Document:

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                                                                     EXHIBIT 4.2

                               AMENDMENT NO. 1 TO

                          SHAREHOLDER RIGHTS AGREEMENT

     Amendment, dated as of February 28, 2000 (the "Amendment") to the
Shareholder Rights Agreement, dated as of March 9, 1998 (the "Rights
Agreement"), by and between AvalonBay Communities, Inc., a Maryland corporation
(formerly known as Bay Apartment Communities, Inc., the "Company"), and First
Union National Bank, a national banking institution (as successor Rights Agent
to American Stock Transfer and Trust Company, a New York corporation, the
"Rights Agent").

                               W I T N E S S E T H

     WHEREAS, Section 27 of the Rights Agreement provides that prior to the time
at which any Person becomes an Acquiring Person (as such terms are defined in
the Rights Agreement), the Company and the Rights Agent shall, if the Board of
Directors of the Company so directs, supplement or amend any provision of the
Rights Agreement as the Board of Directors of the Company may deem necessary or
desirable without the approval of any holders of certificates representing
shares of the Company's common stock, par value $.01 per share (the "Common
Stock"); and

     WHEREAS, the Company desires to modify certain terms and provisions of the
Rights Agreement to make such terms and provisions consistent with certain terms
and provisions contained in the Company's Articles of Amendment and Restatement
of Articles of Incorporation.

     NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:

     1. Section 1(a) of the Rights Agreement is amended and restated in its
entirety as follows:

     "(a) "ACQUIRING PERSON" shall mean (I) any Person (as such term is
hereinafter defined), other than any Person that is a Look-Through Entity (as
such term is hereinafter defined), who or which, together with all Affiliates
(as such term is hereinafter defined) and Associates (as such term is
hereinafter defined) of such Person, shall be the Beneficial Owner (as such term
is hereinafter defined) of 10% or more of the shares of Common Stock of the
Company then outstanding, and (II) any Person that is a Look-Through Entity who
or which, together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of 15% or more of the shares of Common Stock of the Company
then outstanding; PROVIDED, HOWEVER, that none of the following Persons shall be
an "Acquiring Person": (i) the Company;

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(ii) any Subsidiary (as such term is hereinafter defined) of the Company; (iii)
any employee benefit plan or compensation arrangement of the Company or any
Subsidiary of the Company; or (iv) any Person holding shares of Common Stock of
the Company organized, appointed or established by the Company or any Subsidiary
of the Company for or pursuant to the terms of any such employee benefit plan or
compensation arrangement (the Persons described in clauses (i) through (iv)
above are referred to herein as "Exempt Persons"); PROVIDED FURTHER, HOWEVER,
that the term "Acquiring Person" shall not include (A) any Grandfathered Person
(as such term is hereinafter defined), unless such Grandfathered Person after
the Grandfathered Time (as such term is hereinafter defined) becomes the
Beneficial Owner of more than the greater of 15% or the Grandfathered Percentage
(as such term is hereinafter defined) applicable to such Grandfathered Person,
or (B) Avalon (as such term is hereinafter defined), or any of its Affiliates or
Associates, solely by reason of its execution of the Agreement and Plan of
Merger dated as of March 9, 1998 by and between the Company and Avalon (as
amended from time to time, the "Merger Agreement").

     Notwithstanding the foregoing, no Person shall become an "Acquiring Person"
as the result of an acquisition by the Company of Common Stock of the Company
which, by reducing the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 10% (or in the case of (x)
a Grandfathered Person, the Grandfathered Percentage applicable to such
Grandfathered Person, and (y) a Person that is a Look-Through Entity, 15%) or
more of the shares of Common Stock of the Company then outstanding; PROVIDED,
HOWEVER, that if a Person shall become the Beneficial Owner of 10% (or in the
case of (x) a Grandfathered Person, the Grandfathered Percentage applicable to
such Grandfathered Person, and (y) a Person that is a Look-Through Entity, 15%)
or more of the shares of Common Stock of the Company then outstanding by reason
of share purchases by the Company and shall, after such share purchases by the
Company, become the Beneficial Owner of any additional shares (other than
pursuant to a stock split, stock dividend or similar transaction) of Common
Stock of the Company and immediately thereafter be the Beneficial Owner of 10%
(or in the case of (x) a Grandfathered Person, the Grandfathered Percentage
applicable to such Grandfathered Person, and (y) a Person that is a Look-Through
Entity, 15%) or more of the shares of Common Stock of the Company then
outstanding, then such Person shall be deemed to be an "Acquiring Person."

     In addition, notwithstanding the foregoing, a Person shall not be an
"Acquiring Person" if the Board of Directors of the Company determines that a
Person who would otherwise be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this Section 1(a), has become such inadvertently, and
such Person divests as promptly as practicable (or within such period of time as
the Board of Directors of the Company determines is reasonable) a sufficient
number of shares of Common Stock of the Company so that such Person would no
longer be an "Acquiring Person," as defined pursuant to the foregoing provisions
of this Section 1(a)."

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     2. Section 1 of the Rights Agreement is amended by adding a new subsection
(w) as follows immediately after the current subsection (v) and redesignating
the current subsections (w) through (nn) as (x) through (oo):

     "(w) "LOOK-THROUGH ENTITY" shall mean a Person that is either (i) a trust
described in Section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), and exempt from tax under Section 501(a) of the Code as modified
by Section 856(h)(3) of the Code or (ii) registered under the Investment Company
Act of 1940, as amended, and in each case shall include such Person's Associates
and Affiliates."

     3. Section 3(a) of the Rights Agreement is amended and restated in its
entirety as follows:

     "(a) From the date hereof until the earlier of (i) the Close of Business on
the tenth calendar day after the Stock Acquisition Date or (ii) the Close of
Business on the tenth Business Day (or such later calendar day, if any, as the
Board of Directors of the Company may determine in its sole discretion) after
the date a tender or exchange offer by any Person, other than an Exempt Person,
is first published or sent or given within the meaning of Rule 14d-4(a) of the
Exchange Act, or any successor rule, if, upon consummation thereof, such Person
would be the Beneficial Owner of 10% (or in the case of (x) a Grandfathered
Person, the Grandfathered Percentage applicable to such Grandfathered Person,
and (y) a Person that is a Look-Through Entity, 15%) or more of the shares of
Common Stock of the Company then outstanding (including any such date which is
after the date of this Agreement and prior to the issuance of the Rights) (the
earliest of such dates being herein referred to as the "Distribution Date"), (x)
the Rights will be evidenced (subject to the provisions of Section 3(b) hereof)
by the certificates for the Common Stock of the Company registered in the names
of the holders of the Common Stock of the Company (which certificates for Common
Stock of the Company shall be deemed also to be certificates for Rights) and not
by separate certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock of the
Company. As soon as practicable after the Distribution Date, the Rights Agent
will, at the Company's expense send, by first-class, insured, postage prepaid
mail, to each record holder of the Common Stock of the Company as of the Close
of Business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more certificates, in substantially the form of
EXHIBIT B hereto (the "Right Certificates"), evidencing one Right for each share
of Common Stock of the Company so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights per share of
Common Stock of the Company has been made pursuant to Section 11(o) hereof, the
Company may make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) at the time of distribution of the Right
Certificates, so that Right Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional Rights. As of
and after the Close of Business on the Distribution Date, the Rights will be
evidenced solely by such Right Certificates."

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     4. Section 24(a)(ii) of the Rights Agreement is amended and restated in its
entirety as follows:

     "(ii) Notwithstanding the foregoing, the Board of Directors of the Company
may, at its option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
7(e) hereof) for shares of Common Stock of the Company at an exchange ratio
specified in the following sentence, as appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date of
this Agreement. Subject to the adjustment described in the foregoing sentence,
each Right may be exchanged for that number of shares of Common Stock of the
Company obtained by dividing the Spread (as defined in Section 11(a)(iii)) by
the then Fair Market Value per one one-thousandth of a share of Preferred Stock
on the earlier of (x) the date on which any person becomes an Acquiring Person
or (y) the date on which a tender or exchange offer by any Person (other than an
Exempt Person) is first published or sent or given within the meaning of Rule
14d-4(a) of the Exchange Act or any successor rule, if upon consummation thereof
such Person would be the Beneficial Owner of 10% (or in the case of (x) a
Grandfathered Person, the Grandfathered Percentage applicable to such
Grandfathered Person, and (y) a Person that is a Look-Through Entity, 15%) or
more of the shares of Common Stock of the Company then outstanding (such
exchange ratio being referred to herein as the "Section 24(a)(ii) Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors of the Company
shall not be empowered to effect such exchange at any time after any Person
(other than an Exempt Person), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the Common Stock of
the Company."

     5. The address and contact information of the Company set forth in Section
26 of the Rights Agreement is amended and restated in its entirety as follows:

               "AvalonBay Communities, Inc.
               2900 Eisenhower Avenue
               Suite 300
               Alexandria, VA 22314
               Attention: Secretary"

     6. The address and contact information of the Rights Agent set forth in
Section 26 of the Rights Agreement is amended and restated in its entirety as
follows:

               "First Union National Bank
               1525 West W.T. Harris Boulevard, 3C3
               Charlotte, North Carolina 28288-1153
               Attention: Shareholder Services Group"

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     7. Any term used herein and not defined shall have the meaning ascribed to
such term in the Rights Agreement.

                    [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written. This Amendment may be
executed in one or more counterparts all of which shall be considered one and
the same amendment and each of which shall be deemed to be an original.

ATTEST:                                     AVALONBAY COMMUNITIES, INC.

By: /S/ DAVID J. KRAMER                     By: /S/ THOMAS J. SARGEANT
  ----------------------                      --------------------------------
Name: David J. Kramer                       Name:  Thomas J. Sargeant
                                            Title: Senior Vice President--Chief
                                                   Financial Officer

ATTEST:                                     FIRST UNION NATIONAL BANK,
                                            as Rights Agent

By: /S/ TED WIENER                          By: /S/ KRISTIN N. KNAPP
   ----------------------                     --------------------------------
Name: Ted Wiener                            Name:  Kristin N. Knapp
                                            Title: Assistant Vice President<PAGE>

                                SAMES CORPORATION

                              AMENDED AND RESTATED

                             1996 STOCK OPTION PLAN

                                   ARTICLE 1.

                     ESTABLISHMENT, OBJECTIVES, AND DURATION

         1.1 ESTABLISHMENT OF THE PLAN. SAMES CORPORATION, a Delaware
corporation (formerly known as Binks Sames Corporation) (hereinafter referred to
as the "Company"), has previously established an incentive compensation plan
known as the Binks Sames Corporation Amended and Restated 1996 Stock Option Plan
(hereinafter referred to as the "Plan"), effective as of October 24, 1996 (the
"Effective Date").

         The Company now desires to further amend and restate the Plan as
provided herein. Subject to approval by the Company's stockholders, the Plan as
amended and restated herein shall become effective as of April 25, 2000, and
shall remain in effect as provided in Section 1.3 hereof.

         1.2 PURPOSE OF THE PLAN. The purpose of this Plan is to benefit the
Company and its subsidiaries and affiliated companies by enabling the Company to
offer to certain present and future executives, key personnel, consultants and
non-employee directors stock based incentives in the Company, thereby giving
them a stake in the growth and prosperity of the Company and encouraging the
continuance of their services with the Company or subsidiaries or affiliated
companies.

         1.3. DURATION OF THE PLAN. The Plan shall commence on the Effective
Date and shall remain in effect, subject to the right of the Board of Directors
to amend or terminate the Plan at any time pursuant to Article 16 hereof, until
all Shares subject to it shall have been purchased or acquired according to the
Plan's provisions. However, in no event may an Award be granted under the Plan
on or after October 24, 2006.

                                   ARTICLE 2.

                                   DEFINITIONS

         Whenever used in the Plan, the following terms shall have the meanings
set forth below, and when the meaning is intended, the initial letter of the
word shall be capitalized:

         "AWARD" means, individually or collectively, a grant under this Plan of
Nonqualified Stock Options or Incentive Stock Options.

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         "AWARD AGREEMENT" means a writing provided by the Company to each
Participant setting forth the terms and provisions applicable to Awards granted
under this Plan. The Participant's acceptance of the terms of the Award
Agreement shall be evidenced by his or her continued employment without written
objection before any exercise or payment of the Award. If the Participant
objects in writing, the grant of the Award shall be revoked.

         "BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.

         "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the
Company.

         "CAUSE" shall mean, with respect to termination of a Participant's
employment or directorship, the occurrence of any one or more of the following,
as determined by the Committee, in the exercise of good faith and reasonable
judgment:

         (i)      In the case where there is no employment, change in control or
                  similar agreement in effect between the Participant and the
                  Company or a Subsidiary at the time of the grant of the Award,
                  or where there is such an agreement but the agreement does not
                  define "cause" (or similar words) or a "cause" termination
                  would not be permitted under such agreement at that time
                  because other conditions were not satisfied, the termination
                  of an employment or consulting arrangement due to the willful
                  and continued failure or refusal by the Participant to
                  substantially perform assigned duties (other than any such
                  failure resulting from the Participant's Disability), the
                  Participant's dishonesty or theft, the Participant's violation
                  of any obligations or duties under any employee agreement, or
                  the Participant's gross negligence or willful misconduct; or

         (ii)     In the case where there is an employment, change in control or
                  similar agreement in effect between the Participant and the
                  Company or a Subsidiary at the time of the grant of the Award
                  that defines "cause" (or similar words) and a "cause"
                  termination would be permitted under such agreement at that
                  time, the termination of an employment or consulting
                  arrangement that is or would be deemed to be for "cause" (or
                  similar words) as defined in such agreement.

No act or failure to act on a Participant's part shall be considered willful
unless done, or omitted to be done, by the Participant not in good faith and
without reasonable belief that his action or omission was in the best interest
of the Company.

         "CHANGE OF CONTROL" of the Company shall mean:

         (a)      The Company is merged or consolidated or reorganized into or
                  with another corporation or other legal person (an "Acquiror")
                  and as a result of such merger, consolidation or
                  reorganization less than 50% of the outstanding voting
                  securities

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                  or other capital interests of the surviving, resulting or
                  acquiring corporation or other legal person are owned in the
                  aggregate by the stockholders of the Company, directly or
                  indirectly, immediately prior to such merger, consolidation or
                  reorganization, other than by the Acquiror or any corporation
                  or other legal person controlling, controlled by or under
                  common control with the Acquiror;

         (b)      The Company sells all or substantially all of its business
                  and/or assets to an Acquiror, of which less than 50% of the
                  outstanding voting securities or other capital interests are
                  owned in the aggregate by the stockholders of the Company,
                  directly or indirectly, immediately prior to such sale, other
                  than by any corporation or other legal person controlling,
                  controlled by or under common control with the Acquiror;

         (c)      There is a report filed on Schedule 13D or Schedule 14D-1 (or
                  any successor schedule, form or report), each as promulgated
                  pursuant to the Exchange Act, or other public announcement
                  disclosing that any person or group (as the terms "person" and
                  "group" are used in Section 13(d)(3) or Section 14(d)(2) of
                  the Exchange Act and the rules and regulations promulgated
                  thereunder) has become the beneficial owner (as the term
                  "beneficial owner" is defined under Rule 13d-3 or any
                  successor rule or regulation promulgated under the Exchange
                  Act) of 15% or more of the issued and outstanding shares of
                  voting securities of Company, other than (i) a trustee or
                  other fiduciary holding securities under any employee benefit
                  plan of the Company or any Subsidiary, (ii) a corporation
                  owned directly or indirectly by the stockholders of the
                  Company in substantially the same proportion as their
                  ownership of stock in the Company, (iii) Burke B. Roche, his
                  spouse or any of their descendants or any spouse of their
                  descendants, William B. Roche, his spouse or any of their
                  descendants or any spouse of their descendants, any trust or
                  other arrangement for the benefit of Burke B. Roche, William
                  B. Roche, the spouse of either of them, or any of their
                  descendants or the spouse of any such descendants (Burke B.
                  Roche, William B. Roche and such other individuals, trusts or
                  other arrangements, collectively, the "Roche Family"), or (iv)
                  any group which includes the Roche Family if a majority of the
                  voting securities of the Company beneficially owned by such
                  group are beneficially owned by the Roche Family; or

         (d)      Individuals who are members of the Incumbent Board cease to
                  constitute a majority of the Board of Directors of the
                  Company. For this purpose, "Incumbent Board" means (i) the
                  members of the Board of Directors of the Company on the
                  Effective Date and (ii) any individual who becomes a member of
                  the Board of Directors of the Company after the Effective
                  Date, if such individual's election or nomination for election
                  as a Director was approved by the affirmative vote of the then
                  Incumbent Board.

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         "CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation thereto.

         "COMMITTEE" means the Committee as specified in Article 3 herein
appointed by the Board to administer the Plan with respect to grants of Awards.

         "COMMON STOCK" means the common stock, $1.00 par value per share, of
the Company.

         "COMPANY" means Binks Manufacturing Company, a Delaware corporation, as
well as any successor to such entity as provided in Article 13 herein.

         "DIRECTOR" means any individual who is a member of the Board of
Directors of the Company.

         "DISABILITY" shall have the meaning ascribed to such term in the
Participant's governing long-term disability plan. If no long term disability
plan is in place with respect to a Participant, then with respect to that
Participant, Disability shall have the same meaning ascribed to such term under
Section 22(e)(3) of the Code.

         "EARLY RETIREMENT" means the Participant's termination of employment
with the Company and all Subsidiaries (for reasons other than Cause) on or after
attaining age 55 having completed five or more years of employment with the
Company or Subsidiaries.

         "EFFECTIVE DATE" shall have the meaning ascribed to such term in
Section 1.1 hereof.

         "EMPLOYEE" means any employee of the Company or any Subsidiary, or any
consultant who provides services to the Company or any Subsidiary; provided,
that for purposes hereof, references to periods of employment or termination of
employment shall be deemed, in the case of a consultant, to be references to his
or her consulting arrangement with the Company or any Subsidiary. Non-Employee
Directors shall not be considered Employees under this Plan unless specifically
designated otherwise.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.

         "FAIR MARKET VALUE" shall mean, as of any date, the closing sales price
of the Common Stock on the American Stock Exchange Composite Tape (as reported
in THE WALL STREET JOURNAL, Midwest Edition) on such date (or if the date is not
a trading day, on the trading day next preceding the date of exercise).

         "INCENTIVE STOCK OPTION" or "ISO" means an option to purchase Shares
granted under Article 6 herein and which is designated as an Incentive Stock
Option and which is intended to meet the requirements of Code Section 422.

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         "NON-EMPLOYEE DIRECTOR" means, as of a given date, an individual who is
a Director but who is not an Employee of the Company or any Subsidiary, and
since the date of the most recent annual meeting of stockholders at which he or
she was elected a Director (or, if he or she was not elected at an annual
meeting, the date the individual was first elected to the Board of Directors)
has not been an Employee.

         "NONQUALIFIED STOCK OPTION" or "NQSO" means an option to purchase
Shares granted under Article 6 herein and which is not intended to meet the
requirements of Code Section 422.

         "OPTION" means an Incentive Stock Option or a Nonqualified Stock
Option, as described in Article 6 herein.

         "OPTION PRICE" means the price at which a Share may be purchased by a
Participant pursuant to an Option.

         "PARTICIPANT" means an individual who has outstanding an Award granted
under the Plan.

         "PERSON" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a group as defined in Section 13(d) thereof.

         "RETIREMENT" means the Participant's termination of employment with the
Company or its Subsidiaries (for reasons other than Cause) on or after the date
the Participant attains age 65, or, in the case of Non-Employee Directors, shall
mean the termination of his or her directorship (for reasons other than Cause)
on or after attaining age 55.

         "SHARES" means shares of Common Stock, $1 par value per share, of the
Company.

         "SUBSIDIARY" means any corporation, partnership, joint venture,
affiliate, or other entity in which the Company is the direct or indirect
beneficial owner of not less than 20% of all issued and outstanding equity
interests.

                                   ARTICLE 3.

                                 ADMINISTRATION

         3.1 THE COMMITTEE. The Plan shall be administered by the Board, or by
the Compensation Committee of the Board, or by any other Committee appointed by
the Board. The functions of the Committee may be exercised by the full Board.

         3.2 AUTHORITY OF THE COMMITTEE. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select Employees and
consultants who shall participate in the Plan;

                                 5

<PAGE>

determine the sizes and types of Awards; determine the terms and conditions of
Awards in a manner consistent with the Plan; construe and interpret the Plan and
any agreement or instrument entered into under the Plan; establish, amend, or
waive rules and regulations for the Plan's administration; and (subject to the
provisions of Article 11 herein) amend the terms and conditions of any
outstanding Award to the extent such terms and conditions are within the
discretion of the Committee as provided in the Plan. Further, the Committee
shall make all other determinations which may be necessary or advisable for the
administration of the Plan. As permitted by law, the Committee may delegate the
authority granted to it herein.

         3.3 DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its stockholders, Employees, Participants, and their
estates and beneficiaries.

                                   ARTICLE 4.

                  SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS

         4.1 SHARES AVAILABLE FOR AWARDS. The aggregate number of Shares which
may be issued or used for reference purposes under this Plan or with respect to
which Awards may be granted shall not exceed 300,000 Shares (subject to
adjustment as provided in Section 4.3), which may be either authorized and
unissued Shares or Shares held in or acquired for the treasury of the Company.
Of the aggregate number of Shares, up to all of such Shares may be issued with
respect to Incentive Stock Option Awards. Upon:

         (a)      a cancellation, termination, expiration, forfeiture, or lapse
                  for any reason of any Award; or

         (b)      payment of an Option Price and/or payment of any taxes arising
                  upon exercise of an Option with previously acquired Shares or
                  by withholding Shares which otherwise would be acquired on
                  exercise or issued upon such payout,

then the number of Shares underlying any such Award which were not issued as a
result of any of the foregoing actions shall again be available for the purposes
of Awards under the Plan.

         4.2 INDIVIDUAL PARTICIPANT LIMITATIONS. Subject to adjustment as
provided in Section 4.3 herein, the maximum aggregate number of Shares with
respect to which Options may be granted in any one fiscal year to a Participant
shall be 50,000.

         4.3 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any

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<PAGE>

reorganization (whether or not such reorganization comes within the definition
of such term in Code Section 368) or any partial or complete liquidation of the
Company, such adjustment shall be made in the number and class of Shares
available for Awards, the number and class of and/or price of Shares subject to
outstanding Awards granted under the Plan and the number of Shares set forth in
Sections 4.1 and 4.2, as may be determined to be appropriate and equitable by
the Committee, in its sole discretion, to prevent dilution or enlargement of
rights; provided, however, that the number of Shares subject to any Award shall
always be a whole number.

                                   ARTICLE 5.

                          ELIGIBILITY AND PARTICIPATION

         5.1 ELIGIBILITY. Persons eligible to participate in this Plan include
all Employees of the Company and its Subsidiaries, as determined by the
Committee, including Employees who are Directors and Employees who reside in
countries other than the United States of America. Non-Employee Directors shall
also be eligible to receive Awards of Nonqualified Stock Options under the Plan.

         5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees, those to
whom Awards shall be granted and shall determine the nature and amount of each
Award.

                                   ARTICLE 6.

                                  STOCK OPTIONS

         6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
Options may be granted to Employees at any time and from time to time as
determined by the Committee in its sole discretion. The Committee, in its sole
discretion, shall determine the number of Shares subject to each Option,
provided that during any Fiscal Year, no Participant shall be granted Options
covering more than 50,000 Shares. The Committee may grant Incentive Stock
Options, Nonqualified Stock Options, or a combination thereof.

         6.2 AWARD AGREEMENT. Each Option shall be evidenced by an Award
Agreement that shall specify the Exercise Price, the expiration date of the
Option, the number of Shares to which the Option pertains, any conditions to
exercise of the Option, and such other terms and conditions as the Committee, in
its discretion, shall determine. The Award Agreement shall specify whether the
Option is intended to be an Incentive Stock Option or Nonqualified Stock Option.

         6.3 EXERCISE PRICE. Subject to the provisions of this Section 6.3, the
Exercise Price for each Option shall be determined by the Committee in its sole
discretion.

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<PAGE>

              (a)    NONQUALIFIED STOCK OPTIONS. In the case of a Nonqualified
                     Stock Option, the Exercise Price shall be not less than the
                     Fair Market Value of a Share on the Grant Date.

              (b)    INCENTIVE STOCK OPTIONS. In the case of an Incentive Stock
                     Option, the Exercise Price shall be not less than one
                     hundred percent (100%) of the Fair Market Value of a Share
                     on the Grant Date; provided, however, that if on the Grant
                     Date, the Employee (together with persons whose stock
                     ownership is attributed to the Employee pursuant to Section
                     424(d) of the Code) owns stock possessing more than 10% of
                     the total combined voting power of all classes of stock of
                     the Company or any of its Subsidiaries, the Exercise Price
                     shall be not less than one hundred and ten percent (110%)
                     of the Fair Market Value of a Share on the Grant Date.

              (c)    SUBSTITUTE OPTIONS. Notwithstanding the provisions of
                     Sections 6.3(a) and 6.3(b), in the event that the Company
                     or a Subsidiary consummates a transaction described in
                     Section 424(a) of the Code (E.G., the acquisition of
                     property or stock from an unrelated corporation), persons
                     who become Employees on account of such transaction may be
                     granted Options in substitution for options granted by
                     their former employer. If such substitute Options are
                     granted, the Committee, in its sole discretion and
                     consistent with Section 424(a) of the Code, shall determine
                     the Exercise Price of such substitute Options.

         6.4 EXPIRATION OF OPTIONS. Subject to the provisions of Section 6.8,
Options granted pursuant to this Article 6 shall expire in accordance with this
Section 6.4.

              (a)    EXPIRATION DATES. Each Option granted pursuant to this
                     Article 6 shall terminate no later than the first to occur
                     of the following events:

                     (i)    The date for termination of the Option set forth in
                            the written Award Agreement; or

                     (ii)   The expiration of ten (10) years from the Grant
                            Date; or

                     (iii)  The expiration of one (1) month from the date of the
                            Participant's termination of employment for a reason
                            other than the Participant's death, Disability,
                            Retirement, Early Retirement (under circumstances
                            described in Section 6.4(b) below relating to
                            retirement from the industry) or for Cause; or

                     (iv)   The expiration of three (3) years from the date of
                            the Participant's termination of employment by
                            reason of death or Disability; or

                                       8

<PAGE>

                     (v)    The date of termination of employment in the event
                            of a termination for Cause.

              (b)    EFFECT OF DEATH, DISABILITY, RETIREMENT AND EARLY
                     RETIREMENT. Notwithstanding Section 6.4(a):

                     (i)    Upon the death or Disability of the Participant,
                            each Option held by the Participant shall become
                            exercisable in full (without regard to any
                            installment or other vesting provisions thereof) and
                            shall be exercisable thereafter until the first to
                            occur of the dates set forth in Section 6.4(a)(i),
                            (ii) or (iv).

                     (ii)   Upon Retirement, each Option held by the Participant
                            shall become exercisable in full (without regard to
                            any installment or other vesting provisions thereof)
                            and shall be exercisable by the Participant until
                            the earlier of the date of termination of the Option
                            set forth in the Award Agreement or the expiration
                            of ten (10) years from the Grant Date of the Option.

                     (iii)  Upon Early Retirement, each Option held by a
                            Participant who from such Early Retirement retires
                            and remains retired from the industry (a "sunset
                            arrangement") shall remain outstanding and, to the
                            extent not then exercisable, shall become
                            exercisable in accordance with the installment or
                            other vesting provisions thereof as if the
                            Participant continued as an Employee of the Company
                            or a Subsidiary during such sunset arrangement. The
                            Options, to the extent exercisable at Early
                            Retirement or which become exercisable during the
                            sunset arrangement shall remain exercisable by the
                            Participant until the earlier of the date of
                            termination of the Option set forth in the Award
                            Agreement or the expiration of ten (10) years from
                            the Grant Date. In the event the Participant does
                            not remain so retired in accordance with the sunset
                            arrangement, then the Participant shall be deemed to
                            have terminated employment under circumstances
                            described in Section 6.4(a)(iii) above as of such
                            date he or she fails to be so retired and his or her
                            Options shall terminate on the first to occur of the
                            dates set forth in Section 6.4(a)(i), (ii) or (iii).

                                            9

<PAGE>

                     (iv)   In the event of the death of the Participant after
                            his Retirement or Early Retirement, but prior to the
                            expiration of his or her Options, then his or her
                            Options shall be exercisable in full by his or her
                            beneficiaries until the earlier of the date such
                            Options would have expired had the Participant
                            survived until such date or the expiration of three
                            (3) years for the date of the Participant's death.

              (c)    COMMITTEE DISCRETION. Subject to the limits of Section
                     6.4(a) and (b) above, the Committee, in its sole discretion
                     shall provide in each Award Agreement when each Option
                     expires and becomes unexercisable. In the event the Award
                     Agreement does not set forth such provisions, then the
                     Option evidenced thereby shall expire and become
                     unexercisable in accordance with the provisions of Section
                     6.4(a) and (b) above.

         6.5 EXERCISABILITY OF OPTIONS. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall determine in its sole discretion and prescribe in the Award
Agreement. In the event that the Award Agreement does not set forth times with
respect to the exercisability of Options, then each such Option granted to an
Employee shall become exercisable on the first anniversary of the Grant Date to
the extent of one-fourth (25%) of the Shares which may be purchased under the
Option (rounded down to the nearest whole number), and on each of the second,
third and fourth anniversary of the Grant Date to the extent of an additional
one-fourth (25%) of such Shares. After an Option is granted, the Committee, in
its sole discretion, may accelerate the exercisability of the Option.
Notwithstanding the foregoing, upon a Change in Control, any and all Options
granted under this Article 6 shall become immediately exercisable in full.

         6.6 PAYMENT. Options shall be exercised by the Participant's delivery
of a written notice of exercise to the Secretary of the Company (or its
designee), setting forth the number of Shares with respect to which the Option
is to be exercised, accompanied by full payment for the Shares.

         Upon the exercise of any Option, the Exercise Price shall be payable to
the Company in full in cash or its equivalent. The Committee, in its sole
discretion, also may permit exercise (a) by tendering previously acquired Shares
having an aggregate Fair Market Value at the time of exercise equal to the total
Exercise Price, or (b) by any other means which the Committee, in its sole
discretion, determines to both provide legal consideration for the Shares, and
to be consistent with the purposes of the Plan.

         As soon as practicable after receipt of a written notification of
exercise and full payment for the Shares purchased, the Company shall deliver to
the Participant (or the Participant's designated broker), Share certificates
(which may be in book entry form) representing such Shares.

                                  10

<PAGE>

         6.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose
such restrictions on any Shares acquired pursuant to the exercise of an Option
as it may deem advisable, including, but not limited to, restrictions related to
applicable Federal securities laws, the requirements of any national securities
exchange or system upon which Shares are then listed or traded, or any blue sky
or state securities laws.

         6.8      CERTAIN ADDITIONAL PROVISIONS FOR INCENTIVE STOCK OPTIONS.

              (a)    EXERCISABILITY. The aggregate Fair Market Value (determined
                     on the Grant Date(s)) of the Shares with respect to which
                     Incentive Stock Options are exercisable for the first time
                     by any Employee during any calendar year (under all plans
                     of the Company and its Subsidiaries) shall not exceed
                     $100,000, provided, however, that in the event that
                     acceleration of the exercisability of an Incentive Stock
                     Option would cause such $100,000 limitation to be exceeded,
                     then those Incentive Stock Options up to such $100,000
                     limitation (determined in the order such Options were
                     granted) shall continue to be Incentive Stock Options and
                     the remainder shall be Nonqualified Stock Options.

              (b)    TERMINATION OF EMPLOYMENT. No Incentive Stock Option may be
                     exercised more than three (3) months after the
                     Participant's termination of employment with the Company
                     and all Subsidiaries for any reason other than Disability
                     or death (in which case the Incentive Stock Option may be
                     exercised until the expiration of one (1) year from the
                     date of death or disability), unless (i) the Participant
                     dies during such three-month period, in which case the
                     Incentive Stock Option may be exercised by his or her
                     beneficiaries until the expiration of one (1) year from the
                     date of death (this Section 6.8(b)(i) is not applicable to
                     Awards granted to employees of Sames S.A.), or (ii) the
                     Award Agreement or the Committee permits later exercise,
                     provided that if the Incentive Stock Option is not
                     exercised within such three (3) month or one (1) year
                     periods, whichever is applicable, then such Incentive Stock
                     Option shall become a Nonqualified Stock Option.

              (c)    EMPLOYEES ONLY. Incentive Stock Options may be granted only
                     to individuals who are Employees (other than consultants)
                     on the Grant Date.

              (d)    EXPIRATION. No Incentive Stock Option may be exercised
                     after the expiration of ten (10) years from the Grant Date;
                     provided, however, that if the Option is granted to an
                     Employee who, together with persons whose stock ownership
                     is attributed to the Employee pursuant to section 424(d) of
                     the Code, owns stock possessing more than 10% of the total
                     combined voting power of all classes of the stock of the
                     Company or any of its

                                       11

<PAGE>

                     Subsidiaries, the Option may not be exercised after the
                     expiration of five (5) years from the Grant Date.

                                   ARTICLE 7.

                             NON-EMPLOYEE DIRECTORS

         7.1      GRANTING OF OPTIONS.

              (a)    INITIAL AWARDS. Each Non-Employee Director who (i) is a
                     Non-Employee Director on the Effective Date of the Plan or
                     (b) first becomes a Non-Employee Director after the
                     Effective Date of the Plan shall be granted a Nonqualified
                     Stock Option to purchase 3,000 Shares. Such Option shall be
                     granted on either the Effective Date of the Plan, or the
                     date such person first becomes a Non-Employee Director, as
                     the case may be.

              (b)    ANNUAL AWARDS. Thereafter, for so long as the Non-Employee
                     Director remains such, he or she annually shall be granted
                     an Option for an additional 2,000 Shares. Each such Option
                     shall be granted on the date of each Annual Meeting of
                     Stockholders, commencing with the 1997 Annual Meeting of
                     Stockholders, but only if the Non-Employee Director will
                     continue to serve as a Director after such Annual Meeting.

              (c)    OTHER AWARDS. The Board of Directors may in its discretion
                     increase the number of Shares subject to an initial Award
                     or annual Award in recognition of significant additional
                     duties and responsibilities assumed by a Non-Employee
                     Director in connection with his or her service as chairman
                     of the Board of Directors or other positions on the Board
                     of Directors.

              (d)    NON-EMPLOYEE DIRECTORS OF SAMES S.A. All Non-Employee
                     Directors of Sames S.A. are excluded from the scope of this
                     Article 7.

         7.2      TERMS OF OPTIONS.

              (a)    OPTION AGREEMENT. Each Option granted pursuant to this
                     Article 7 shall be evidenced by an Award Agreement which
                     shall be executed by the Participant and the Company.

                                       12

<PAGE>

              (b)    EXERCISE PRICE. The Exercise Price for the Shares subject
                     to each Option granted pursuant to this Article 7 shall be
                     100% of the Fair Market Value of such Shares on the Grant
                     Date.

              (c)    EXERCISABILITY. Each initial Award granted pursuant to
                     Section 7.1(a) shall become exercisable on the first
                     anniversary of the Grant Date to the extent of one-fourth
                     (25%) of the Shares which may be purchased under the Option
                     (rounded down to the nearest whole number), and on each of
                     the second, third and fourth anniversary of the Grant Date
                     to the extent of an additional one-fourth (25%) of such
                     Shares. After an Option is granted, the Committee, in its
                     sole discretion, may accelerate the exercisability of the
                     Option. Notwithstanding the foregoing, upon a Change in
                     Control, any and all Options granted under this Article 7
                     shall become immediately exercisable in full. Each annual
                     Award granted pursuant to Section 7.1(b) shall become
                     exercisable in full on the first anniversary of the Grant
                     Date.

              (d)    EXPIRATION OF OPTIONS. Each Option granted under this
                     Article 7 shall terminate upon the first to occur of the
                     following events:

                     (i)    The expiration of ten (10) years from the Grant
                            Date; or

                     (ii)   The expiration of one (1) month from the date of the
                            termination of the Participant's service as a
                            Director for a reason other than death, Disability,
                            Retirement or Cause; or

                     (iii)  The expiration of three (3) years from the date of
                            the termination of the Participant's service as a
                            Director by reason of death or Disability; or

                     (iv)   The date of termination of the Participant's service
                            as a Director for Cause.

              (e)    EFFECT OF DEATH, DISABILITY OR RETIREMENT.

                     (i)    Upon the death or Disability of the Participant,
                            each Option granted under this Article 7 held by the
                            Participant shall become exercisable in full
                            (without regard to any installment or other vesting
                            provisions thereof) and shall be exercisable
                            thereafter until the first to occur of the dates set
                            forth in Section 7.2(d)(i) or (iii).

                     (ii)   Upon Retirement, each Option granted under this
                            Article 7 held by the Participant shall become
                            exercisable in full (without regard to any
                            installment or other vesting provisions thereof) and
                            shall be

                                          13

<PAGE>

                            exercisable by the Participant until the expiration
                            of ten (10) years from the Grant Date of the Option.

                     (iii)  In the event of the death of the Participant after
                            his or her Retirement, but prior to the expiration
                            of his or her Options granted under this Article 7,
                            such Options shall be exercisable in full by his or
                            her beneficiaries until the earlier of the date such
                            Options would have expired had the Participant
                            survived until such date or the expiration of three
                            (3) years from the date of the Participant's death.

              (f)    OTHER TERMS. All provisions of the Plan not inconsistent
                     with this Article 7 shall apply to Options granted to
                     Non-Employee Directors.

                                     ARTICLE 8.

                             BENEFICIARY DESIGNATION

         Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death before
he or she receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Participant, shall be in a form
prescribed by the Company, and will be effective only when filed by the
Participant in writing with the Secretary of the Company during the
Participant's lifetime. In the absence of any such designation, benefits
remaining unpaid at the Participant's death shall be paid to the Participant's
estate. Provided, however, Awards granted to employees of Sames S.A. shall be
excluded from this Article 8.

                                   ARTICLE 9.

                                    DEFERRALS

         The Committee may permit a Participant to defer such Participant's
receipt of the delivery of Shares that would otherwise be due to such
Participant upon the exercise of any Option.

                                   ARTICLE 10.

                             LIMITED TRANSFERABILITY

         The Committee may, in its discretion, authorize all or a portion of the
Options (other than Incentive Stock Options) granted to a Participant to be on
terms which permit transfer by such Participant to (a) the spouse, children or
grandchildren of the Participant ("Immediate Family Members"), (b) a trust or
trusts for the exclusive benefit of such Immediate Family Members, or (c) a
partnership in which such Immediate Family Members are the only partners,
provided that (i) there may be no consideration for any such transfer, (ii) the
Award Agreement pursuant to

                                        14

<PAGE>

which such Options are granted expressly provides for transferability in a
manner consistent with this Article 10, and (iii) subsequent transfers of
transferred Options shall be prohibited except those in accordance with Article
8. Following transfer, any such Options shall continue to be subject to the same
terms and conditions as were applicable immediately prior to transfer, provided
that for purposes of Article 8 hereof the term "Participant" shall be deemed to
refer to the transferee. The provisions of Articles 6 and 7 relating to the
period of exercisability and expiration of the Option shall continue to be
applied with respect to the original Participant, and the Options shall be
exercisable by the transferee only to the extent, and for the periods, set forth
in said Articles 6 and 7.

                                     15

<PAGE>

                                   ARTICLE 11.

                    AMENDMENT, MODIFICATION, AND TERMINATION

         11.1 AMENDMENT, MODIFICATION, AND TERMINATION. The Board may at any
time and from time to time, alter, amend, suspend or terminate the Plan in whole
or in part; subject to any requirement of stockholder approval imposed by
applicable law, rule or regulation.

         11.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or
modification of the Plan shall adversely affect in any material way any Award
previously granted under the Plan, without the written consent of the
Participant holding such Award.

                                   ARTICLE 12.

                                   WITHHOLDING

         12.1 TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of the Plan.

         12.2 SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options, or upon any other taxable event arising as a result of
Awards granted hereunder, Participants may elect to satisfy the withholding
requirement, in whole or in part, by having the Company withhold Shares having a
Fair Market Value on the date the tax is to be determined equal to the minimum
statutory total tax which would be imposed on the transaction. All such
elections shall be irrevocable, made in writing, signed by the Participant, and
shall be subject to any restrictions or limitations that the Committee, in its
sole discretion, deems appropriate.

                                   ARTICLE 13.

                                   SUCCESSORS

         All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect merger,
consolidation, purchase of all or substantially all of the business and/or
assets of the Company or otherwise.

                                   ARTICLE 14.

                               LEGAL CONSTRUCTION

                                      16

<PAGE>

         14.1 GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.

         14.2 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.

         14.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

         14.4 GOVERNING LAW. To the extent not preempted by Federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with and
governed by the laws of the State of Delaware.

                                   ARTICLE 15.

                       COMMITTEE DISCRETION IN CONNECTION

                        WITH AWARDS TO FOREIGN EMPLOYEES

         Notwithstanding any provision of this Plan to the contrary, with
respect to the grant of any Award to an individual employed in a foreign
country, the Committee in its sole discretion may provide in the Award Agreement
for such Awards terms and provisions as the Committee shall deem necessary or
appropriate to enable such Award to comply with applicable foreign law,
provided, however, that except for Awards granted pursuant to Section 6.3(c) of
the Plan, in no event shall the exercise price of any award be less than Fair
Market Value as of the Grant Date.

                                         17

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