  before  the  later of (a) the date two (2)
years after the Date of Grant,  and (b) the date one (1) year after  transfer of
such Shares to  Optionee  upon  exercise of this  Option,  then  Optionee  shall
immediately notify the Company in writing of such disposition.

     6.  Compliance with Laws and  Regulations.  The exercise of this Option and
the  issuance  and  transfer  of Shares  shall be subject to  compliance  by the
Company  and  Optionee  with all  applicable  requirements  of federal and state
securities  laws and with all applicable  requirements  of any stock exchange on
which the  Company's  Common Stock may be listed at the time of such issuance or
transfer.  Optionee  understands  that the  Company  is under no  obligation  to
register or qualify the Shares with the Securities and Exchange Commission,  any
state securities commission or any stock exchange to effect such compliance.

     7.  Nontransferability  of Option. Except as otherwise set forth in Section
11 of the Plan,  this Option may not be  transferred in any manner other than by
will or by the laws of descent and distribution, and may be exercised during the
lifetime of Optionee only by Optionee. The terms of this Option shall be binding
upon the executors, administrators, successors, and assigns of Optionee.

     8. Tax Consequences. Set forth below is a brief summary, as of the date the
Board adopted the Plan, of some of the federal tax  consequences  of exercise of
this Option and disposition of Shares.  THIS SUMMARY IS NECESSARILY  INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.  OPTIONEE SHOULD CONSULT
A TAX ADVISOR BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

                                       -3-
<PAGE>

     8.1.  Exercise  of  Incentive  Stock  Option.  To the  extent  this  Option
qualifies as an ISO, there will be no regular  federal income tax liability upon
the  exercise of this Option,  although  the excess,  if any, of the fair market
value of the  Shares on the date of  exercise  over the  Exercise  Price will be
treated as a tax preference item for federal income tax purposes and may subject
Optionee to the alternative minimum tax in the year of exercise.

     8.2. Exercise of Nonqualified  Stock Option. To the extent this Option does
not qualify as an ISO, there may be a regular  federal income tax liability upon
the  exercise  of this  Option.  Optionee  will be  treated  as having  received
compensation  income (taxable at ordinary income tax rates) equal to the excess,
if any, of the fair market value of the Shares on the date of exercise  over the
Exercise  Price.  The  Company  may be  required  to  withhold  from  Optionee's
compensation  or  collect  from  Optionee  and  pay  to  the  applicable  taxing
authorities an amount equal to a percentage of this  compensation  income at the
time of exercise.

     8.3.  Disposition of Shares.  The following tax consequences may apply upon
disposition of the Shares.

          (a)  Incentive  Stock  Options.  If the  Shares are held for more than
     twelve (12) months after the date of the transfer of the Shares pursuant to
     the  exercise  of an ISO and are  disposed of more than two (2) years after
     the Date of Grant,  any gain realized on  disposition of the Shares will be
     treated  as  capital  gain for  federal  income  tax  purposes.  If  Shares
     purchased  under an ISO are disposed of within the  applicable one (1) year
     or two (2) year  period,  any gain  realized  on such  disposition  will be
     treated as  compensation  income  (taxable at ordinary income rates) to the
     extent of the excess, if any, of the fair market value of the Shares on the
     date of exercise over the Exercise Price.

          (b) Nonqualified  Stock Options.  If the Shares are held for more than
     twelve (12) months after the date of the transfer of the Shares pursuant to
     the exercise of an NQSO,  any gain  realized on  disposition  of the Shares
     will be treated as long-term capital gains.

          (c)  Withholding.  The  Company  may  be  required  to  withhold  from
     Participant's compensation,  or collect from the Participant and pay to the
     applicable  taxing  authorities,  an amount  equal to a  percentage  of the
     compensation income.

     9. Privileges of Stock Ownership. Optionee shall not have any of the rights
of a  stockholder  with  respect  to any  Shares  until the Shares are issued to
Optionee.

     10.  Interpretation.  Any  dispute  regarding  the  interpretation  of this
Agreement  shall  be  submitted  by  Optionee  or the  Company  to the  Board of
Directors of the Company for review. The resolution of such dispute by the Board
of Directors shall be final and binding on the Company and Optionee.

     11. Entire Agreement.  The Plan is incorporated  herein by reference.  This
Agreement  and the  Plan  and  the  Exercise  Agreement  constitute  the  entire
agreement  and  understanding  of the  parties  hereto  and with  respect to the
subject matter  hereof,  and supersede all prior  understandings  and agreements
with respect to such subject matter.

     12.  Notices.  Any notice  required to be given or delivered to the Company
under the terms of this  Agreement  shall be in  writing  and  addressed  to the
Corporate  Secretary  of the Company at its  principal  corporate  offices.  Any
notice  required to be given or  delivered  to Optionee  shall be in writing and
addressed to Optionee at the address indicated above or to such other address as
such  party may  designate  in  writing  from time to time to the  Company.  All
notices shall be deemed to have been given

                                       -4-
<PAGE>

or delivered upon: personal delivery; three (3) days after deposit in the United
States mail by certified or registered mail (return receipt requested);  one (1)
business day after deposit with any return receipt express courier (prepaid); or
one (1) business day after transmission by facsimile.

     13. Successors and Assigns.  The Company may assign any of its rights under
this Agreement. This Agreement shall be binding upon and inure to the benefit of
the  successors  and  assigns of the  Company.  Subject to the  restrictions  on
transfer set forth  herein,  this  Agreement  shall be binding upon Optionee and
Optionee's heirs, executors, administrators, legal representatives,  successors,
and assigns.

     14.  Governing  Law. This  Agreement  shall be governed by and construed in
accordance with the internal laws of the State of New Jersey,  without regard to
that body of law pertaining to choice of law or conflict of law.

     15. Acceptance.  Optionee hereby acknowledges receipt of a copy of the Plan
and this  Agreement.  Optionee has read and understands the terms and provisions
thereof,  and accepts this Option,  subject to all terms and  conditions  of the
Plan and this  Agreement.  Optionee  acknowledges  that there may be adverse tax
consequences  upon exercise of this Option or disposition of the Shares and that
the Company has advised Optionee to consult a tax advisor prior to such exercise
or disposition.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in
duplicate by its duly  representative,  and Optionee has executed this Agreement
in duplicate as of the Date of Grant.

TECH LABORATORIES, INC.                      OPTIONEE

By:
   ----------------------------              ---------------------------
   Earl Bjorndal                             Bernard M. Ciongoli
   Vice President

                                       -5-
<PAGE>

                                    Exhibit A

                             TECH LABORATORIES, INC.
                  1996 INCENTIVE STOCK OPTION PLAN (the "Plan")
                         STOCK OPTION EXERCISE AGREEMENT

     I hereby  elect to  purchase  the number of shares of Common  Stock of Tech
Laboratories, Inc. (the "Company") as set forth below:

Optionee:
         -----------------------------------------------------------------------
Social Security Number:
                       ---------------------------------------------------------
Address:
        ------------------------------------------------------------------------

Type of Option:   |_|  Incentive Stock Option

                  |_|  Nonqualified Stock Option

Number of Shares Purchased:
                           -----------------------------------------------------
Purchase Price per Share:
                         -------------------------------------------------------
Aggregate Purchase Price:
                         -------------------------------------------------------
Date of Option Agreement:
                         -------------------------------------------------------

Exact Name of Title to Shares:
                              --------------------------------------------------

     1. Delivery  Purchase  Price.  Optionee  hereby delivers to the Company the
Aggregate  Purchase Price, to the extent  permitted in the Option Agreement (the
"Option Agreement") as follows (check as applicable and complete):

|_|  In cash (by  check) in the amount of  $______________,  receipt of which is
     acknowledged by the Company;

|_|  By cancellation of indebtedness of the Company to Optionee in the amount of
     $______________.

|_|  Through a "same-day-sale" commitment, delivered herewith, from Optionee and
     the NASD Dealer named therein, in the amount of $_________________; or

|_|  Through a "margin"  commitment,  delivered  herewith  from Optionee and the
     NASD Dealer named therein, in the amount of $________________.

2. Market  Standoff  Agreement.  Optionee,  if  requested  by the Company and an
underwriter of Common Stock (or other  securities of the Company,  agrees not to
sell or otherwise  transfer or dispose of any Common Stock (or other securities)
of the Company  held by Optionee  during the period  requested  by the  managing
underwriter  following the  effective  date of a  registration  statement of the
Company filed under the Securities Act, provided that all officers and directors
of the Company are required to enter into a similar  agreement.  Such  agreement
shall be in writing in a form  satisfactory to the Company and such underwriter.
The Company may impose stop-transfer instructions with respect to the shares (or
other  securities)  subject to the foregoing  restriction  until the end of such
period.

3. Tax Consequences.  OPTIONEE  UNDERSTANDS THAT OPTIONEE MAY SUFFER ADVERSE TAX
CONSEQUENCES  AS A RESULT OF OPTIONEE'S  PURCHASE OR  DISPOSITION OF THE SHARES.
OPTIONEE  REPRESENTS  THAT  OPTIONEE HAS  CONSULTED  WITH ANY TAX  CONSULTANT(S)
OPTIONEE DEEMS  ADVISABLE IN CONNECTION  WITH THE PURCHASE OR DISPOSITION OF THE
SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.

4. Entire  Agreement.  The Plan and Option Agreement are incorporated  herein by
reference.   This  Exercise  Agreement,  the  Plan,  and  the  Option  Agreement
constitute the entire  agreement and  understanding of the parties and supersede
in their  entirety all prior  understandings  and  agreements of the Company and
Optionee  with  respect to the subject  matter  hereof,  and are governed by New
Jersey law except for that body of law  pertaining  to choice of law or conflict
of law.

Date:
     ---------------------                    ---------------------------------
                                              Signature of Optionee

                                       -6-

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