Document:

Exhibit 4.2

                             MEDTOX SCIENTIFIC, INC.
                     QUALIFIED EMPLOYEE STOCK PURCHASE PLAN

                  WHEREAS, MEDTOX Scientific,  Inc., a Delaware corporation (the
"Company"), adopted the Environmental Diagnostics, Inc. Qualified Employee Stock
Purchase  Plan (the  "Plan") to offer its  employees  the right to purchase  its
Common Stock, $0.15 par value per share ("Stock"), on March 13, 1986;

                  WHEREAS, the Plan was approved by the Company's shareholders
on September 11, 1986;

                  WHEREAS,  pursuant  to  Section  14 of the Plan,  the Board of
Directors  of the Company  may amend or modify the Plan at any time,  subject to
any required shareholder approval;

                  WHEREAS, the Company desires to amend and restate the Plan and
to  increase  the  number of shares  authorized  under the Plan,  subject to and
effective upon shareholder approval;

                  NOW,  THEREFORE,  pursuant to premises  and  covenants  herein
contained,  the Company  does hereby  amend and restate the Plan  subject to and
effective upon shareholder approval which shall read as follows:

SECTION 1.        EMPLOYEES ENTITLED TO PARTICIPATE.
                  ---------------------------------

                  An individual is eligible to participate in the Plan if (a) he
is  regularly  scheduled  to work for more than  twenty  hours per week and five
months  per  calendar  year;  (b) he is  employed  by the  Company  or any other
corporation in which the Company owns or acquires,  directly or  indirectly,  at
least 50% of the total  combined  voting power of all classes of stock,  if such
corporation   has  been  designed  as  a   participating   corporation   by  the
Administration  Committee;  and (c) he agrees to pay the  subscription  price by
payroll  deduction.  In accordance  with the  requirements of Section 423 of the
Internal  Revenue Code of 1986, as amended (the "Internal  Revenue  Code"),  all
employees  granted  subscriptions  under the Plan shall have the same rights and
privileges hereunder,  subject to the provisions of federal and state securities
laws that may effect transactions made pursuant to the Plan by certain employees
who may be deemed to be insiders of the Company.

                  It is intended  that the Plan allow for  broad-based  employee
participation  and not  discriminate in favor of highly  compensated  employees.
Accordingly, the Plan shall be administered in compliance with Section 410(b) of
the  Internal  Revenue  Code  with  regard  to  the  broad-based   participation
requirement  and Section  401(a)(4) of the Internal  Revenue Code with regard to
the nondiscrimination requirement. Accordingly, the Plan shall be interpreted in
accordance with such provisions as now written or as hereafter amended.
<PAGE>

SECTION 2.        SUBSCRIPTION PRICE.
                  ------------------

                  The  subscription  price  hereunder shall be the lesser of (a)
85% of the fair market value of the Stock on the day the  executed  subscription
form is received  by the  Company,  or (b) 85% of the fair  market  value of the
Stock on the day the right to purchase is exercised, as provided in Section 7(A)
below.  For purposes of this Plan, the "fair market value" of the Stock shall be
determined as set forth below.

                  If the Stock is traded on a national securities exchange, then
the "fair  market  value" on a date shall be the  closing  price of the Stock on
such  exchange  based on the sale of a minimum of 100  shares of Stock;  if less
than 100 shares are traded on such date, then the fair market value shall be the
average of the high bid and low asked  prices on such date;  or if no prices are
quoted on such date,  then the fair market  value shall be the closing  price of
the Stock on such exchange based on the sale of a minimum of 100 shares of Stock
on the last prior date on which at least 100 shares were sold.

                  If the Stock is not traded on a national securities  exchange,
but is  quoted  in the  over-the-counter  market  as  reported  on the  National
Association of Securities  Dealers  Automated  Quotation  ("NASDAQ") System on a
date,  then the "fair market value" of the shares on such date shall be the last
sale price reported by the NASDAQ System or the NASDAQ  National  Market System,
as  applicable,  based on the sale of a minimum of 100 shares of Stock;  if less
than 100 shares are traded on such date, then the fair market value shall be the
average of the high bid and low asked  prices on such date as reported by NASDAQ
System or the NASDAQ National Market System, as applicable;  or if no prices are
quoted on such date,  then the fair market value shall be the last sale price of
the Stock as reported by NASDAQ  based on the sale of a minimum of 100 shares of
Stock on the last prior date on which at least 100 shares were sold.

                  If the Stock is not traded on a national  securities  exchange
or reported by NASDAQ, if any  broker-dealer  makes a market for the Stock, then
the "fair  market  value" of the  shares on a date  shall be the  average of the
highest and lowest quoted selling prices of the Stock on that date, said average
to be based on the sale of a minimum  of 100  shares of Stock;  if less than 100
shares are traded on such date, then the fair market value of the shares on such
date shall be the  average of the high bid and low asked  prices on such date in
such market; or if no prices are quoted on such date, then the fair market value
of the shares on such date shall be the average of the highest and lowest quoted
selling  prices of the Stock  based on the sale of a  minimum  of 100  shares of
Stock on the last prior date on which at least 100 shares were sold.

         If  the  Stock  is  not  traded  in  any  established   market  and  no
broker-dealer makes a market in the Stock, then the "fair market value" shall be
the fair  value  thereof  as  determined  in good  faith  by the  Administration
Committee pursuant to any appropriate method selected by the Committee.

<PAGE>

SECTION 3.        NUMBER OF SHARES AUTHORIZED.
                  ---------------------------

                  The total  number of shares of Stock  authorized  to be issued
hereunder  is 150,000  shares,  which shall be newly issued  shares.  Additional
shares may be authorized to be issued  hereunder  from time to time by the Board
of Directors  of the  Company,  provided  that the  stockholders  of the Company
approve such  increase  within twelve (12) months before or after such action by
the Board of Directors.

SECTION 4.        SUBSCRIPTIONS.
                  -------------

                  A.       How to Subscribe.
                           ----------------

                  Any eligible employee may subscribe hereunder by executing and
mailing or  delivering  to the  Secretary  of the Company or any  representative
designated by him a subscription form approved by the Administration  Committee.
The receipt of such  subscription form by the Company shall constitute the grant
to the employee (and the acceptance by him) of a right to purchase the number of
shares indicated on the form at the subscription  price and subject to the terms
and conditions  contained  herein,  except that no such right shall be deemed to
have been  granted  (i) during any period in which the  offering  of Stock under
this Plan does not comply with the  requirements  of the Securities Act of 1933,
as amended,  or any applicable  state  securities law, or (ii) if  subscriptions
have been  issued  for the total  number  of shares  authorized  to be issued or
transferred hereunder.

                  B.       Number of Shares for Which Employee May Subscribe.
                           -------------------------------------------------

                  The maximum  number of shares  which an eligible  employee may
subscribe for under the Plan shall be subject to such  limitations  from time to
time established by the Administration Committee. The maximum number shall apply
equally to all eligible  participants.  An employee may  subscribe for less than
the  maximum  number of shares and may  successively  subscribe  for  additional
shares  until he has  subscribed  for the  maximum  number of shares  permitted;
provided,  however,  that the  receipt of each new  subscription  by the Company
shall be considered to be a separate  grant of a right to purchase the number of
shares indicated on the subscription  form for all purposes  hereunder and shall
be subject to the waiting periods provided below.

                  C.       Waiting Period.
                           --------------

                  An  employee  who has  subscribed  for less  than the  maximum
number of shares may not subscribe for additional shares unless (i) at least six
(6) months have elapsed since the date of receipt of his last prior subscription
form, (ii) such employee has withdrawn a prior  subscription  and at least three
(3) months  have  elapsed  since the date of his last  withdrawal,  or (iii) all
prior  subscriptions  by the employee to acquire shares under the Plan have been
paid in full.

<PAGE>

                  D.       Limitations on Subscriptions.
                           ----------------------------

                  Notwithstanding any provision herein, an employee shall not be
entitled  to  subscribe   hereunder  if,   immediately   after  receipt  of  the
subscription form by the Company, such employee owns stock possessing 5% or more
of the  total  combined  voting  power or value of all  classes  of stock of his
employer corporation or its parent or any subsidiary  corporation.  For purposes
of the preceding  sentence,  the rules of Section 424(d) of the Internal Revenue
Code shall apply in determining  the stock  ownership of an employee,  and stock
which the employee may purchase  under  outstanding  subscriptions  hereunder or
under any  other  stock  option  plan  shall be  treated  as stock  owned by the
employee.  Notwithstanding any provision herein, if the rights of an employee to
purchase  stock  under all stock  purchase  plans (to which  Section  423 of the
Internal Revenue Code is applicable) of his employer  corporation and its parent
and  subsidiary  corporations  accrue  (within the meaning of and subject to the
rules  contained in Section  423(b)(8) of the Internal  Revenue  Code) at a rate
which exceeds $25,000 of fair market value of such stock (determined at the time
the subscription form is received by the Company) for any calendar year in which
such subscription is outstanding at any time, such employee's subscription shall
be reduced,  in the manner prescribed by the Administration  Committee,  so that
the  employee's  rights do not  accrue at a rate which  exceeds  $25,000 of fair
market value of such stock for such calendar year as described above.

SECTION 5.        PAYMENT OF SUBSCRIPTION PRICE.
                  -----------------------------

                  A.  Payroll Deductions.
                      ------------------

                  Payment of the subscription price under the Plan shall be made
by payroll deductions pursuant to such procedures and limitations as established
from  time  to time  by the  Administration  Committee.  Beginning  on the  date
specified in the  subscription  form, or as soon as practicable  for the Company
thereafter,  but in no event  later  than two months  after the date  specified,
deductions  for  payment  of the  subscription  prices  shall be made  from each
regular   payroll  check  for  a   participating   employee  until  all  of  his
subscriptions  have been  paid or  withdrawn,  but in no event  may the  payment
period be  structured  so that the date of  exercise of the  purchase  rights as
provided in Section 7(A) hereof exceeds  twenty-seven  (27) months from the date
of grant of such purchase rights. If local law prohibits payroll  deductions for
such purpose,  any alternative method approved by the  Administration  Committee
may be substituted.  All payments shall be forwarded monthly to the Treasurer of
the Company.

                  B.  Prepayment of Subscription Price.
                      --------------------------------

                  No  prepayment  of  subscription  prices may be made except as
provided in Sections 9 and 14 below.

<PAGE>

SECTION 6.        SUBSCRIPTION ACCOUNTS.
                  ---------------------

                  A subscription account shall be created for each participating
employee and all amounts  withheld  from his  compensation  shall be credited to
such  account.  Amounts  credited to such  accounts  shall be available  for the
general use of the  Company.  The Company will provide a statement at least once
each year of the remaining balance in each participating employee's account.

SECTION 7.        ISSUANCE OF STOCK.
                  -----------------

                  A.       Completion of Payment for 100 Share Unit.
                           ----------------------------------------

                  When the subscription account of any employee contains
an amount  equal to at least 100  shares or any  lesser  number of shares  under
subscription  (on a first in first out basis)  multiplied  by 85% of fair market
value of the Stock on the day the executed  subscription form is received by the
Company,  the employee  shall be deemed to have  exercised the right to purchase
100 or such lesser number of shares.  Thereafter the employee's account shall be
debited for the subscription price (as defined in Section 2) of such shares, and
the Company shall issue or cause to be transferred to the employee a certificate
for such shares within a reasonable time. If the fair market value on the day of
exercise is below that on the day the executed  subscription was received by the
Company, the employee's subscription account shall be charged for only an amount
equal to 85% of the fair market value on such  exercise  date of the shares then
acquired  and the  balance in the  account  shall be held to pay for  additional
shares under subscription,  if any, or returned if no additional shares are then
under  subscription.  The  number of  shares  purchased  shall in every  case be
determined solely by reference to the fair market value on the date the executed
subscription form is received by the Company, and may not be increased by reason
of any subsequent decline in fair market value.

                  B.       Rights as Stockholders.
                           ----------------------

                  Nothing  in this  Plan  shall  confer  upon any  participating
employee  any  rights  as a  stockholder  except  the right to be issued a stock
certificate for fully-paid  shares of Stock as provided  herein,  and until such
issuance,  the participating  employee shall not be deemed the owner of any such
shares for any purpose.

                  C.       Extension of Time for Delivery.
                           ------------------------------

                  The time of issuance  and  delivery of shares may be postponed
for such  period as may be required  to comply  with  registration  requirements
under the Securities Act of 1933, as amended,  listing requirements of any stock
exchange upon which Stock may be listed, if any, and the requirements  under any
other law or regulation applicable to the issuance or transfer of such shares.

<PAGE>

SECTION 8.        WITHDRAWAL OF SUBSCRIPTIONS.
                  ---------------------------

                  Any  employee  may  withdraw  any  subscription  upon filing a
notice  thereof with the person  designated  by and on the form  approved by the
Administration  Committee.  Said subscription  shall thereupon be canceled as to
all shares with respect to which the right to purchase has not been exercised as
provided in Section 7(A) above. If the employee  withdraws all his subscriptions
hereunder,  he will be entitled  to receive  the  balance of his account  within
thirty (30) days after the receipt of such  notice.  If an employee  withdraws a
subscription,  he shall not be entitled to subscribe for  additional  shares for
three (3) months after the last such withdrawal.

SECTION 9.        TERMINATION OF EMPLOYMENT.
                  -------------------------

                  A.       Death, Permanent Disability and Retirement.
                           ------------------------------------------

                  If a participating  employee's  services are terminated before
his  subscription  is fully  paid,  because of death,  permanent  disability  or
retirement at age 55 or thereafter,  the employee (or, in the case of death, his
estate) may, at his option,  within three (3) months  thereafter  in the case of
such  permanent  disability or retirement or within twelve months  thereafter in
the case of death,  prepay his  subscription in whole or in part, or receive the
balance of his  subscription  account in  satisfaction  of all rights  under the
Plan.

                  B.       Other Termination of Service.
                           ----------------------------

                  If a participating  employee's  services are terminated before
his  subscription  is fully paid,  for any reason  other than  death,  permanent
disability or retirement at age 55 or thereafter,  the employee will be entitled
to receive only the balance of his  subscription  account.  Such  payment  shall
constitute  satisfaction  of all his rights under this Plan,  and all  remaining
subscriptions hereunder shall be deemed withdrawn.

                  C.       Temporary Absence.
                           -----------------

                  Any  employee  whose name is taken off the regular  payroll by
reason of leave of absence,  temporary layoff, or through temporary  disability,
may at his option (i)  withdraw  his  subscriptions  hereunder  and  receive the
amount to which he would be entitled if his  services  were  terminated  for any
reason as provided in  subparagraph  (B) hereof,  or (ii) make regular  periodic
payments to the  Treasurer  of the  Company in an amount  equal to the sum which
would have been withheld had he continued on the regular payroll.

SECTION 10.       RIGHTS NOT TRANSFERABLE.
                  -----------------------

                  Neither the right of an employee to purchase shares hereunder,
nor his  account  balance,  shall be  transferable  by the  employee  (by way of
assignment,  pledge,  or  otherwise)  except by will or the laws of descent  and
distribution,  and neither  such right nor such  balance  shall be liable for or
subject to the debts or liabilities of such employee.  If any action is taken by

<PAGE>

the employee to so transfer  such right or balance,  such action shall be deemed
to constitute a withdrawal of the subscription involved.

SECTION 11.       ADMINISTRATION COMMITTEE.
                  ------------------------

                  This Plan shall be administered by an Administration Committee
consisting of two or more  non-employee  directors of the Company,  who shall be
appointed by its Board of Directors. The Committee, or a majority thereof, shall
have the authority to interpret  this Plan, to prescribe  rules and  regulations
thereunder,  and to make all other determinations necessary or advisable for the
Plan's  administration.  The  members of the  Committee  shall serve until their
successors have been appointed by the Board of Directors.

SECTION 12.       ADJUSTMENTS.
                  -----------

                  In the event of a  dividend  payable  in  Common  Stock of the
Company or a subdivision or combination of the Common Stock of the Company,  the
number of shares  offered under this Plan,  and the number of shares  offered by
options   outstanding   under  the  Plan,   shall  be   increased  or  decreased
proportionately,   as  the  case  may  be,   without  change  in  the  aggregate
subscription price for such shares. In case the Company is reorganized or merged
or consolidated with another corporation,  appropriate  provisions shall be made
for the protection and continuation of any outstanding  subscriptions  under the
Plan by the  substitution  on an  equitable  basis  determined  by the  Board of
Directors of appropriate stock or other securities of the reorganized, merged or
consolidated corporation which will be issuable in respect of the Stock.

SECTION 13.       TAX ON ADDITIONAL COMPENSATION.
                  ------------------------------

                  In the event that the  issuance  or  disposition  of any Stock
subscribed  hereunder  results in additional  compensation  to an employee under
federal,  state or foreign laws which  require that the tax thereon be withheld,
the Company and its  subsidiaries  will deduct from the employee's  compensation
the  amount  required  for  such  withholding.  Until  such tax is  withheld  or
otherwise  paid by the employee to the  Company,  Stock paid for but unissued or
undelivered hereunder will be held by the Company in issued form as security for
the amount required to be withheld.

SECTION 14.       TERM OF PLAN.
                  ------------

                  This amended and restated  Plan is subject to and shall become
effective  upon  approval  by the  stockholders  of the  Company.  The  Board of
Directors may  terminate the Plan at any time,  and may amend the Plan from time
to time,  subject to any approval of the stockholders of the Company that may be
required in order that the Plan shall  continue to qualify  under Section 423 of
the Internal Revenue Code. Upon termination of the Plan, participating employees
shall,  in the  discretion  of the Board of  Directors,  either be  permitted to
complete  unpaid  subscriptions  in a manner  determined  by the  Administration
Committee  or shall be entitled  to receive  the  balance in their  subscription
account in satisfaction of all rights under the Plan.
<PAGE>

SECTION 15.       INTERPRETATION OF THE PLAN.
                  --------------------------

                  It is  intended  that this Plan shall meet and comply with all
the  requirements  of Section  423 of the  Internal  Revenue  Code,  and related
Sections.  The Plan and the  terms  used  herein  shall  be  interpreted  by the
Administration  Committee in such manner as to carry out such intention,  and in
particular, the grant of a right to purchase shares hereunder shall be deemed to
constitute  the grant of an option  under  Section 423 of the  Internal  Revenue
Code,  and the  exercise of the right to purchase  hereunder  shall be deemed to
constitute the exercise of an option under such Section.

         IN WITNESS  WHEREOF,  the Company has caused  these  instruments  to be
executed by its duly  authorized  officers and its corporate seal to be hereunto
affixed, all as of the day and year first above written.

                                            MEDTOX SCIENTIFIC, INC.
ATTEST:

___________________________                 By:________________________________
                  Secretary                                           President

(Corporate Seal)Exhibit 4.3

                             MEDTOX SCIENTIFIC, INC.
                              AMENDED AND RESTATED
                  STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
                         effective as of January 1, 1994

                                    ARTICLE I

Purpose

         This Stock  Option  Plan for  Non-Employee  Directors  (the  "Plan") is
designed to advance the interest of MEDTOX Scientific,  Inc. (the "Company") and
its  stockholders by providing an incentive to members of the Board of Directors
of the Company (the "Board") who are not full-time or part-time employees of the
Company or its parent or subsidiaries  ("Non-Employee Directors") to continue in
the  service  of  the  Company  and  by  creating  a  direct  interest  of  such
Non-Employee  Directors in the future  success of the  Company's  operations  by
granting to such  persons  options to acquire  shares of the common stock of the
Company, par value $.15 per share (the "Common Stock"). As used herein, "parent"
shall mean a "parent  corporation"  as defined in Section 424(e) of the Internal
Revenue  Code of 1986,  as amended (the  "Code") and  "subsidiary"  shall mean a
"subsidiary corporation" as defined in Section 424(f) of the Code.

                                   ARTICLE II

Administration

         The Plan shall be  administrated  by a Stock  Option  Committee  of the
Company (the  "Committee")  appointed by the Board from among its members  which
shall consist of not less than two Non-Employee Directors who are "disinterested
persons" within the meaning of Rule 16b-3(c)(2)(i) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). The Committee shall have authority
to adopt such rules and regulations and to make such  determinations  as are not
inconsistent with the Plan and are necessary or desirable for its implementation
and  administration.  All decisions,  determinations and  interpretations of the
Committee shall be final and binding on all optionees.

         The  Committee  shall hold its  meetings at such times and places as it
may  determine,  with a majority of the  Committee  constituting  a quorum.  Any
action  which the  Committee  has the power to take at a meeting may be taken by
the Committee  without a meeting if all the members of the Committee  give their
consent to such action in writing.

                                   ARTICLE III

Stock

         The shares to be optioned  under the Plan  ("Option  Shares")  shall be
shares of  authorized  but unissued  Common  Stock of the Company or  previously
issued  shares of Common Stock  reacquired  by the Company.  The total number of

<PAGE>

shares  of  Common  Stock  subject  to  awards  of  nonqualified  stock  options
("Options")  granted under the Plan shall not exceed in the  aggregate  300,000,
except  as such  number of  shares  shall be  adjusted  in  accordance  with the
provisions of Articles XI and XII hereof. The Options granted under the plan are
not  intended to qualify as incentive  stock  options  under  section 422 of the
Code. If an Option should expire or become  unexercisable for any reason without
having been exercised in full, the unpurchased  Option Shares which were subject
thereto shall, unless the Plan shall have been terminated,  become available for
the grant of other Options under the Plan.

                                   ARTICLE IV

Eligibility of Participants

         Each  Non-Employee  Director  shall be eligible  to receive  Options in
accordance with the provisions of the Plan.

                                    ARTICLE V

Initial Awards

         Upon the initial election or appointment of a Non-Employee  Director (a
"New Non-Employee Director"), the Committee may in its discretion grant such New
Non-Employee  Director an Option (the "Initial  Award") to acquire any number of
shares  of  Common  Stock of the  Company  at such  price  and on such  terms as
determined by the Committee in its sole discretion;  provided,  however, that no
Option so granted may be exercised  more than ten years after the date of grant.
Notwithstanding  any language in the Plan to the  contrary,  the  provisions  of
Articles VI an through VIII of the Plan shall not apply to an Initial Award. Any
New  Non-Employee  Director  receiving an Initial  Award shall be  ineligible to
serve on the Committee for a period of at least one year after the date of grant
(or such  shorter  period as may be  permitted  by rule 16b-3 under the exchange
Act).

                                   ARTICLE VI

Annual Awards

         On  January  1st of each year  commencing  on  January  1,  1994,  each
Non-Employee  Director  shall be granted an option  (the  "Annual  Award") for a
number of shares of Common Stock  determined  by dividing  $10,000 by the Option
Price determined in accordance with Article VII hereof, subject to adjustment as
provided  in  Articles  XI and XII below.  Notwithstanding  the  foregoing,  any
Non-Employee  Director may take an irrevocable election not to receive an Annual
Award  provided that the election is contained in a written  notice  provided to
the  Committee  not later than June 30th of the year  preceding  the date of the
Annual  Award to which the  election  pertains.  In the event that the number of
shares  available for grants under the Plan is  insufficient to grant the number
of Options  determined as provided above to each Non-Employee  Director electing
to receive an Annual Award, Options for the remaining number of shares of Common
Stock  available  for grant under the Plan shall be granted in equal  amounts to
each Non-Employee Director who elected to receive the Annual Award.
<PAGE>

         Upon the grant of each Annual Award,  the Company and the  Non-Employee
Director  shall enter into an option  agreement  which shall specify the date of
the grant and the Option Price and shall include or incorporate by reference the
substance  of all the  provision  set forth in Articles  VII through X below and
such other  provisions  consistent with the plan as the Committee may determine.
The Committee shall have no discretion to select the Non-Employee  Directors who
will receive  Annual Awards or to determine the number of Option Shares  covered
by such Annual Award, the Option Price per Option Share, the circumstances under
which an Annual Award may be granted, or the period within which Options granted
pursuant  to Annual  Awards  may be  exercised  or to alter  any other  terms or
conditions in the Plan with respect to Annual Awards to Non-Employee  Directors,
except for administering the Plan subject to the express provisions of the Plan.

                                   ARTICLE VII

Option Price

         The per share  Option  exercise  price  (the  "Option  Price")  for all
Options  granted  pursuant  to Annual  Awards  under the Plan  shall be the fair
market value of the shares of Common Stock of the Company on the date the Annual
Award is  granted.  If the Common  Stock is listed for  trading on any  national
securities  exchange,  then the "fair market  value" shall be the closing  sales
price of the Common Stock on such  exchange on the date of grant.  If the Common
Stock is not listed for trading on a national securities exchange, but is quoted
on the National  Association of Securities  Dealers  Automated  Quotation System
("NASDAQ"), then the "fair market value" shall be the average of the closing bid
and asked prices  quoted on NASDAQ on the date of grant.  If the Common Stock is
neither listed on any national  securities exchange nor quoted on NASDAQ, but is
traded in the over-the-counter market, then the "fair market value" shall be the
average closing bid and asked prices on the date of grant provided by any market
maker in the Common Stock selected by the Company to provide quotations for this
purpose.  If there is no market maker in the Common Stock, the fair market value
shall be the last sales price of the Common  Stock on the date of grant.  In the
event on any date of grant of options there is no sale of at least 100 shares of
Common  Stock,  the sale  price or the bid and  asked  prices on the last day on
which  there was a sale of at least 100 shares of Common  Stock shall be used to
determine "fair market value."

                                  ARTICLE VIII

Exercise and Term of Options

         An Option granted  pursuant to an Annual Award shall not be exercisable
unless:  (a) the Option has vested as provided below; (b) the person  exercising
the Option has been at all times during the period,  beginning  with the date of
grant of the  Option  and ending on the date of such  exercise,  a  Non-Employee
Director,  except that (i) in the event an optionee  ceases to be a director for
any reason,  his Option granted  pursuant to an Annual Award shall terminate and
may not be  exercised  after the  expiration  of thirty  (30)  days  after  such
termination,  and (ii) if an  optionee  shall  die  holding  an  Option  granted
pursuant to an Annual Award that has not been fully  exercised,  his  executors,

<PAGE>

administrators,  heirs,  or  distributees,  as the case may be, may, at any time
within three (3) months  after the date of such death,  exercise the Option with
respect to any Option Shares as to which the descendent could have exercised the
Option at the time of his death;  (c)  payment in full is made for the shares of
Common Stock being acquired  thereunder at the time of exercise in United States
dollars by cash or check;  and (d)  payment in full is made for any  withholding
obligation as provided in Article IX below.

 Any other provision of the Plan notwithstanding,  no Option granted pursuant to
an Annual  Award  shall be  exercised  after the date ten years from the date of
grant of such Annual Award, subject to earlier termination as provided above.

 Except for Options granted  pursuant to Annual Awards made prior to October 28,
1992,  Options  granted  pursuant to Annual  Awards  under the Plan shall become
vested in four (4) equal quarterly  installments on the last day of March, June,
September  and December of the year during which the Annual Award is granted if,
on such dates,  the  Non-Employee  Director  remains a member of the Board.  If,
prior to any such vesting date, the Non-Employee  Director ceases to be a member
of the Board,  the Option granted  pursuant to the Annual Award which would have
vested on that date shall terminate on the date the Non-Employee Director ceases
to be a member of the Board.

                                   ARTICLE IX

Payment of Shares

         Payment of the Option  Price for  Option  Shares  shall be made in full
upon exercise of the Option. Any rights of the Non-Employee Director to exercise
an Option shall be conditioned upon the Non-Employee  Director forwarding to the
Company,  in addition to the Option Price of the Option Shares,  cash payment of
an amount equal to the amount of the Company is required by law or regulation of
any  governmental  authority,  whether  federal,  state,  or local,  domestic or
foreign,  to  withhold  in  connection  with such  exercise  of the  Option,  as
determined by the Committee in its discretion.  The amount of such payment shall
be communicated to the  Non-Employee  Director as soon as practicable  following
receipt by the Company of the Non-Employee Director's notice of exercise.

                                    ARTICLE X

Non-Transferability of Option

No Option  under the Plan  shall be  transferable  except by will or the laws of
descent and distribution.  During the lifetime of the optionee,  an Option shall
be exercisable only by the optionee.

<PAGE>

                                   ARTICLE XI

Adjustment for Changes in Capitalization

If the  number of Shares of the  Company  as a whole are  increased,  decreased,
changed  into,  or  exchanged  for a  different  number  or  kind of  shares  or
securities   of   the   Company,   whether   through   merger,    consolidation,
reorganization, recapitalization,  reclassification, stock divided, stock split,
combination of shares,  exchange of shares, change in corporate structure or the
like, an appropriate and  proportionate  adjustment  shall be made in the number
and kind of shares subject to this Plan, and in the number,  kind, and per share
exercise  price of shares  subject to  unexercised  Options or portions  thereof
granted prior to any such change. Any such adjustment in an outstanding  Option,
however,  shall be made  without a change in the total price  applicable  to the
unexercised  portion of the Option but with a  corresponding  adjustment  in the
price for each share covered by the Option.  No fractional shares of stock shall
be issued under the Plan on of account of any adjustment specified above.

                                   ARTICLE XII

Rights Upon Reorganization, Merger, or Consolidation

         Upon a reorganization, merger, or consolidation in which the Company is
not the surviving  corporation,  or upon the sale of all or substantially all of
the property of the Company to another  corporation,  provision shall be made in
connection with such  transaction for the assumption of the Plan and the Options
theretofore granted by the successor corporation.  Provision may, alternatively,
be made for the  substitution  for such Options of new options of the  successor
corporation  or a Parent or Subsidiary  thereof.  In any such case,  appropriate
adjustment as to the number and kind of shares and the per share exercise prices
shall be made. No  fractional  shares of stock shall be issued under the Plan on
account of any adjustment specified above.

                                  ARTICLE XIII

No Obligation to Exercise Option

The  granting  of an Option  shall  impose no  obligation  on the  recipient  to
exercise such Option.

                                   ARTICLE XIV

Right as a Stockholder

         An optionee or a permitted  transferee of an Option shall have no right
as  stockholder  with respect to any Option  Shares  covered by his Option until
such person shall have become the holder of such Option Shares,  and such person
shall not be entitled  to any  dividends  or  distributions  of other  rights in
respect of such Option  Shares for which the record date is prior to the date on
which such person shall have become the holder of record thereof.
<PAGE>

                                   ARTICLE XV

Regulatory Matters

Every  Option  under the Plan is granted  upon the  express  condition  that the
inability of the Company to comply with,  or any delay in  complying  with,  any
laws, rules or regulations  governing the issuance of Option Shares necessary to
satisfy such Option  (including but not limited to complying with the securities
Act of 1933,  as amended (the "Act") and all rules and  regulations  promulgated
thereunder),  the fulfillment of which condition is deemed  necessary by counsel
for the Company to the lawful  issuance or  transfer of any such  shares,  shall
relieve the Company of any liability for the  non-issuance or  non-transfer,  or
any  delay in the  issuance  or  transfer  of such  shares.  Further,  it is the
intention of the Company that the Plan comply in all respects with Rule 16b-3 of
the Exchange Act ("Rule  16b-3").  If any Plan  provisions is found not to be in
compliance with Rule 16b-3, the provision shall be deemed null and void.

                                   ARTICLE XVI

Amendments or Discontinuance of the Plan

The Plan may be  amended  at any time and from  time to time by the Board as the
Board  shall deem  advisable;  provided,  however,  that  except as  provided in
Articles XI and XII above,  the Board may not,  without further  approval by the
stockholders  of the Company,  increase the maximum  numbers of shares of Common
Stock as to which Options may be granted under the Plan, reduce the Option Price
described in Article VII above,  extend the period  during which  Options may be
granted or exercised  under the Plan or change the class of persons  eligible to
receive  Options under the Plan. No amendment of the Plan shall  materially  and
adversely  affect any right of any  Non-Employee  Director  with  respect to any
Option theretofore granted without such Non-Employee Director's written consent.
Notwithstanding the foregoing, the Plan may not be amended to change the amount,
price or timing of the Initial and Annual  Awards  until at least six months (or
such longer or shorter period required by Rule 16b-3) after the date of the last
preceding  amendment  except to comport with  changes in the Code,  the Employee
Retirement  Income  Security  Act,  or the  rules  and  regulations  promulgated
thereunder.

                                  ARTICLE XVII

Miscellaneous Provisions

Except as expressly provided for in the Plan, no Non-Employee  Director or other
person shall have any claim or right to be granted an Option under the Plan.

It shall be the obligation of the  Non-Employee  Director (or any beneficiary or
person entitled to act under Article VII) to pay the Company,  promptly upon its
demand,  such  amount as may be  requested  by the  Company  for the  purpose of
satisfying any liability to withhold federal, state, local, or foreign income or
other taxes

The expenses of the Plan shall be borne by the Company.
<PAGE>

                                  ARTICLE XVIII

Termination

This Plan shall  determinate  upon the  adoption  of a  resolution  of the Board
terminating the Plan. No termination of the Plan shall  materially and adversely
affect any of the rights or  obligations  of any person,  without  his  consent,
under  any  Option  theretofore  granted  under  the Plan  except  that upon the
dissolution  or  liquidation  of the Company,  this Plan and the Options  issued
hereunder shall terminate.

                                   ARTICLE XIX

Effectiveness

          The Plan was initially  adopted by the  stockholders of the Company on
October 24, 1989, and  amendments to the Plan were approved by the  stockholders
on October 30, 1991 and October 28, 1992.  This amendment and restatement of the
Plan shall be effective as of January 1,1994 (the "Effective Date"),  subject to
approval  by  the   shareholders  of  the  Company  within  twelve  (12)  months
thereafter. All Options granted under the Plan prior to the Effective Date shall
continue to be subject to the provisions of the Plan as in effect on the date of
grant.  All Options  granted under the Plan on or after the Effective Date shall
be subject to the provisions of this amendment and restatement of the Plan.

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