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                                                                    EXHIBIT 10.1

                             ESCO TECHNOLOGIES INC.
                             1994 STOCK OPTION PLAN
                         AMENDED AND RESTATED EFFECTIVE
                                OCTOBER 16, 2000

1.       Purpose of the Plan.

         The ESCO Technologies Inc. 1994 Stock Option Plan (the "Plan") is
intended as an incentive to, and to encourage ownership of the stock of ESCO
Technologies Inc. ("Company") by, certain key management employees of the
Company and its subsidiaries. Certain options granted hereunder may qualify as
incentive stock options ("Incentive Stock Options") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
other options granted hereunder may not qualify as Incentive Stock Options, as
determined in each instance by the Committee referred to in Paragraph 4 (the
"Committee").

2.       Stock Subject to the Plan.

         Seven hundred thousand (700,000) shares of the authorized but unissued
Common Stock, par value of $0.01 per share, of the Company have been allocated
to the Plan and will be reserved for issue upon the exercise of options granted
under the Plan. The Company may, in its discretion, use shares held in the
treasury in lieu of authorized but unissued shares. If any such option shall
expire or terminate for any reason without having been exercised in full, the
unpurchased shares subject thereto shall again be available for the purposes of
the Plan. Any shares of Common Stock which are used by an optionee as full or
partial payment to the Company of the purchase price of shares of Common Stock
upon exercise of a stock option shall again be available for the purposes of the
Plan. The number of shares with respect to which options and stock appreciation
rights ("SARs") may be granted to any individual during any calendar year may
not exceed seventy thousand (70,000) shares.

3.       Administration.

         The Plan shall be administered by the Committee. Subject to the express
provisions of the Plan, the Committee shall have plenary authority, in its
discretion, to determine the individuals to whom, and the time or times at
which, options and SARs shall be granted and the number of shares to be subject
to each option or SAR. In making such determinations the Committee may take into
account the nature of the services rendered by the respective individuals, their
present and potential contributions to the Company's success and such other
factors as the Committee, in its discretion, shall deem relevant. Subject to the
express provisions of the Plan, the Committee shall also have plenary authority
to interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the terms and provisions of the respective stock
option and SAR agreements (which need not be identical) and to make all other
determinations necessary or advisable for the administration of the Plan. The
Committee's determinations on the matters referred to in this Paragraph 3 shall
be conclusive.

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4.       The Committee.

         The Committee shall be the Human Resources and Ethics Committee of the
Board of Directors and shall at all times be constituted to comply with Rule
16b-3 under the Securities Exchange Act of 1934, or any successor to such Rule.
In addition, in order for options and SARs to qualify for the exemption from the
one million dollar limitation on deduction for executive compensation under
Section 162(m) of the Code, such Committee would also have to consist solely of
two or more Outside Directors. For this purpose, an Outside Director shall mean
a director of the Company who:

         (1)  is not an employee of the Company or any subsidiary while he is a
              member of the Committee;

         (2)  is not a former employee of the Company or a subsidiary who
              receives compensation for prior services (other than benefits
              under a tax-qualified retirement plan) during the taxable year;

         (3)  has not been an Officer of the Company or a subsidiary; and

         (4)  shall not receive Remuneration from the Company or a subsidiary
              either directly or indirectly in any capacity other than as a
              director.

         Notwithstanding the foregoing, a person may qualify as an Outside
Director until the first meeting of shareholders of the Company at which
directors are elected which occurs after January 1, 1995 if such person is a
director who is a "disinterested person" within the meaning of Rule
16b-3(c)(2)(i), 17 CFR ss.240.16b-3(c)(2)(i) as in effect on April 30, 1991.
"Remuneration" and "Officer" as used herein shall be determined in accordance
with Prop. Treas. Reg. ss.1.162-27(e)(3) or any successor thereto.

         The Committee shall be appointed by the Board of Directors, which may
from time to time appoint members of the Committee in substitution for members
previously appointed and may fill vacancies, however caused, in the Committee.
The Board shall select the Chairman. The Committee shall hold its meetings at
such times and places as it may determine. A majority of its members shall
constitute a quorum. All determinations of the Committee shall be made by a
majority of its members present at any meeting at which there is a quorum. Any
decision or determination reduced to writing and signed by all of the members
shall be fully as effective as if it had been made by a majority vote at a
meeting duly called and held. The Committee may appoint a secretary, shall keep
minutes of its meetings and shall make such rules and regulations for the
conduct of its business as it shall deem advisable.

5.       Eligibility.

         Options and SARs may be granted only to key management employees of the
Company or its subsidiaries. The term "key management employees" is not limited
to, but includes, officers, whether or not they are directors, but does not
include directors who are not also

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executive employees of the Company, or a subsidiary thereof. The term
"subsidiary" shall mean any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if, at the time of the granting
of the option or SAR, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain, or such other meaning as may be hereafter ascribed to it in Section 424
of the Code.

6.       Option Prices.

         The purchase price of the Common Stock under each option shall not be
less than 100% of the fair market value of the stock at the time of the granting
of the option. Such fair market value shall generally be considered to be the
mean between the high and low prices of the Company's Common Stock as traded on
the New York Stock Exchange on the day the option is granted; provided, however,
that the Committee may adopt any other criterion for the determination of such
fair market value as it may determine to be appropriate. The purchase price is
to be paid in full upon the exercise of the option, either (i) in cash, (ii) in
the discretion of the Committee, by the tender to the Company of shares of the
Common Stock of the Company, owned by the optionee and registered in his name,
having a fair market value equal to the cash exercise price of the option being
exercised, with the fair market value of such stock to be determined in such
appropriate manner as may be provided for by the Committee or as may be required
in order to comply with, or to conform to the requirements of, any applicable
laws or regulations, or (iii) in the discretion of the Committee, by any
combination of the payment methods specified in clauses (i) and (ii) hereof;
provided that, no shares of Common Stock may be tendered in exercise of an
option if such shares were acquired by the optionee through the exercise of an
Incentive Stock Option unless (i) such shares have been held by the optionee for
at least one year and (ii) at least two years have elapsed since such Incentive
Stock Option was granted. The proceeds of sale of stock subject to option are to
be added to the general funds of the Company or to the shares of the Common
Stock of the Company held in its Treasury, and used for its corporate purposes
as the Board of Directors shall determine.

7.       Option Amounts.

         The maximum aggregate fair market value (determined at the time an
option is granted in the same manner as provided for in Paragraph 6 hereof) of
the Common Stock of the Company with respect to which Incentive Stock Options
are exercisable for the first time by any optionee during any calendar year
(under all plans of the Company and its subsidiaries) shall not exceed $100,000.

8.       Exercise of Options.

         The term of each option shall be not more than ten (10) years from the
date of granting thereof or such shorter period as is prescribed in Paragraph 9
following. No option or SAR may be exercised during the first six (6) months of
its term. Within such limit, options will be exercisable at such time or times,
and subject to such restrictions and conditions, as the Committee shall, in each
instance, approve, which need not be uniform for all optionees;

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provided, however, that except as provided in Paragraphs 9 and 10 following, no
option may be exercised at any time unless the optionee is then an employee of
the Company or a subsidiary and has been so employed continuously since the
granting of the option. The holder of an option shall have none of the rights of
a shareholder with respect to the shares subject to option until such shares
shall be issued to him upon the exercise of his option. Upon exercise of an
option the Committee shall withhold a sufficient number of shares to satisfy the
Company's withholding obligations for any taxes incurred as a result of such
exercise, and the Committee may, at the request of the optionee, withhold a
sufficient number of shares to satisfy the optionee's tax liability incurred as
a result of such exercise up to the maximum marginal federal, state and local
tax rates; provided, that in lieu of all or part of such withholding, the
optionee may pay an equivalent amount of cash to the Company.

9.       Termination of Employment.

         The holder of any option issued hereunder must exercise the option
prior to his termination of employment, except that if the employment of an
optionee terminates with the consent and approval of his employer, the Committee
in its absolute discretion may permit the optionee to exercise his option, to
the extent that he was entitled to exercise it at the date of such termination
of employment, at any time within three (3) months after such termination, but
not after ten (10) years from the date of the granting thereof. If the optionee
terminates employment on account of disability he may exercise such option to
the extent he was entitled to exercise it at the date of such termination at any
time within one (1) year of the termination of his employment but not after ten
(10) years from the date of the granting thereof. For this purpose a person
shall be deemed to be disabled if he is permanently and totally disabled within
the meaning of Section 422(c)(6) of the Code, which, as of the date hereof,
shall mean that he is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months. A person shall be considered
disabled only if he furnishes such proof of disability as the Committee may
require. Options granted under the Plan shall not be affected by any change of
employment so long as the holder continues to be an employee of the Company or a
subsidiary thereof. The option agreements may contain such provisions as the
Committee shall approve with reference to the effect of approved leaves of
absence. Nothing in the Plan or in any option granted pursuant to the Plan shall
confer on any individual any right to continue in the employ of the Company or
any subsidiary or interfere in any way with the right of the Company or any
subsidiary thereof to terminate his employment at any time.

10.      Death of Holder of Option.

         In the event of the death of an individual to whom an option has been
granted under the Plan, while he is employed by the Company (or a subsidiary) or
within three (3) months after the termination of his employment (or one (1) year
in the case of the termination of employment of an option holder who is disabled
as above provided) the option theretofore granted to him may be exercised, to
the extent that he was entitled to exercise it at the date of such death, by a
legatee or legatees of the option holder under his last will, or by his personal
representatives or distributees,

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at any time within a period of one (1) year after his death, but not after ten
(10) years from the date of granting thereof, and only if and to the extent that
he was entitled to exercise the option at the date of his death.

11.      Non-Transferability of Options.

         Each option granted under the Plan shall, by its terms, be
non-transferable otherwise than by will or the laws of descent and distribution
and an option may be exercised, during the lifetime of the holder thereof, only
by him.

12.      Successive Option Grants.

         Successive option grants may be made to any holder of options under the
Plan.

13.      Investment Purpose.

         Each option under the Plan shall be granted only on the condition that
all purchases of stock thereunder shall be for investment purposes, and not with
a view to resale or distribution, except that the Committee may make such
provision with respect to options granted under this Plan as it deems necessary
or advisable for the release of such condition upon the registration with the
Securities and Exchange Commission of stock subject to the option, or upon the
happening of any other contingency warranting the release of such condition.

14.      Alternative Stock Appreciation Rights.

         (a) Grant. At the time of grant of an option, the Committee, in its
discretion, may grant to the optionee under the Plan an alternative SAR for all
or any part of the number of shares covered by his option. The SAR agreement
shall specify the options in respect of which the alternative SAR is granted.
Any subsequent exercise of an option by the holder thereof who also holds an
alternative SAR shall reduce his alternative SAR by the same number of shares as
to which his option is exercised. Any exercise of his alternative SAR shall
reduce his option by the same number of shares as to which his SAR is exercised.
An alternative SAR granted to an option holder shall specify a time period for
exercise of such SAR, which time period may not extend beyond, but may be less
than, the time period during which the corresponding option may be exercised.
The failure of the holder of the alternative SAR to exercise such SAR within the
time period specified shall not reduce his option rights. If an alternative SAR
is granted for a number of shares less than the total number of shares covered
by the corresponding option the Committee may later grant to the option holder
an additional alternative SAR covering additional shares, provided, however,
that the aggregate amount of all alternative SARs held by an option holder shall
at no time exceed the total number of shares covered by his unexercised options.

         (b) Exercise. The holder of any option which by its terms is
exercisable who also holds an alternative SAR may, in lieu of exercising his
option, elect to exercise his alternative SAR; subject, however, to the
limitations on time of exercise hereinafter set forth. Such SAR shall be
exercised by the delivery to the Company of a written notice which shall state
that the

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optionee elects to exercise his SAR as to the number of shares specified in the
notice and which shall further state what portion, if any, of the SAR exercise
amount (hereinafter defined) the holder thereof requests be paid to him in cash
and what portion, if any, he request be paid to him in Common Stock of the
Company. The Committee promptly shall cause to be paid to such holder the SAR
exercise amount either in cash, in Common Stock of the Company, or any
combination of cash and stock as it may determine. Such determination may be
either in accordance with the request made by the holder of the SAR or
otherwise, in the sole discretion of the Committee. The SAR exercise amount is
the excess of the fair market value of one share of the Company's Common Stock
on the date of exercise over the per option price for the option in respect of
which the alternative SAR was granted multiplied by the number of shares as to
which the SAR is exercised. For the purposes hereof fair market value of one
share of the Company's Common Stock on the date of exercise shall be the mean
between the high and low prices of the Company's Common Stock on the New York
Stock Exchange on such date; provided, that the Committee may adopt any other
criterion for the determination of such fair market value as it may determine to
be appropriate.

         (c) Other Provisions of Plan Applicable. All provisions of this Plan
applicable to options granted hereunder shall apply with equal effect to
alternative SARs. Not in limitation of the prior sentence it is expressly
provided that no SAR shall be transferable otherwise than by will or the laws of
descent and distribution and an SAR may be exercised, during the lifetime of the
holder thereof, only by such holder.

15.      Adjustments Upon Changes in Capitalization or Corporate Acquisitions.

         Notwithstanding any other provisions of the Plan, the option and SAR
agreements may contain such provisions as the Committee shall determine to be
appropriate for the adjustment of the number and class of shares subject to each
outstanding option or SAR and the option prices and SAR exercise amounts in the
event of changes in the outstanding Common Stock by reason of stock dividends,
recapitalization, mergers, consolidations, split-ups, combinations or exchanges
of shares and the like, and, in the event of any such change in the outstanding
Common Stock, the aggregate number and class of shares available under the Plan
and the maximum number of shares as to which options and SARs may be granted to
any individual shall be appropriately adjusted by the Committee, whose
determination shall be conclusive. In the event the Company or a subsidiary
enters into a transaction described in Section 424(a) of the Code with any other
corporation, the Committee may grant options or SARs to employees or former
employees of such corporation in substitution of options or SARs previously
granted to them upon such terms and conditions as shall be necessary to qualify
such grant as a substitution described in Section 424(a) of the Code. In the
event of a special, non-recurring distribution with respect to the Company's
Common Stock, the Committee may adjust the number of shares subject to each
option and the option price per share in such manner as the Committee deems just
and equitable to reflect such distribution, but in no event shall the total
number of shares used under the Plan exceed the number authorized under
Paragraph 2.

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16.      Amendment and Termination.

         Either the Board of Directors or the Committee may at any time
terminate the Plan, or make such modifications of the Plan as it shall deem
advisable; provided, however, that neither the Board of Directors nor the
Committee may, without further approval by the holders of Common Stock, increase
the maximum numbers of shares as to which options or SARs may be granted under
the Plan (except under the anti-dilution provisions hereof), or change the class
of employees to whom options or SARs may be granted, or withdraw the authority
to administer the Plan from a committee whose members satisfy the requirements
of Paragraph 4. No termination or amendment of the Plan may, without the consent
of the optionee to whom any option or SAR shall theretofore have been granted,
adversely affect the rights of such optionee under such option or SAR.

17.      Effectiveness of the Plan.

         The Plan shall become effective upon adoption by the Board of Directors
or the Committee subject, however, to its further approval by the shareholders
of the Company given within twelve (12) months of the date the Plan is adopted
by the Board of Directors or the Committee at a regular meeting of the
shareholders or at a special meeting duly called and held for such purpose.
Grants of options or SARs may be made prior to such shareholder approval but all
option and SAR grants made prior to shareholder approval shall be subject to the
obtaining of such approval and if such approval is not obtained, such options
and SARs shall not be effective for any purpose.

18.      Time of Granting of Options or SARs.

         An option or SAR grant under the Plan shall be deemed to be made on the
date on which the Committee, by formal action of its members duly recorded in
the records thereof, makes an award of an option or SAR to an eligible employee
of the Company or its subsidiaries (but in no event prior to the adoption of the
Plan by the Board of Directors), provided that such option or SAR is evidenced
by a written option or SAR agreement duly executed on behalf of the Company and
on behalf of the optionee within a reasonable time after the date of the
Committee action.

19.      Term of Plan.

         This Plan shall terminate ten (10) years after the date on which it is
approved and adopted by the Board of Directors or the Committee, and no option
or SAR shall be granted hereunder after the expiration of such ten-year period.
Options or SARs outstanding at the termination of the Plan shall continue in
full force and effect and shall not be affected thereby.

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         The foregoing Plan was approved and adopted by the Human Resources and
Ethics Committee of the Board of Directors of the Company on August 3, 1994, and
was amended on September 4, 1996, May 7, 1998 and October 16, 2000.

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                                                                    EXHIBIT 10.2

                             ESCO TECHNOLOGIES INC.
                             1999 STOCK OPTION PLAN
                         AMENDED AND RESTATED EFFECTIVE
                                OCTOBER 16, 2000

 1.        Purpose of the Plan.

           The ESCO Technologies Inc. 1999 Stock Option Plan (the "Plan") is
intended as an incentive to, and to encourage ownership of the stock of ESCO
Technologies Inc. ("Company") by, certain key officers, managers and
professional employees of the Company and its subsidiaries. It is intended that
certain options granted hereunder will qualify as incentive stock options
("Incentive Stock Options") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code") and that other options granted
hereunder will not qualify as Incentive Stock Options.

 2.        Stock Subject to the Plan.

           Six hundred ten thousand (610,000) shares of the authorized but
unissued Common Stock, par value of $0.01 per share, of the Company have been
allocated to the Plan and will be reserved for issue upon the exercise of
options granted under the Plan. The Company may, in its discretion, use shares
held in the treasury in lieu of authorized but unissued shares. If any such
option shall expire or terminate for any reason without having been exercised in
full, the unpurchased shares subject thereto shall again be available for the
purposes of the Plan. Any shares of Common Stock which are used by an optionee
as full or partial payment to the Company of the purchase price of shares of
Common Stock upon exercise of a stock option shall again be available for the
purposes of the Plan. The number of shares with respect to which options and
stock appreciation rights ("SARs") may be granted to any individual during any
calendar year may not exceed seventy thousand (70,000) shares.

 3.        Administration.

           The Plan shall be administered by the Committee referred to in
Paragraph 4 (the "Committee"). Subject to the express provisions of the Plan,
the Committee shall have plenary authority, in its discretion, to determine the
individuals to whom, and the time or times at which, options and SARs shall be
granted and the number of shares to be subject to each option or SAR. In making
such determinations the Committee may take into account the nature of the
services rendered by the respective individuals, their present and potential
contributions to the Company's success and such other factors as the Committee,
in its discretion, shall deem relevant. Subject to the express provisions of the
Plan, the Committee shall also have plenary authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, to determine
the terms and provisions of the respective stock option and SAR agreements
(which need not be identical) and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee's determinations on
the matters referred to in this Paragraph 3 shall be conclusive.

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 4.        The Committee.

           The Committee shall be the Human Resources and Ethics Committee of
the Board of Directors and shall at all times be constituted to comply with Rule
16b-3 under the Securities Exchange Act of 1934, or any successor to such Rule.
In addition, such Committee shall consist solely of two or more Outside
Directors. For this purpose, an Outside Director shall mean a director of the
Company who:

           (1)      is not an employee of the Company or any subsidiary while he
                    is a member of the Committee;

           (2)      is not a former employee of the Company or a subsidiary who
                    receives compensation for prior services (other than
                    benefits under a tax-qualified retirement plan) during the
                    taxable year;

           (3)      has not been an Officer of the Company or a subsidiary; and

           (4)      shall not receive Remuneration from the Company or a
                    subsidiary either directly or indirectly in any capacity
                    other than as a director.

"Remuneration" and "Officer" as used herein shall be determined in accordance
with Treas. Reg.ss.1.162-27(e)(3) or any successor thereto.

           The Committee shall be appointed by the Board of Directors, which may
from time to time appoint members of the Committee in substitution for members
previously appointed and may fill vacancies, however caused, in the Committee.
The Board of Directors shall select one of the Committee members as its
Chairman, and shall hold its meetings at such times and places as it may
determine. A majority of its members shall constitute a quorum. All
determinations of the Committee shall be made by a majority of its members
present at any meeting at which there is a quorum. Any decision or determination
reduced to writing and signed by all of the members shall be fully as effective
as if it had been made by a majority vote at a meeting duly called and held. The
Committee may appoint a secretary, shall keep minutes of its meetings and shall
make such rules and regulations for the conduct of its business as it shall deem
advisable.

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 5.        Eligibility.

           Options and SARs may be granted only to key officers, managers and
professional employees of the Company or its subsidiaries. The term "key
officers, managers and professional employees" is not limited to, but includes,
officers, whether or not they are directors, but does not include directors who
are not also executive employees of the Company, or a subsidiary thereof. The
term "subsidiary" shall mean any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of the
granting of the option or SAR, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain, or such other meaning as may be hereafter ascribed to it in
Section 424 of the Code.

 6.        Option Prices.

           The purchase price of the Common Stock under each option shall not be
less than 100% of the fair market value of the stock at the time of the granting
of the option. Such fair market value shall generally be considered to be the
mean between the high and low prices of the Company's Common Stock as traded on
the New York Stock Exchange on the day the option is granted; provided, however,
that the Committee may adopt any other criterion for the determination of such
fair market value as it may determine to be appropriate. The purchase price is
to be paid in full upon the exercise of the option, either (i) in cash, (ii) in
the discretion of the Committee, by the tender to the Company of shares of the
Common Stock of the Company, owned by the optionee and registered in his name,
having a fair market value equal to the cash exercise price of the option being
exercised, with the fair market value of such stock to be determined in such
appropriate manner as may be provided for by the Committee or as may be required
in order to comply with, or to conform to the requirements of, any applicable
laws or regulations, or (iii) in the discretion of the Committee, by any
combination of the payment methods specified in clauses (i) and (ii) hereof;
provided that, no shares of Common Stock may be tendered in exercise of an
Incentive Stock Option if such shares were acquired by the optionee through the
exercise of an Incentive Stock Option unless (i) such shares have been held by
the optionee for at least one year and (ii) at least two years have elapsed
since such prior Incentive Stock Option was granted. In addition, in the
discretion of the Committee, the optionee may effect a "cashless exercise" of an
option in lieu of paying the option price in cash or shares of Common Stock of
the Company owned by the optionee, by surrendering the option for that number of
shares of Common Stock determined by multiplying the number of option shares to
which he would otherwise be entitled by a fraction, the numerator of which is
the excess of the then-current fair market value per share of the Common Stock
over the exercise price, and the denominator of which is the then-current fair
market value per share of Common Stock. The proceeds of sale of stock subject to
option are to be added to the general funds of the Company or to the shares of
the Common Stock of the Company held in its Treasury, and used for its corporate
purposes as the Board of Directors shall determine.

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7.        Option Amounts.

           The maximum aggregate fair market value (determined at the time an
option is granted in the same manner as provided for in Paragraph 6 hereof) of
the Common Stock of the Company with respect to which Incentive Stock Options
are exercisable for the first time by any optionee during any calendar year
(under all plans of the Company and its subsidiaries) shall not exceed $100,000.

 8.        Exercise of Options.

           The term of each option shall be not more than ten (10) years from
the date of granting thereof or such shorter period as is prescribed in
Paragraph 9 following. Within such limit, options will be exercisable at such
time or times, and subject to such restrictions and conditions, as the Committee
shall, in each instance, approve, which need not be uniform for all optionees;
provided, however, that except as provided in Paragraphs 9 and 10 following, no
option may be exercised at any time unless the optionee is then an employee of
the Company or a subsidiary and has been so employed continuously since the
granting of the option. The holder of an option shall have none of the rights of
a shareholder with respect to the shares subject to option until such shares
shall be issued to him upon the exercise of his option. Upon exercise of an
option the Committee shall withhold a sufficient number of shares to satisfy the
Company's withholding obligations for any taxes incurred as a result of such
exercise, and the Committee may, at the request of the optionee, withhold a
sufficient number of shares to satisfy the optionee's tax liability incurred as
a result of such exercise up to the maximum marginal federal, state and local
tax rates; provided, that in lieu of all or part of such withholding, the
optionee may pay an equivalent amount of cash to the Company.

 9.        Termination of Employment.

           The holder of any option issued hereunder must exercise the option
prior to his termination of employment, except that if the employment of an
optionee terminates with the consent and approval of his employer, the Committee
may, in its absolute discretion, permit the optionee to exercise his option, to
the extent that he was entitled to exercise it at the date of such termination
of employment, at any time within three (3) months after such termination, but
not after ten (10) years from the date of the granting thereof. If the optionee
terminates employment on account of disability he may exercise such option to
the extent he was entitled to exercise it at the date of such termination at any
time within one (1) year of the termination of his employment but not after ten
(10) years from the date of the granting thereof. For this purpose a person
shall be deemed to be disabled if he is permanently and totally disabled within
the meaning of Section 422(c)(6) of the Code, which, as of the date hereof,
shall mean that he is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months. A person shall be considered
disabled only if he furnishes such proof of disability as the Committee may
require. Options granted under the Plan shall not be affected by any change of
employment so long as the holder continues to be an employee of the Company or a
subsidiary

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thereof. The option agreements may contain such provisions as the Committee
shall approve with reference to the effect of approved leaves of absence.
Nothing in the Plan or in any option granted pursuant to the Plan shall confer
on any individual any right to continue in the employ of the Company or any
subsidiary or interfere in any way with the right of the Company or any
subsidiary thereof to terminate his employment at any time.

10.        Death of Holder of Option.

           In the event of the death of an individual to whom an option has been
granted under the Plan, while he is employed by the Company (or a subsidiary) or
within three (3) months after the termination of his employment (or one (1) year
in the case of the termination of employment of an option holder who is disabled
as above provided) the option theretofore granted to him may be exercised, to
the extent that he was entitled to exercise it at the date of such death, by a
legatee or legatees of the option holder under his last will, or by his personal
representatives or distributees, at any time within a period of one (1) year
after his death, but not after ten (10) years from the date of granting thereof,
and only if and to the extent that he was entitled to exercise the option at the
date of his death.

11.        Non-Transferability of Options.

           Each Incentive Stock Option granted under the Plan shall, by its
terms, be non-transferable otherwise than by will or the laws of descent and
distribution and an option may be exercised, during the lifetime of the holder
thereof, only by him.

12.        Successive Option Grants.

           Successive option grants may be made to any holder of options under
the Plan.

13.        Investment Purpose.

           Each option under the Plan shall be granted only on the condition
that all purchases of stock thereunder shall be for investment purposes, and not
with a view to resale or distribution, except that the Committee may make such
provision with respect to options granted under this Plan as it deems necessary
or advisable for the release of such condition upon the registration with the
Securities and Exchange Commission of stock subject to the option, or upon the
happening of any other contingency warranting the release of such condition.

14.        Alternative Stock Appreciation Rights.

           (a) Grant. At the time of grant of an option, the Committee, in its
discretion, may grant to the optionee under the Plan an alternative SAR for all
or any part of the number of shares covered by his option. The SAR agreement
shall specify the options in respect of which the alternative SAR is granted.
Any subsequent exercise of an option by the holder thereof who also holds an
alternative SAR shall reduce his alternative SAR by the same number of

                                       5
<PAGE>   6

shares as to which his option is exercised. Any exercise of his alternative SAR
shall reduce his option by the same number of shares as to which his SAR is
exercised. An alternative SAR granted to an option holder shall specify a time
period for exercise of such SAR, which time period may not extend beyond, but
may be less than, the time period during which the corresponding option may be
exercised. The failure of the holder of the alternative SAR to exercise such SAR
within the time period specified shall not reduce his option rights. If an
alternative SAR is granted for a number of shares less than the total number of
shares covered by the corresponding option the Committee may later grant to the
option holder an additional alternative SAR covering additional shares,
provided, however, that the aggregate amount of all alternative SARs held by an
option holder shall at no time exceed the total number of shares covered by his
unexercised options.

           (b) Exercise. The holder of any option which by its terms is
exercisable who also holds an alternative SAR may, in lieu of exercising his
option, elect to exercise his alternative SAR; subject, however, to the
limitations on time of exercise hereinafter set forth. Such SAR shall be
exercised by the delivery to the Company of a written notice which shall state
that the optionee elects to exercise his SAR as to the number of shares
specified in the notice and which shall further state what portion, if any, of
the SAR exercise amount (hereinafter defined) the holder thereof requests be
paid to him in cash and what portion, if any, he request be paid to him in
Common Stock of the Company. The Committee promptly shall cause to be paid to
such holder the SAR exercise amount either in cash, in Common Stock of the
Company, or any combination of cash and stock as it may determine. Such
determination may be either in accordance with the request made by the holder of
the SAR or otherwise, in the sole discretion of the Committee. The SAR exercise
amount is the excess of the fair market value of one share of the Company's
Common Stock on the date of exercise over the per option price for the option in
respect of which the alternative SAR was granted multiplied by the number of
shares as to which the SAR is exercised. For the purposes hereof fair market
value of one share of the Company's Common Stock on the date of exercise shall
be the mean between the high and low prices of the Company's Common Stock on the
New York Stock Exchange on such date; provided, that the Committee may adopt any
other criterion for the determination of such fair market value as it may
determine to be appropriate.

           (c) Other Provisions of Plan Applicable. All provisions of this Plan
applicable to options granted hereunder shall apply with equal effect to
alternative SARs. Not in limitation of the prior sentence it is expressly
provided that no SAR shall be transferable otherwise than by will or the laws of
descent and distribution and an SAR may be exercised, during the lifetime of the
holder thereof, only by such holder.

                                       6
<PAGE>   7

15.        Adjustments Upon Changes in Capitalization or Corporate Acquisitions.

           Notwithstanding any other provisions of the Plan, the option and SAR
agreements may contain such provisions as the Committee shall determine to be
appropriate for the adjustment of the number and class of shares subject to each
outstanding option or SAR and the option prices and SAR exercise amounts in the
event of changes in the outstanding Common Stock by reason of stock dividends,
recapitalization, mergers, consolidations, split-ups, combinations or exchanges
of shares and the like, and, in the event of any such change in the outstanding
Common Stock, the aggregate number and class of shares available under the Plan
and the maximum number of shares as to which options and SARs may be granted to
any individual shall be appropriately adjusted by the Committee, whose
determination shall be conclusive. In the event the Company or a subsidiary
enters into a transaction described in Section 424(a) of the Code with any other
corporation, the Committee may grant options or SARs to employees or former
employees of such corporation in substitution of options or SARs previously
granted to them upon such terms and conditions as shall be necessary to qualify
such grant as a substitution described in Section 424(a) of the Code.

16.        Amendment and Termination.

           Either the Board of Directors or the Committee may at any time
terminate the Plan, or make such modifications of the Plan as it shall deem
advisable; provided, however, that neither the Board of Directors nor the
Committee may, without further approval by the holders of Common Stock, increase
the maximum numbers of shares as to which options or SARs may be granted under
the Plan (except under the anti-dilution provisions hereof), or change the class
of employees to whom options or SARs may be granted, or withdraw the authority
to administer the Plan from a committee whose members satisfy the requirements
of Paragraph 4. No termination or amendment of the Plan may, without the consent
of the optionee to whom any option or SAR shall theretofore have been granted,
adversely affect the rights of such optionee under such option or SAR.

17.        Effectiveness of the Plan.

           The Plan shall become effective upon adoption by the Board of
Directors or the Committee subject, however, to its further approval by the
shareholders of the Company given within twelve (12) months of the date the Plan
is adopted by the Board of Directors or the Committee at a regular meeting of
the shareholders or at a special meeting duly called and held for such purpose.
Grants of options or SARs may be made prior to such shareholder approval but all
option and SAR grants made prior to shareholder approval shall be subject to the
obtaining of such approval and if such approval is not obtained, such options
and SARs shall not be effective for any purpose.

18.        Time of Granting of Options or SARs.

           An option or SAR grant under the Plan shall be deemed to be made on
the date on which the Committee, by formal action of its members duly recorded
in the records thereof,

                                       7
<PAGE>   8

makes an award of an option or SAR to an eligible employee of the Company or its
subsidiaries (but in no event prior to the adoption of the Plan by the Board of
Directors), provided that such option or SAR is evidenced by a written option or
SAR agreement duly executed on behalf of the Company and on behalf of the
optionee within a reasonable time after the date of the Committee action.

19.        Term of Plan.

           This Plan shall terminate ten (10) years after the date on which it
is approved and adopted by the Board of Directors or the Committee, and no
option or SAR shall be granted hereunder after the expiration of such ten-year
period. Options or SARs outstanding at the termination of the Plan shall
continue in accordance with their terms and shall not be affected by such
termination.

                                      * * *

           The foregoing Plan was approved and adopted by the Human Resources
and Ethics Committee of the Board of Directors of the Company on August 6, 1998,
and was amended May 4, 2000 and October 16, 2000.

                                       8

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