Document:

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                                                                   EXHIBIT 10.12

                                 1999 STOCK PLAN
                       NON-QUALIFIED STOCK OPTION CONTRACT
                       -----------------------------------

     The parties to this Non-Qualified Stock Option Contract are MedSource
Technologies, Inc., a Delaware corporation (the "Company"), and ___________ (the
"Optionee"). Each capitalized term used but not defined herein shall have the
meaning assigned to it in the Company's 1999 Stock Plan (the "Plan").

     The parties agree as follows:

     1. The Company, in accordance with the allotment made by the Administrators
and subject to the terms and conditions of the Plan, hereby grants to the
Optionee an option to purchase an aggregate of _____ shares of Common Stock at
an exercise price of $_____ per share, such exercise price being at least equal
to the fair market value of such shares of Common Stock on the date hereof.

     2. (a) The term of this option shall be 10 years from the date hereof,
subject to earlier termination as provided in this Contract and the Plan. This
option shall vest as to 25% of the total number of shares of Common Stock
subject hereto on the first anniversary of the date hereof and as to an
additional 25% of such total number of shares on each of the next three
anniversaries of the date hereof.

        (b) If the Optionee's termination of employment with the
Company or any of its Subsidiaries or a Parent occurs by reason of the
Optionee's death or Disability (i) less than six months before the first
anniversary of the date hereof, then this option shall vest as to one-half of
the total number of shares of Common Stock (rounded up to the nearest whole
share) that would otherwise have vested on the first anniversary of the date
hereof if the Optionee had continued to be employed by the Company, any of its
Subsidiaries or a Parent, (ii) less than six months before the second
anniversary of the date hereof, then, in addition to the number of shares of
Common Stock as to which this option is then otherwise vested, this option shall
vest as to one-half of the total number of shares of Common Stock (rounded up to
the nearest whole share) that would otherwise have vested on the second
anniversary of the date hereof if the Optionee had continued to be employed by
the Company, any of its Subsidiaries or a Parent, (iii) less than six months
before the third anniversary of the date hereof, then, in addition to the number
of shares of Common Stock as to which this option is then otherwise vested, this
option shall vest as to one-half of the total number of shares of Common Stock
(rounded up to the nearest whole share) that would otherwise have vested on the
third anniversary of the date hereof if the Optionee had continued to be
employed by the Company, any of its Subsidiaries or a Parent or (iv) less than
six

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months before the fourth anniversary of the date hereof, then, in addition to
the number of shares of Common Stock as to which this option is then otherwise
vested, this option shall vest as to one-half of the total number of shares of
Common Stock (rounded up to the nearest whole share) that would otherwise have
vested on the fourth anniversary of the date hereof if the Optionee had
continued to be employed by the Company, any of its Subsidiaries or a Parent.

        (c) Immediately prior to the consummation of a Transaction (as defined
herein) in which the holders of shares of Common Stock would receive as
consideration in exchange for their shares of Common Stock, either (x)
securities of an unaffiliated entity that are listed on the New York Stock
Exchange, Inc., the American Stock Exchange LLC or The NASDAQ Stock Market's
National Market that represent more than 50% of the total consideration to be
received by the holders of shares of Common Stock in such Transaction (as
determined by the Administrators) or (y) cash that represents more than 50% of
the total consideration to be received by the holders of shares of Common Stock
in such Transaction (as determined by the Administrators), then this option
shall vest (if less than one-half of the shares of Common Stock subject hereto
are not already vested) as to the excess, if any, of that number of shares of
Common Stock equal to one-half of the total number of shares of Common Stock
subject hereto over the total number of shares of Common Stock already vested at
that time. [If, following any Transaction (whether or not the stockholders of
the Company receive cash as set forth above), the Company, any Subsidiary or a
Parent terminates the Optionee's employment without Cause, then this option
shall vest as of the date of termination of employment as to that number of
shares of Common Stock equal to the lesser of (i) one-half of the total number
of shares of Common Stock subject hereto and (ii) the total number of unvested
shares of Common Stock as of the date of termination.]

        (d) The right to purchase shares of Common Stock under this option shall
be cumulative, so that if the full number of shares purchasable in a period
shall not be purchased, the balance may be purchased at any time or from time to
time thereafter, but not after the expiration of the term of this option as
herein provided and as provided in the Plan.

     3. This option shall be exercised by giving written notice to the Company
at its then principal office, currently 110 Cheshire Lane, Suite 100,
Minneapolis, Minnesota 55305, Attention: Chief Financial Officer, stating that
the Optionee is exercising the option hereunder, specifying the number of shares
being purchased and accompanied by payment in full of the aggregate purchase
price therefore (a) in cash or by certified check, (b) with the consent of the
Company, with previously acquired shares of Common Stock that are fully paid,
vested, transferrable and have been held by the Optionee for the requisite
period to avoid a charge to the Company's earnings for financial accounting
purposes, or (c) with the consent of the Company, with a combination of the
foregoing.

     4. The Company (or a Parent or a Subsidiary) may withhold cash and/or
shares of Common Stock to be issued to the Optionee in the amount that the
Company determines is necessary to satisfy its obligation to withhold taxes or
other amounts incurred by reason of the grant, exercise or disposition of this
option or the disposition of the underlying shares of

                                       -2-

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Common Stock. Alternatively, the Company may require the Optionee to pay the
Company such amount and the Optionee agrees to pay such amount to the Company in
cash, promptly upon demand.

     5. (a) The Optionee represents and warrants that any and all shares of
Common Stock purchased by the Optionee pursuant to the exercise of this option
will be acquired for the Optionee's own account and not with a view to, or for
resale in connection with, any distribution or public offering thereof within
the meaning of the Securities Act and such shares may not be disposed of except
in compliance with all federal and state securities laws. Notwithstanding any
other provisions of this agreement to the contrary, the Company shall not be
required to sell or issue any shares of Common Stock pursuant to this option if
the sale or issuance of such shares would constitute a violation of any
provision of any law or regulation of any governmental authority, including
without limitation any federal or state securities laws or regulations. The
Company may require that the Optionee deliver at the time of each exercise of
the option and as a condition to exercise of the option, a further written
representation that the shares of Common Stock being acquired upon exercise
shall be acquired by the Optionee solely for investment and will not be sold or
transferred without registration or an exemption from registration under the
Securities Act and applicable state securities laws and regulations, including
compliance with all requirements for such exemption. The Company may also
require that the Optionee deliver other written representations that will permit
the Company to comply with federal and applicable state securities laws in
connection with the issuance of the shares, including representations as to the
knowledge and experience in financial and business matters of the Optionee and
the Optionee's ability to bear the economic risk of the Optionee's investment.
The Company may require that the Optionee obtain a "purchaser representative" as
that term is defined in applicable federal and state securities laws, prior to
the sale or issuance of such shares.

     The Optionee shall have no right to require the Company, and the Company
shall have no obligation, to register the issuance or sale of any security
acquired pursuant to the exercise of the Option granted by this agreement under
the Securities Act or under any other law or regulation.

        (b) The Optionee acknowledges and agrees that in any event or series of
events set forth in Section 11(b) of the Plan (a "Transaction"), unless other
provision is made therefor in such Transaction, (x) the Company (or its
designee) shall have the right (but not the obligation) to purchase all options
that are vested prior to the closing of such Transaction for an amount equal to
the excess, if any, of the aggregate amount that would have been received in
such Transaction by the Optionee with respect to the shares of Common Stock
subject to the vested portion of this option, determined as if the Optionee had
exercised such vested portion immediately prior to such Transaction, over the
aggregate exercise price therefor, which excess may be paid in cash or the
property to be received by owners of Common Stock in such Transaction and (y)
the rights of the Optionee with respect to the unvested portion of this option
shall be cancelled. Prior to a Transaction, the Company may, in its discretion,
notify the Optionee of such proposed purchase by sending to the Optionee written
notice of such proposed Transaction. The notice may set forth a date by which
the Company shall close such purchase and shall contain such other information
as the Company, in its discretion, believes is necessary

                                       -3-

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to close such purchase at or prior to consummation of such Transaction.

     6. (a) Upon any termination of the Optionee's employment with the Company
or any of its Subsidiaries or a Parent by reason of the Optionee's death or
Disability or by such employer without Cause, then the Optionee may exercise the
option to the extent vested (whether or not otherwise exercisable) during the
period beginning on the effective date of such termination and ending 90 days
after such date.

        (b) The right to purchase shares under this option shall terminate
immediately upon the termination of the Optionee's employment with the Company,
any of its Subsidiaries or a Parent for any reason not previously specified in
this paragraph 6 (including, without limitation, (i) for Cause or (ii) without
the consent of the Company), but the option granted hereunder shall not be
affected by a change in status of the Optionee so long as the Optionee continues
to be an employee of the Company, any of its Subsidiaries or a Parent
(regardless of having changed from one to the other or having been transferred
from one entity to the other).

     7. (a) The Optionee acknowledges the time and expense incurred by the
Company and its Subsidiaries (collectively, the "Companies") in connection with
developing proprietary and confidential information in connection with their
respective businesses and operations. The Optionee agrees that he will not
divulge, communicate or use to the detriment of the Companies or for the benefit
of any other person, firm or entity, or misappropriate in any way, any
confidential information or trade secrets relating to the Companies or any of
their respective businesses including, without limitation, financial condition,
operations or prospects, business strategies, operating plans, acquisition
strategies, pro forma financial information, market analyses, acquisition terms
and conditions, personnel information, trade processes, manufacturing methods,
know-how, customer lists and relationships, supplier lists, or other non-public
proprietary and confidential information relating to the Companies.

        (b) For so long as the Optionee is an employee of any of the Companies
and for a period of one year thereafter, the Optionee shall not, directly or
indirectly, for himself or on behalf of any other person, firm or entity,
employ, engage or retain any person who at any time during the preceding
12-month period shall have been an employee of any of the Companies or contact
any supplier, customer or employee of any of the Companies for the purpose of
soliciting or diverting any such supplier, customer or employee from the
Companies or otherwise interfering with the business relationship of the
Companies with any of the foregoing.

        (c) For so long as the Optionee is an employee of any of the Companies
and for a period of one year thereafter, the Optionee shall not, directly or
indirectly, engage in, or serve as a principal, partner, joint venturer, member,
manager, trustee, agent, stockholder, director, officer or employee of, or
consultant or advisor to, or in any other capacity, or in any manner own,
control, manage, operate, or otherwise participate, invest, or have any interest
in, or be connected with, any person, firm or entity that engages in, directly
or indirectly, any activity that is the same as, similar to or competitive with,
the business of the Companies as then conducted in the United States; provided,
however, that, notwithstanding the foregoing, the

                                       -4-

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Optionee may own up to 3% of the voting securities of any publicly-traded
company.

        (d) The Optionee acknowledges and agrees that the agreements in this
paragraph 7 are reasonable and necessary for the protection of the Companies and
are an essential inducement to the Company's entering into this agreement
whereby the Optionee is receiving substantial benefits. Accordingly, the
Optionee shall be bound by the provisions hereof to the maximum extent permitted
by law, it being the intent and spirit of the parties that the foregoing shall
be fully enforceable. However, the parties further agree that, if any of the
provisions hereof shall for any reason be held to be excessively broad as to
duration, geographical scope, property or subject matter, such provision shall
be construed by limiting and reducing it so as to be enforceable to the extent
compatible with the applicable law as it shall herein pertain.

        (e) The Optionee acknowledges and agrees that the services to
be rendered by the Optionee to the Companies are of a unique nature and that it
would be difficult or impossible to replace such services and that by reason
thereof the Optionee agrees and consents that if he violates the provisions of
this paragraph 7, the Company, in addition to any other rights and remedies
available under this agreement or otherwise, shall be entitled to an injunction
to be issued or specific enforcement to be required (without the necessity of
any bond) restricting the Optionee from committing or continuing any such
violation.

     8. The Optionee hereby represents and warrants to the Company that, unless
a registration statement under the Securities Act with respect to the shares of
Common Stock to be received upon an exercise of this option is effective and
current at the time of exercise of this option, the shares of Common Stock to be
issued upon the exercise of this option will be acquired by the Optionee for the
Optionee's own account, for investment only and not with a view to the resale or
distribution thereof. In any event, the Optionee shall notify the Company of any
proposed resale of the shares of Common Stock issued to him upon exercise of
this option. Any subsequent resale or distribution of shares of Common Stock by
the Optionee shall be made only pursuant to (a) a registration statement under
the Securities Act which is effective and current with respect to the sale of
shares of Common Stock being sold, or (b) a specific exemption from the
registration requirements of the Securities Act, but in claiming such exemption,
the Optionee shall, prior to any offer of sale or sale of such shares of Common
Stock, provide the Company (unless waived by the Company) with a favorable
written opinion of counsel satisfactory to the Company, in form, substance and
scope satisfactory to the Company, as to the applicability of such exemption to
the proposed sale or distribution. Such representations and warranties shall
also be deemed to be made by the Optionee upon each exercise of this option.
Nothing herein shall be construed as requiring the Company to register the
shares subject to this option under the Securities Act or to keep any
registration statement effective or current.

     9. Notwithstanding anything herein to the contrary, if at any time the
Administrators determine, in their sole discretion, that the listing or
qualification of the shares of Common Stock subject to this option on any
securities exchange, NASDAQ or under any applicable law, or the consent or
approval, or filing with, of any governmental agency or regulatory body, is
necessary

                                       -5-

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or desirable as a condition to, or in connection with, the granting of an option
or the issue of shares of Common Stock hereunder, this option may not be
exercised in whole or in part unless such filing, listing, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Administrators.

     10. The Company may endorse such legend or legends upon the certificates
for shares of Common Stock issued upon exercise of this option and may issue
such "stop transfer" instructions to its transfer agent in respect of such
shares as it determines, in its discretion, to be necessary or appropriate to
(a) prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act or any applicable state securities law, or
(b) implement the provisions of the Plan or this Contract or any other agreement
between the Company and the Optionee with respect to such shares of Common
Stock.

     11. Nothing in the Plan or herein shall confer upon the Optionee any right
to continue as a director of the Company or in the employ, or as a consultant
to, of the Company, any Parent or any of its Subsidiaries, or interfere in any
way with any right of the Company, any Parent or its Subsidiaries to terminate
any such relationship at any time for any reason whatsoever without liability to
the Company, any Parent or any of its Subsidiaries.

     12. Prior to or simultaneously with the grant of this option, the Optionee
has executed the Stockholders Agreement in the form annexed hereto as Exhibit A.
The Optionee hereby agrees to execute any "lock-up" or similar agreement that an
underwriter of any public offering of the Company's securities might request to
restrict the transfer by the Optionee of shares of Common Stock owned or which
may become owned by the Optionee for a period of time not to exceed 30 days
prior to, nor 270 days following, the effective date of such public offering.
The Optionee agrees to maintain the confidentiality of any information provided
to him or learned by him by reason of, as result of, or in connection with,
holding an option or owing shares in the Company.

     13. The Company and the Optionee are subject to and bound by all of the
terms and conditions of the Plan, a copy of which is attached hereto and made a
part hereof. In the event of a conflict between the terms of this Contract and
the terms of the Plan, the terms of the Plan shall govern.

     14. The Optionee represents and agrees that he will comply with all
applicable laws relating to the Plan and the grant and exercise of this option
and the disposition of the shares of Common Stock acquired upon exercise of the
option, including without limitation, federal and state securities and "blue
sky" laws.

     15. This option is not transferable by the Optionee and may be exercised
(a) during the lifetime of the Optionee, only by the Optionee and (b) after the
death of the Optionee, only by the personal representative of the Optionee's
estate.

     16. This Contract shall be binding upon and inure to the benefit of any
successor or assign of the Company and to the personal representative of the
Optionee's estate.

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     17. This Contract shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without regard to the
conflict of law that would defer to the substantive laws of another
jurisdiction.

     18. The invalidity, illegality or unenforceability of any term or provision
herein shall not affect the validity, legality or enforceability of any other
term or provision, all of which shall be valid, legal and enforceable to the
fullest extent permitted by applicable law. This Contract shall not be construed
or interpreted with any presumption against the Company by reason of the Company
causing this Contract to be drafted.

     19. This Contract (together with the Plan) constitutes the entire agreement
and understanding between the parties with respect to the subject matter hereof
and supersedes any prior and/or contemporaneous agreements or understandings
with respect thereto (whether written or oral), all of which are merged herein.
This Contract may not be amended or modified except by an instrument in writing
signed by the parties hereto, and no term or provision hereof may be waived by
any party except by an instrument in writing signed by such party.
Notwithstanding the foregoing, the Optionee agrees that the Company may amend
the Plan and the options granted to the Optionee under the Plan, subject to the
limitations contained in the Plan.

                      [The next page is the signature page]

                                       -7-

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     The parties have executed and delivered this Non-Qualified Stock Option
Contract as of the date first written above.

                                       MEDSOURCE TECHNOLOGIES, INC.

                                       By:
                                           ----------------------------------
                                           Name:    Richard J. Effress
                                           Title:   Chairman of the Board

                                           ----------------------------------
                                           Name:
                                                    -------------------------

                                       -8-<PAGE>

                                                                   EXHIBIT 10.15

                          MEDSOURCE TECHNOLOGIES, INC.
                        2001 EMPLOYEE STOCK PURCHASE PLAN

                        ARTICLE I - ESTABLISHMENT OF PLAN

1.1  Adoption by Board of Directors. By action of the Board of Directors of
     Medsource Technologies, Inc. (the "Corporation") on December 1, 2001 and by
     the Compensation Committee on March      , 2002, subject to approval by its
                                        ------
     shareholders, the Corporation has adopted an employee stock purchase plan
     pursuant to which eligible employees of the Corporation and certain of its
     Subsidiaries may be offered the opportunity to purchase shares of Stock of
     the Corporation. The terms and conditions of this Plan are set forth in
     this plan document, as amended from time to time as provided herein. The
     Corporation intends that the Plan shall qualify as an "employee stock
     purchase plan" under Section 423 of the Internal Revenue Code of 1986, as
     amended from time to time, (the "Code") and shall be construed in a manner
     consistent with the requirements of Code Section 423 and the regulations
     thereunder.

1.2  Shareholder Approval and Term. This Plan shall become effective upon its
     adoption by the Board of Directors and shall terminate November 30, 2011;
     provided, however, that the Plan shall be subject to approval by the
     shareholders of the Corporation within twelve (12) months after the Plan is
     adopted by the Board in the manner provided under Code Section 423 and the
     regulations thereunder; and provided, further that the Board of Directors
     may extend the term of the Plan for such period as the Board, in its sole
     discretion, deems advisable. In the event the shareholders fail to approve
     the Plan within twelve (12) months after the Plan is adopted by the Board,
     this Plan shall not become effective and shall have no force and effect,
     participation in the Plan shall immediately cease, all outstanding options
     shall immediately be canceled and all payroll deductions shall be returned
     to the Participants without interest. No shares of stock shall be issued to
     any Participant for any Phase unless and until the shareholders approve the
     Plan within such twelve-month period.

                              ARTICLE II - PURPOSE

2.1  Purpose. The primary purpose of the Plan is to provide an opportunity for
     Eligible Employees of the Corporation to become shareholders of the
     Corporation, thereby providing them with an incentive to remain in the
     Corporation's employ, to improve operations, to increase profits and to
     contribute more significantly to the Corporation's success.

                                       -1-

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                            ARTICLE III - DEFINITIONS

3.1  "Administrator" means the Board of Directors or such Committee appointed by
     the Board of Directors to administer the Plan. The Board or the Committee
     may, in its sole discretion, authorize the officers of the Corporation to
     carry out the day-to-day operation of the Plan. In its sole discretion, the
     Board may take such actions as may be taken by the Administrator, in
     addition to those powers expressly reserved to the Board under this Plan.

3.2  "Board of Directors" or "Board" means the Board of Directors of Medsource
     Technologies, Inc.

3.3  "Compensation" means the Participant's base compensation, excluding
     bonuses, overtime and commissions.

3.4  "Corporation" means Medsource Technologies, Inc., a Delaware corporation.

3.5  "Eligible Employee" means any employee who is a full-time or part-time
     employee of the Corporation or one of its Subsidiaries and, as determined
     on or immediately prior to an Enrollment Period, is customarily employed
     for more than twenty (20) hours per week.

3.6  "Enrollment Period" means the period determined by the Administrator for
     purposes of accepting elections to participate during a Phase from Eligible
     Employees.

3.7  "Fiscal Year" means the fiscal year of the Corporation, which is the
     twelve-month period beginning July 1 and ending June 30 each year.

3.8  "Participant" means an Eligible Employee who has been granted an option and
     is participating during a Phase through payroll deductions, but shall
     exclude those employees subject to the limitations described in Section 9.3
     below.

3.9  "Phase" means the period beginning on the date that the option was granted,
     otherwise referred to as the commencement date of the Phase, and ending on
     the date that the option was exercised, otherwise referred to as the
     termination date of the Phase.

3.10 "Plan" means the Medsource Technologies, Inc. 2001 Employee Stock Purchase
     Plan.

3.11 "Stock" means the voting common stock of the Corporation.

3.12 "Subsidiary" means any corporation defined as a subsidiary of the
     Corporation in Code Section 424(f) as of the effective date of the Plan,
     and such other corporations

                                       -2-

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     that qualify as subsidiaries of the Corporation under Code Section 424(f)
     as the Board approves to participate in this Plan from time to time.

                           ARTICLE IV - ADMINISTRATION

4.1  Administration. Except for those matters expressly reserved to the Board
     pursuant to any provision of the Plan, the Administrator shall have full
     responsibility for administration of the Plan, which responsibility shall
     include, but shall not be limited to, the following:

     (a)  The Administrator shall, subject to the provisions of the Plan,
          establish, adopt and revise such rules and procedures for
          administering the Plan, and shall make all other determinations as it
          may deem necessary or advisable for the administration of the Plan;

     (b)  The Administrator shall, subject to the provisions of the Plan,
          determine all terms and conditions that shall apply to the grant and
          exercise of options under this Plan, including, but not limited to,
          the number of shares of Stock that may be granted, the date of grant,
          the exercise price and the manner of exercise of an option. The
          Administrator may, in its discretion, consider the recommendations of
          the management of the Corporation when determining such terms and
          conditions;

     (c)  The Administrator shall have the exclusive authority to interpret the
          provisions of the Plan, and each such interpretation or determination
          shall be conclusive and binding for all purposes and on all persons,
          including, but not limited to, the Corporation and its Subsidiaries,
          the shareholders of the Corporation and its Subsidiaries, the
          Administrator, the directors, officers and employees of the
          Corporation and its Subsidiaries, and the Participants and the
          respective successors-in-interest of all of the foregoing; and

     (d)  The Administrator shall keep minutes of its meetings or other written
          records of its decisions regarding the Plan and shall, upon requests,
          provide copies to the Board.

                                       -3-

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                         ARTICLE V - PHASES OF THE PLAN

5.1  Phases. The Plan shall be carried out in one or more Phases of six (6)
     months each. Unless otherwise determined by the Administrator, in its
     discretion, Phases shall commence on November 1 and May 1 of each fiscal
     year during the term of the Plan; provided, however, that the first phase
     shall commence on the effective date of the Corporation's initial public
     offering and end on the next following October 30th. No two Phases shall
     run concurrently.

5.2  Limitations. The Administrator may, in its discretion, limit the number of
     shares available for option grants during any Phase as it deems
     appropriate. Without limiting the foregoing, in the event all of the shares
     of Stock reserved for the grant of options under Section 12.1 is issued
     pursuant to the terms hereof prior to the commencement of one or more
     Phases or the number of shares of Stock remaining is so small, in the
     opinion of the Administrator, as to render administration of any succeeding
     Phase impracticable, such Phase or Phases may be canceled or the number of
     shares of Stock limited as provided herein. In addition, if, based on the
     payroll deductions authorized by Participants at the beginning of a Phase,
     the Administrator determines that the number of shares of Stock which would
     be purchased at the end of a Phase exceeds the number of shares of Stock
     remaining reserved under Section 12.1 hereof for issuance under the Plan,
     or if the number of shares of Stock for which options are to be granted
     exceeds the number of shares designated for option grants by the
     Administrator for such Phase, then the Administrator shall make a pro rata
     allocation of the shares of Stock remaining available in as nearly uniform
     and equitable a manner as the Administrator shall consider practicable as
     of the commencement date of the Phase or, if the Administrator so elects,
     as of the termination date of the Phase. In the event such allocation is
     made as of the commencement date of a Phase, the payroll deductions which
     otherwise would have been made on behalf of Participants shall be reduced
     accordingly.

                            ARTICLE VI - ELIGIBILITY

6.1  Eligibility. Subject to the limitations described in Section 9.3, each
     employee who is an Eligible Employee on or immediately prior to the
     commencement of a Phase shall be eligible to participate in such Phase. If,
     in the discretion of the Administrator, any Phase commences on a date other
     than November 1 or May 1, whether an employee is an Eligible Employee shall
     be determined on a date selected by the Administrator, which date shall be
     prior to the commencement date of the Phase.

                                       -4-

<PAGE>

                           ARTICLE VII - PARTICIPATION

7.1  Participation. Participation in the Plan is voluntary. An Eligible Employee
     who desires to participate in any Phase of the Plan must complete the
     enrollment form provided by the Administrator and deliver such form to the
     Administrator or its designated representative during the Enrollment Period
     established by the Administrator prior to the commencement date of the
     Phase.

7.2  Subsequent Phases. An Eligible Employee who elects to participate in a
     Phase shall be deemed to have elected to participate in each subsequent
     Phase unless such Participant elects to discontinue payroll deductions
     during a Phase or exercises his or her right to withdraw amounts previously
     withheld, as provided under Article X hereof. In such event, such
     Participant must complete a new enrollment form and file such form with the
     Administrator during the Enrollment Period prior to the next Phase with
     respect to which the Eligible Employee wishes to participate.

                   ARTICLE VIII - PAYMENT; PAYROLL DEDUCTIONS

8.1  Enrollment. Each Eligible Employee electing to participate shall indicate
     such election on the enrollment form and designate therein a percentage of
     such Participant's Compensation to be deducted during the Phase. Subject to
     the Participant's right to discontinue payroll deductions as provided in
     Section 10.2, such percentage shall be at least one percent (1%) but not
     more than ten percent (10%) of such Participant's Compensation to be paid
     during such Phase, or such other maximum percentage as the Administrator
     may establish from time to time. In order to be effective, such enrollment
     form must be properly completed and received by the Administrator by the
     due date indicated on such form, or by such other date established by the
     Administrator.

8.2  Payroll Deductions. Payroll deductions for a Participant shall commence
     with the paycheck issued immediately after the commencement date of the
     Phase and shall terminate with the paycheck issued immediately prior to the
     termination date of the Phase, unless the Participant elects to discontinue
     payroll deductions or exercises his or her right to withdraw all
     accumulated payroll deductions previously withheld during the Phase as
     provided in Article X hereof. The authorized payroll deductions shall be
     made over the pay periods of such Phase by deducting from the Participant's
     Compensation for each such pay period that percentage specified by the
     Participant in the enrollment form.

     Unless the Participant has elected to discontinue payroll deductions or
     exercised his or her right to withdraw all accumulated payroll deductions
     previously withheld during the preceding Phase (in which event the
     Participant must complete a new enrollment form to participate in any
     subsequent Phase), the Corporation shall continue to withhold from such
     Participant's Compensation the same percentage specified by the Participant
     in the most recent enrollment form previously completed

                                       -5-

<PAGE>

     by the Participant in all subsequent Phases; provided, however, that the
     Participant may, if he or she so chooses, increase, decrease or discontinue
     payroll deductions for any or all such subsequent Phases by properly
     completing a new enrollment form during the Enrollment Period for such
     subsequent Phase and delivering such form to the Administrator by the due
     date indicated on such form.

8.3  Change in Compensation During a Phase. In the event that the Participant's
     Compensation is, for any reason, increased or decreased during a Phase, so
     that the amount actually withheld on behalf of the Participant as of the
     termination date of the Phase is different from the amount anticipated to
     be withheld as determined on the commencement date of the Phase, then the
     extent to which the Participant may exercise his or her option shall be
     based on the amounts actually withheld on his or her behalf, subject to the
     limitations in Article IX. In the event of a change in the pay period of
     any Participant, such as from biweekly to monthly, an appropriate
     adjustment shall be made to the deduction in each new pay period so as to
     ensure the deduction of the proper amount authorized by the Participant.

8.4  Increases or Decreases During a Phase. In addition to the right to
     discontinue or withdraw payroll deductions during a Phase as provided in
     Article X, a Participant may increase or decrease the percentage of
     Compensation designated to be deducted as payroll deductions during a Phase
     (but not below 1% nor above 10%) by completing a new enrollment form and
     filing such form with the Administrator. Such increase or decrease shall be
     effective with the next payroll period beginning after the date that the
     Administrator receives such form and shall apply to all remaining
     Compensation paid during the Phase. The Participant may exercise the right
     to increase or decrease his or her payroll deductions only once during each
     Phase.

                              ARTICLE IX - OPTIONS

9.1  Grant of Option. Subject to Article X, a Participant who has elected to
     participate in the manner described in Article VIII and who is employed by
     the Corporation or a Subsidiary as of the commencement date of a Phase
     shall be granted an option as of such date to purchase that number of whole
     shares of Stock determined by dividing the total amount to be credited to
     the Participant's account by the option price per share set forth in
     Section 9.2(a) below. The option price per share for such Stock shall be
     determined under Section 9.2 hereof, and the number of shares exercisable
     shall be determined under Section 9.3 hereof.

9.2  Option Price. Subject to the limitations hereinbelow, the option price for
     such Stock shall be the lower of the amounts determined under paragraphs
     (a) and (b) below:

     (a)  Eighty-five percent (85%) of the closing price for a share of the
          Corporation's Stock as reported on the Nasdaq National Market, Nasdaq

                                       -6-

<PAGE>

          SmallCap Market or on an established securities exchange as of the
          commencement date of the Phase; or

     (b)  Eighty-five percent (85%) of the closing price for a share of the
          Corporation's Stock as reported on the Nasdaq National Market, Nasdaq
          SmallCap Market or on an established securities exchange as of the
          termination date of the Phase.

     In the event that the commencement or termination date of a Phase is a
     Saturday, Sunday or holiday, the amounts determined under the foregoing
     subsections shall be determined using the price as of the last preceding
     trading day.

     If the Corporation's Stock is not listed on the Nasdaq National Market,
     Nasdaq SmallCap Market or on an established securities exchange, then the
     option price shall equal the lesser of (i) eighty-five percent (85%) of the
     fair market value of a share of the Corporation's Stock as of the
     commencement date of the Phase; or (ii) eighty-five percent (85%) of the
     fair market value of such stock as of the termination date of the Phase.
     Such "fair market value" shall be determined by the Board.

9.3  Limitations. No employee shall be granted an option hereunder:

     (a)  Which permits his or her rights to purchase Stock under all employee
          stock purchase plans of the Corporation or its Subsidiaries to accrue
          at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) of fair
          market value of such Stock (determined at the time such option is
          granted) for each calendar year in which such option is outstanding at
          any time;

     (b)  If such employee would own and/or hold, immediately after the grant of
          the option, Stock possessing five percent (5%) or more of the total
          combined voting power or value of all classes of stock of the
          Corporation or of any Subsidiary. For purposes of determining stock
          ownership under this paragraph, the rules of Section 424(d) of the
          Code and the regulations thereunder shall apply.

     (c)  Which, if exercised, would cause the limits established by the
          Administrator under Section 5.2 to be exceeded.

9.4  Exercise of Option. Subject to a Participant's right to withdraw in the
     manner provided in Section 10.1, a Participant's option for the purchase of
     shares of Stock will be exercised automatically on the termination date of
     that Phase. In no event, however, shall a Participant be allowed to
     exercise an option for more shares of Stock than can be purchased with the
     payroll deductions accumulated by the Participant in his or her bookkeeping
     account during such Phase.

                                       -7-

<PAGE>

9.5  Delivery of Shares. As promptly as practicable after the termination of any
     Phase, the Corporation's transfer agent or other authorized representative
     shall deliver to each Participant herein certificates for that number of
     whole shares of Stock purchased upon the exercise of the Participant's
     option. The Corporation may, in its sole discretion, arrange with the
     Corporation's transfer agent or other authorized representative to
     establish, at the direction of the Participant, individual securities
     accounts to which will be credited that number of whole shares of Stock
     that are purchased upon such exercise, such securities account to be
     subject to such terms and conditions as may be imposed by the transfer
     agent or authorized representative.

     The shares of the Corporation's common stock to be delivered to a
     Participant pursuant to the exercise of an option under Section 9.4 of the
     Plan will be registered in the name of the Participant or, if the
     Participant so directs by written notice to the Administrator prior to the
     termination date of the Phase, in the names of the Participant and one
     other person the Participant may designate as his joint tenant with rights
     of survivorship, to the extent permitted by law.

     Any accumulated payroll deductions remaining after the exercise of the
     Participant's option shall be returned to the Participant, without
     interest, on the first paycheck issued for the payroll period which begins
     on or immediately after the commencement date of the next Phase; provided,
     however, that the Corporation may, under rules of uniform application,
     retain such remaining amount in the Participant's bookkeeping account and
     apply it toward the purchase of shares of Stock in the next succeeding
     Phase, unless the Participant requests a withdrawal of such amount pursuant
     to Section 10.1.

                            ARTICLE X - WITHDRAWAL OR
                     DISCONTINUATION OF PAYROLL WITHHOLDINGS

10.1 Withdrawal. Once during the Phase, a Participant may request a withdrawal
     of all accumulated payroll deductions then credited to the Participant's
     bookkeeping account by completing a withdrawal form and filing such form
     with the Administrator. The Participant's request shall be effective as of
     the beginning of the next payroll period immediately following the date
     that the Administrator receives the Participant's properly completed
     withdrawal form. As soon as administratively feasible after the end of the
     Phase, all payroll deductions credited to a bookkeeping account for the
     Participant will be paid to such Participant, without interest, and no
     further payroll deductions will be made during that Phase or any future
     Phase unless the Participant completes a new enrollment form as provided in
     Section 8.2 above. If the Participant requests a withdrawal, the option
     granted to the Participant under that Phase of the Plan shall immediately
     lapse and shall not be exercisable. Partial withdrawals of payroll
     deductions are not permitted.

     Notwithstanding the foregoing, in order to be effective for a particular
     Phase, the Participant's request for withdrawal must be properly completed
     and received by the

                                       -8-

<PAGE>

     Administrator on or before such date immediately preceding the termination
     date of the Phase established by the Administrator. Requests for withdrawal
     that are received after that due date shall not be effective and no
     withdrawal shall be made, unless otherwise determined by the Administrator.

10.2 Discontinuation. At any time during the Phase, a Participant may also
     request that the Administrator discontinue any further payroll deductions
     that would otherwise be made during the remainder of the Phase by
     completing a new enrollment form and filing such form with the
     Administrator on or before such date immediately preceding the termination
     date of the Phase established by the Administrator. The Participant's
     request shall be effective as of the beginning of the next payroll period
     immediately following the date that the Administrator receives the
     Participant's properly completed enrollment form. Upon the effective date
     of the Participant's request, the Corporation will discontinue making
     payroll deductions for such Participant for that Phase, and all future
     Phases, unless the Participant completes a new enrollment form as provided
     in Section 8.2 above.

                     ARTICLE XI - TERMINATION OF EMPLOYMENT

11.1 Termination. If, on or before the termination date of any Phase, a
     Participant's employment terminates with the Corporation for any reason,
     voluntarily or involuntarily, including by reason of retirement or death,
     the payroll deductions credited to such Participant's bookkeeping account
     for such Phase, if any, will be returned to the Participant, without
     interest, and any options granted to such Participant under the Plan shall
     immediately lapse and shall not be exercisable. The return of such payroll
     deductions shall be made to the Participant as soon as administratively
     practicable following the end of the Phase in which the Participant
     terminates employment. In the event that such termination occurs near the
     end of a Phase and the Corporation is unable to discontinue payroll
     deductions for such Participant for his or her final paycheck(s), such
     deductions shall still be made but shall be returned to the Participant as
     provided herein. In no event shall the accumulated payroll deductions be
     used to purchase any shares of Stock.

     If the option lapses as a result of the Participant's death, any
     accumulated payroll deductions credited to the Participant's bookkeeping
     account will be paid to the Participant's estate, without interest. In the
     event a Participant dies after exercise of the Participant's option but
     prior to delivery of the Stock to be transferred pursuant to the exercise
     of the option under Section 9.4 above, any such Stock and/or accumulated
     payroll deductions remaining after such exercise shall be paid by the
     Corporation to the Participant's estate.

     The Corporation will not be responsible for or be required to give effect
     to the disposition of any cash or Stock or the exercise of any option in
     accordance with any will or other testamentary disposition made by such
     Participant or in accordance with the provisions of any law concerning
     intestacy, or otherwise. No person shall,

                                       -9-

<PAGE>

     prior to the death of a Participant, acquire any interest in any Stock, in
     any option or in the cash credited to the Participant's bookkeeping account
     during any Phase of the Plan.

11.2 Subsidiaries. In the event that any Subsidiary ceases to be a Subsidiary of
     the Corporation, the employees of such Subsidiary shall be considered to
     have terminated their employment for purposes of Section 11.1 hereof as of
     the date the Subsidiary ceased to be a Subsidiary of the Corporation.

                    ARTICLE XII - STOCK RESERVED FOR OPTIONS

12.1 Shares Reserved. Subject to adjustment as provided in Section 14.1 hereof,
     the maximum number of shares of Stock that shall be made available for sale
     under the Plan shall be five hundred thousand (500,000) shares, plus an
     annual increase to be added on the first day of each Fiscal Year beginning
     in 2002 equal to the lesser of (i) seven hundred and fifty thousand
     (750,000) shares, (ii) 2.5% of the issued and outstanding Stock on such
     date and (iii) a lesser amount determined by the Board. Shares subject to
     the unexercised portion of any lapsed or expired option may again be
     subject to option under the Plan.

12.2 Rights as Shareholder. The Participant shall have no rights as a
     shareholder with respect to any shares of Stock subject to the
     Participant's option until the date of the issuance of a stock certificate
     evidencing such shares as provided in Section 9.5. No adjustment shall be
     made for dividends (ordinary or extraordinary, whether in cash, securities
     or other property), distributions or other rights for which the record date
     is prior to the date such stock certificate is actually issued, except as
     otherwise provided in Section 14.1 hereof.

                   ARTICLE XIII - ACCOUNTING AND USE OF FUNDS

13.1 Bookkeeping Account. Payroll deductions for Participants shall be credited
     to bookkeeping accounts, established by the Corporation for each such
     Participant under the Plan. A Participant may not make any cash payments
     into such account. Such account shall be solely for bookkeeping purposes
     and shall not require the Corporation to establish any separate fund or
     trust hereunder. All funds from payroll deductions received or held by the
     Corporation under the Plan may be used, without limitation, for any
     corporate purpose by the Corporation, which shall not be obligated to
     segregate such funds from its other funds. In no event shall Participants
     be entitled to interest on the amounts credited to such bookkeeping
     accounts.

                       ARTICLE XIV - ADJUSTMENT PROVISION

                                      -10-

<PAGE>

14.1 General. Subject to any required action by the shareholders of the
     Corporation, in the event of an increase or decrease in the number of
     outstanding shares of Stock or in the event the Stock is changed into or
     exchanged for a different number or kind of shares of stock or other
     securities of the Corporation or another corporation by reason of a
     reorganization, merger, consolidation, divestiture (including a spin-off),
     liquidation, recapitalization, reclassification, stock dividend, stock
     split, combination of shares, rights offering or any other change in the
     corporate structure or shares of the Corporation, the Board (or, if the
     Corporation is not the surviving corporation in any such transaction, the
     board of directors of the surviving corporation), in its sole discretion,
     shall adjust the number and kind of securities subject to and reserved
     under the Plan and, to prevent the dilution or enlargement of rights of
     those Eligible Employees to whom options have been granted, shall adjust
     the number and kind of securities subject to such outstanding options and,
     where applicable, the exercise price per share for such securities.

     In the event of the sale by the Corporation of substantially all of its
     assets and the consequent discontinuance of its business, or in the event
     of a merger, exchange, consolidation, reorganization, divestiture
     (including a spin-off), liquidation, reclassification or extraordinary
     dividend (collectively referred to as a "transaction"), after which the
     Corporation is not the surviving corporation, the Board may, in its sole
     discretion, at the time of adoption of the plan for such transaction,
     provide for one or more of the following:

     (a)  The acceleration of the exercisability of outstanding options granted
          at the commencement of the Phase then in effect, to the extent of the
          accumulated payroll deductions made as of the date of such
          acceleration pursuant to Article VIII hereof;

     (b)  The complete termination of this Plan and a refund of amounts credited
          to the Participants' bookkeeping accounts hereunder; or

     (c)  The continuance of the Plan only with respect to completion of the
          then current Phase and the exercise of options thereunder. In the
          event of such continuance, Participants shall have the right to
          exercise their options as to an equivalent number of shares of stock
          of the corporation succeeding the Corporation by reason of such
          transaction.

     In the event of a transaction where the Corporation survives, then the Plan
     shall continue in effect, unless the Board takes one or more of the actions
     set forth above. The grant of an option pursuant to the Plan shall not
     limit in any way the right or power of the Corporation to make adjustments,
     reclassifications, reorganizations or changes in its capital or business
     structure or to merge, exchange or consolidate or to dissolve, liquidate,
     sell or transfer all or any part of its business or assets.

                                      -11-

<PAGE>

                   ARTICLE XV - NONTRANSFERABILITY OF OPTIONS

15.1 Nontransferability. Options granted under any Phase of the Plan shall not
     be transferable and shall be exercisable only by the Participant during the
     Participant's lifetime.

15.2 Nonalienation. Neither payroll deductions granted to a Participant's
     account, nor any rights with regard to the exercise of an option or to
     receive Stock under any Phase of the Plan may be assigned, transferred,
     pledged or otherwise disposed of in any way by the Participant. Any such
     attempted assignment, transfer, pledge or other disposition shall be null
     and void and without effect, except that the Corporation may, at its
     option, treat such act as an election to withdraw in accordance with
     Section 10.1.

                     ARTICLE XVI - AMENDMENT AND TERMINATION

16.1 General. The Plan may be terminated at any time by the Board of Directors,
     provided that, except as permitted in Section 14.1 hereof, no such
     termination shall take effect with respect to any options then outstanding.
     The Board may, from time to time, amend the Plan as it may deem proper and
     in the best interests of the Corporation or as may be necessary to comply
     with Code Section 423, as amended, and the regulations thereunder, or other
     applicable laws or regulations; provided, however, no such amendment shall,
     without the consent of a Participant, materially adversely affect or impair
     the right of a Participant with respect to any outstanding option; and
     provided, further, that no such amendment shall:

     (a)  increase the total number of shares for which options may be granted
          under the Plan (except as provided in Section 14.1 herein);

     (b)  modify the group of Subsidiaries whose employees may be eligible to
          participate in the Plan or materially modify any other requirements as
          to eligibility for participation in the Plan; or

     (c)  materially increase the benefits accruing to Participants under the
          Plan;

     without the approval of the Corporation's shareholders, if such approval is
     required for compliance with Code Section 423, as amended, and the
     regulations thereunder, or other applicable laws or regulations.

                                      -12-

<PAGE>

                             ARTICLE XVII - NOTICES

17.1 General. All notices, forms, elections or other communications in
     connection with the Plan or any Phase thereof shall be in such form as
     specified by the Corporation or the Administrator from time to time, and
     shall be deemed to have been duly given when received by the Participant or
     his or her personal representative or by the Corporation or its designated
     representative, as the case may be.

                                      -13-

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