Document:

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                                  EXHIBIT 10.51

                                           *** TEXT OMITTED AND FILED SEPARATELY
                                                CONFIDENTIAL TREATMENT REQUESTED
                                         UNDER 17 C.F.R. SECTIONS 200.80 (B)(4),
                                                                   AND 240.24B-2

                    THIRD AMENDMENT OF THE LICENSE AGREEMENT

      This THIRD AMENDMENT OF THE LICENSE AGREEMENT (this "THIRD AMENDMENT") is
made and entered into as of March 29, 2004, by and between EPIMMUNE INC. (the
"COMPANY") and INNOGENETICS, NV ("INNOGENETICS") (collectively referred to
herein as the "PARTIES").

                                R E C I T A L S

      WHEREAS, the Company and Genencor International, Inc. ("GENENCOR") entered
into that certain License Agreement, dated July 9, 2001 (the "LICENSE
AGREEMENT"), as amended by the First Amendment of the License Agreement, dated
October 16, 2002 (the "FIRST AMENDMENT"), and the Second Amendment of the
License Agreement, dated March 15, 2004 (the "SECOND AMENDMENT");

      WHEREAS, Genencor proposes to assign its rights and obligations under the
License Agreement, as amended by the First Amendment and the Second Amendment,
to Innogenetics, in connection with a sale to Innogenetics of substantially all
of its business assets relating to vaccines for the prevention and/or treatment
of hepatitis B virus infections, hepatitis C virus infections and human
papilloma virus infections (the "TRANSACTION"); and

      WHEREAS, contingent on and at the time of Genencor assigning to
Innogenetics its rights and obligations under the License Agreement, as amended
by the First Amendment and the Second Amendment, the Parties wish to amend the
License Agreement, as amended by the First Amendment and the Second Amendment,
on the terms and conditions set forth herein.

      NOW, THEREFORE, in consideration of the mutual undertakings of the Parties
as set forth below as well as other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Parties do hereby mutually
agree as follows:

      1.    EFFECTIVE DATE. This Third Amendment shall become effective upon the
date Genencor assigns to Innogenetics its rights and obligations under the
License Agreement, as amended by the First Amendment and the Second Amendment
("Effective Date"), and subject to the condition precedent of Genencor assigning
its rights and obligations under the License Agreement as amended by the First
Amendment and the Second Amendment. In the event Innogenetics provides the
Company with written notice of the termination of the Transaction within
[...***...] after the Effective Date, effective upon the date of such notice,
this Third Amendment shall automatically terminate and shall be void and have no
further effect. The Parties acknowledge that,

                                              * CONFIDENTIAL TREATMENT REQUESTED

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as of the Effective Date, references to Genencor in the License Agreement, as
amended by its First Amendment, the Second Amendment and this Third Amendment
shall be amended so as to replace "GCOR" with "Innogenetics".

      2. AMENDMENT TO LICENSE AGREEMENT.

      SECTION 1.6. As of the Effective Date, Section 1.6 of the License
Agreement is hereby amended and restated in its entirety as follows:

      "1.6  "Collaboration Term" shall mean the four and one-half (4-1/2) year
            period from April 2, 2001 through September 30, 2005, unless
            extended by mutual agreement or terminated early as provided for in
            the Collaboration Agreement."

      3.    REPRESENTATIONS AND WARRANTIES. Both Parties agree that, effective
as of the Effective Date (Effective Date as defined in this Third Amendment
under Section 1 above), (1) Epimmune renews its representations and warranties
as mentioned under 7.1 of the License Agreement, as amended by the First
Amendment and the Second Amendment, and (2) Innogenetics makes the
representations and warranties as mentioned under 7.2 of the License Agreement,
as amended by the First and the Second Amendment.

      4.    OTHER TERMS REMAIN IN EFFECT. All terms and conditions of the
License Agreement as amended by the First Amendment and the Second Amendment,
which are not modified by this Third Amendment, shall remain in full force and
effect. From and after the Effective Date, for purposes of the License
Agreement, the term "Agreement" shall be deemed to mean the License Agreement as
amended by the First Amendment, the Second Amendment and this Third Amendment.

      4.    MISCELLANEOUS. This Third Amendment shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California. The provisions hereof shall inure to the benefit of, and be binding
upon, the successors and assigns of Innogenetics and the Company. Parties agree
that no press release or other communication will be issued relating to the
existence or the terms and conditions of this Third Amendment before the
Effective Date mentioned herein.

      IN WITNESS WHEREOF, the Parties have executed this THIRD AMENDMENT OF THE
LICENSE AGREEMENT as of the date first above written.

INNOGENETICS, NV                         EPIMMUNE INC.

By:   /s/ Philippe Archinard             By:   /s/ Robert J. De Vaere
     -------------------------------          ---------------------------

Name:  Philippe Archinard                Name:  Robert J. De Vaere

Title:         CEO                       Title:            CFO

                                       2<PAGE>

                                                                   Exhibit 10.67

                       THE 2000 EQUITY PARTICIPATION PLAN

                                       OF

                             GEN-PROBE INCORPORATED
               (adopted by Board of Directors on August 17, 2000)
                  (adopted by Stockholders on August 17, 2000)

         Gen-Probe Incorporated, a Delaware corporation, has adopted The 2000
Equity Participation Plan of Gen-Probe Incorporated (the "Plan"), effective
August 17, 2000, for the benefit of its eligible Employees, Consultants and
Directors.

                  The purposes of the Plan are as follows:

                  (1)      To provide an additional incentive for Directors,
Employees and Consultants (as such terms are defined below) to further the
growth, development and financial success of the Company by personally
benefiting through the ownership of Company stock and/or rights which recognize
such growth, development and financial success.

                  (2)      To enable the Company to obtain and retain the
services of Directors, Employees and Consultants considered essential to the
long range success of the Company by offering them an opportunity to own stock
in the Company and/or rights which will reflect the growth, development and
financial success of the Company.

                                   ARTICLE I.

                                   DEFINITIONS

                  1.1.     General. Wherever the following terms are used in the
Plan they shall have the meanings specified below, unless the context clearly
indicates otherwise.

                  1.2.     Administrator. "Administrator" shall mean the entity
that conducts the general administration of the Plan as provided herein. With
reference to the administration of the Plan with respect to Options granted to
Non-Employee Directors, the term "Administrator" shall refer to the Board. With
reference to the administration of the Plan with respect to any other Options,
the term "Administrator" shall refer to the Committee, except to the extent the
Board has assumed the authority for administration of the Plan as provided in
Section 7.2.

                  1.3.     Board. "Board" shall mean the Board of Directors of
the Company.

                  1.4.     Change in Control. "Change in Control" shall mean a
change in ownership or control of the Company effected through any of the
following transactions:

                  (a)      any person or related group of persons (other than
the Company or a person that, prior to such transaction, directly or indirectly
controls, is controlled by, or is under common control with, the Company)
directly or indirectly acquires beneficial ownership (within

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the meaning of Rule 13d-3 under the Exchange Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the Company's
outstanding securities pursuant to a tender or exchange offer for securities of
the Company; or

                  (b)      there is a change in the composition of the Board
over a period of thirty-six (36) consecutive months (or less) such that a
majority of the Board members (rounded up to the nearest whole number) ceases,
by reason of one or more proxy contests for the election of Board members, to be
comprised of individuals who either (i) have been Board members continuously
since the beginning of such period or (ii) have been elected or nominated for
election as Board members during such period by at least a majority of the Board
members described in clause (i) who were still in office at the time such
election or nomination was approved by the Board; or

                  (c)      the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation (or other entity), other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity or another entity) more than 66-2/3% of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; provided, however,
that a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no person acquires more than 25% of
the combined voting power of the Company's then outstanding voting securities
shall not constitute a Change in Control; or

                  (d)      the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets.

                  1.5.     Code. "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.

                  1.6.     Committee. "Committee" shall mean the Board, or
Compensation Committee of the Board, or another committee or subcommittee of the
Board, appointed as provided in Section 7.1.

                  1.7.     Common Stock. "Common Stock" shall mean the Common
Stock of the Company, par value $0.0001 per share.

                  1.8.     Company. "Company" shall mean Gen-Probe Incorporated,
a Delaware corporation.

                  1.9.     Consultant. "Consultant" shall mean any consultant or
adviser (other than an Employee) if:

                  (a)      the consultant or adviser renders bona fide services
to the Company;

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                  (b)      the services rendered by the consultant or adviser
are not in connection with the offer or sale of securities in a capital-raising
transaction and do not directly or indirectly promote or maintain a market for
the Company's securities; and

                  (c)      the consultant or adviser is a natural person who has
contracted directly with the Company to render such services.

                  1.10.    Director. "Director" shall mean a member of the
Board. "Director" shall include both a member of the Board who is an Employee
and a Non-Employee Director.

                  1.11.    DRO. "DRO" shall mean a domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.

                  1.12.    Employee. "Employee" shall mean any officer or other
employee (as defined in accordance with Section 3401(c) of the Code) of the
Company, or of any corporation which is a Subsidiary.

                  1.13.    Exchange Act. "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended from time to time.

                  1.14.    Fair Market Value. "Fair Market Value" of a share of
Common Stock as of a given date shall be (a) the closing price of a share of
Common Stock on the principal exchange on which shares of Common Stock are then
trading, if any (or as reported on any composite index which includes such
principal exchange), on the trading day previous to such date, or if shares were
not traded on the trading day previous to such date, then on the next preceding
date on which a trade occurred, or (b) if Common Stock is not traded on an
exchange but is quoted on NASDAQ or a successor quotation system, the mean
between the closing representative bid and asked prices for the Common Stock on
the trading day previous to such date as reported by NASDAQ or such successor
quotation system, or if shares were not traded on the trading day previous to
such date, then on the next preceding date on which a trade occurred; or (c) if
Common Stock is not publicly traded on an exchange and not quoted on NASDAQ or a
successor quotation system, the fair market value of a share of Common Stock as
established by the Administrator acting in good faith, which value shall be
final and binding on any Holder or other person entitled under an Option.

                  1.15.    Holder. "Holder" shall mean a person who has been
granted an Option.

                  1.16.    Incentive Stock Option. "Incentive Stock Option"
shall mean an Option which conforms to the applicable provisions of Section 422
of the Code and which is designated as an Incentive Stock Option by the
Administrator.

                  1.17.    Non-Employee Director. "Non-Employee Director" shall
mean a member of the Board who is not an Employee.

                  1.18.    Non-Qualified Stock Option. "Non-Qualified Stock
Option" shall mean an Option which is not designated as an Incentive Stock
Option by the Administrator.

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                  1.19.    Option. "Option" shall mean a stock option granted
under Article IV of the Plan. An Option granted under the Plan shall, as
determined by the Administrator, be either a Non-Qualified Stock Option or an
Incentive Stock Option; provided, however, that Options granted to Non-Employee
Directors and Consultants shall be Non-Qualified Stock Options.

                  1.20.    Option Agreement. "Option Agreement" shall mean a
written agreement executed by an authorized officer of the Company and the
Holder, which shall contain such terms and conditions with respect to an Option,
as the Administrator shall determine, consistent with the Plan.

                  1.21.    Option Limit. "Option Limit" shall mean Three Hundred
One Thousand Seven Hundred Forty Six (301,746)(1) shares of Common Stock, as
adjusted pursuant to Section 8.3 of the Plan.

                  1.22.    Performance Criteria. "Performance Criteria" shall
mean the following business criteria with respect to the Company, any Subsidiary
or any division or operating unit: (a) net income, (b) pre-tax income, (c)
operating income, (d) cash flow, (e) earnings per share, (f) return on equity,
(g) return on invested capital or assets, (h) cost reductions or savings, (i)
funds from operations, (j) appreciation in the Fair Market Value of Common Stock
and (k) earnings before any one or more of the following items: interest, taxes,
depreciation or amortization.

                  1.23.    Plan. "Plan" shall mean The 2000 Equity Participation
Plan of Gen-Probe Incorporated.

                  1.24.    Rule 16b-3. "Rule 16b-3" shall mean that certain Rule
16b-3 under the Exchange Act, as such Rule may be amended from time to time.

                  1.25.    Section 162(m) Employee. "Section 162(m) Employee"
shall mean any Employee designated by the Administrator as a Employee whose
compensation for the fiscal year in which the Employee is so designated or a
future fiscal year may be subject to the limit on deductible compensation
imposed by Section 162(m) of the Code.

                  1.26.    Securities Act. "Securities Act" shall mean the
Securities Act of 1933, as amended from time to time.

                  1.27.    Subsidiary. "Subsidiary" shall mean any corporation
in an unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain then owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.

                  1.28.    Substitute Option. "Substitute Option" shall mean an
Option granted under the Plan upon the assumption of, or in substitution for,
outstanding equity awards previously

----------
(1) Adjusted from 1,000,000 to 301,746 to reflect: (i) the .8241-for-one option
adjustment to give effect to the merger of Gen-Probe Holding Company into
Gen-Probe Incorporated in July 2002; (ii) the .366153-for-one reverse stock
split in August 2002; and (iii) the two-for-one stock split implemented as a
100% stock dividend, effective September 2003.

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granted by another company or entity, in connection with a corporate or similar
transaction, such as a merger, combination, consolidation or acquisition of
property or stock; provided, however, that in no event shall the term
"Substitute Option" be construed to refer to an option granted in connection
with the cancellation and repricing of an Option.

                  1.29.    Termination of Consultancy. "Termination of
Consultancy" shall mean the time when the engagement of a Holder as a Consultant
to the Company or a Subsidiary is terminated for any reason, with or without
cause, including, but not by way of limitation, by resignation, discharge,
death, disability or retirement; but excluding terminations where there is a
simultaneous engagement by or commencement of employment with the Company or any
Subsidiary or a parent corporation thereof (within the meaning of Section 422 of
the Code). The Administrator, in its absolute discretion, shall determine the
effect of all matters and questions relating to Termination of Consultancy,
including, but not by way of limitation, the question of whether a Termination
of Consultancy resulted from a discharge for cause, and all questions of whether
a particular leave of absence constitutes a Termination of Consultancy.
Notwithstanding any other provision of the Plan, the Company or any Subsidiary
has an absolute and unrestricted right to terminate a Consultant's service at
any time for any reason whatsoever, with or without cause, except to the extent
expressly provided otherwise in writing.

                  1.30.    Termination of Directorship. "Termination of
Directorship" shall mean the time when a Holder who is a Non-Employee Director
ceases to be a Director for any reason, including, but not by way of limitation,
a termination by resignation, removal, failure to be re-elected, death,
disability or retirement. The Board, in its sole and absolute discretion, shall
determine the effect of all matters and questions relating to Termination of
Directorship with respect to Non-Employee Directors.

                  1.31.    Termination of Employment. "Termination of
Employment" shall mean the time when the employee-employer relationship between
a Holder and the Company or any Subsidiary is terminated for any reason, with or
without cause, including, but not by way of limitation, a termination by
resignation, discharge, death, disability or retirement; but excluding (a)
terminations where there is a simultaneous reemployment or continuing employment
of a Holder by the Company or any Subsidiary or a parent corporation thereof
(within the meaning of Section 422 of the Code), (b) at the discretion of the
Administrator, terminations which result in a temporary severance of the
employee-employer relationship, and (c) at the discretion of the Administrator,
terminations which are followed by the simultaneous establishment of a
consulting relationship by the Company or a Subsidiary with the former employee.
The Administrator, in its absolute discretion, shall determine the effect of all
matters and questions relating to Termination of Employment, including, but not
by way of limitation, the question of whether a Termination of Employment
resulted from a discharge for cause, and all questions of whether a particular
leave of absence constitutes a Termination of Employment; provided, however,
that, with respect to Incentive Stock Options, unless otherwise determined by
the Administrator in its discretion, a leave of absence, change in status from
an employee to an independent contractor or other change in the
employee-employer relationship shall constitute a Termination of Employment if,
and to the extent that, such leave of absence, change in status or other change
interrupts employment for the purposes of Section 422(a)(2) of the Code and the
then applicable regulations and revenue rulings under said Section.

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                                   ARTICLE II.

                             SHARES SUBJECT TO PLAN

                  2.1.     Shares Subject to Plan.

                  (a)      The shares of stock subject to Options shall be
Common Stock, subject to Section 8.3 of the Plan. The aggregate number of such
shares which may be issued upon exercise of such Options shall not exceed FOUR
MILLION EIGHT HUNDRED TWENTY SEVEN THOUSAND NINE HUNDRED FORTY SIX
(4,827,946)(2). The shares of Common Stock issuable upon exercise of such
Options may be either previously authorized but unissued shares or treasury
shares.

                  (b)      The maximum number of shares of Common Stock which
may be subject to Options granted under the Plan to any individual in any
calendar year shall not exceed the Option Limit. To the extent required by
Section 162(m) of the Code, shares subject to Options which are canceled
continue to be counted against the Option Limit.

                  (c)      Notwithstanding the foregoing, if the offer or sale
of shares of Common Stock under the Plan is subject to Section 260.140.45 of
Title 10 of the California Code of Regulations (or other applicable law limiting
the offers or sales of shares of Common Stock under the Plan), the aggregate
number of shares of Common Stock issuable upon the exercise of all outstanding
Options (together with options and similar awards outstanding under any other
stock option plan of the Company) and the total number of shares provided for
under any stock bonus or similar plan of the Company shall not exceed thirty
percent (30%) (or such other higher percentage limitation as may be approved by
the stockholders of the Company pursuant to Section 260.140.45) of the then
outstanding shares of Common Stock, as calculated in accordance with the
conditions and exclusions of Section 260.140.45 (or such other limitation under
applicable law).

                  2.2.     Add-Back of Options. If any Option expires or is
canceled without having been fully exercised, the number of shares of Common
Stock subject to such Option but as to which such Option was not exercised prior
to its expiration or cancellation may again be optioned hereunder, subject to
the limitations of Section 2.1. Furthermore, any shares subject to Options which
are adjusted pursuant to Section 8.3 and become exercisable with respect to
shares of stock of another corporation shall be considered cancelled and may
again be optioned hereunder, subject to the limitations of Section 2.1. Shares
of Common Stock which are delivered by the Holder or withheld by the Company
upon the exercise of any Option under the Plan, in payment of the exercise price
thereof or tax withholding thereon, may again be optioned, granted or awarded
hereunder, subject to the limitations of Section 2.1. Notwithstanding the
provisions of this Section 2.2, no shares of Common Stock may again be optioned
if such action

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(2) Adjusted from 8,000,000 to 4,827,946 to reflect: (i) the .8241-for-one
option adjustment to give effect to the merger of Gen-Probe Holding Company into
Gen-Probe Incorporated in July 2002; (ii) the .366153-for-one reverse stock
split in August 2002; and (iii) the two-for-one stock split implemented as a
100% stock dividend, effective September 2003.

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would cause an Incentive Stock Option to fail to qualify as an "incentive stock
option" under Section 422 of the Code.

                                  ARTICLE III.

                               GRANTING OF OPTIONS

                  3.1.     Option Agreement. Each Option shall be evidenced by
an Option Agreement. Option Agreements evidencing Options intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 162(m) of the Code. Option Agreements
evidencing Incentive Stock Options shall contain such terms and conditions as
may be necessary to meet the applicable provisions of Section 422 of the Code.

                  3.2.     Provisions Applicable to Section 162(m) Employees.

                  (a)      The Committee, in its discretion, may determine
whether an Option is to qualify as performance-based compensation as described
in Section 162(m)(4)(C) of the Code.

                  (b)      Notwithstanding anything in the Plan to the contrary,
the Committee may grant any Option to a Section 162(m) Employee that vests or
becomes exercisable upon the attainment of performance goals which are related
to one or more of the Performance Criteria.

                  (c)      Furthermore, notwithstanding any other provision of
the Plan, any Option which is granted to a Section 162(m) Employee and is
intended to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code shall be subject to any additional limitations set
forth in Section 162(m) of the Code (including any amendment to Section 162(m)
of the Code) or any regulations or rulings issued thereunder that are
requirements for qualification as performance-based compensation as described in
Section 162(m)(4)(C) of the Code, and the Plan and such Options shall be deemed
amended to the extent necessary to conform to such requirements.

                  3.3.     Limitations Applicable to Section 16 Persons.
Notwithstanding any other provision of the Plan, the Plan, and any Option
granted to any individual who is then subject to Section 16 of the Exchange Act,
shall be subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 of the Exchange Act) that are requirements for the application of
such exemptive rule. To the extent permitted by applicable law, the Plan and the
Options granted hereunder shall be deemed amended to the extent necessary to
conform to such applicable exemptive rule.

                  3.4.     At-Will Employment. Nothing in the Plan or in any
Option Agreement hereunder shall confer upon any Holder any right to continue in
the employ of, or as a Consultant for, the Company or any Subsidiary, or as a
Director of the Company, or shall interfere with or restrict in any way the
rights of the Company and any Subsidiary, which are hereby expressly reserved,
to discharge any Holder at any time for any reason whatsoever, with or without
cause,

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except to the extent expressly provided otherwise in a written employment or
consulting agreement between the Holder and the Company and any Subsidiary.

                                   ARTICLE IV.

                        GRANTING OF OPTIONS TO EMPLOYEES,
                     CONSULTANTS AND NON-EMPLOYEE DIRECTORS

                  4.1.     Eligibility. Any Employee or Consultant selected by
the Committee pursuant to Section 4.4(a)(i) shall be eligible to be granted an
Option. Any Non-Employee Director selected by the Board pursuant to Section
4.5(a)(i) shall be eligible to be granted an Option. All grants shall be made at
the discretion of the Committee or the Board, as the case may be, and no person
shall be entitled to a grant of an Option as a matter of right.

                  4.2.     Disqualification for Stock Ownership. No person may
be granted an Incentive Stock Option under the Plan if such person, at the time
the Incentive Stock Option is granted, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any then existing Subsidiary or parent corporation (within the
meaning of Section 422 of the Code) unless such Incentive Stock Option conforms
to the applicable provisions of Section 422 of the Code.

                  4.3.     Qualification of Incentive Stock Options. No
Incentive Stock Option shall be granted to any person who is not an Employee.

                  4.4.     Granting of Options to Employees and Consultants.

                  (a)      The Committee shall from time to time, in its
absolute discretion, and subject to applicable limitations of the Plan:

                           (i)      Select from among the Employees or
         Consultants (including Employees or Consultants who have previously
         been granted Options under the Plan) such of them as in its opinion
         should be granted Options;

                           (ii)     Subject to the Option Limit, determine the
         number of shares of Common Stock to be subject to such Options granted
         to the selected Employees or Consultants;

                           (iii)    Subject to Section 4.3, determine whether
         such Options are to be Incentive Stock Options or Non-Qualified Stock
         Options and whether such Options are to qualify as performance-based
         compensation as described in Section 162(m)(4)(C) of the Code; and

                           (iv)     Determine the terms and conditions of such
         Options, consistent with the Plan; provided, however, that the terms
         and conditions of Options intended to qualify as performance-based
         compensation as described in Section 162(m)(4)(C) of the Code shall
         include, but not be limited to, such terms and conditions as may be
         necessary to meet the applicable provisions of Section 162(m) of the
         Code.

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                  (b)      Upon the selection of an Employee or Consultant to be
granted an Option, the Committee shall instruct the Secretary of the Company to
issue the Option and may impose such conditions on the grant of the Option as it
deems appropriate, and the Committee shall authorize one or more of the officers
of the Company to prepare, execute and deliver the Option Agreement with respect
to such Option.

                  (c)      Any Incentive Stock Option granted under the Plan may
be modified by the Committee, with the consent of the Holder, to disqualify such
Option from treatment as an "incentive stock option" under Section 422 of the
Code.

                  4.5.     Granting of Options to Non-Employee Directors.

                  (a)      Subject to Section 4.5(b), the Board shall from time
to time, in its absolute discretion, and subject to applicable limitations of
the Plan:

                           (i)      Determine whether to grant Options to
         Non-Employee Directors, and, in the event Options are so granted,
         select from among the Non-Employee Directors (including Non-Employee
         Directors who have previously been granted Options under the Plan) such
         of them as in its opinion should be granted Options;

                           (ii)     Subject to the Option Limit, determine the
         number of shares of Common Stock to be subject to such Options granted
         to the selected Non-Employee Directors; and

                           (iii)    Determine the terms and conditions of such
         Options, consistent with the Plan.

                  (b)      Upon the selection of a Non-Employee Director to be
granted an Option, and the grant of an Option to a Non-Employee Director, the
Board shall instruct the Secretary of the Company to issue the Option and may
impose such conditions on the grant of the Option as it deems appropriate, and
the Board shall authorize one or more officers of the Company to prepare,
execute and deliver the Option Agreement with respect to such Option.

                  4.6.     Options in Lieu of Cash Compensation. Options may be
granted under the Plan to Employees and Consultants in lieu of cash bonuses
which would otherwise be payable to such Employees and Consultants and to
Non-Employee Directors in lieu of directors' fees which would otherwise be
payable to such Non-Employee Directors, pursuant to such policies which may be
adopted by the Administrator from time to time.

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                                   ARTICLE V.

                                TERMS OF OPTIONS

                  5.1.     Option Price. The price per share of the shares of
Common Stock subject to each Option granted to Employees and Consultants shall
be set by the Committee; provided, however, that such price shall be no less
than 100% of the Fair Market Value of a share of Common Stock on the date the
Option is granted, and:

                           (a)      in the case of Incentive Stock Options, such
         price shall not be less than 100% of the Fair Market Value of a share
         of Common Stock on the date the Option is modified, extended or renewed
         for purposes of Section 424(h) of the Code;

                           (b)      in the case of Incentive Stock Options
         granted to an individual then owning (within the meaning of Section
         424(d) of the Code) more than 10% of the total combined voting power of
         all classes of stock of the Company or any Subsidiary or parent
         corporation thereof (within the meaning of Section 422 of the Code),
         such price shall not be less than 110% of the Fair Market Value of a
         share of Common Stock on the date the Option is granted (or the date
         the Option is modified, extended or renewed for purposes of Section
         424(h) of the Code); and

                           (c)      To the extent required by Section 25102(o)
         of the California Corporations Code and the regulations thereunder, in
         the case of Options granted to an individual then owning more than 10%
         of the total combined voting power of all classes of stock of the
         Company or any subsidiary or parent corporation thereof (within the
         meaning of Section 260.140.41 of Title 10 of the California Code of
         Regulations), such price shall not be less than 110% of the Fair Market
         Value of a share of Common Stock on the date the Option is granted.

                  5.2.     Option Term. The term of an Option granted to an
Employee or Consultant shall be set by the Committee in its absolute discretion;
provided, however, that the term shall not be more than ten (10) years from the
date the Option is granted; and, provided, further, that, in the case of
Incentive Stock Options, the term shall not be more than five (5) years from the
date the Incentive Stock Option is granted if the Incentive Stock Option is
granted to an individual then owning (within the meaning of Section 424(d) of
the Code) more than 10% of the total combined voting power of all classes of
stock of the Company or any Subsidiary or parent corporation thereof (within the
meaning of Section 422 of the Code). Except as limited by requirements of
Section 422 of the Code and regulations and rulings thereunder applicable to
Incentive Stock Options, or the requirements of Section 25102(o) of the
California Corporations Code and the regulations thereunder, the Committee may
extend the term of any outstanding Option in connection with any Termination of
Employment or Termination of Consultancy of the Holder, or amend any other term
or condition of such Option relating to such a termination.

                                       10
<PAGE>

                  5.3.     Option Vesting

                  (a)      The period during which the right to exercise, in
whole or in part, an Option granted to an Employee or a Consultant vests in the
Holder shall be set by the Committee and the Committee may determine that an
Option may not be exercised in whole or in part for a specified period after it
is granted; provided, however, that, to the extent required by Section 25102(o)
of the California Corporations Code and the regulations thereunder, except with
regard to Options granted to officers of the Company or any Subsidiary,
Directors or Consultants, in no event shall an Option granted hereunder become
vested and exercisable at a rate of less than twenty percent (20%) per year over
five (5) years from the date the Option is granted, subject to the continued
employment of the Holder with the Company or the Subsidiaries or other
reasonable conditions established by the Committee. At any time after grant of
an Option, the Committee may, in its absolute discretion and subject to whatever
terms and conditions it selects, accelerate the period during which an Option
granted to an Employee or Consultant vests and becomes exercisable.

                  (b)      No portion of an Option granted to an Employee or
Consultant which is unexercisable at Termination of Employment or Termination of
Consultancy, as applicable, shall thereafter become exercisable, except as may
be otherwise provided by the Committee either in the Option Agreement or by
action of the Committee following the grant of the Option.

                  (c)      To the extent that the aggregate Fair Market Value of
stock with respect to which "incentive stock options" (within the meaning of
Section 422 of the Code, but without regard to Section 422(d) of the Code) are
exercisable for the first time by a Holder during any calendar year (under the
Plan and all other incentive stock option plans of the Company and any parent or
subsidiary corporation (within the meaning of Section 422 of the Code) of the
Company), exceeds $100,000, such Options or other options shall be treated as
non-qualified stock options to the extent required by Section 422 of the Code.
The rule set forth in the preceding sentence shall be applied by taking Options
or other options into account in the order in which they were granted. For
purposes of this Section 5.3(c), the Fair Market Value of stock shall be
determined as of the time the Option or other options with respect to such stock
is granted.

                  5.4.     Terms of Options Granted to Non-Employee Directors.
The price per share of the shares subject to each Option granted to a
Non-Employee Director shall equal 100% of the Fair Market Value of a share of
Common Stock on the date the Option is granted; provided, however, that, to the
extent required by Section 25102(o) of the California Corporations Code and the
regulations thereunder, in the case of Options granted to a Non-Employee
Director then owning more than 10% of the total combined voting power of all
classes of stock of the Company or any subsidiary or parent corporation thereof
(within the meaning of Section 260.140.41 of Title 10 of the California Code of
Regulations), such price shall be not less than 110% of the Fair Market Value of
a share of Common Stock on the date the Option is granted. The period during
which the right to exercise, in whole or in part, an Option granted to a
Non-Employee Director vests in the Holder shall be set by the Administrator and
the Administrator may determine that an Option may not be exercised in whole or
in part for a specified period after it is granted. The term of each Option
granted to a Non-Employee Director

                                       11
<PAGE>

shall be determined by the Administrator and shall be no greater than ten (10)
years from the date the Option is granted. No portion of an Option which is
unexercisable at Termination of Directorship shall thereafter become
exercisable. Options granted to Non-Employee Directors under Section 4.5 shall
be subject to such other terms and conditions as are determined by the
Administrator.

                  5.5.     Substitute Awards. Notwithstanding the foregoing
provisions of this Article V to the contrary, in the case of an Option that is a
Substitute Award, the price per share of the shares subject to such Option may
be less than the Fair Market Value per share on the date of grant, provided,
that the excess of:

                           (a) the aggregate Fair Market Value (as of the date
         such Substitute Award is granted) of the shares subject to the
         Substitute Award; over

                           (b) the aggregate exercise price thereof; does not
         exceed the excess of;

                           (c) the aggregate fair market value (as of the time
         immediately preceding the transaction giving rise to the Substitute
         Award, such fair market value to be determined by the Administrator) of
         the shares of the predecessor entity that were subject to the grant
         assumed or substituted for by the Company; over

                           (d) the aggregate exercise price of such shares.

                  5.6.     Restrictions on Common Stock. The Administrator may,
in its sole discretion, provide under the terms of an Option that shares of
Common Stock purchased upon exercise of such Option shall be subject to
repurchase from the Holder by the Company, or shall be subject to such
restrictions as the Administrator shall provide, which restrictions may include,
without limitation, restrictions concerning voting rights and transferability
and restrictions based on duration of employment with the Company and the
Subsidiaries, Company performance and individual performance; provided, however,
that, by action taken after the Common Stock is purchased upon exercise of the
Option, the Administrator may, on such terms and conditions as it may determine
to be appropriate, terminate the Company's repurchase right or remove any or all
of the restrictions imposed by the terms of the Option Agreement. The Company's
right to repurchase the Common Stock from the Holder then subject to the right
shall provide that immediately upon a Termination of Employment, a Termination
of Consultancy, or a Termination of Directorship, as applicable, and for such
period as the Administrator shall determine, the Company shall have the right to
purchase the Common Stock at a price per share equal to the price paid by the
Holder for such Common Stock, or such other price as is determined by the
Administrator; provided, however, that, in the event of a Change in Control,
such right of repurchase shall terminate immediately prior to the effective date
of such Change in Control. Shares of Common Stock purchased upon the exercise of
an Option may not be sold, transferred or encumbered until any repurchase right
and any and all restrictions are terminated or expire. The Secretary of the
Company or such other escrow holder as the Administrator may appoint shall
retain physical custody of each certificate representing such shares of Common
Stock until the repurchase right and any and all of the restrictions imposed
under the Option Agreement with respect to the shares evidenced by such
certificate terminate, expire or shall have

                                       12
<PAGE>

been removed. In order to enforce the restrictions imposed upon shares of Common
Stock hereunder, the Administrator shall cause a legend or legends to be placed
on certificates representing all shares of Common Stock that are still subject
to any repurchase right or restrictions under Option Agreements, which legend or
legends shall make appropriate reference to the conditions imposed thereby. If a
Holder makes an election under Section 83(b) of the Code, or any successor
section thereto, to be taxed with respect to the Common Stock as of the date of
transfer of the Common Stock rather than as of the date or dates upon which the
Holder would otherwise be taxable under Section 83(a) of the Code, the Holder
shall deliver a copy of such election to the Company immediately after filing
such election with the Internal Revenue Service.

                                   ARTICLE VI.

                               EXERCISE OF OPTIONS

                  6.1.     Partial Exercise. An exercisable Option may be
exercised in whole or in part. However, an Option shall not be exercisable with
respect to fractional shares and the Administrator may require that, by the
terms of the Option, a partial exercise be with respect to a minimum number of
shares.

                  6.2.     Manner of Exercise. All or a portion of an
exercisable Option shall be deemed exercised upon delivery of all of the
following to the Secretary of the Company or his office:

                           (a)      A written notice complying with the
         applicable rules established by the Administrator stating that the
         Option, or a portion thereof, is exercised. The notice shall be signed
         by the Holder or other person then entitled to exercise the Option or
         such portion of the Option;

                           (b)      Such representations and documents as the
         Administrator, in its absolute discretion, deems necessary or advisable
         to effect compliance with all applicable provisions of the Securities
         Act and any other federal or state securities laws or regulations. The
         Administrator may, in its absolute discretion, also take whatever
         additional actions it deems appropriate to effect such compliance
         including, without limitation, placing legends on share certificates
         and issuing stop-transfer notices to agents and registrars;

                           (c)      In the event that the Option shall be
         exercised pursuant to Section 8.1 by any person or persons other than
         the Holder, appropriate proof of the right of such person or persons to
         exercise the Option; and

                           (d)      Full cash payment to the Secretary of the
         Company for the shares with respect to which the Option, or portion
         thereof, is exercised. However, the Administrator, may in its sole and
         absolute discretion (i) allow a delay in payment up to thirty (30) days
         from the date the Option, or portion thereof, is exercised; (ii) allow
         payment, in whole or in part, through the delivery of shares of Common
         Stock which

                                       13
<PAGE>

         have been owned by the Holder for at least six months, duly endorsed
         for transfer to the Company with a Fair Market Value on the date of
         delivery equal to the aggregate exercise price of the Option or
         exercised portion thereof; (iii) allow payment, in whole or in part,
         through the surrender of shares of Common Stock then issuable upon
         exercise of the Option having a Fair Market Value on the date of Option
         exercise equal to the aggregate exercise price of the Option or
         exercised portion thereof; (iv) allow payment, in whole or in part,
         through the delivery of a notice that the Holder has placed a market
         sell order with a broker with respect to shares of Common Stock then
         issuable upon exercise of the Option, and that the broker has been
         directed to pay a sufficient portion of the net proceeds of the sale to
         the Company in satisfaction of the Option exercise price, provided that
         payment of such proceeds is then made to the Company upon settlement of
         such sale; or (v) allow payment through any combination of the
         consideration provided in the foregoing subparagraphs (ii), (iii) and
         (iv).

                  6.3.     Conditions to Issuance of Stock Certificates. The
Company shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following conditions:

                           (a)      The admission of such shares to listing on
         all stock exchanges on which such class of stock is then listed;

                           (b)      The completion of any registration or other
         qualification of such shares under any state or federal law, or under
         the rulings or regulations of the Securities and Exchange Commission or
         any other governmental regulatory body which the Administrator shall,
         in its absolute discretion, deem necessary or advisable;

                           (c)      The obtaining of any approval or other
         clearance from any state or federal governmental agency which the
         Administrator shall, in its absolute discretion, determine to be
         necessary or advisable;

                           (d)      The lapse of such reasonable period of time
         following the exercise of the Option as the Administrator may establish
         from time to time for reasons of administrative convenience; and

                           (e)      The receipt by the Company of full payment
         for such shares, including payment of any applicable withholding tax,
         which in the discretion of the Administrator may be in the form of
         consideration used by the Holder to pay for such shares under Section
         6.2(d).

                  6.4.     Rights as Stockholders. Holders shall not be, nor
have any of the rights or privileges of, stockholders of the Company in respect
of any shares purchasable upon the exercise of any part of an Option unless and
until certificates representing such shares have been issued by the Company to
such Holders.

                  6.5.     Ownership and Transfer Restrictions. The
Administrator, in its absolute discretion, may impose such restrictions on the
ownership and transferability of the shares

                                       14
<PAGE>

purchasable upon the exercise of an Option as it deems appropriate. Any such
restriction shall be set forth in the respective Option Agreement and may be
referred to on the certificates evidencing such shares. The Holder shall give
the Company prompt notice of any disposition of shares of Common Stock acquired
by exercise of an Incentive Stock Option within (a) two years from the date of
granting (including the date the Option is modified, extended or renewed for
purposes of Section 424(h) of the Code) such Option to such Holder or (b) one
year after the transfer of such shares to such Holder.

                  6.6.     Exercise of Options following Termination. To the
extent required by Section 25102(o) of the California Corporations Code and
Section 260.140.41 of Title 10 of the California Code of Regulations (or other
applicable law), an Option may be exercised in the event of Termination of
Consultancy, Termination of Directorship or Termination of Employment (other
than for cause as defined by applicable law, the Option Agreement or a contract
of employment with the Holder), to the extent that such Option is exercisable on
the date of such Termination:

                           (a)      for a period of at least six months (or such
         longer period as is required by applicable law) from the date of such
         Termination if such Termination was caused by death or disability, and

                           (b)      for a period of at least 30 days (or such
         longer period as is required by applicable law) from the date of such
         Termination if such Termination was caused by reason other than the
         death or disability of the Holder.

                  6.7.     Additional Limitations on Exercise of Options.
Holders may be required to comply with any timing or other restrictions with
respect to the settlement or exercise of an Option, including a window-period
limitation, as may be imposed in the discretion of the Administrator.

                                  ARTICLE VII.

                                 ADMINISTRATION

                  7.1.     Committee. Prior to the Company's initial
registration of Common Stock under Section 12 of the Exchange Act, the Committee
shall consist of the entire Board. Following such registration, the Committee
shall be the Compensation Committee of the Board (or another committee or a
subcommittee of the Board assuming the functions of the Committee under the
Plan), and the Compensation Committee (or other committee or subcommittee) shall
consist solely of two or more Non-Employee Directors appointed by and holding
office at the pleasure of the Board, each of whom is both a "non-employee
director" as defined by Rule 16b-3 and an "outside director" for purposes of
Section 162(m) of the Code. Appointment of Committee members shall be effective
upon acceptance of appointment. Committee members may resign at any time by
delivering written notice to the Board. Vacancies in the Committee may be filled
by the Board.

                                       15
<PAGE>

                  7.2.     Duties and Powers of Committee. It shall be the duty
of the Committee to conduct the general administration of the Plan in accordance
with its provisions. The Committee shall have the power to interpret the Plan
and the Option Agreements, and to adopt such rules for the administration,
interpretation, and application of the Plan as are consistent therewith, to
interpret, amend or revoke any such rules and to amend any Option Agreement
provided that the rights or obligations of the Holder of the Option that is the
subject of any such Option Agreement are not affected adversely. Any such
interpretations and rules with respect to Incentive Stock Options shall be
consistent with the provisions of Section 422 of the Code. In its absolute
discretion, the Board may at any time and from time to time assume any and all
rights and duties of the Committee under the Plan, except with respect to
matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations
or rules issued thereunder, are required to be determined in the sole discretion
of the Committee. Notwithstanding the foregoing, the full Board, acting by a
majority of its members in office, shall conduct the general administration of
the Plan with respect to Options granted to Non-Employee Directors.

                  7.3.     Majority Rule; Unanimous Written Consent. The
Committee shall act by a majority of its members in attendance at a meeting at
which a quorum is present or by a memorandum or other written instrument signed
by all members of the Committee.

                  7.4.     Compensation; Professional Assistance; Good Faith
Actions. Members of the Committee shall receive such compensation, if any, for
their services as members as may be determined by the Board. All expenses and
liabilities which members of the Committee incur in connection with the
administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers, or other persons. The Committee, the Company and the
Company's officers and Directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee or the Board in good
faith shall be final and binding upon all Holders, the Company and all other
interested persons. No members of the Committee or Board shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan or Options, and all members of the Committee and the Board
shall be fully protected by the Company in respect of any such action,
determination or interpretation.

                  7.5.     Delegation of Authority to Grant Options. The
Committee may, but need not, delegate from time to time some or all of its
authority to grant Options under the Plan to a committee consisting of one or
more members of the Committee or of one or more officers of the Company;
provided, however, that the Committee may not delegate its authority to grant
Options to individuals (a) who are subject on the date of the grant to the
reporting rules under Section 16(a) of the Exchange Act, (b) who are Section
162(m) Employees or (c) who are officers of the Company who are delegated
authority by the Committee hereunder. Any delegation hereunder shall be subject
to the restrictions and limits that the Committee specifies at the time of such
delegation of authority and may be rescinded at any time by the Committee. At
all times, any committee appointed under this Section 7.5 shall serve in such
capacity at the pleasure of the Committee.

                                       16
<PAGE>

                                  ARTICLE VIII.

                            MISCELLANEOUS PROVISIONS

                  8.1.     Not Transferable. No Option under the Plan may be
sold, pledged, assigned or transferred in any manner other than by will or the
laws of descent and distribution or, subject to the consent of the
Administrator, pursuant to a DRO, unless and until such Option has been
exercised, or the shares underlying such Option have been issued, and all
restrictions applicable to such shares have lapsed. No Option or interest or
right therein shall be liable for the debts, contracts or engagements of the
Holder or his successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment or any other
means whether such disposition be voluntary or involuntary or by operation of
law by judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect, except to the extent that such disposition is
permitted by the preceding sentence.

                  During the lifetime of the Holder, only he may exercise an
Option (or any portion thereof) granted to him under the Plan, unless it has
been disposed of with the consent of the Administrator pursuant to a DRO. After
the death of the Holder, any exercisable portion of an Option may, prior to the
time when such portion becomes unexercisable under the Plan or the applicable
Option Agreement, be exercised by his personal representative or by any person
empowered to do so under the deceased Holder's will or under the then applicable
laws of descent and distribution.

                  Notwithstanding the foregoing provisions of this Section 8.1,
and subject to the requirements of Section 260.140.41 of Title 10 of the
California Code of Regulations (to the extent applicable), the Administrator, in
its sole discretion, may determine to grant a Non-Qualified Stock Option which,
by its terms as set forth in the applicable Option Agreement, may be transferred
by the Holder, in writing and with prior written notice to the Administrator, to
any one or more Permitted Transferees (as defined below), subject to the
following terms and conditions: (a) a Non-Qualified Stock Option transferred to
a Permitted Transferee shall not be assignable or transferable by the Permitted
Transferee other than by will or the laws of descent and distribution; (b) any
Non-Qualified Stock Option which is transferred to a Permitted Transferee shall
continue to be subject to all the terms and conditions of the Non-Qualified
Stock Option as applicable to the original Holder (other than the ability to
further transfer the Non-Qualified Stock Option); and (c) the Holder and the
Permitted Transferee shall execute any and all documents requested by the
Administrator, including, without limitation, documents to: (i) confirm the
status of the transferee as a Permitted Transferee, (ii) satisfy any
requirements for an exemption for the transfer under applicable federal and
state securities laws and (iii) evidence the transfer. For purposes of this
Section, "Permitted Transferee" shall mean, with respect to a Holder, any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, any person
sharing the Holder's household (other than a tenant or employee), a trust in
which these persons (or the Holder) control the management of assets, and any
other entity in which these persons (or the Holder) owns more than fifty percent
(50%) of the voting interests, or any other transferee specifically approved by
the Administrator

                                       17
<PAGE>

after taking into account any state or federal tax or securities laws applicable
to transferable Non-Qualified Stock Options.

                  8.2.     Amendment, Suspension or Termination of the Plan.
Except as otherwise provided in this Section 8.2, the Plan may be wholly or
partially amended or otherwise modified, suspended or terminated at any time or
from time to time by the Board. However, without approval of the Company's
stockholders given within twelve months before or after the action by the Board,
no action of the Board may, except as provided in Section 8.3, increase the
limits imposed in Section 2.1 on the maximum number of shares which may be
issued under the Plan. No amendment, suspension or termination of the Plan
shall, without the consent of the Holder alter or impair any rights or
obligations under any Option theretofore granted or awarded, unless the Option
itself otherwise expressly so provides. No Options may be granted or awarded
during any period of suspension or after termination of the Plan, and in no
event may any Option be granted under the Plan after the first to occur of the
following events:

                           (a)      The expiration of ten years from the date
         the Plan is adopted by the Board; or

                           (b)      The expiration of ten years from the date
         the Plan is approved by the Company's stockholders under Section 8.4.

                  8.3.     Changes in Common Stock or Assets of the Company,
Acquisition or Liquidation of the Company and Other Corporate Events.

                  (a)      Subject to Section 8.3(d), in the event that the
Administrator determines that any dividend or other distribution (whether in the
form of cash, Common Stock, other securities, or other property),
recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Company, or
exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of the
Company, or other similar corporate transaction or event, in the Administrator's
sole discretion, affects the Common Stock such that an adjustment is determined
by the Administrator to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to an Option, then the Administrator shall, in
such manner as it may deem equitable, adjust any or all of

                           (i)      the number and kind of shares of Common
         Stock (or other securities or property) with respect to which Options
         may be granted (including, but not limited to, adjustments of the
         limitations in Section 2.1 on the maximum number and kind of shares
         which may be issued and adjustments of the Option Limit),

                           (ii)     the number and kind of shares of Common
         Stock (or other securities or property) subject to outstanding Options,
         and

                           (iii)    the exercise price with respect to any
         Option.

                                       18
<PAGE>

                  (b)      Subject to Sections 8.3(b)(vii) and 8.3(d), in the
event of any transaction or event described in Section 8.3(a) or any unusual or
nonrecurring transactions or events affecting the Company, any affiliate of the
Company, or the financial statements of the Company or any affiliate, or of
changes in applicable laws, regulations, or accounting principles, the
Administrator, in its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, either by the terms of the Option or by
action taken prior to the occurrence of such transaction or event (any such
action applied to Employees and former Employees to be applied uniformly) and
either automatically or upon the Holder's request, is hereby authorized to take
any one or more of the following actions whenever the Administrator determines
that such action is appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan
or with respect to any Option under the Plan, to facilitate such transactions or
events or to give effect to such changes in laws, regulations or principles:

                           (i)      To provide for either the cancellation of
         any such Option for an amount of cash equal to the amount that could
         have been attained upon the exercise of such Option or realization of
         the Holder's rights had such Option been currently exercisable or fully
         vested, or the replacement of such Option with other rights or property
         selected by the Administrator in its sole discretion;

                           (ii)     To provide that the Option cannot vest or be
         exercised after such event;

                           (iii)    To provide that such Option shall be
         exercisable as to all shares covered thereby, notwithstanding anything
         to the contrary in Section 5.3 or 5.4 or the provisions of such Option;

                           (iv)     To provide that such Option be assumed by
         the successor or survivor corporation, or a parent or subsidiary
         thereof, or shall be substituted for by similar options, rights or
         awards covering the stock of the successor or survivor corporation, or
         a parent or subsidiary thereof, with appropriate adjustments as to the
         number and kind of shares and prices; and

                           (v)      To make adjustments in the number and type
         of shares of Common Stock (or other securities or property) subject to
         outstanding Options and/or in the terms and conditions of (including
         the exercise price), and the criteria included in, outstanding Options
         and Options which may be granted in the future.

                           (vi)     To provide that, for a specified period of
         time prior to such event, the restrictions imposed under an Option
         Agreement upon some or all shares of Common Stock may be terminated and
         some or all shares of such Common Stock may cease to be subject to
         repurchase after such event.

                           (vii) Notwithstanding any other provision of the
         Plan, in the event of a Change in Control, each outstanding Option
         shall, immediately prior to the effective date of the Change in
         Control, automatically become fully exercisable for all of the shares
         of

                                       19
<PAGE>

         Common Stock at the time subject to such Option and may be exercised
         for any or all of those shares as fully-vested shares of Common Stock.

                  (c)      Subject to Sections 8.3(d), 3.2 and 3.3, the
Administrator may, in its discretion, include such further provisions and
limitations in any Option, Option Agreement or certificate, as it may deem
equitable and in the best interests of the Company.

                  (d)      With respect to Options which are granted to Section
162(m) Employees and are intended to qualify as performance-based compensation
under Section 162(m)(4)(C), no adjustment or action described in this Section
8.3 or in any other provision of the Plan shall be authorized to the extent that
such adjustment or action would cause such Option to fail to so qualify under
Section 162(m)(4)(C), or any successor provisions thereto. No adjustment or
action described in this Section 8.3 or in any other provision of the Plan shall
be authorized to the extent that such adjustment or action would cause the Plan
to violate Section 422(b)(1) of the Code. Furthermore, no such adjustment or
action shall be authorized to the extent such adjustment or action would result
in short-swing profits liability under Section 16 or violate the exemptive
conditions of Rule 16b-3 unless the Administrator determines that the Option is
not to comply with such exemptive conditions. The number of shares of Common
Stock subject to any Option shall always be rounded to the next whole number.

                  (e)      Notwithstanding the foregoing, in the event that the
Company becomes a party to a transaction that is intended to qualify for
"pooling of interests" accounting treatment and, but for one or more of the
provisions of this Plan or any Option Agreement would so qualify, then this Plan
and any Option Agreement shall be interpreted so as to preserve such accounting
treatment, and to the extent that any provision of the Plan or any Option
Agreement would disqualify the transaction from pooling of interests accounting
treatment (including, if applicable, an entire Option Agreement), then such
provision shall be null and void. All determinations to be made in connection
with the preceding sentence shall be made by the independent accounting firm
whose opinion with respect to "pooling of interests" treatment is required as a
condition to the Company's consummation of such transaction.

                  (f)      The existence of the Plan, the Option Agreement and
the Options granted hereunder shall not affect or restrict in any way the right
or power of the Company or the shareholders of the Company to make or authorize
any adjustment, recapitalization, reorganization or other change in the
Company's capital structure or its business, any merger or consolidation of the
Company, any issue of stock or of options, warrants or rights to purchase stock
or of bonds, debentures, preferred or prior preference stocks whose rights are
superior to or affect the Common Stock or the rights thereof or which are
convertible into or exchangeable for Common Stock, or the dissolution or
liquidation of the company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

                  8.4.     Approval of Plan by Stockholders. The Plan shall be
submitted for the approval of the Company's stockholders within twelve months
after the date of the Board's initial adoption of the Plan. Options may be
granted prior to such stockholder approval; provided, however, that such Options
shall not be exercisable nor shall such Options vest prior to

                                       20
<PAGE>

the time when the Plan is approved by the stockholders; and provided, further,
that if such approval has not been obtained at the end of said twelve-month
period, all Options previously granted or awarded under the Plan shall thereupon
be canceled and become null and void.

                  8.5.     Tax Withholding. The Company shall be entitled to
require payment in cash or deduction from other compensation payable to each
Holder of any sums required by federal, state or local tax law to be withheld
with respect to the issuance, vesting, exercise or payment of any Option. The
Administrator may in its discretion and in satisfaction of the foregoing
requirement allow such Holder to elect to have the Company withhold shares of
Common Stock otherwise issuable under such Option (or allow the return of shares
of Common Stock) having a Fair Market Value equal to the sums required to be
withheld. Notwithstanding any other provision of the Plan, the number of shares
of Common Stock which may be withheld with respect to the issuance, vesting,
exercise or payment of any Option (or which may be repurchased from the Holder
of such Option within six months after such shares of Common Stock were acquired
by the Holder from the Company) in order to satisfy the Holder's federal and
state income and payroll tax liabilities with respect to the issuance, vesting,
exercise or payment of the Option shall be limited to the number of shares which
have a Fair Market Value on the date of withholding or repurchase equal to the
aggregate amount of such liabilities based on the minimum statutory withholding
rates for federal and state tax income and payroll tax purposes that are
applicable to such supplemental taxable income.

                  8.6.     Forfeiture Provisions. Subject to the limitations of
applicable law, pursuant to its general authority to determine the terms and
conditions applicable to Options under the Plan, the Administrator shall have
the right to provide, in the terms of Options made under the Plan, or to require
a Holder to agree by separate written instrument, that if (a)(i) the Holder at
any time, or during a specified time period, engages in any activity in
competition with the Company, or which is inimical, contrary or harmful to the
interests of the Company, as further defined by the Administrator or (ii) the
Holder incurs a Termination of Employment, Termination of Consultancy or
Termination of Directorship for cause, then (b) (i) any proceeds, gains or other
economic benefit actually or constructively received by the Holder upon any
exercise of the Option, or upon the receipt or resale of any Common Stock
underlying the Option, must be paid to the Company, and (ii) the Option shall
terminate and any unexercised portion of the Option (whether or not vested)
shall be forfeited.

                  8.7.     Effect of Plan upon Options and Compensation Plans.
The adoption of the Plan shall not affect any other compensation or incentive
plans in effect for the Company or any Subsidiary. Nothing in the Plan shall be
construed to limit the right of the Company (a) to establish any other forms of
incentives or compensation for Employees, Directors or Consultants of the
Company or any Subsidiary or (b) to grant or assume options or other rights or
awards otherwise than under the Plan in connection with any proper corporate
purpose including but not by way of limitation, the grant or assumption of
options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation,
partnership, limited liability company, firm or association.

                  8.8.     Compliance with Laws. The Plan, the granting and
vesting of Options under the Plan and the issuance and delivery of shares of
Common Stock and the payment of

                                       21
<PAGE>

money under the Plan or under Options granted hereunder are subject to
compliance with all applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law and federal
margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities delivered under
the Plan shall be subject to such restrictions, and the person acquiring such
securities shall, if requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary or desirable to
assure compliance with all applicable legal requirements. To the extent
permitted by applicable law, the Plan and Options granted or awarded hereunder
shall be deemed amended to the extent necessary to conform to such laws, rules
and regulations.

                  8.9.     Inability to Obtain Authority. The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of share of Common Stock hereunder, shall relieve the Company
of any liability in respect of the failure to issue or sell such shares of
Common Stock as to which such requisite authority shall not have been obtained.

                  8.10.    Reservation of Shares. The Company, during the term
of this Plan, shall at all times reserve and keep available such number of
shares of Common Stock as shall be sufficient to satisfy the requirements of the
Plan.

                  8.11.    Information to Holders and Purchasers. To the extent
required by Section 25102(o) of the California Corporation Code and Section
260.140.46 of Title 10 of the California Code of Regulations (or other
applicable law), the Company shall provide to each Holder of an Option and to
each person who acquires shares of Common Stock pursuant to the Plan, not less
frequently than annually during the period such Holder holds an Option, and, in
the case of a Holder or other person who acquires shares of Common Stock
pursuant to the Plan, during the period such Holder or person owns such shares,
copies of the Company's annual financial statements. Notwithstanding the
preceding sentence, the Company shall not be required to provide such statements
to Employees, Directors and Consultants whose duties in connection with the
Company assure their access to equivalent information.

                  8.12.    Repurchase Provisions. The Administrator in its
discretion may provide that the Company may repurchase shares of Common Stock
acquired upon exercise of an Option upon a Holder's Termination of Consultancy,
Termination of Directorship or Termination of Employment; provided, however,
that any such repurchase right shall be set forth in the applicable Option
Agreement or in another agreement entered into pursuant to such Option
Agreement; and, provided, further, that, to the extent required by Section
25102(o) of the California Corporation Code and Section 260.140.41 of Title 10
of the California Code of Regulations (or other applicable law), any such
repurchase of shares of Common Stock from a person who is not an officer of the
Company or any Subsidiary, a Director or a Consultant shall be upon the
following terms: (a) if the repurchase option gives the Company the right to
repurchase the shares upon Termination of Employment at not less than the Fair
Market Value of the shares to be purchased on the date of Termination of
Employment, then (i) the right to repurchase shall be exercised for cash or
cancellation of purchase money indebtedness for the shares within ninety (90)
days of Termination of Employment (or in the case of shares issued

                                       22
<PAGE>

upon exercise of Options after such date of termination, within ninety (90) days
after the date of the exercise) or such longer period as may be agreed to by the
Administrator and the person and (ii) the right shall terminate when the shares
of Common Stock become publicly traded; and (b) if the repurchase right gives
the Company the right to repurchase the shares upon Termination of Employment at
the original purchase price for such shares, then (i) the right to repurchase at
the original purchase price shall lapse at the rate of at least twenty percent
(20%) of the shares per year over five (5) years from the date the Option is
granted (without respect to the date the Option was exercised or became
exercisable) and (ii) the right to repurchase shall be exercised for cash or
cancellation of purchase money indebtedness for the shares within ninety (90)
days of Termination of Employment (or, in the case of shares issued upon
exercise of Options after such date of Termination of Employment, within ninety
(90) days after the date of the exercise) or such longer period as may be agreed
to by the Administrator and the person.

                  8.13.    Investment Intent. The Company may require a Holder
or other person purchasing shares of Common Stock, as a condition of exercising
or acquiring Common Stock under any Option, to give written assurances
satisfactory to the Company as to the Holder's or other person's knowledge and
experience in financial and business matters and/or to employ a representative
reasonably satisfactory to the Company who is knowledgeable and experienced in
financial and business matters and that such Holder or person is capable of
evaluating, alone or together with the representative, the merits and risks of
exercising the Option; and to give written assurances satisfactory to the
Company stating that the person is acquiring the stock subject to the Option for
such Holder or person's own account and not with any present intention of
selling or otherwise distributing the Common Stock. The foregoing requirements,
and any assurances given pursuant to such requirements, shall be inoperative if
the issuance of the shares upon the exercise or acquisition of Common Stock
under the applicable Option has been registered under a then currently effective
registration statement under the Securities Act, or as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities laws. The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the stock.

                  8.14.    Titles. Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of the
Plan.

                  8.15.    Governing Law. The Plan and any agreements hereunder
shall be administered, interpreted and enforced under the internal laws of the
State of California without regard to conflicts of laws thereof.

                                       23
<PAGE>

                                      * * *

                  I hereby certify that the foregoing Plan was duly adopted by
the Board of Directors of Gen-Probe Incorporated on August 17, 2000.

                  Executed on this 30th day of October 2000.

                                                 /s/ R. William Bowen
                                                 ----------------------
                                                 R. William Bowen, Jr.
                                                 Assistant Secretary

                                      * * *

                  I hereby certify that the foregoing Plan was duly adopted by
the sole shareholder of Gen-Probe Incorporated on August 17, 2000.

                  Executed on this 30th day of October 2000.

                                                 /s/ R. William Bowen
                                                 -----------------------
                                                 R. William Bowen, Jr.
                                                 Assistant Secretary

                                       24

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