Document:

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                                                                   Exhibit 10.41

                            STOCK PURCHASE AGREEMENT

         This Stock Purchase Agreement (the "Agreement") is entered into as of
February 1, 2001 (the "Effective Date") by and between MEDICAL RESEARCH GROUP,
INC., a Delaware corporation (the "Company"), and MINIMED INC., a Delaware
corporation ("MiniMed").

In consideration of the mutual promises, covenants and conditions hereinafter
set forth, the parties hereto agree as follows:

         1. DEFINITIONS.

                  1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following respective meanings:

                  "Common Stock" shall mean the Company's common stock, $0.001
par value.

                  "Proprietary Assets" shall mean all patents, patent
applications, trademarks, service marks, trade names, copyrights, moral rights,
maskworks, trade secrets, confidential and proprietary information, compositions
of matter, formulas, designs, proprietary rights, know-how and processes of the
Company.

                  1.2 Index of Other Defined Terms. In addition to the terms
defined above, the following terms shall have the respective meanings given
thereto in the sections indicated below:

                Defined Term                                   Section
                ------------                                   -------
"Act"                                                           4.5(b)
"Action"                                                         4.9
"Agreement"                                                    Preamble
"Balance Sheet Date"                                             4.13
"Bylaws"                                                         4.11
"Closings"                                                       3.1
"Company"                                                      Preamble
"Company Contracts"                                              4.11
"Effective Date"                                               Preamble
"Financial Statements"                                           4.13
"First Tranche"                                                  2.2
"Glucose Sensor Agreement"                                       9.4
"Initial Closing"                                                3.1
"Lender Consents"                                                2.2
"MiniMed"                                                      Preamble
"MiniMed Transactions"                                           4.14
"Pump Agreement"                                                 9.13
"Shares"                                                         2.1
"Second Closing"                                                 3.1
"Second Tranche"                                                 2.2

         2. AGREEMENT TO PURCHASE AND SELL STOCK.

                  2.1. Agreement to Purchase and Sell. Subject to the terms and
conditions hereof (including Section 2.2, below), on the date of the Initial
Closing, the Company will issue and sell to MiniMed, and MiniMed agrees to
purchase from the Company, One Million Nine Hundred Twenty Thousand Six Hundred
Fourteen (1,920,614) shares of Common Stock (the "Shares") at a price of Fifteen
Dollars Sixty Two Cents ($15.62) per share for an aggregate purchase price of
Twenty-Nine Million Nine Hundred Ninety-Nine Thousand Nine Hundred Ninety
Dollars ($29,999,990). The purchase price for the Shares shall be paid by wire
transfer of funds

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to a designated account of the Company, provided that wire transfer instructions
are delivered to MiniMed at least one (1) business day prior to the Closing.

                  2.2. Tranches. If MiniMed is not able to obtain, on or before
the Initial Closing, any consents ("Lender Consents") that may be required from
its third-party lenders in order to purchase the full amount of the Shares, then
MiniMed may elect to split the Shares into two tranches, the first of which
shall consist of Eight Hundred Ninety-Six Thousand, Two Hundred Eighty-Seven
(896,287) shares of Common Stock for an aggregate purchase price of Fourteen
Million Dollars ($14,000,000) (the "First Tranche") and the second of which
shall consist of the remaining One Million Twenty-Four Thousand Three Hundred
Twenty-Seven (1,024,327) shares of Common Stock for an aggregate purchase price
of Fifteen Million Nine Hundred Ninety-Nine Thousand Nine Hundred Ninety Dollars
($15,999,990) (the "Second Tranche"). In such case, the purchase and sale of the
First Tranche shall be consummated on the Initial Closing and the consummation
of the purchase and sale of the Second Tranche shall be deferred until such time
as MiniMed shall have obtained such Lender Consents (or, in MiniMed's sole
discretion, waived such condition), provided, however, that if MiniMed does not
obtain such Lender Consents (or waive such condition) by the date set for the
Second Closing, MiniMed's obligation to purchase, and the Company's obligation
to sell, the Second Tranche shall terminate and be of no further force or effect
(without giving rise to any claims for any breach hereunder).

         3. CLOSINGS; DELIVERY.

                  3.1. The Closings. The purchase and sale of the Shares (or, in
any event, the First Tranche) hereunder shall be held at the offices of Gibson,
Dunn & Crutcher LLP, on March 7, 2001, or at such other time and place as
Company and MiniMed may mutually agree upon (the "Initial Closing"). If
necessary pursuant to Section 2.2, a further closing (the "Second Closing") will
be held on April 6, 2001 or at such other time as the Company and MiniMed may
agree. The Initial Closing and the Second Closing may be referred to together
herein as the "Closings."

                  3.2. Delivery. At each of the Closings, the Company will
deliver to MiniMed a certificate representing the shares to be purchased by
MiniMed hereunder at the Initial Closing or Second Closing, as applicable,
against payment of the full purchase price therefor by wire transfer.

                  3.3. Reasonable Efforts. The parties will use all commercially
reasonable efforts to cause all conditions to the Closings to be satisfied and
the Closings to occur.

         4. COMPANY REPRESENTATIONS AND WARRANTIES. The Company hereby
represents and warrants to MiniMed that the statements in this Section 4 are all
true and correct and will be true and correct as of the Initial Closing:

                  4.1. Organization, Good Standing and Qualification. The
Company is a corporation duly organized, validly existing and in good standing
under, and by virtue of, the laws of the State of Delaware and has all requisite
corporate power and authority to own its properties and assets and to carry on
its business as now conducted and as presently proposed to be conducted. The
Company is qualified to do business as a foreign corporation in each
jurisdiction where failure to be so qualified would have a material adverse
effect on its properties, assets, liabilities, financial condition, results,
business, affairs, prospects or operations (a "Material Adverse Effect").

         4.2. Capitalization. Immediately prior to the Initial Closing, the
authorized capital stock of the Company will consist of the following:

                  (a) Common Stock. A total of fifty million (50,000,000)
authorized shares of Common Stock ($0.001 par value) of which twenty-one million
four hundred fifty-three thousand nine hundred eighty (21,453,980) shares are
issued and outstanding.

                  (b) Preferred Stock. A total of five million (5,000,000)
authorized shares of Preferred Stock ($0.001 par value), none of which are
issued and outstanding.

                  (c) Options, Warrants, Reserved Shares. Except for the up to
3,500,000 shares of Common Stock reserved for issuance under the Company's 1999
Stock Incentive Plan (and the stock option plan of the Company's predecessor)
under which options to purchase an aggregate of 2,210,500 shares (with a
weighted average exercise price of $3.17 per share) are outstanding (and any
additional options that may be granted under such plan in the ordinary course of
business, consistent with past

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practice, between the date hereof and the Initial Closing), there are no
options, warrants, conversion privileges or other rights, or agreements with
respect to the issuance thereof, presently outstanding to purchase any of the
capital stock of the Company.

                  4.3. Subsidiaries. Except as disclosed to MiniMed in writing,
the Company does not presently own or control, directly or indirectly, any
equity interest in any other corporation, partnership, trust, joint venture,
association, or other entity.

                  4.4. Due Authorization; Consents. All corporate action on the
part of the Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of, and the performance of all obligations
of the Company under, this Agreement, and the authorization, issuance and
delivery of all of the Shares being sold under this Agreement has been taken or
will be taken prior to the Initial Closing. This Agreement is a valid and
binding obligation of the Company enforceable in accordance with its terms,
subject, as to enforcement of remedies, to applicable bankruptcy, insolvency,
moratorium, reorganization and similar laws affecting creditors' rights
generally and to general equitable principles. The Shares are not subject to any
preemptive rights or rights of first refusal. All consents, approvals and
authorizations of, and registrations, qualifications and filings with, any
federal or state governmental agency, authority or body, or any third party,
required in connection with the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
obtained or will be obtained prior to the Initial Closing.

                  4.5. Valid Issuance of Stock.
                           (a) The Shares, when issued, sold and delivered in
accordance with the terms of this Agreement, will be duly and validly issued,
fully paid and non assessable.

                           (b) The outstanding shares of the capital stock of
the Company are duly and validly issued, fully paid and non assessable, and such
shares of such capital stock, and all outstanding stock, options and other
securities of the Company have been issued in full compliance with the
registration and prospectus delivery requirements of the Securities Act of 1933,
as amended (the "Act"), and the registration and qualification requirements of
all applicable state securities laws, or in compliance with applicable
exemptions therefrom, and all other provisions of applicable federal and state
securities laws, including, without limitation, anti-fraud provisions.

                  4.6. Liabilities. Except as shown on the Financial Statements,
the Company has no material indebtedness for borrowed money that the Company has
directly or indirectly created, incurred, assumed, or guaranteed, or with
respect to which the Company has otherwise become directly or indirectly liable.

                  4.7. Title to Properties and Assets. The Company has good and
marketable title to, or rights to use, its properties and assets held in each
case subject to no mortgage, pledge, lien, encumbrance, security interest or
charge of any kind, except for liens in favor of MiniMed or disclosed in the
Financial Statements.

                  4.8. Status of Proprietary Assets.

                           (a) Ownership. To the knowledge of the Company, the
Company has full title and ownership of, or has license to, all Proprietary
Assets necessary to enable it to carry on its business as now conducted and as
presently proposed to be conducted without any conflict with or infringement of
the rights of others. To the knowledge of the Company, no third party has any
ownership right, title, interest, claim in or lien on any of the Company's
Proprietary Assets and the Company has taken, and in the future the Company will
use its commercially reasonable efforts to take, all steps reasonably necessary
to preserve its legal rights in, and the secrecy of, all its Proprietary Assets,
except those for which disclosure is required for legitimate business or legal
reasons.

                           (b) No Infringement. To the Company's knowledge, the
Company has not violated or infringed, and is not currently violating or
infringing any Proprietary Asset of any other person or entity. The Company has
not received any communications alleging that the Company (or any of its
employees or consultants) has violated or infringed or, by conducting its
business as proposed, would violate or infringe, any Proprietary Asset of any
other person or entity.

                  4.9. Litigation. There is no action, suit, proceeding, claim,
arbitration or investigation ("Action") pending (or, to the Company's knowledge,
currently threatened) against the Company, its activities, properties or assets
or, to the Company's knowledge, against any officer, director or employee of the
Company in connection with such officer's, director's or employee's relationship
with, or actions taken on behalf of the Company. To the Company's knowledge,
there is no factual or legal basis for any

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such Action that might result, individually or in the aggregate, in any Material
Adverse Effect. The Company is not a party to or subject to the provisions of
any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality and there is no Action by the Company currently
pending or which the Company intends to initiate.

                  4.10. Governmental Consents. All consents, approvals, orders,
authorizations or registrations, qualifications, designations, declarations or
filings with any federal, state or local governmental authority on the part of
the Company required in connection with the consummation of the transactions
contemplated herein shall have been obtained prior to and be effective as of the
Closing. Based in part on the representations of MiniMed set forth in Section 5
below, the offer, sale and issuance of the Shares in conformity with the terms
of this Agreement are exempt from the registration and prospectus delivery
requirements of the Act.

                  4.11. Compliance with Other Instruments. The Company is not
in, nor shall the conduct of its business as proposed to be conducted result in,
any violation, breach or default of any term of the Company's Certificate of
Incorporation or the Company's bylaws (the "Bylaws") or in any material respect
of any term or provision of any mortgage, indenture, contract, agreement or
instrument to which the Company is a party or by which it may be bound, (the
"Company Contracts") or of any provision of any foreign or domestic state or
federal judgment, decree, order, statute, rule or regulation applicable to or
binding upon the Company. The execution, delivery and performance of and
compliance with this Agreement and the consummation of the transactions
contemplated hereby will not result in any such violation, breach or default, or
be in conflict with or constitute, with or without the passage of time or the
giving of notice or both, either a default under the Company's Certificate of
Incorporation, Bylaws or the Company Contracts or, to the Company's knowledge, a
violation of any statutes, laws, regulations or orders, or an event which
results in the creation of any lien, charge or encumbrance upon any asset of the
Company.

                  4.12. Disclosure. No representation or warranty by the Company
in this Agreement or in any statement or certificate signed by any officer of
the Company furnished or to be furnished to MiniMed pursuant to this Agreement
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances in which
they are made, not misleading.

                  4.13. Financial Statements. The Company has provided MiniMed
with true and correct copies of an audited balance sheet of the Company dated
December 31, 1999, and an audited income statement and statement of changes in
cash flows of the Company for its fiscal year ended December 31, 1999; and an
unaudited balance sheet of the Company dated September 29, 2000 (the "Balance
Sheet Date"), an unaudited income statement of the Company for the period ended
September 29, 2000 (all such financial statements being collectively referred to
herein as the "Financial Statements"). Except as otherwise disclosed in writing
to MiniMed, such Financial Statements (a) are in accordance with the books and
records of the Company, (b) are true, correct and complete and present fairly
the financial condition of the Company at the date or dates therein indicated
and the results of operations for the period or periods therein specified, and
(c) have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as to the unaudited financial
statements, for the omission of notes thereto and normal year-end audit
adjustments. Specifically, but not by way of limitation, the respective balance
sheets of the Financial Statements disclose all of the Company's material debts,
liabilities and obligations of any nature, whether due or to become due, as of
their respective dates (including, without limitation, absolute liabilities,
accrued liabilities, and known contingent liabilities) to the extent such debts,
liabilities and obligations are required to be disclosed in accordance with
generally accepted accounting principles. The Company has good and marketable
title to all assets set forth on the balance sheets of the Financial Statements,
except for such assets as have been spent, sold or transferred in the ordinary
course of business since their respective dates.

                  4.14. Certain Actions. Since the Balance Sheet Date, the
Company has not: (a) declared or paid any dividends, or authorized or made any
distribution upon or with respect to any class or series of its capital stock;
(b) incurred any indebtedness for money borrowed individually in excess of five
hundred thousand dollars ($500,000) or in excess of one million dollars
($1,000,000) in the aggregate; (c) made any loans or advances to any person,
other than ordinary advances for travel expenses; or (d) sold, exchanged or
otherwise disposed of any material assets or rights other than in the ordinary
course of its business, other than in "MiniMed Transactions" as defined below.
"MiniMed Transactions" shall mean any transactions between the Company and
MiniMed, including the return by MiniMed, in January and February 2001, of
approximately $1.6 million of products to the Company for examination and rework
or replacement (which is expected to be completed in March or April 2001).

                  4.15. Activities Since Balance Sheet Date. Since the Balance
Sheet Date (and excluding any MiniMed Transactions), there has not been:

                  (a)      any damage, destruction or loss, whether or not
                           covered by insurance, which has had, or may be
                           expected to have, a Material Adverse Effect;

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                  (b)      any waiver by the Company of a valuable right or of a
                           material debt owed to it; or

                  (c)      to the Company's knowledge, any other event or
                           condition of any character which has had, or is
                           likely to have, a Material Adverse Effect.

                  4.16 Exempt Offering. Based in part upon MiniMed's
representations in Section 5, the offer and sale of the Shares pursuant to this
Agreement are exempt from the registration requirements of Section 5 of the Act
by virtue of, among other things, Section 4(2) thereof and Rule 506 thereunder,
from the qualification requirements of the California Corporate Securities Law
of 1968, as amended, by virtue of, among other things, Section 25102(f) thereof,
and from the registration or qualification requirements of any other applicable
state securities laws.

         5. REPRESENTATIONS AND WARRANTIES OF MINIMED. MiniMed represents and
warrants to the Company as follows:

                  5.1. Due Authorization; Consents. All corporate action on the
part of MiniMed, its officers, directors and shareholders necessary for the
authorization, execution and delivery of, and the performance of all obligations
of MiniMed under, this Agreement has been taken or will be taken prior to the
Initial Closing. This Agreement is a valid and binding obligation of MiniMed
enforceable in accordance with its terms, subject, as to enforcement of
remedies, to applicable bankruptcy, insolvency, moratorium, reorganization and
similar laws affecting creditors' rights generally and to general equitable
principles. All consents, approvals and authorizations of, and registrations,
qualifications and filings with, any federal or state governmental agency,
authority or body, or any third party (with the possible exception of the Lender
Consents), required in connection with the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby
have been obtained or will be obtained prior to the Initial Closing.

                  5.2. Investigation; Economic Risk. MiniMed acknowledges that
it has a pre-existing business relationship with the Company, and has had an
opportunity to discuss the business, affairs and current prospects of the
Company with its officers. MiniMed further acknowledges having had access to
information about the Company that it has requested. MiniMed acknowledges that
it is able to fend for itself in the transactions contemplated by this Agreement
and has the ability to bear the economic risks of its investment pursuant to
this Agreement.

                  5.3. Purchase for Own Account. The Shares will be acquired for
its own account, not as a nominee or agent, and not with a view to or in
connection with the sale or distribution of any part thereof in violation of the
Act.

                  5.4. Exempt from Registration; Restricted Securities. MiniMed
understands that the Shares will not be registered under the Act, on the ground
that the sale provided for in this Agreement is exempt from registration under
the Act, and that the reliance of the Company on such exemption is predicated in
part on MiniMed's representations set forth in this Agreement. MiniMed
understands that the Shares being purchased hereunder are restricted securities
within the meaning of Rule 144 under the Act; that the Shares are not registered
and must be held indefinitely unless they are subsequently registered or an
exemption from such registration is available.

                  5.5. Restrictive Legends. It is understood that each
certificate representing (a) the Shares, and (b) any other securities issued in
respect of the foregoing upon any stock split, stock dividend, recapitalization,
merger or similar event shall be stamped or otherwise imprinted with a legend
substantially in the following form:

         THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES
         LAWS OF ANY STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
         TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
         AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
         PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE
         AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
         INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE
         SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
         REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
         TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
         STATE SECURITIES LAWS.

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                  5.6 Removal of Restrictive Legend. The legend set forth above
shall be removed by the Company from any certificate evidencing Shares upon
delivery to the Company of an opinion by counsel, reasonably satisfactory to the
Company, that a registration statement under the Act is at that time in effect
with respect to the legended security or that such security can be freely
transferred in a public sale without such a registration statement being in
effect and that such transfer will not jeopardize the exemption or exemptions
from registration pursuant to which the Company issued the Shares.

         6. COVENANTS OF THE COMPANY. The Company covenants to MiniMed as
follows:

                  6.1 Use of Proceeds. The Company will use the proceeds from
the sale of the Shares for working capital and other general corporate purposes.

                  6.2 Inspection Rights. MiniMed shall have the right to review
all books and records, reports, accounts and other financial documents of the
Company as it may reasonably request and to copy the same and to make excerpts
therefrom, all at such reasonable times and as MiniMed may reasonably request,
upon prior written notice to the Company, so long as such review and copying
does not unreasonably interfere with the business of the Company and MiniMed
agrees to keep confidential, and not disclose, except as may be required by law
or court order, all information obtained during such review of a confidential or
proprietary nature (and not otherwise known to MiniMed through other sources or
publicly known).

                  6.3. Information Rights. The Company shall deliver to MiniMed
(a) annual financial statements as soon as available (and, in any event, within
150 days after the end of each fiscal year), which financial statements may be
unaudited unless the Company otherwise has caused its financial statements to be
audited, and (b) unaudited quarterly financial statements within 45 days of the
end of each fiscal quarter.

         7. CONDITIONS TO MINIMED'S OBLIGATIONS AT THE CLOSINGS. The obligation
of MiniMed to purchase the Shares at the Closings is subject to the fulfillment
(or waiver by MiniMed) on or prior to the Closings, of the following conditions:

                  7.1. Representations and Warranties Correct. The
representations and warranties made by the Company in Section 4 hereof shall be
true and correct when made, and shall be true and correct as of the date of the
Initial Closing with the same force and effect as if they had been made on and
as of such date, subject to any changes contemplated by this Agreement.

                  7.2. Performance of Obligations. The Company shall have
performed and complied with all agreements, obligations and conditions contained
in this Agreement that are required to be performed or complied with by it on or
before the Initial Closing and shall have obtained all approvals, consents and
qualifications necessary to complete the purchase and sale described herein.

                  7.3. Compliance Certificate. At the Initial Closing, the
Company shall deliver to MiniMed a certificate, dated the date of the Initial
Closing, signed by the Company's President certifying that the conditions
specified in Sections 7.1 and 7.2 have been fulfilled.

                  7.4. Securities Laws. The offer and sale of the Shares to
MiniMed pursuant to this Agreement shall be exempt from the registration
requirements of the Act and the registration and/or qualification requirements
of all applicable state securities laws.

                  7.5. Opinion of Company's Counsel. MiniMed shall have received
from counsel to the Company an opinion addressed to MiniMed, dated the date of
the Initial Closing, in form and substance reasonably acceptable to MiniMed.

                  7.6 Lender Consents. With respect to the Second Closing only,
MiniMed shall have received the Lender Consents.

         8. CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSING. The obligations
of the Company under this Agreement are subject to the fulfillment (or waiver by
the Company) on or prior to the Closings of the following conditions:

                  8.1. Representations and Warranties Correct. The
representations and warranties made by MiniMed in Section 5 hereof shall be true
and correct when made, and shall be true and correct as of the date of the
Initial Closing with the same force and effect as if they had been made on and
as of such date, subject to any changes contemplated by this Agreement.

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                  8.2. Payment of Purchase Price. MiniMed shall have delivered
to the Company the purchase price for the shares being purchased in accordance
with the provisions of Section 3.

                  8.3. Securities Exemptions. The offer and sale of the Shares
to MiniMed pursuant to this Agreement shall be exempt from the registration
requirements of the Act, and the registration and/or qualification requirements
of all applicable state securities laws.

         9. MISCELLANEOUS.

                  9.1. Governing Law. This Agreement shall be governed in all
respects by the laws of the state of California without regard to provisions
regarding choice of laws.

                  9.2. Survival. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by any party hereto
and the closing of the transactions contemplated hereby.

                  9.3. Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto. This Agreement and the rights and obligations therein may
not be assigned by MiniMed without the written consent of the Company except to
a parent corporation, a subsidiary or affiliate or in connection with a
consolidation or merger or sale of all or substantially all of the assets of
MiniMed. This Agreement and the rights and obligations therein may not be
assigned by the Company without the written consent of MiniMed.

                  9.4. Entire Agreement. This Agreement, the Pump Agreement (as
defined below), the Mutual Nondisclosure Agreement between the parties with an
effective date of January 2, 1996, the Glucose Sensor Option Agreement dated as
of September 1, 1998, as amended by the Amendment thereto dated as of the same
date as this Agreement (the "Glucose Sensor Agreement"), the Agreement Re
Implantable Pump Business dated as of September 1, 1998, and the other
agreements and instruments entered into pursuant to said Agreement Re
Implantable Pump Business together constitute the entire agreement between the
parties hereto pertaining to the subject matter hereof and thereof and supersede
all prior agreements, understandings, negotiations and discussions, whether oral
or written, relating to the subject matter hereof or thereof.

                  9.5. Notices. Except as may be otherwise provided herein, all
notices, requests, waivers and other communications made pursuant to this
Agreement shall be in writing and shall be conclusively deemed to have been duly
given (a) when hand delivered to the other party; (b) when received when sent by
facsimile at the address and number set forth below; (c) three business days
after deposit in the U.S. mail with first class or certified mail receipt
requested postage prepaid and addressed to the other party as set forth below;
or (d) the next business day after deposit with a national overnight delivery
service, postage prepaid, addressed to the parties as set forth below with
next-business-day delivery guaranteed, provided that the sending party receives
a confirmation of delivery from the delivery service provider.

       To MiniMed:                          To the Company:

       MiniMed Inc.                         Medical Research Group, Inc.
       18000 Devonshire Street              12744 San Fernando Road
       Northridge, CA  91325                Sylmar, CA  91342
       Attn:  General Counsel               Attn:  President
       Fax Number:  (818) 576-6228          Fax Number:  (818) 367-5149

       With copies to:                      With copies to:

       Gibson, Dunn & Crutcher LLP          Resch Polster Alpert & Berger LLP
       333 S. Grand Avenue                  10390 Santa Monica Blvd., 4th Floor
       Los Angeles, CA  90071               Los Angeles, CA  90025-5058
       Attn:  Roy J. Schmidt                Attn:  Aaron A. Grunfeld
       Fax Number:  (213) 229-7520          Fax Number:  (310) 552-3209

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Each person making a communication hereunder by facsimile shall promptly confirm
by telephone to the person to whom such communication was addressed each
communication made by it by facsimile pursuant hereto but the absence of such
confirmation shall not affect the validity of any such communication. A party
may change or supplement the addresses given above, or designate additional
addresses, for purposes of this Section 9.5 by giving the other party written
notice of the new address in the manner set forth above.

                  9.6. Other Agreements. Any default under Sections 2.1 or 2.2
of this Agreement shall constitute a default under the Pump Agreement (as
defined below) and the Glucose Sensor Option Agreement.

                  9.7. Amendments and Waivers. Any term of this Agreement may be
amended only with the written consent of the Company and MiniMed.

                  9.8. Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to the Company or to MiniMed, upon any breach or
default of any party hereto under this Agreement, shall impair any such right,
power or remedy of the Company, or MiniMed nor shall it be construed to be a
waiver of any such breach or default, or an acquiescence therein, or of any
similar breach of default thereafter occurring; nor shall any waiver of any
other breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of the Company or
MiniMed of any breach of default under this Agreement or any waiver on the part
of the Company or MiniMed of any provisions or conditions of this Agreement,
must be in writing and shall be effective only to the extent specifically set
forth in such writing. All remedies, either under this Agreement, or by law or
otherwise afforded to the Company or MiniMed shall be cumulative and not
alternative.

                  9.9. Finder's Fees. Each party (a) represents and warrants to
the other party hereto that it has retained no finder or broker in connection
with the transactions contemplated by this Agreement (except that U.S. Bancorp
Piper Jaffrey has provided financial advisory services to MiniMed and its Board
of Directors), and (b) hereby agrees to indemnify and to hold harmless the other
party hereto from and against any liability for any commission or compensation
in the nature of a finder's fee of any broker or other person or firm (and the
costs and expenses of defending against such liability or asserted liability)
for which the indemnifying party or any of its employees or representatives are
responsible.

                  9.10. Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.

                  9.11. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.

                  9.12. Severability. Should any provision of this Agreement be
determined to be illegal or unenforceable, such determination shall not affect
the remaining provisions of this Agreement.

                  9.13. Disputes and Arbitration. The dispute resolution
provisions in Section 29 of that certain Amended and Restated Implantable Pump
License and Distribution Agreement entered into by the Company and MiniMed,
dated of even date herewith (the "Pump Agreement"), are hereby expressly
incorporated herein by this reference.

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

MINIMED INC.                             MEDICAL RESEARCH GROUP, INC.

/s/ ERIC KENTOR                          /s/ RONALD LEBEL
-------------------------------------    ---------------------------------------
    Eric Kentor                              Ronald lebel
    Senior Vice President                    President

                                       8<PAGE>   1
                                                                    EXHIBIT 10.2

                               ON ASSIGNMENT, INC.

                         RESTATED 1987 STOCK OPTION PLAN
                     (As amended and restated July 11, 2000)

                                  ARTICLE ONE
                                     GENERAL

        I. PURPOSES OF THE PLAN

               A. This Restated 1987 Stock Option Plan (the "Plan") is intended
to promote the interests of On Assignment, Inc., a Delaware corporation (the
"Corporation"), by providing a method whereby eligible individuals may be
offered incentives and rewards which will encourage them to acquire a
proprietary interest, or otherwise increase their proprietary interest, in the
Corporation and continue to render services to the Corporation (or its Parent or
Subsidiary corporations). This restatement of the Plan shall become effective on
the date on which the restatement is adopted by the Board, subject to the
approval of the stockholders ("Effective Date").

               B. For purposes of the Plan, the following provisions shall be
applicable in determining the Parent and Subsidiary corporations of the
Corporation:

                    (i) Any corporation (other than the Corporation) in an
        unbroken chain of corporations ending with the Corporation shall be
        considered to be a PARENT corporation of the Corporation ("Parent"),
        provided each such corporation in the unbroken chain (other than the
        Corporation) owns, at the time of the determination, 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.

                    (ii) Each corporation (other than the Corporation) in an
        unbroken chain of corporations beginning with the Corporation shall be
        considered to be a SUBSIDIARY of the Corporation ("Subsidiary"),
        provided each such corporation (other than the last corporation) in the
        unbroken chain owns, at the time of the determination, 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.

        II. STRUCTURE OF THE PLAN

               A. Option Programs. The Plan shall be divided into two separate
components: the Discretionary Option Grant Program described in Article Two and
the Automatic Option Grant Program described in Article Three. Under the
Discretionary Option Grant Program, eligible individuals may, at the discretion
of the Plan Administrator, be granted options to purchase shares of Common Stock
in accordance with the provisions of Article Two. Under the Automatic Option
Grant Program, each eligible member of the Corporation's Board of

                                       35
<PAGE>   2

Directors (the "Board") will automatically receive an option grant to purchase
shares of Common Stock in accordance with the provisions of Article Three.

               B. General Provisions. Unless the context clearly indicates
otherwise, the provisions of Articles One and Four of the Plan shall apply to
the Discretionary Option Grant Program and the Automatic Option Grant Program
and shall accordingly govern the interests of all individuals under the Plan.

        III. ADMINISTRATION OF THE PLAN

               A. The Discretionary Option Grant Program shall be administered
by one or more committees comprised of Board members. The primary committee (the
"Primary Committee") shall be comprised of two or more non-employee Board
members and shall have sole and exclusive authority to grant stock options and
stock appreciation rights under the Discretionary Option Grant Program to
officers and employee-directors of the Corporation subject to the short-swing
profit restrictions of the Federal securities laws. Stock options may be granted
under the Discretionary Option Grant Program to all other eligible employees and
consultants by either the Primary Committee or a second committee comprised of
one or more Board members (the "Secondary Committee"). The members of the
Primary Committee and the Secondary Committee shall each serve for such period
of time as the Board may determine and shall be subject to removal by the Board
at any time.

               B. No Board member shall be eligible to serve on the Primary
Committee if such individual has, within the twelve (12)-month period
immediately preceding the date he or she is to be appointed to the Committee,
received an option grant or stock award under this Plan or any other stock plan
of the Corporation, its Parent or Subsidiary corporation, other than pursuant to
the Automatic Option Grant Program in effect under Article Three.

               C. Subject to the limited authority provided the Secondary
Committee to effect option grants in accordance with the provisions of Section
III.A of this Article One, the Primary Committee shall serve as the Plan
Administrator and shall have full power and authority (subject to the express
provisions of the Discretionary Option Grant Program) to establish such rules
and regulations as it may deem appropriate for the proper administration of such
program and to make such determinations under the program and any outstanding
option as it may deem necessary or advisable. Decisions of the Plan
Administrator shall be final and binding on all parties with an interest in the
Plan or any outstanding option under this Discretionary Option Grant Program.
Service on the Primary or Secondary Committee shall constitute service as a
Board member, and members of either Committee shall accordingly be entitled to
full indemnification and reimbursement as Board members for their service on
either Committee. No member of the Primary or Secondary Committee shall be
liable for any act or omission made in good faith with respect to the Plan or
any option granted under the Plan.

               D. Administration of the Automatic Option Grant Program shall be
self-executing in accordance with the express terms and conditions of Article
Three.

        IV. ELIGIBILITY FOR OPTION GRANTS

                                       36
<PAGE>   3

               A. The persons eligible to receive option grants under Article
Two shall be limited to the following:

                    (i) key employees (including officers and directors) of the
        Corporation (or its Parent or Subsidiary corporations) who render
        services which contribute to the success and growth of the Corporation
        (or its Parent or Subsidiary corporations) or which may reasonably be
        anticipated to contribute to the future success and growth of the
        Corporation (or its Parent or Subsidiary corporations); and

                    (ii) those consultants or independent contractors who
        provide valuable services to the Corporation (or its Parent or
        Subsidiary corporations).

                    (iii) From and after the first date on which the shares of
        the Corporation's common stock are registered under Section 12(g) of the
        Securities Exchange Act of 1934, as amended (the "IPO Effective Date"),
        non-employee members of the Board or the non-employee members of the
        board of directors of any Parent corporation shall not be eligible to
        participate in the Discretionary Option Grant Program or in any other
        stock option, stock purchase, stock bonus or other stock plan of the
        Corporation (or its Parent or Subsidiary corporations). However,
        non-employee members of the Board shall be eligible to receive automatic
        option grants pursuant to the provisions of Article Three.

               B. The Plan Administrator shall have full authority to determine
which eligible individuals are to receive option grants under the Discretionary
Option Grant Program, the number of shares to be covered by each such grant,
whether the granted option is to be an incentive stock option ("Incentive
Option") which satisfies the requirements of Section 422 of the Internal Revenue
Code or a Non-qualified option not intended to meet such requirements, the time
or times at which each such option is to become exercisable, and the maximum
term for which the option is to be outstanding.

        V. STOCK SUBJECT TO THE PLAN

               A. The stock issuable under the Plan shall be shares of the
Corporation's authorized but unissued or reacquired Common Stock. The aggregate
number of shares which may be issued under the Plan shall not exceed 10,000,000
shares, which includes an increase of 1,000,000 shares authorized by the Board
on February 13, 1997 and approved by the Corporation's stockholders at the 1997
Annual Stockholders Meeting and an increase of 2,000,000 shares authorized by
the Board on April 7, 2000 and approved by the Corporation's stockholders at the
2000 Annual Stockholders Meeting. All share numbers in this Plan reflect a stock
dividend that occurred on October 20, 1997 and April 3, 2000 and resulted in a
distribution of one share of Common Stock for each share of Common Stock. The
total number of shares issuable under the Plan shall be subject to adjustment
from time to time in accordance with the provisions of this Section V. In no
event may any one individual participating in the Plan be granted stock options
for more than 1,000,000 shares of Common Stock over the remaining term

                                       37
<PAGE>   4

of the Plan. For purposes of this limitation, any option grants made prior to
December 31, 1993 will not be taken into account.

               B. Should an option expire or terminate for any reason prior to
exercise or surrender in full the shares subject to the portion of the option
not so exercised or surrendered shall be available for subsequent option grants
under the Plan. Shares subject to any option or portion thereof canceled in
accordance with Section IV of Article Two or Section III of Article Three and
shares repurchased by the Corporation pursuant to its repurchase rights under
the Plan shall not be available for subsequent option grants under the Plan. In
addition, should the exercise price of an outstanding option under the Plan be
paid with shares of Common Stock, then the number of shares of Common Stock
available for issuance under the Plan shall be reduced by the gross number of
shares for which the option is exercised, and not by the net number of shares of
Common Stock actually issued to the option holder.

               C. In the event any change is made to the Common Stock issuable
under the Plan by reason of (a) any Corporate Transaction (as defined in Section
III of Article Two) or (b) any stock split, stock dividend, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without receipt of consideration, then unless such change
results in the termination of all outstanding options under the Plan as a result
of the Corporate Transaction, appropriate adjustments shall be made to (i) the
aggregate class and/or number of shares issuable under the Plan, (ii) the class
and/or number of shares and price per share of the Common Stock subject to each
outstanding option under the Discretionary Option Grant Program, (iii) the
number and/or class of shares per non-employee Board member for which automatic
option grants are subsequently to be made under the Automatic Option Grant
Program, and (iv) the number and/or class of shares and price per share of the
Common Stock in effect under each automatic grant outstanding under the
Automatic Option Grant Program. Such adjustments to the outstanding options are
to be effected in a manner which shall preclude the enlargement or dilution of
rights and benefits under such options. The adjustments determined by the Plan
Administrator shall be final, binding and conclusive.

                                   ARTICLE TWO
                       DISCRETIONARY OPTION GRANT PROGRAM

        I. TERMS AND CONDITIONS OF OPTIONS

               Options granted pursuant to this Article Two shall be authorized
by action of the Plan Administrator and may, at the Plan Administrator's
discretion, be either Incentive Options or Non-qualified options. Individuals
who are not Employees may only be granted Non-qualified options. The Secondary
Committee shall be authorized by the Plan Administrator to approve Incentive
Options only. Each granted option shall be evidenced by one or more instruments
in the form approved by the Plan Administrator; provided, however, that each
such instrument shall comply with and incorporate the terms and conditions
specified below. Each instrument evidencing an Incentive Option shall, in
addition, be subject to the applicable provisions of Section II of this Article
Two.

               A. Option Price.

                                       38
<PAGE>   5

               1. The option price per share shall be fixed by the Plan
Administrator, provided, however, that in no event shall the option price per
share be less than eighty-five percent (85%) of the fair market value of a share
of Common Stock on the date of the option grant.

               2. The option price shall become immediately due upon exercise of
the option and shall, subject to the provisions of Section VI of this Article
Two and the instrument evidencing the grant, be payable in one of the
alternative forms specified below:

                    (i) cash or check made payable to the Corporation's order;

                    (ii) shares of Common Stock held for the requisite period
        necessary to avoid a charge to the Corporation's earnings for financial
        reporting purposes and valued at Fair Market Value on the Exercise Date
        (as such terms are defined below); or

                    (iii) through a broker-dealer sale and remittance procedure
        pursuant to which the optionee shall provide irrevocable written
        instructions (I) to the designated broker-dealer to effect the immediate
        sale of the purchased shares and remit to the Corporation, out of the
        sale proceeds an amount equal to the aggregate option price payable for
        the purchased shares plus all applicable Federal and state income and
        employment taxes required to be withheld by the Corporation by reason of
        such purchase and (II) to the Corporation to deliver the certificates
        for the purchased shares directly to such broker-dealer.

        For purposes of this subparagraph 2, the Exercise Date shall be the
first date on which the Corporation shall have received written notice of the
exercise of the option. Except to the extent the sale and remittance procedure
is utilized in connection with the exercise of the option, payment of the option
price for the purchased shares must accompany such notice.

               3. The Fair Market Value of a share of Common Stock on any
relevant date under subparagraph 1 or 2 above (and for all other valuation
purposes under the Plan) shall be determined in accordance with the following
provisions:

               - If the Common Stock is not at the time listed or admitted to
        trading on any stock exchange but is traded on the Nasdaq National
        Market System, the fair market value shall be the closing price of one
        share of Common Stock on the date in question, as such price is reported
        by the National Association of Securities Dealers through its Nasdaq
        system or any successor system. If there is no closing price for the
        Common Stock on the date in question, then the closing price on the last
        preceding date for which such quotation exists shall be determinative of
        fair market value.

               - If the Common Stock is at the time listed or admitted to
        trading on any national stock exchange, then the Fair Market Value shall
        be the

                                       39
<PAGE>   6

        closing selling price per share of Common Stock on the date in question
        on the stock exchange determined by the Plan Administrator to be the
        primary market for the Common Stock, as such price is officially quoted
        in the composite tape of transactions on such exchange. If there is no
        reported sale of Common Stock on such exchange on the date in question,
        then the Fair Market Value shall be the closing selling price on the
        exchange on the last preceding date for which such quotation exists.

               - If the Common Stock is at the time neither listed nor admitted
        to trading on any stock exchange nor traded on the Nasdaq National
        Market System, or if the Plan Administrator determines that the value
        determined pursuant to the preceding paragraphs does not reflect Fair
        Market Value, then the Fair Market Value shall be determined by the Plan
        Administrator after taking into account such factors as the Plan
        Administrator shall deem appropriate.

        B. Term and Exercise of Options. Each option granted under this Article
Two shall be exercisable at such time or times, during such period, and for such
number of shares as shall be determined by the Plan Administrator and set forth
in the stock option agreement evidencing such option; provided, however, that no
such option shall have a term in excess of ten (10) years from the grant date.
During the lifetime of the optionee, the option shall be exercisable only by the
optionee and shall not be assignable or transferable by the optionee otherwise
than by will or by the laws of descent and distribution.

        C. Termination of Service.

               1. Except to the extent otherwise provided pursuant to Section
VII of this Article Two, the following provisions shall govern the exercise
period applicable to any options held by the optionee at the time of cessation
of Service or death.

               - Should the optionee cease to remain in Service for any reason
        other than death or permanent disability, then the period for which each
        outstanding option held by such optionee is to remain exercisable shall
        be limited to the three (3)-month period following the date of such
        cessation of Service.

               - In the event such Service terminates by reason of permanent
        disability (as defined in Section 22(e)(3) of the Internal Revenue
        Code), then the period for which each outstanding option held by the
        optionee is to remain exercisable shall be limited to the twelve
        (12)-month period following the date of such cessation of Service.

               - Should the optionee die while in Service or during the three
        (3)-month period following his or her cessation of Service, then the
        period for which each of his or her outstanding options is to remain
        exercisable shall be limited to the three (3)-year period following the
        date of the optionee's cessation of Service. During such limited period,
        the option may be exercised by the personal representative of the
        optionee's estate or by the person or persons to whom the

                                       40
<PAGE>   7

        option is transferred pursuant to the optionee's will or in accordance
        with the laws of descent and distribution.

               - Under no circumstances, however, shall any such option be
        exercisable after the specified expiration date of the option term.

               - Each such option shall, during such limited exercise period, be
        exercisable for any or all of the shares for which the option is
        exercisable on the date of the optionee's cessation of Service. Upon the
        expiration of such limited exercise period or (if earlier) upon the
        expiration of the option term, the option shall terminate and cease to
        be exercisable.

               2. The Plan Administrator shall have complete discretion,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to permit one or more options held by the optionee
under this Article Two to be exercised, during the limited period of
exercisability provided under subparagraph 1 above, not only with respect to the
number of shares for which each such option is exercisable at the time of the
optionee's cessation of Service but also with respect to one or more subsequent
installments of purchasable shares for which the option would otherwise have
become exercisable had such cessation of Service not occurred.

               3. For purposes of the foregoing provisions of this paragraph I.C
(and all other provisions of the Plan), unless it is evidenced otherwise in the
specific option agreement evidencing the option grant and/or the purchase
agreement evidencing the purchased optioned shares, the optionee shall be deemed
to remain in SERVICE for so long as such individual renders services on a
periodic basis to the Corporation or any Parent or Subsidiary corporation in the
capacity of an Employee, a non-employee member of the Board or an independent
consultant or advisor. The optionee shall be considered to be an EMPLOYEE for so
long as such individual remains in the employ of the Corporation or one or more
of its Parent or Subsidiary corporations subject to the control and direction of
the employer entity not only as to the work to be performed but also as to the
manner and method of performance.

        D. Stockholder Rights. An optionee shall have none of the rights of a
stockholder with respect to any shares covered by the option until such
individual shall have exercised the option, paid the exercise price for the
purchased shares and been issued a stock certificate for such shares.

        E. Repurchase Rights. The shares of Common Stock acquired upon the
exercise of options granted under this Article Two may be subject to one or more
repurchase rights of the Corporation in accordance with the following
provisions:

               1. The Plan Administrator may in its discretion determine that it
shall be a term and condition of one or more options exercised under this
Article Two that the Corporation (or its assignees) shall have the right,
exercisable upon the optionee's cessation of Service, to repurchase at the
option price all or (at the discretion of the Corporation and with the consent
of the optionee) any portion of the shares of Common Stock previously acquired
by the optionee upon the exercise of such option. Any such repurchase right
shall be exercisable by the

                                       41
<PAGE>   8

Corporation (or its assignees) upon such terms and conditions (including the
establishment of the appropriate vesting schedule and other provision for the
expiration of such right in one or more installments over the optionee's period
of Service) as the Plan Administrator may specify in the instrument evidencing
such right.

                    2. All of the Corporation's outstanding repurchase rights
shall automatically terminate, and all shares subject to such terminated rights
shall immediately vest in full, upon the occurrence of any Corporate Transaction
under Section III of this Article Two; provided, however, that no such
termination of the repurchase rights or immediate vesting of the shares shall
occur if (and to the extent): (i) the Corporation's outstanding repurchase
rights are to be assigned to the successor corporation (or Parent thereof) in
connection with the Corporate Transaction or (ii) such termination of repurchase
rights and acceleration of vesting are precluded by other limitations imposed by
the Plan Administrator at the time of the option grant.

        II. INCENTIVE OPTIONS

               The terms and conditions specified below shall be applicable to
all Incentive Options granted under this Article Two. Incentive Options may only
be granted to individuals who are Employees. Options which are specifically
designated as "Non-qualified" options when issued under the Plan shall not be
subject to such terms and conditions.

               A. Option Price. The option price per share of the Common Stock
subject to an Incentive Option shall in no event be less than one hundred
percent (100%) of the Fair Market Value of a share of Common Stock on the date
of grant.

               B. Dollar Limitation. The aggregate Fair Market Value (determined
as of the respective date or dates of grant) of the Common Stock for which one
or more options granted to any Employee under this Plan (or any other option
plan of the Corporation or its Parent or Subsidiary corporations) may for the
first time become exercisable as Incentive Options under the Federal tax laws
during any one calendar year shall not exceed the sum of One Hundred Thousand
Dollars ($100,000). To the extent the Employee holds two or more such options
which become exercisable for the first time in the same calendar year, the
foregoing limitation on the exercisability thereof as Incentive Options under
the Federal tax laws shall be applied on the basis of the order in which such
options are granted.

               C. 10% Stockholder. If any individual to whom an Incentive Option
is to be granted pursuant to the provisions of the Plan is on the date of grant
the owner of stock (as determined under Section 424(d) of the Internal Revenue
Code) possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Corporation or any one of its Parent or
Subsidiary corporations (such person to be herein referred to as a 10%
Stockholder), then the option price per share shall not be less than one hundred
and ten percent (110%) of the Fair Market Value per share of Common Stock on the
date of grant and the option term shall not exceed five (5) years measured from
the grant date.

               Except as modified by the preceding provisions of this Section
II, all the provisions of the Plan shall be applicable to the Incentive Options
granted hereunder.

                                       42
<PAGE>   9

        III. CORPORATE TRANSACTIONS

               A. In the event of any of the following stockholder-approved
transactions (a "Corporate Transaction"):

                    (i) a merger or consolidation in which the Corporation is
        not the surviving entity, except for a transaction the principal purpose
        of which is to change the state of the Corporation's incorporation;

                    (ii) the sale, transfer or other disposition of all or
        substantially all of the assets of the Corporation; or

                    (iii) any reverse merger in which the Corporation is the
        surviving entity but in which fifty percent (50%) or more of the
        Corporation's outstanding voting stock is transferred to holders
        different from those who held the stock immediately prior to such
        merger,

then each option outstanding under this Article Two shall be automatically
accelerated so that each such option shall, immediately prior to the specified
effective date for such Corporate Transaction, become fully exercisable with
respect to the total number of shares of Common Stock purchasable under such
option and may be exercised for all or any portion of such shares. However, no
option shall be so accelerated if and to the extent (i) such option is to be
assumed by the successor corporation or Parent thereof or to be replaced with a
comparable option to purchase shares of the capital stock of such successor
corporation or Parent thereof or (ii) such acceleration is subject to other
applicable limitations imposed by the Plan Administrator in the relevant option
agreement.

               B. In connection with any such Corporate Transaction, the
exercisability as an incentive stock option under the Federal tax laws of any
accelerated options under this Article Two shall remain subject to the
applicable dollar limitation of paragraph II.B of this Article Two.

               C. The grant of options under this Article Two shall in no way
affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.

               D. Upon the consummation of the Corporate Transaction, all
outstanding options under this Article Two shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation or its
Parent company.

        IV. SURRENDER OF OPTIONS FOR CASH OR STOCK

               A. Provided and only if the Plan Administrator determines in its
discretion to implement the stock appreciation right provisions of this Section
V, one or more optionees may be granted the right, exercisable upon such terms
and conditions as the Plan Administrator may establish at the time of the option
grant or at any time thereafter, to surrender all or part of an unexercised
option under this Article Two in exchange for a distribution from the
Corporation, payable in cash or in shares of Common Stock, equal in amount to
the excess of (i) the Fair

                                       43
<PAGE>   10

Market Value (at date of surrender) of the number of shares in which the
optionee is at the time vested under the surrendered option or portion thereof
over (ii) the aggregate option price payable for such vested shares.

               B. No surrender of an option shall be effective hereunder unless
it is approved by the Plan Administrator. If the surrender is so approved, then
the distribution to which the optionee shall accordingly become entitled under
this Section V may be made in shares of Common Stock valued at Fair Market Value
at date of surrender, in cash, or partly in shares and partly in cash, as the
Plan Administrator shall in its sole discretion deem appropriate.

               C. If the surrender of an option is rejected by the Plan
Administrator, then the optionee shall retain whatever rights the optionee had
under the surrendered option (or surrendered portion thereof) on the date of
surrender and may exercise such rights at any time prior to the later of (i)
five (5) business days after the receipt of the rejection notice or (ii) the
last day on which the option is otherwise exercisable in accordance with the
terms of the instrument evidencing such option, but in no event may such rights
be exercised at any time after ten (10) years (or five (5) years in the case of
a 10% Stockholder) after the date of the option grant.

               D. One or more officers of the Corporation subject to the
short-swing profit restrictions of the Federal securities laws may, in the Plan
Administrator's sole discretion, be granted limited stock appreciation rights in
tandem with their outstanding options under this Article Two. Each outstanding
option with such a limited stock appreciation right in effect for at least six
(6) months shall automatically be canceled, to the extent exercisable for vested
shares of Common Stock, upon the occurrence of a Hostile Take-Over, and the
optionee shall in return be entitled to a cash distribution from the Corporation
in an amount equal to the excess of (i) the Take-Over Price of the number of
shares in which the optionee is at the time vested under the canceled option or
canceled portion over (ii) the aggregate option price payable for such vested
shares. Such cash distribution shall be made within five (5) days following the
consummation of the Hostile Take-Over. Neither the approval of the Plan
Administrator nor the consent of the Board shall be required in connection with
such option cancellation and cash distribution. The balance (if any) of each
such option shall continue in full force and effect in accordance with the terms
and conditions of the instrument evidencing such grant.

               E. For purposes of paragraph IV.D, the following definitions
shall be in effect:

                    A Hostile Take-Over shall be deemed to occur in the event
        (i) any person or related group of persons (other than the Corporation
        or a person that directly or indirectly controls, is controlled by, or
        is under common control with, the Corporation) directly or indirectly
        acquires beneficial ownership (within the meaning of Rule 13d-3 of the
        Securities and Exchange Act of 1934, as amended (the "1934 Act")) of
        securities possessing more than fifty percent (50%) of the total
        combined voting power of the Corporation's outstanding securities
        pursuant to a tender or exchange offer made directly to the
        Corporation's stockholders which the Board does not recommend such
        stockholders to accept and (ii) more than fifty percent (50%) of the
        securities so acquired in such tender or exchange offer are

                                       44
<PAGE>   11

        accepted from holders other than Corporation officers and directors
        participating in the Plan.

                    The Take-Over Price per share shall be deemed to be equal to
        the greater of (a) the Fair Market Value per share on the date of
        cancellation, as determined pursuant to the valuation provisions of
        paragraph I.A.3 of this Article Two, or (b) the highest reported price
        per share paid in effecting such Hostile Take-Over. However, if the
        canceled option is an Incentive Option, the Take-Over Price shall not
        exceed the clause (a) price per share.

               F. The shares of Common Stock subject to any option surrendered
or canceled for an appreciation distribution pursuant to this Section IV shall
NOT be available for subsequent option grants under the Plan.

        V. LOANS OR INSTALLMENT PAYMENTS

               A. The Plan Administrator may assist any optionee (including any
officer or director) in the exercise of one or more options under this Article
Two by (a) authorizing the extension of a loan to such optionee from the
Corporation or (b) permitting the optionee to pay the option price for the
purchased Common Stock in installments over a period of years. The terms of any
loan or installment method of payment (including the interest rate and terms of
repayment) will be established by the Plan Administrator in its sole discretion.
Loans and installment payments may be granted without security or collateral
(other than loans to optionees who are consultants or independent contractors,
which must be adequately secured by collateral other than the purchased shares),
but the maximum credit available to the optionee shall not exceed the sum of (i)
the aggregate option price payable for the purchased shares (less the par value)
plus (ii) any Federal and state income and employment tax liability incurred by
the optionee in connection with the exercise of the option.

               B. The Plan Administrator may, in its absolute discretion,
determine that one or more loans extended under Section V.A above shall be
subject to forgiveness by the Corporation in whole or in part upon such terms
and conditions as the Plan Administrator in its discretion deems appropriate.

        VI. EXTENSION OF EXERCISE PERIOD

               The Plan Administrator shall have full power and authority,
exercisable in its sole discretion to extend, either at the time when the option
is granted or at any time while the option remains outstanding, the period of
time for which any option granted under this Article Two is to remain
exercisable following the optionee's cessation of Service from the period set
forth in the option agreement to such greater period of time as the Plan
Administrator shall deem appropriate; provided, however, that in no event shall
such option be exercisable after the specified expiration date of the option
term.

                                       45
<PAGE>   12

                                  ARTICLE THREE
                         AUTOMATIC OPTION GRANT PROGRAM

        I. ELIGIBILITY

               The individuals eligible to receive automatic option grants
pursuant to the provisions of this Article Three shall be limited to the
following:

                    (1) each individual who is serving as a non-employee member
        of the Board on the IPO Effective Date; and

                    (2) each individual who is first appointed or elected as a
        non-employee Board member at any time after the IPO Effective Date.

        II. TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS

               A. Grant Dates. Option grants will be made under this Article
Three on the dates specified below:

                    (i) Each individual who has not previously been an Employee,
        and who first becomes a non-employee Board member at any time after the
        IPO Effective Date, whether through election at an Annual Stockholders
        Meeting or through appointment by the Board, shall automatically be
        granted, at the time of such initial election or appointment, a
        Non-qualified stock option to purchase 18,000 shares of Common Stock.

                    (ii) Commencing with the 1993 Annual Stockholders Meeting
        and each subsequent Annual Stockholders Meeting until 1996, each
        individual who is at the time serving as a non-employee member of the
        Board shall receive a grant of a Non-qualified option to purchase 3,000
        shares of Common Stock, provided such individual has been a member of
        the Board for at least six (6) months.

                    (iii) Commencing with the 1996 Annual Stockholders Meeting
        and each subsequent Annual Stockholders Meeting until 1999, each
        individual who is at the time serving as a non-employee member of the
        Board shall receive a grant of a Non-qualified option to purchase 6,000
        shares of Common Stock, instead of the 3,000 shares under Section
        II.A(ii) above.

                    (iv) Commencing with the 1999 Annual Stockholders Meeting,
        each individual who is at the time serving as a non-employee member of
        the Board shall receive a grant of a Non-qualified option to purchase
        12,000 shares of Common Stock, instead of the 6,000 shares under Section
        II.A(iii) above; provided, however, that a non-employee member of the
        Board shall only receive this 12,000-share option grant at the 1999
        Annual Stockholders Meeting and will receive no grant at the 2000 Annual
        Stockholders Meeting.

                                       46
<PAGE>   13

                    (v) Commencing with the 2000 Annual Stockholders Meeting,
        each individual who is at the time serving as a non-employee member of
        the Board shall receive a grant of a Non-qualified option to purchase
        9,000 shares of Common Stock, instead of the 6,000 shares under Section
        II.A(iii) above

               The 18,000-share limitation, 3,000-share limitation, 6,000-share
limitation and 12,000-share limitation on the automatic option grant to be made
to each non-employee Board member shall be subject to periodic adjustment
pursuant to the applicable provisions of Section V.C of Article One.

               B. Exercise Price. The exercise price per share shall be equal to
one hundred percent (100%) of the Fair Market Value per share of Common Stock on
the automatic grant date.

               C. Payment.

                    The exercise price shall be payable in one of the
alternative forms specified below:

                         (i) cash or check made payable to the Corporation's
        order;

                         (ii) shares of Common Stock held for the requisite
        period necessary to avoid a charge to the Corporation's earnings for
        financial reporting purposes and valued at Fair Market Value on the
        Exercise Date (as such terms are defined in paragraph I.A of Article
        Two); or

                         (iii) through a broker-dealer sale and remittance
        procedure pursuant to which the optionee shall provide irrevocable
        written instructions (I) to the designated broker-dealer to effect the
        immediate sale of the purchased shares and remit to the Corporation, out
        of the sale proceeds an amount equal to the aggregate option price
        payable for the purchased shares plus all applicable Federal and state
        income and employment taxes required to be withheld by the Corporation
        by reason of such purchase and (II) to the Corporation to deliver the
        certificates for the purchased shares directly to such broker-dealer.

               Except to the extent the sale and remittance procedure specified
above is utilized for the exercise of the option, payment of the exercise price
for the purchased shares must accompany the written notice of option exercise.

               D. Option Term. Each automatic grant under this Article Three
shall have a maximum term of ten (10) years measured from the automatic grant
date.

               E. Exercisability. Each annual automatic grant for 3,000 shares
shall be immediately exercisable in full for the option shares. Each annual
automatic grant for 6,000 shares shall be immediately exercisable in full for
the option shares, provided that the optionee

                                       47
<PAGE>   14

has been a member of the Board for six (6) months on the annual automatic grant
date; if the optionee has not been a member of the Board for six (6) months on
the annual automatic grant date, such automatic option grant shall become
exercisable in full for the option shares on the date six (6) months following
the annual automatic grant date. Each annual automatic grant for 12,000 shares
shall be immediately exercisable in full for the option shares. Each initial
automatic grant for 18,000 shares shall become exercisable for the option shares
in three (3) installments as follows:

                         (i) The option shall become exercisable for one-third
        (1/3) of the option shares upon completion of twelve (12) months of
        Board service measured from the automatic grant date.

                         (ii) The option shall become exercisable for an
        additional one-third (1/3) of the option shares upon the completion of
        twenty-four (24) months of Board service measured from the automatic
        grant date.

                         (iii) The option shall become exercisable for the final
        one-third (1/3) of the option shares upon the completion of thirty-six
        (36) months of Board service measured from the automatic grant date.

               As the option becomes exercisable for one or more installments of
the option shares, the installments shall accumulate, and the option shall
remain exercisable for the accumulated installments until the expiration or
sooner termination of the option term. The option, however, shall not become
exercisable for any additional option shares following the optionee's cessation
of Board service, except to the extent the option is otherwise to become
exercisable in accordance with the provisions of Section III of this Article
Three.

               F. Non-Transferability. During the lifetime of the optionee, the
option shall be exercisable only by the optionee and shall not be assignable or
transferable by the optionee otherwise than by will or by the laws of descent
and distribution following the optionee's death.

               G. Effect of Termination of Board Membership.

                    1. Should the optionee cease to be a Board member for any
reason (other than death) while holding an automatic option grant under this
Article Three, then such optionee shall have a six (6)-month period following
the date of such cessation of Board membership in which to exercise such option
for any or all of the shares of Common Stock for which the option is exercisable
at the time the optionee ceases service as a Board member.

                    2. Should the optionee die while serving as a Board member
or during the six (6)-month period following his or her cessation of Board
service, then the option may subsequently be exercised, for any or all of the
shares of Common Stock for which the option is exercisable at the time of the
optionee's cessation of Board membership, by the personal representative of the
optionee's estate or by the person or persons to whom the option is transferred
pursuant to the optionee's will or in accordance with the laws of descent and
distribution. Any such exercise must, however, occur within three (3) years
after the date of the optionee's cessation of Board service.

                                       48
<PAGE>   15

                    3. In no event shall any automatic grant under this Article
Three remain exercisable after the specified expiration date of the ten
(10)-year option term. Upon the expiration of the applicable exercise period in
accordance with subparagraphs 1 and 2 above or (if earlier) upon the expiration
of the ten (10)-year option term, the automatic grant shall terminate and cease
to be exercisable.

               H. Stockholder Rights. The holder of an automatic option grant
under this Article Three shall have no stockholder rights with respect to any
shares covered by such option until such individual shall have exercised the
option, paid the exercise price for the purchased shares and been issued a stock
certificate for such shares.

               I. Remaining Terms. The remaining terms and conditions of each
automatic option grant shall be as set forth in the prototype Non-Employee
Director Automatic Grant Agreement.

        III. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER

               A. In the event of any Corporate Transaction (as such term is
defined in Section III of Article Two), then the exercisability of each
automatic option grant outstanding under this Article Three shall automatically
accelerate so that each such option shall, immediately prior to the specified
effective date for the Corporate Transaction, become fully exercisable with
respect to the total number of shares of Common Stock at the time subject to
such option and may be exercised for all or any portion of such shares. Upon the
consummation of the Corporate Transaction, all automatic option grants under
this Article Three shall terminate and cease to be outstanding.

               B. In connection with any Change in Control of the Corporation,
the exercisability of each automatic option grant at the time outstanding under
this Article Three shall automatically accelerate so that each such option
shall, immediately prior to the specified effective date for the Change in
Control, become fully exercisable with respect to the total number of shares of
Common Stock at the time subject to such option and may be exercised for all or
any portion of such shares. For purposes of this Article Three, a Change in
Control shall be deemed to occur in the event:

                    (i) any person or related group of persons (other than the
        Corporation or a person that directly or indirectly controls, is
        controlled by, or is under common control with, the Corporation)
        directly or indirectly acquires beneficial ownership (within the meaning
        of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty
        percent (50%) of the total combined voting power of the Corporation's
        outstanding securities pursuant to a tender or exchange offer made
        directly to the Corporation's stockholders which the Board does not
        recommend such stockholders to accept; or

                    (ii) there is a change in the composition of the Board over
        a period of twenty-four (24) consecutive months or less such that a
        majority of the Board members (rounded up to the next whole number)
        cease, by reason of

                                       49
<PAGE>   16

        one or more proxy contests for the election of Board members, to be
        comprised of individuals who either (A) have been Board members
        continuously since the beginning of such period or (B) have been elected
        or nominated for election as Board members during such period by at
        least two-thirds of the Board members described in clause (A) who were
        still in office at the time such election or nomination was approved by
        the Board.

               C. Upon the occurrence of a Hostile Take-Over, each automatic
option grant which has been outstanding under this Article Three for a period of
at least six (6) months shall automatically be canceled in return for a cash
distribution from the Corporation in an amount equal to the excess of (i) the
Take-Over Price of the shares of Common Stock at the time subject to the
canceled option (whether or not the option is otherwise at the time exercisable
for such shares) over (ii) the aggregate exercise price payable for such shares.
The cash distribution payable upon such cancellation shall be made within five
(5) days following the consummation of the Hostile Take-Over. Neither the
approval of the Plan Administrator nor the consent of the Board shall be
required in connection with such option cancellation and cash distribution.

               D. For purposes of this Article Three, Hostile Take-Over shall
have the meaning assigned to such term in paragraph V.E of Article Two. The
Take-Over Price per share shall be deemed to be equal to the greater of (a) the
Fair Market Value per share on the date of cancellation, as determined pursuant
to the valuation provisions of paragraph I.A.3 of Article Two, or (b) the
highest reported price per share paid in effecting such Hostile Take-Over.

               E. The shares of Common Stock subject to each option canceled in
connection with the Hostile Take-Over shall NOT be available for subsequent
issuance under this Plan.

               F. The automatic option grants outstanding under this Article
Three shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.

        IV. AMENDMENT OF THE AUTOMATIC GRANT PROVISIONS

               The provisions of this Automatic Option Grant Program, including
any automatic option grants outstanding under this Article Three, may not be
amended at intervals more frequently than once every six (6) months, other than
to the extent necessary to comply with applicable Federal income tax laws and
regulations.

                                  ARTICLE FOUR
                                  MISCELLANEOUS

        I. AMENDMENT OF THE PLAN

               The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects whatsoever; provided,
however, that (i) no such amendment or modification shall, without the consent
of the holders, adversely affect rights and obligations

                                       50
<PAGE>   17

with respect to options at the time outstanding under the Plan and (ii) any
amendment to the Automatic Option Grant Program (or any options outstanding
thereunder) shall be in compliance with the limitation of Section IV of Article
Three. In addition, the Board shall not, without the approval of the
stockholders of the Corporation (i) increase the maximum number of shares
issuable under the Plan, except for permissible adjustments under Section V.C of
Article One, (ii) materially modify the eligibility requirements for the grant
of options under the Plan or (iii) otherwise materially increase the benefits
accruing to participants under the Plan.

        II. EFFECTIVE DATE AND TERM OF PLAN

               A. The Plan was restated on June 22, 1992 to be effective on the
IPO Effective Date, and the Corporation's stockholders approved the restatement
on September 4, 1992. Article One, Section III of the Plan was subsequently
amended to permit the establishment of a secondary committee to administer the
Plan. Such amendment became effective on the September 30, 1992 date of its
approval by the Board. The Plan was restated on October 13, 1993 to (i) amend
the automatic grant program under the Option Plan to increase to 18,000 from
6,000 the number of shares awarded to non-employee directors upon initial
election or appointment and to delete vesting restrictions for the annual
3,000-share automatic option grants and (ii) limit the maximum number of shares
for which any individual participant may be granted stock options over the
remaining term of the Option Plan. The Plan was restated on December 7, 1995 to
(i) amend the automatic grant program under the Option Plan to increase to 6,000
from 3,000 the number of shares awarded to each non-employee director upon each
annual meeting of the Corporation's stockholders and (ii) eliminate the
six-month service requirement for receiving such automatic annual grants,
provided that the annual option grants to non-employee directors who have not
served as Board members for at least six (6) months prior to the date of such
annual grant shall become exercisable six (6) months after the date of such
grant. The Plan was restated on February 13, 1997 to increase by 1,000,000 the
number of shares of the Corporation's Common Stock reserved for issuance under
the Plan from 3,000,000 shares to 4,000,000 shares. The Corporation's
stockholders approved of the share increase at the 1997 Annual Stockholders
Meeting. The Plan was restated on June 8, 1999 to (i) reflect the stock dividend
that occurred on October 20, 1997 and resulted in a distribution of one share of
Common stock for each share of Common Stock; and (ii) increase to 12,000 from
6,000 the number of shares awarded to each non-employee director upon each
annual meeting of the Corporation's stockholders, provided that each such grant
shall only be made to a non-employee member of the Board at every other annual
meeting of the Corporation's stockholders. The Plan was restated on July 11,
2000 to increase by 2,000,000 the number of shares of the Corporation's Common
Stock reserved for issuance under the Plan from 8,000,000 shares to 10,000,000
shares. The Corporation's stockholders approved of the share increase at the
2000 Annual Stockholders Meeting.

               B. The provisions of this 2000 restatement shall apply only to
options granted under the Plan from and after the Effective Date. Each option
issued and outstanding under the Plan immediately prior to the Effective Date
shall continue to be governed by the terms and conditions of the Plan (and the
instrument evidencing such grant) as in effect on the date each such option was
previously granted, and nothing in this restatement shall be deemed to affect or

                                       51
<PAGE>   18

otherwise modify the rights or obligations of the holders of such prior options
with respect to the acquisition of shares of Common Stock thereunder.

               C. The option acceleration provisions of Section III of Article
Two relating to Corporate Transactions may, in the Plan Administrator's
discretion, be extended to one or more outstanding stock options under the Plan
which were granted prior to the IPO Effective Date and which do not otherwise
provide for such acceleration.

               D. The sale and remittance procedure authorized for the exercise
of outstanding options under this Plan shall be available for all options
granted under this Plan on or after the IPO Effective Date and all Non-qualified
options outstanding under the Plan.

               E. The Plan shall terminate upon the earlier of (i) June 21, 2002
or (ii) the date on which all shares available for issuance under the Plan shall
have been issued or canceled pursuant to the exercise or surrender of options
granted hereunder. If the date of termination is determined under clause (i)
above, then options outstanding on such date shall thereafter continue to have
force and effect in accordance with the provisions of the instruments evidencing
such options.

               F. Options may be granted under this Plan to purchase shares of
Common Stock in excess of the number of shares then available for issuance under
the Plan, provided (i) an amendment to increase the maximum number of shares
issuable under the Plan is adopted by the Board prior to the initial grant of
any such option and within one year thereafter such amendment is approved by the
stockholders of the Corporation and (ii) each option granted is not to become
exercisable, in whole or in part, at any time prior to the obtaining of such
stockholder approval.

        III. USE OF PROCEEDS

               Any cash proceeds received by the Corporation from the sale of
shares pursuant to options granted under the Plan shall be used for general
corporate purposes.

        IV. WITHHOLDING

               The Corporation's obligation to deliver shares upon the exercise
or surrender of any options granted under the Plan shall be subject to the
satisfaction of all applicable Federal, state and local income and employment
tax withholding requirements.

        V. REGULATORY APPROVALS

               A. The implementation of the Plan, the granting of any option or
surrender right hereunder, and the issuance of stock upon the exercise or
surrender of any such option shall be subject to the procurement by the
Corporation of all approvals and permits required by regulatory authorities
having jurisdiction over the Plan, the options granted under it and the stock
issued pursuant to it.

               B. No shares of Common Stock or other assets shall be issued or
delivered under the Plan, unless and until, in the opinion of counsel for the
Corporation (or its successor in

                                       52
<PAGE>   19

the event of any Corporate Transaction), there shall have been compliance with
all applicable requirements of the Federal and state securities exchange on
which stock of the same class is then listed, and all other requirements of law
or of any regulatory bodies having jurisdiction over such issuance and delivery.

        VI. NO EMPLOYMENT/SERVICE RIGHTS

               Neither the action of the Corporation in establishing this Plan,
nor any action taken by the Board or the Plan Administrator hereunder, nor any
provision of this Plan shall be construed so as to grant any individual the
right to remain in the employ or Service of the Corporation (or any Parent or
Subsidiary corporation) for any period of specific duration, and the Corporation
(or any Parent or Subsidiary corporation retaining the services of such
individual) may terminate such individual's employment or Service at any time
and for any reason, with or without cause.

                                       53

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