Document:

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                                                                    EXHIBIT 10.5

                            INDEMNIFICATION AGREEMENT

         THIS AGREEMENT is made this ___ day of _______________, 2000 by and
between GENOMIC SOLUTIONS INC., a Delaware corporation (the "Company"), and
____________________ (the "Indemnitee").

                                    RECITALS:

         A. Indemnitee is a member of the Board of Directors and/or an executive
officer of the Company, and in such capacities is performing a valuable service
for the Company.

         B. The Company has adopted an Amended and Restated Certificate of
Incorporation, as amended (the "Certificate") and Bylaws (the "Bylaws")
authorizing and directing the Company to indemnify the directors, officers,
agents and employees of the Company to the maximum extent authorized by the
Delaware General Corporation Law, as amended to date (the "Act").

         C. The Act specifically provides that it is not exclusive, and thereby
contemplates that contracts may be entered into between the Company and its
directors, officers, agents and employees with respect to the indemnification of
such persons.

         D. Recent developments with respect to the terms and availability of
directors and officers liability insurance ("D&O Insurance") and the
application, amendment and enforcement of statutory and other indemnification
provisions generally have raised questions concerning the adequacy and
reliability of the protection afforded to directors and officers thereby.

         E. To resolve such questions and thereby induce Indemnitee to continue
to serve as a member of the Board of Directors of the Company or as an officer,
or both, the Company desires to enter into this contract with Indemnitee.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of Indemnitee's continued service with
the Company after the date hereof, the parties agree as follows:

         1. D&O Insurance. The Company shall evaluate whether to procure D&O
Insurance, and if it, in its discretion, procures such insurance, it shall
maintain D&O Insurance so long as, in the reasonable business judgment of the
then directors of the Company, both (i) the premium cost for such insurance is
reasonably related to the amount of coverage provided, and (ii) the coverage
provided by such insurance is not so limited by exclusions that insufficient
benefit may be derived therefrom.

         2. Indemnity. Subject only to the exclusions set forth in Section 3
hereof, the Company hereby agrees to hold harmless and indemnify Indemnitee, on
demand and as such expenses are incurred, against any and all expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by Indemnitee in connection with any
threatened, pending or completed action, suit or proceedings, whether civil,
criminal, administrative or investigative

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(including an action by or in the right of the Company) to which Indemnitee is,
was or at any time becomes a party, or is threatened to be made a party, by
reason of the fact that Indemnitee is, was or at any time becomes a director,
officer, employee or agent of the Company, or is or was serving or at any time
serves at the request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise to
the fullest extent authorized and permitted by the provisions of the Act, or by
any amendment thereof or other statutory provisions authorizing or permitting
such indemnification which is adopted after the date hereof.

         3.       Limitations on Indemnity. No indemnity pursuant to Section 2
hereof shall be paid by the Company:

                  (a) except to the extent the aggregate of losses to be
         indemnified hereunder exceed the amount of such losses for which
         Indemnitee is indemnified pursuant to any D&O Insurance purchased and
         maintained by the Company;

                  (b) in respect to remuneration paid to Indemnitee if a final
         decision by a court having jurisdiction in the matter shall determine
         that such remuneration was in violation of law;

                  (c) on account of any suit in which judgment is rendered
         against Indemnitee for an accounting of profits made from the purchase
         or sale by Indemnitee of securities of the Company pursuant to the
         provisions of Section 16(b) of the Securities Exchange Act of 1934 and
         amendments thereto or similar provisions of any federal, state or local
         statutory law;

                  (d) if a final decision by a court having jurisdiction in the
         matter shall determine that Indemnitee's act or omission involved an
         act or omission undertaken with deliberate intent to cause injury to
         the Company or undertaken with reckless disregard for the best
         interests of the Company;

                  (e) if a final decision by a court having jurisdiction in the
         matter shall determine that such indemnification is not lawful; or

                  (f) if otherwise prohibited by the Act.

         4.       Continuation of Indemnity. All agreements and obligations of
the Company contained herein shall continue during the period Indemnitee is a
director, officer, employee or agent of the Company (or is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise) and shall
continue thereafter so long as Indemnitee shall be subject to any possible claim
or threatened, pending or completed action, suit or proceeding, whether civil,
criminal or investigative, by reason of the fact that Indemnitee was a director
of the Company or serving in any other capacity referred to herein.

         5.       Notification and Defense of Claim. Promptly after receipt by
Indemnitee of notice of the commencement of any action, suit or proceeding,
Indemnitee will, if a claim in respect thereof is to

                                      -2-
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be made against the Company under this Agreement, notify the Company in writing
of the commencement thereof; but the omission so to notify the Company will not
relieve it from any liability which it may have to Indemnitee otherwise than
under this Agreement. With respect to any such action, suit or proceeding as to
which Indemnitee notifies the Company of the commencement thereof:

                  (a) The Company will be entitled to participate therein at its
         own expense.

                  (b) Except as otherwise provided below, to the extent that it
         may wish, the Company, jointly with any other indemnifying party
         similarly notified, will be entitled to assume the defense thereof,
         with counsel selected by the Company and reasonably satisfactory to
         Indemnitee. After notice from the Company to Indemnitee of its election
         so to assume the defense thereof, the Company will not be liable to
         Indemnitee under this Agreement for any legal or other expenses
         subsequently incurred by Indemnitee in connection with the defense
         thereof other than reasonable costs of investigation or as otherwise
         provided below. Indemnitee shall have the right to employ counsel in
         such action, suit or proceeding but the fees and expenses of such
         counsel incurred after notice from the Company of its assumption of the
         defense thereof shall be at the expense of Indemnitee unless (i) the
         employment of counsel by Indemnitee has been authorized by Company,
         (ii) Indemnitee shall have reasonably concluded that there may be a
         conflict of interest between the Company and Indemnitee in the conduct
         of the defense of such action or (iii) the Company shall not in fact
         have employed counsel to assume the defense of such action, in each of
         which cases the fees and expenses of counsel shall be at the expense of
         the Company. The Company shall not be entitled to assume the defense of
         any action, suit or proceeding brought by or on behalf of the Company
         or as to which Indemnitee shall have made the conclusion provided for
         in (ii) above and notified the Company or as to which Indemnitee shall
         have made the conclusion provided for in (ii) above and notified the
         Company of such decision in writing specifying the reasons therefore.

                  (c) The Company shall not be liable to indemnify Indemnitee
         under this Agreement for any amounts paid in settlement of any action
         or claim effected without its written consent. The Company shall not
         settle any action or claim in any manner which would impose any penalty
         or limitation on Indemnitee without Indemnitee's prior written consent.
         Neither the Company nor Indemnitee will unreasonably withhold their
         consent to any proposed settlement.

         6.       Repayment of Expenses. Indemnitee agrees that Indemnitee will
reimburse the Company for all reasonable fees and expenses paid by the Company
in defending any civil or criminal action, suit or proceeding against Indemnitee
if and only to the extent that a final decision by a court having jurisdiction
in the matter shall determine that Indemnitee is not entitled to be indemnified
by the Company for such fees and expenses under the provisions of the Act, the
Certificate, the Bylaws, this Agreement or otherwise.

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         7.       Enforcement.

                  (a) The Company expressly confirms and agrees that it has
         entered into this Agreement and assumed the obligations imposed on the
         Company hereby to induce Indemnitee to continue as a director or as an
         executive officer of the Company or any of its subsidiaries or an
         affiliated company as directed by the Company, and acknowledges that
         Indemnitee is relying upon this Agreement in continuing in such
         capacity.

                  (b) If Indemnitee is required to bring any action to enforce
         rights or to collect moneys due under this Agreement and is successful
         in such action, the Company shall reimburse Indemnitee for all of
         Indemnitee's reasonable fees and expenses in bringing and pursuing such
         action.

         8.       Severability. Each of the provisions of this Agreement is a
separate and distinct agreement, independent of the others, so that if any
provision hereof shall be held to be invalid or unenforceable for any reason,
such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof.

         9.       Governing Law; Binding Effect; Amendment and Termination.

                  (a) This Agreement shall be interpreted and enforced in
         accordance with the laws of the State of Delaware applicable to
         contracts made and to be wholly performed in such state.

                  (b) This Agreement shall be binding upon Indemnitee and upon
         the Company, its successors and assigns, and shall inure to the benefit
         of Indemnitee, his/her heirs, personal representatives and assigns and
         to the benefit of the Company, its successors and assigns.

                  (c) No amendment, modification, termination or cancellation of
         this Agreement shall be effective unless in writing signed by both
         parties hereto.

         10.      Counterparts. This document may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one instrument.

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         IN WITNESS WHEREOF, the parties have executed this Agreement on and as
of the day and year first above written.

                                       GENOMIC SOLUTIONS INC.
                                       a Delaware corporation

                                       By:
                                           -------------------------------------
                                           Jeffrey  S. Williams, President and
                                           Chief Executive Officer

                                       "INDEMNITEE"

                                       -----------------------------------------

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                                                                    EXHIBIT 10.6

                            B.I. SYSTEMS CORPORATION

                               1994 OMNIBUS EQUITY

                                 INCENTIVE PLAN

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                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                          Page
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<S>                                                                       <C>
  SECTION 1 ESTABLISHMENT, PURPOSE AND DURATION ..........................  1
           1.1  Establishment of the Plan ................................  1
           1.2  Purpose of the Plan ......................................  1
           1.3  Duration of the Plan .....................................  1
  SECTION 2 DEFINITIONS ..................................................  2
           2.1  "Affiliated SAR" .........................................  2
           2.2  "Award" ..................................................  2
           2.3  "Award Agreement" ........................................  2
           2.4  "Board" ..................................................  2
           2.5  "Code" ...................................................  2
           2.6  "Committee" ..............................................  2
           2.7  "Company" ................................................  2
           2.8  "Consultant" .............................................  2
           2.9  "Director" ...............................................  2
           2.10 "Disability" .............................................  2
           2.11 "Employee" ...............................................  2
           2.12 "Exchange Act ............................................  3
           2.13 "Fair Market Value" ......................................  3
           2.14 "Freestanding SAR" .......................................  3
           2.15 "Incentive Stock Option" .................................  3
           2.16 "Insider" ................................................  3
           2.17 "Nonqualified Stock Option" ..............................  3
           2.18 "Option" .................................................  3
           2.19 "Option Price" ...........................................  3
           2.20 "Participant" ............................................  3
           2.21 "Performance Unit" .......................................  4
           2.22 "Performance Share" ......................................  4
           2.23 "Period of Restriction" ..................................  4
           2.24 "Restricted Stock" .......................................  4
           2.25 "Retirement" .............................................  4
           2.26 "Shares" .................................................  4
           2.27 "Stock Appreciation Right" ...............................  4
           2.28 "Subsidiary" .............................................  4
           2.29 "Tandem SAR" .............................................  4
           2.30 "Window Period" ..........................................  4

  SECTION 3 ADMINISTRATION ...............................................  5
           3.1  The Committee ............................................  5
           3.2  Authority of the Committee ...............................  5
           3.3  Decisions Binding ........................................  5

  SECTION 4 SHARES SUBJECT TO THE PLAN ...................................  6
           4.1  Number of Shares .........................................  6
           4.2  Lapsed Awards ............................................  7
</TABLE>

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<TABLE>
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           4.3  Adjustments in Authorized Shares .........................  7

  SECTION 5 ELIGIBILITY AND PARTICIPATION ................................  8
           5.1  Eligibility ..............................................  8
           5.2  Actual Participation......................................  8

  SECTION 6 STOCK OPTIONS ................................................  8
           6.1  Grant of Options .........................................  8
           6.2  Award Agreement ..........................................  8
           6.3  Option Price .............................................  8
                6.3.1 Nonqualified Stock Options .........................  8
                6.3.2 incentive Stock Options ............................  8
           6.4  Duration of Options ......................................  9
           6.5  Exercise of Options ......................................  9
           6.6  Payment ..................................................  9
           6.7  Restrictions on Share Transferability .................... 10
           6.8  Certain Additional Provisions for Incentive Stock
                Options .................................................. 10
                6.8.1 Exercisability ..................................... 10
                6.8.2 Termination of Employment .......................... 10
                6.8.3 Employees Only ..................................... 10
           6.9  Nontransferability of Options ............................ 10

  SECTION 7 STOCK APPRECIATION RIGHTS .................................... 11
           7.1  Grant of SARs ............................................ 11
           7.2  Exercise of Tandem SARs .................................. 11
           7.3  Exercise of Affiliated SARs .............................. 11
           7.4  Exercise of Freestanding SARs ............................ 11
           7.5  SAR Agreement ............................................ 11
           7.6  Term of SARs ............................................. 12
           7.7  Payment of SAR Amount .................................... 12
           7.8  Rule 16b-3 Requirements .................................. 12
           7.9  Nontransferability of SARs ............................... 12

  SECTION 8 RESTRICTED STOCK ............................................. 13
           8.1  Grant of Restricted Stock................................. 13
           8.2  Restricted Stock Agreement ............................... 13
           8.3  Transferability .......................................... 13
           8.4  Other Restrictions ....................................... 13
           8.5  Certificate Legend ....................................... 13
           8.6  Removal of Restrictions .................................. 14
           8.7  Voting Rights ............................................ 14
           8.8  Dividends and Other Distributions ........................ 14
           8.9  Return of Restricted Stock to Company .................... 14
</TABLE>
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<TABLE>
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  SECTION 9 PERFORMANCE UNITS AND PERFORMANCE SHARES ..................... 15
           9.1  Grant of Performance Units/Shares ........................ 15
           9.2  Value of Performance Units/Shares ........................ 15
           9.3  Earning of Performance Units/Shares ...................... 15
           9.4  Form and Timing of Payment of Performance
                Units/Shares ............................................. 15
           9.5  Cancellation of Performance Units/Shares ................. 15
           9.6  Nontransferability ....................................... 16

  SECTION 10 BENEFICIARY DESIGNATION ..................................... 16

  SECTION 11 DEFERRALS ................................................... 16

  SECTION 12 RIGHTS OF EMPLOYEES ......................................... 17
          12.1  No Effect on Employment or Service ....................... 17
          12.2  Participation ............................................ 17

  SECTION 13 AMENDMENT, SUSPENSION, OR TERMINATION ....................... 17

  SECTION 14 WITHHOLDING ................................................. 17
          14.1  Tax Withholding .......................................... 17
          14.2  Shares Withholding ....................................... 17

  SECTION 15 INDEMNIFICATION ............................................. 18

  SECTION 16 SUCCESSORS .................................................. 19

  SECTION 17 LEGAL CONSTRUCTION .......................................... 19
          17.1  Gender and Number ........................................ 19
          17.2  Severability ............................................. 19
          17.3  Requirements of Law ...................................... 19
          17.4  Securities Law Compliance ................................ 19
          17.5  Governing Law ............................................ 19
          17.6  Captions ................................................. 20

  EXECUTION .............................................................. 20
</TABLE>

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                            B.I. SYSTEMS CORPORATION
                       1994 OMNIBUS EQUITY INCENTIVE PLAN

                                    SECTION I
                       ESTABLISHMENT, PURPOSE AND DURATION

         1.1 Establishment of the Plan. B.I. Systems Corporation, a Delaware
corporation (the "Company"), hereby establishes an incentive compensation plan
to be known as the "B.I. Systems Corporation 1994 Omnibus Equity Incentive Plan"
(the "Plan"). The Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, SARs, Restricted Stock, Performance Units, and
Performance Shares. The Plan became effective July 19, 1994 and was ratified by
an affirmative vote of the holders of a majority of Shares on July 22, 1994.

         1.2 Purpose of the Plan. The purpose of the Plan is to promote the
success, and enhance the value, of the Company by linking the personal interests
of Participants to those of Company shareholders, and by providing Participants
with an incentive for outstanding performance.

         The Plan is further intended to provide flexibility to the Company in
its ability to motivate, attract, and retain the services of Participants upon
whose judgment, interest, and special effort the successful conduct of its
operation largely is dependent.

         1.3 Duration of the Plan. The Plan shall commence on the date specified
in Section 1.1, and shall remain in effect, subject to the right of the Board of
Directors to terminate the Plan at any time pursuant to Section 13 until all
Shares subject to the Plan have been purchased or acquired pursuant to the
provisions of the Plan. However, without further stockholder approval, no
Incentive Stock Option may be granted under the Plan on or after July 1, 2004.

<PAGE>   6

                                    SECTION 2
                                  DEFINITIONS

         The following terms shall have the meanings set forth below, unless
plainly required by the context:

         2.1 "Affiliated SAR" means a SAR that is granted in connection with a
related Option, and which will be deemed to automatically be exercised
simultaneous with the exercise of the related Option.

         2.2 "Award" means, individually or collectively, a grant under the Plan
of Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted Stock,
Performance Units, or Performance Shares.

         2.3 "Award Agreement" means an agreement entered into by each
Participant and the Company, setting forth the terms and provisions applicable
to Awards granted to Participants under this Plan.

         2.4 "Board" or "Board of Directors" means the Board of Directors of the
Company.

         2.5 "Code" means the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code shall include such section, any
valid regulation promulgated thereunder, and any comparable provision of any
future legislation amending, supplementing or superseding such section.

         2.6 "Committee" means the committee, as specified in Section 3,
appointed by the Board to administer the Plan with respect to grants of
Awards.

         2.7 "Company" means B.I. Systems Corporation, a Delaware corporation,
or any successor thereto.

         2.8 "Consultant" means any consultant, independent contractor, or other
person who provides significant services to the Company or its Subsidiaries, but
who is neither an employee of the Company or its Subsidiaries, nor a Director of
the Company.

         2.9 "Director" means any individual who is a member of the Board of
Directors of the Company.

         2.10 "Disability" means a permanent and total disability within the
meaning of Code Section 22(e)(3).

         2.11 "Employee" means any employee of the Company, whether such
employee is so employed at the time the Plan is

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adopted or becomes so employed subsequent to the adoption of the Plan.

         2.12 "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor Act thereto. Reference to a specific
section or regulation of the Exchange Act shall include such section or
regulation, any valid regulation promulgated thereunder, and any comparable
provision of any future legislation amending, supplementing or superseding such
section or regulation.

         2.13 "Fair Market Value" means: (i) if the Shares are traded on an
exchange or are quoted on the National Association of Securities Dealers, Inc.
Automated Quotation ("Nasdaq") National Market System, then the closing or last
sale price, respectively, reported for the relevant date, (ii) if the Shares are
not traded on an exchange or on the Nasdaq National Market System but are traded
in the over-the-counter market, then the mean of the closing bid and asked
prices reported for the relevant date, or (iii) if the Shares are not publicly
traded, then as determined in good faith by the Board upon a review of the
relevant factors.

         2.14 "Freestanding SAR" means a SAR that is granted independently of
any Options.

         2.15 "Incentive Stock Option" or "ISO" means an option to purchase
Shares, which is designated as an Incentive Stock Option and is intended to meet
the requirements of Section 422 of the Code.

         2.16 "Insider" shall mean an Employee who, on the relevant date, is a
Company Director, Company officer (within the meaning of Rule 16a-1 promulgated
under the Exchange Act), or beneficial owner of 10% or more of the Shares.

         2.17 "Nonqualified Stock Option" or "NQSO" means an option to purchase
Shares which is not intended to be an Incentive Stock Option.

         2.18 "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.

         2.19 "Option Price" means the price at which a Share may be purchased
by a Participant pursuant to an Option, as determined by the Committee.

         2.20 "Participant" means an Employee of the Company or a Consultant to
the Company who has outstanding an Award granted under the Plan.

                                        3

<PAGE>   8

         2.21 "Performance Unit" means an Award granted to an Employee pursuant
to Section 9.

         2.22 "Performance Share" means an Award granted to an Employee,
pursuant to Section 9 herein.

         2.23 "Period of Restriction" means the period during which the transfer
of Shares of Restricted Stock is limited in some way (based on the passage of
time, the achievement of performance goals, or upon the occurrence of other
events as determined by the Committee, in its discretion).

         2.24 "Restricted Stock" means an Award granted to a Participant
pursuant to Section 8.

         2.25 "Retirement" shall have the meaning for each respective individual
Participant ascribed to it in the pension plan of the Company applicable to each
such respective Participant.

         2.26 "Shares" means the shares of common stock of the Company.

         2.27 "Stock Appreciation Right" or "SAR" means an Award, granted alone
or in connection with a related Option, designated as a SAR, pursuant to the
terms of Section 7.

         2.28 "Subsidiary" means any corporation in which the Company owns
directly, or indirectly through subsidiaries, at least fifty percent (50%) of
the total combined voting power of all classes of stock, or any other entity
(including, but not limited to, partnerships and joint ventures) in which the
Company owns at least fifty percent (50%) of the combined equity thereof.

         2.29 "Tandem SAR" means a SAR that is granted in connection with a
related Option, the exercise of which shall require forfeiture of the right to
purchase a Share under the related Option (and when a Share is purchased under
the Option, a SAR shall similarly be cancelled).

         2.30 "Window Period" means the period beginning on the third business
day following the date of public release of the Company's quarterly sales and
earnings information, and ending on the twelfth business day following such
date.

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<PAGE>   9

                                    SECTION 3
                                 ADMINISTRATION

         3.1 The Committee. The Plan shall be administered by the Committee. The
Committee shall consist of not less than two (2) Directors. The members of the
Committee shall be appointed from time to time by, and shall serve at the
pleasure of, the Board of Directors. The Committee shall be comprised solely of
Directors who are "disinterested persons" under Rule 16b-3 under the Exchange
Act. Notwithstanding any contrary provision of the Plan, during the period prior
to the time when the Shares first are registered under Section 12 of the
Exchange Act, the Board (a) shall have all of the authority granted under the
Plan to the Committee, and (b) may exercise all of the powers of the Committee.

         3.2 Authority of the Committee. The Committee shall have full power,
except as limited by law or by the Certificate of Incorporation or Bylaws of the
Company, and subject to the provisions herein, to determine the size and types
of Awards; to determine the terms and conditions of such Awards in a manner
consistent with the Plan; to construe and interpret the Plan and any Award
Agreement or instrument entered into under the Plan; to establish, amend, or
waive rules and regulations for the Plan's administration; and (subject to the
provisions of Section 13 herein) to amend the terms and conditions of any
outstanding Award to the extent such terms and conditions are within the
discretion of the Committee as provided in the Plan. Further, the Committee
shall make all other determinations which may be necessary or advisable for the
administration of the Plan. As permitted by law, the Committee may delegate its
powers; provided, however, that only the Committee may administer the Plan with
respect to Insiders.

         3.3 Decisions Binding. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board of Directors shall be final, conclusive, and binding on
all persons, including the Company, its shareholders, Employees, Participants,
and their estates and beneficiaries, and shall be given the maximum deference
permitted by law.

                                       5
<PAGE>   10

                                    SECTION 4
                           SHARES SUBJECT TO THE PLAN

                 4.1   NUMBER of SHARES. Subject to adjustment as provided in
Section 4.3, the total number of Shares available for grant under the Plan may
not exceed 750,000. These 750,000 Shares may be either authorized but unissued
or reacquired Shares.

                 The following rules will apply for purposes of the
determination of the number of Shares available for grant under the Plan:

                 (a)   While an Award is outstanding, it shall be counted
                       against the authorized pool of Shares, regardless of its
                       vested status.

                 (b)   The grant of an Option or Restricted Stock shall reduce
                       the Shares available for grant under the Plan by the
                       number of Shares subject to such Award.

                 (c)   The grant of a Tandem SAR shall reduce the number of
                       Shares available for grant by the number of Shares
                       subject to the related Option (i.e., there is no double
                       counting of options and their related Tandem SARs);
                       provided, however, that, upon the exercise of such Tandem
                       SAR, the authorized Share pool shall be credited with the
                       appropriate number of Shares representing the number of
                       shares reserved for such Tandem SAR less the number of
                       Shares actually delivered upon exercise thereof or the
                       number of Shares having a Fair Market Value equal to the
                       cash payment made upon such exercise.

                 (d)   The grant of an Affiliated SAR shall reduce the number of
                       Shares available for grant by the number of Shares
                       subject to the SAR, in addition to the number of Shares
                       subject to the related Option; provided, however, that,
                       upon the exercise of such Affiliated SAR, the authorized
                       Share pool shall be credited with the appropriate number
                       of Shares representing the number of shares reserved for
                       such Affiliated SAR less the number of Shares actually
                       delivered upon exercise thereof or the number of Shares
                       having a Fair Market Value equal to the cash payment made
                       upon such exercise.

                 (e)   The grant of a Freestanding SAR shall reduce the number
                       of Shares available for grant by the number of
                       Freestanding SARs granted; provided, however,

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<PAGE>   11

                       that, upon the exercise of such Freestanding SAR, the
                       authorized Share pool shall be credited with the
                       appropriate number of Shares representing the number of
                       shares reserved for such Freestanding SAR less the number
                       of Shares actually delivered upon exercise thereof or the
                       number of Shares having a Fair Market Value equal to the
                       cash payment made upon such exercise.

                 (f)   The Committee shall in each cash determine the
                       appropriate number of Shares to deduct from the
                       authorized pool in connection with the grant of
                       Performance Units and/or Performance Shares.

                 (g)   To the extent that an Award is settled in cash rather
                       than in Shares, the authorized Share pool shall be
                       credited with the appropriate number of Shares having a
                       Fair Market Value equal to the cash settlement of the
                       Award.

                4.2    Lapsed Awards. If any Award granted under this Plan is
cancelled, terminates, expires, or lapses for any reason (with the exception of
the termination of a Tandem SAR upon exercise of the related Option, or the
termination of a related Option upon exercise of the corresponding Tandem SAR),
any Shares subject to such Award again shall be available for the grant of an
Award under the Plan. However, in the event that prior to the Award's
cancellation, termination, expiration, or lapse, the holder of the Award at any
time received one or more "benefits of ownership" pursuant to such Award (as
defined by the Securities and Exchange Commission, pursuant to any rule or
interpretation promulgated under Section 16 of the Exchange Act), the Shares
subject to such Award shall not be made available for regrant under the Plan.

                4.3    Adjustments in Authorized Shares. In the event of any
merger, reorganization, consolidation, recapitalization, separation,
liquidation, stock dividend, split-up, Share combination, or other change in the
corporate structure of the Company affecting the Shares, such adjustment shall
be made in the number and class of Shares which may be delivered under the Plan,
and in the number and class of and/or price of Shares subject to outstanding
Options, SARS, and Restricted Stock granted under the Plan, as may be determined
to be appropriate and equitable by the Committee, in its sole discretion, to
prevent dilution or diminishment of Awards; and provided that the number of
Shares subject to any Award shall always be a whole number

                                        7

<PAGE>   12

                                    SECTION 5
                         ELIGIBILITY AND PARTICIPATION

                5.1   Eligibility. Persons eligible to participate in this Plan
include all Employees and Consultants of the Company and its Subsidiaries, as
determined by the Committee, including Employees who are members of the Board.

                5.2   Actual Participation. Subject to the provisions of the
Plan, the Committee in its sole discretion, shall select from all eligible
Employees and Consultants, those to whom Awards shall be granted, and the
Committee, in its sole discretion, shall determine the nature and amount of each
Award.

                                    SECTION 6
                                 STOCK OPTIONS

                 6.1   Grant of Options. Subject to the terms and provisions of
the Plan, Options may be granted to Employees and Consultants at any time and
from time to time as shall be determined by the Committee. The Committee shall
have discretion in determining the number of Shares subject to Options granted
to each Participant. The Committee may grant ISOs, NQSOs, or a combination
thereof.

                 6.2   Award Agreement. Each Option grant shall be evidenced by
an Award Agreement that shall specify the Option Price, the duration of the
Option, the number of Shares to which the Option pertains, the conditions of
exercise of the Options, and such other provisions as the Committee shall
determine. The Award Agreement also shall specify whether the Option is intended
to be an ISO or a NQSO.

                 6.3   Option Price. The Option Price for each grant of an
Option shall be determined by the Committee in its sole discretion.

                       6.3.1   Nonqualifed Stock Options. In the case of a
Nonqualified Stock Option, the Option Price shall be not less than fifty percent
(50%) of the Fair Market value of a Share on the date that the Option is
granted.

                       6.3.2   Incentive Stock Options. In the case of an
Incentive Stock Option, the Option Price shall be not less than one-hundred
percent of the Fair Market Value of a Share on the date that the option is
granted; provided, however, that if at the time the Option is granted, the
Employee (together with persons whose stock ownership is attributed to the
Employee pursuant to Section 424(d) of the Code) owns stock possessing

                                        8

<PAGE>   13

more than 10% of the total combined voting power of all classes of stock of the
Company or any of its Subsidiaries, the Option Price shall be not less than
one-hundred and ten percent (110%) of the Fair Market Value of a Share on the
date that the Option is granted.

                 6.4   Duration of Options. Each Option shall expire at such
time as the Committee, in its sole discretion, shall determine; provided,
however, that no Incentive Stock Option may be exercised after the expiration of
10 years from the date the Option was granted; provided, further, no Incentive
Stock Option granted to an Employee who, together with persons whose stock
ownership is attributed to the Employee pursuant to Section 424(d) of the Code,
owns stock possessing more than 10% of the total combined voting power of all
classes of the stock of the Company or any of its Subsidiaries, may be exercised
after the expiration of 5 years from the date the Option was granted. After the
Option is granted, the Committee, in its sole discretion, may extend the maximum
term of such Option.

                 6.5   Exercise of Options. Options granted under the Plan shall
be exercisable at such times and be subject to such restrictions and conditions
as the Committee, in its sole discretion, shall determine. After an Option is
granted, the Committee, in its sole discretion, may accelerate the
exercisability of the Option. However, in no event may any Option granted to an
Insider be exercisable until six (6) months following the date of its grant.

                 6.6   Payment. Options shall be exercised by the Participant's
delivery of a written notice of exercise to the President or Chief Financial
Officer of the Company, setting forth the number of Shares with respect to which
the Option is to be exercised, accompanied by full payment for the Shares.

                 The Option Price upon exercise of any Option shall be payable
to the Company in full in cash or its equivalent. The Committee, in its sole
discretion, also may permit exercise (a) by tendering previously acquired Shares
having an aggregate Fair Market Value at the time of exercise equal to the total
Option Price (provided that the Shares which are tendered must have been held by
the Participant for at least six (6) months prior to their tender to satisfy the
Option Price), or (b) by any other means which the Committee, in its sole
discretion, determines to provide legal consideration for the Shares, and to be
consistent with the Plan's purpose and applicable law.

                 As soon as practicable after receipt of a written notification
of exercise and full payment, the Company shall deliver to the Participant, in
the Participant's name, Share

                                        9

<PAGE>   14

certificates in an appropriate amount based upon the number of Shares purchased
under the Option(s).

                 6.7   Restrictions on Share Transferability. The Committee may
impose such restrictions on any Shares acquired pursuant to the exercise of an
Option under the Plan, as it may deem advisable, including, without limitation,
restrictions under applicable Federal securities laws, under the requirements,
of any national securities exchange or system upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.

                 6.8   Certain Additional Provisions for Incentive Stock
Options.

                       6.8.1   Exercisability. The aggregate Fair Market Value
(determined at the time the Option is granted) of the Shares with respect to
which Incentive Stock Options are exercisable for the first time by any Employee
during any calendar year (under all plans of the Company and its Subsidiaries)
shall not exceed $100,000.

                       6.8.2   Termination of Employment. No Incentive Stock
Option may be exercised more than three-months after the Participant's
termination of employment for any reason other than Disability or death, unless
(a) the Participant dies during such three-month period, and (b) the Award
Agreement permits later exercise. No Incentive Stock Option may be exercised
more than one year after the Participant's termination of employment on account
of Disability, unless (a) the Participant dies during such one-year period, and
(b) the Award Agreement permits later exercise.

                       6.8.3   Employees Only. Incentive Stock Options may be
granted only to persons who are Employees at the time of grant. Consultants
shall not be eligible to receive Incentive Stock Options.

                 6.9   Nontransferability of Options. No Option granted under
the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will, the laws of descent and distribution, or as
allowed under Section 10. All Options granted to a Participant under the Plan
shall be exercisable during his or her lifetime only by such Participant.

                                  10

<PAGE>   15

                                    SECTION 7
                           STOCK APPRECIATION RIGHTS

                 7.1   Grant of SARs. Subject to the terms and conditions of the
Plan, a SAR may be granted to an Employee or Consultant at any time and from
time to time as shall be determined by the Committee, in its sole discretion.
The Committee may grant Affiliated SARs, Freestanding SARs, Tandem SARs, or any
combination thereof.

                 The Committee shall have complete discretion to determine the
number of SARs granted to any Participant, and consistent with the provisions of
the Plan, the terms and conditions pertaining to such SARs. However, the grant
price of a Freestanding SAR shall be at least equal to the Fair Market Value of
a Share on the date of grant of the SAR. The grant price of Tandem or Affiliated
SARs shall equal the Option Price of the related Option. In no event shall any
SAR granted to an Insider become exercisable within the first six (6) months
after the date it was granted.

                 7.2   Exercise of Tandem SARs. Tandem SARs may be exercised for
all or part of the Shares subject to the related Option upon the surrender of
the right to exercise the equivalent portion of the related Option. A Tandem SAR
may be exercised only with respect to the Shares for which its related Option is
then exercisable.

                 Notwithstanding any other provision of this Plan to the
contrary, with respect to a Tandem SAR granted in connection with an ISO: (i)
the Tandem SAR will expire no later than the expiration of the underlying ISO;
(ii) the value of the payout with respect to the Tandem SAR may be for no more
than one hundred percent (100%) of the difference between the Option Price of
the underlying ISO and the Fair Market Value of the Shares subject to the
underlying ISO at the time the Tandem SAR is exercised; and (iii) the Tandem SAR
may be exercised only when the Fair Market Value of the Shares subject to the
ISO exceeds the Option Price of the ISO.

                 7.3   Exercise of Affiliated SARs. Affiliated SARs shall be
deemed to be exercised upon the exercise of the related Options. The deemed
exercise of Affiliated SARs shall not necessitate a reduction in the number of
related Options.

                 7.4   Exercise of Freestanding SARs. Freestanding SARs shall be
exercisable on such terms and conditions as shall be determined by the
Committee, in its sole discretion.

                 7.5   SAR Agreement. Each SAR grant shall be evidenced by an
Award Agreement that shall specify the grant price, the

                                       11

<PAGE>   16

term of the SAR, the conditions of exercise and such other provisions as the
Committee, in its sole discretion, shall determine.

                 7.6   Term of SARs. The term of a SAR granted under the Plan
shall be determined by the Committee, in its sole discretion.

                 7.7   Payment of SAR Amount. Upon exercise of a SAR, a
Participant shall be entitled to receive payment from the Company in an amount
determined by multiplying:

                 (a)   The difference between the Fair Market Value of a Share
                       on the date of exercise over the grant price; times

                 (b)   The number of Shares with respect to which the SAR is
                       exercised.

                 At the discretion of the Committee, the payment upon SAR
exercise may be in cash, in Shares of equivalent value, or in some combination
thereof.

                 7.8   Rule 16b-3 Requirements. Notwithstanding any other
provision of the Plan, the Committee may impose such conditions on exercise of a
SAR (including, without limitation, the right of the Committee to limit the time
of exercise to specified periods) as may be required to satisfy the requirements
of Rule 16b-3 promulgated under the Exchange Act.

                 For example, if the Participant is an Insider, the ability of
the Participant to exercise SARs for cash will be limited to the Window Periods
during each year. However, if the Committee determines that the Participant no
longer is an Insider, or if the Federal securities laws change to permit
insiders greater freedom of exercise of SARs, then the Committee may permit
Insiders to exercise SARs at other times.

                 7.9   Nontransferability of SARs. No SAR granted under the Plan
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will, the laws of descent and distribution, or as
permitted under Section 10. Further, all SARs granted to a Participant under the
Plan shall be exercisable during his or her lifetime only by such Participant.

                                       12

<PAGE>   17

                                    SECTION 8
                                RESTRICTED STOCK

                 8.1   Grant of Restricted Stock. Subject to the terms and
provisions of the Plan, the Committee, at any time and from time to time, may
grant Shares of Restricted Stock to eligible Employees and Consultants in such
amounts as the Committee; in its sole discretion, shall determine.

                 8.2   Restricted Stock Agreement. Each Restricted Stock grant
shall be evidenced by an Award Agreement that shall specify the Period (or
Periods) of Restriction, the number of Restricted Stock Shares granted, and such
other terms and conditions as the Committee, in its sole discretion, shall
determine.

                 8.3   Transferability. Except as provided in this Section 8,
Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated until the end of the applicable Period of
Restriction established by the Committee and specified in the Award Agreement,
or upon earlier satisfaction of any other conditions, as specified by the
Committee in its sole discretion and set forth in the Award Agreement. However,
in no event may any Restricted Stock granted to an Insider become vested in a
Participant prior to six (6) months following the date of its grant. All rights
with respect to the Restricted Stock granted to a Participant under the Plan
shall be available during his or her lifetime only to such Participant.

                 8.4   Other Restrictions. The Committee, in its sole
discretion, may impose such other restrictions on any Shares of Restricted Stock
as it may deem advisable including, without limitation, restrictions based upon
the achievement of specific performance goals (Company-wide, divisional, and/or
individual), and/or restrictions under applicable Federal or state securities
laws; and may legend the certificates representing Restricted Stock to give
appropriate notice of such restrictions.

                 8.5   Certificate Legend. In addition to any legends placed on
certificates pursuant to Section 8.4, each certificate representing Shares of
Restricted Stock shall bear the following legend:

                 "The sale or other transfer of the shares of stock represented
                 by this certificate, whether voluntary, involuntary, or by
                 operation of law, is subject to certain restrictions on
                 transfer as set forth in the B.I. Systems Corporation 1994
                 Omnibus Equity Incentive Plan, and in a Restricted Stock
                 Agreement. A copy of the Plan and such Restricted Stock
                 Agreement may be

                                       13

<PAGE>   18

                 Obtained from the Secretary of B.I. Systems Corporation"

                 8.6   Removal of Restrictions. Except as otherwise provided in
this Section 8, Shares of Restricted Stock covered by each Restricted Stock
grant made under the plan shall become freely transferable by the Participant
after the last day of the Period of Restriction. The Committee, in its
discretion, may accelerate the time at which any restrictions shall lapse,
and/or remove any restrictions. After the Shares are released from restrictions,
the Participant shall be entitled to have the legend or legends required by
Section 8.4 and 8.5 removed from his or her Share certificate.

                 8.7   Voting Rights. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder may exercise
full voting rights with respect to those Shares unless otherwise provided in the
Award Agreement.

                 8.8   Dividends and Other Distributions. During the Period of
Restriction, Participants holding Shares of Restricted Stock granted hereunder
shall be entitled to receive all dividends and other distributions paid with
respect to those Shares while they are so held, unless otherwise provided in the
Award Agreement. If any such dividends or distributions are paid in Shares, the
Shares shall be subject to the same restrictions on transferability and
forteitability as the Shares of Restricted Stock with respect to which they were
paid.

                 In the event that any dividend or distribution constitutes a
"derivative security" or an equity security" pursuant to the rules promulgated
under Section 16 of the Exchange Act, such dividend or distribution shall be
subject to a vesting period equal to the longer of; (i) the remaining vesting
period of the Shares of Restricted Stock with respect to which the dividend or
distribution is paid; or (ii) six months. The Committee shall establish
procedures for the application of this provision.

                 8.9   Return of Restricted Stock to Company. Subject to the
applicable Award Agreement and Section 8.6, upon the earlier of (a) the
Participant's termination of employment, or (b) the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed shall
revert to the Company and, subject to Section 4.2, again shall become available
for grant under the Plan.

                                       14

<PAGE>   19

                                    SECTION 9
                     PERFORMANCE UNITS AND PERFORMANCE SHARES

     9.1  Grant of Performance Units/Shares. Subject to the terms of the Plan,
Performance Units and Performance Shares may be granted to eligible Employees
and Consultants at any time and from time to time, as shall be determined by the
Committee, in its sole discretion. The Committee shall have complete discretion
in determining the number of Performance Units and Performance Shares granted to
each Participant.

     9.2  Value Of Performance Units/Shares.    Each
Performance Unit shall have an initial value that is established by the
Committee at the time of grant. Each Performance Share shall have an initial
value equal to the Fair Market Value of a Share on the date of grant. The
Committee shall set performance goals in its discretion which, depending on the
extent to which they are met, will determine the number and/or value of
Performance Units/Shares that will be paid out to the Participants. The time
period during which the performance goals must be met shall be called a
"Performance Period." Performance Periods of Awards granted to Insiders shall,
in all cases, exceed six (6) months in length.

     9.3  Earning of Performance Units/Shares. After the applicable Performance
Period has ended, the holder of Performance Units/Shares shall be entitled to
receive a payout of the number of Performance Units/Shares earned by the
Participant over the Performance Period, to be determined as a function of the
extent to which the corresponding performance goals have been achieved.
Notwithstanding the preceding sentence, after the grant of a Performance
Unit/Share, the Committee, in its sole discretion, may waive the achievement of
any performance goals for such Performance Unit/Share.

     9.4  Form and Timing of Payment of Performance Units/Shares. Payment of
earned Performance Units/Shares shall be made in a single lump sum, within
forty-five (45) calendar days following the close of the applicable Performance
Period. The Committee, in its sole discretion, may pay earned Performance
Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market
Value equal to the value of the earned Performance Units/Shares at the close of
the applicable Performance Period) or in a combination thereof.

     Prior to the beginning of each Performance Period, Participants may, in the
discretion of the Committee, elect to defer the receipt of any Performance
Unit/Share payout upon such terms as the Committee shall determine.

                                       15

<PAGE>   20

     9.5  Cancellation of Performance Unit/Shares. Subject to the applicable
Award Agreement, upon the earlier of (a) the Participant's termination of
employment, or (b) the date set forth in the Award Agreement, all remaining
Performance Units/Shares shall be forfeited by the Participant to the Company,
and subject to Section 4.2, the Shares subject thereto shall again be available
for grant under the Plan.

     9.6  Nontransferability. Performance Units/Shares may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further a Participant's
rights under the Plan shall be exercisable during the Participant's lifetime
only by the Participant or the Participant's legal representative.

                                   SECTION 10
                             BENEFICIARY DESIGNATION

     As provided in this Section 10, each Participant under the Plan may name a
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of the Participant's death
before he or she receives any or all of such benefit and/or who may exercise any
vested Award under the Plan following the Participant's death. Each such
designation shall revoke all prior designations by the same Participant and must
be in a form and manner acceptable to the Committee. In the absence of any such
designation, benefits remaining unpaid at the Participant's death shall be paid
to the Participant's estate and, subject to the terms of the Plan, any
unexercised vested Award may be exercised by the administrator or executor of
the Participant's estate.

                                   SECTION 11
                                   DEFERRALS

     The Committee, in its sole discretion, may permit a Participant to defer
such Participant's receipt of the payment of cash or the delivery of Shares that
would otherwise be due to such Participant by virtue of the exercise of an
Option or SAR, the lapse or waiver of restrictions with respect to Restricted
Stock, or the satisfaction of any requirements or goals with respect to
Performance Units/Shares. Any such deferral elections shall be subject to such
rules and procedures as shall be determined by the Committee from time to time.

                                       16

<PAGE>   21

                                   SECTION 12
                               RIGHTS OF EMPLOYEES

     12.1 No Effect on Employment or Service.   Nothing in the Plan shall
interfere with or limit in any way the right of the Company to terminate any
Participant's employment or service at any time, with or without cause. For
purposes of the Plan, transfer of employment of a Participant between the
Company and any one of its Subsidiaries (or between Subsidiaries) shall not be
deemed a termination of employment.

     12.2 Participation. No Employee or Consultant shall have the right to be
selected to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.

                                   SECTION 13
                      AMENDMENT, SUSPENSION, OR TERMINATION

     The Board, in its sole discretion, may alter, amend or terminate the Plan,
or any part thereof, at any time and for any reason; provided, however, that
without further stockholder approval, no such alteration or amendment shall (a)
materially increase the benefits accruing to participants under the Plan, (b)
materially increase the number of securities which may be issued under the Plan,
or (c) materially modify the requirements as to eligibility for participation in
the Plan; provided, further, that stockholder approval is not required if such
approval is not required in order to assure the Plan's continued qualification
under Rule 16b-3 promulgated under the 1934 Act. Neither the amendment,
suspension, nor termination of the Plan shall, without the consent of the
Participant, alter or impair any rights or obligations under any Award
theretofore granted. No Award may be granted during any period of suspension nor
after termination of the Plan.

                                   SECTION 14
                                  WITHHOLDING

     14.1 Tax Withholding. Prior to the delivery of any Shares of cash pursuant
to the Plan, the Company shall have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient
to satisfy Federal, state, and local taxes (including the Participant's FICA
obligation) required by law to be withheld with respect to any Awards.

                                       17

<PAGE>   22

     14.2 Shares Withholding. The Committee may, in its absolute discretion,
permit a Participant to satisfy such tax withholding obligation, in whole or in
part, by electing to have the Company withhold Shares having a value equal to
the amount required to be withheld or by delivering to the Company already-owned
shares to satisfy the withholding requirement. The amount of the withholding
requirement shall be deemed to include any amount which the Committee agrees may
be withheld at the time the election is made, not to exceed the amount
determined by using the maximum federal, state or local marginal income tax
rates applicable to the Participant with respect to the Award on the date that
the amount of tax to be withheld is to be determined (the "Tax Date"). The value
of the Shares to be withheld or delivered will be based on their Fair Market
Value on the Tax Date. Such elections will be subject to the following
restrictions: (1) the election must be made on or before the Tax Date; (2) the
election will be irrevocable; and (3) the election will be subject to the
disapproval of the Committee. Each election by an Optionee or Grantee whose
transactions in shares of Common Stock are subject to Section 16(b) of the
Exchange Act will be subject to the following additional restrictions: (1) the
election may not be made within six months of the grant of the Award (except
that this limitation will not apply in the event the death or disability of the
Participant occurs prior to the expiration of the six-month period), and (2) the
election must be made either at least six months before the Tax Date or within a
Window Period.

                                       18

<PAGE>   23

                                   SECTION 15
                                INDEMNIFICATION

     Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, notion,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan or
any Award Agreement and against and from any and all amounts paid by him or her
in settlement thereof, with the Company's approval, or paid by him or her in
settlement thereof, with the Company's approval, or paid by him or her in
satisfaction of any judgment in any such action, suit, or proceeding against him
or her, provided he or she shall give the company an opportunity, at its own
expense, to handle and defend the same before he or she undertakes to handle and
defend it on his or her own behalf. The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Company's Articles of Incorporation or Bylaws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.

                                   SECTION 16
                                   SUCCESSORS

     All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

                                   SECTION 17
                               LEGAL CONSTRUCTION

     17.1 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.

     17.2 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.

                                       19

<PAGE>   24

     17.3 Requirements of Law.  The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

     Notwithstanding any other provision set forth in the Plan, if required by
the then-current Section 16 of the Exchange Act, any "derivative security" or
"equity" security offered pursuant to the Plan to any Insider may not be sold or
transferred for at least six (6) months after the date of grant of such Award.
The terms "equity security" and "derivative security" shall have the meanings
ascribed to them in the then-current rules promulgated under Section 16 of the
Exchange Act.

     17.4 Securities Law Compliance.  With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the Exchange Act. To the extent any provision of
the Plan, Award Agreement or action by the Committee fails to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.

     17.5 Governing Law. The Plan and all Award Agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Delaware.

     17.6 Caption. Captions are provided herein for convenience only, and are
not to serve as a basis for interpretation or construction of the Plan.

                                    EXECUTION

     IN WITNESS WHEREOF, B.I. Systems Corporation, by its duly authorized
officer, has executed the Plan as of the date indicated below.

                                          B.I. SYSTEMS CORPORATION

Dated: July 19, 1994                      By:
                                             -------------------------------
                                          Donald R. Van Dyke
                                          President

                                       20

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