Document:

EXHIBIT 10.1

                            INDEMNIFICATION AGREEMENT

      This Agreement is made this _____ day of __________, 2000, between
Tanox, Inc., a Delaware corporation (the "Company") and
________________________ ("Agent").

                                    RECITALS

      1. The Agent is serving as a director, officer, employee or other agent of
the Company or, at the request of the Company, another corporation or
enterprise, and the Company desires the Agent to continue to serve in this
capacity.

      2. The Company and the Agent recognize that qualified persons are often
reluctant to serve publicly-held corporations as directors, officers, employees
or agents of such corporations or, at the request of such corporations, other
corporations or enterprises, unless they are provided with adequate protection
through insurance or adequate indemnification against inordinate risks of claims
and actions against them arising out of their service to, and activities on
behalf of, the corporation.

      3. The Company's board of directors has determined that the inability to
attract and retain qualified persons would be detrimental to the best interests
of the Company's stockholders and that the Company should act to assure these
persons that there will be increased certainty of adequate protection in the
future.

      4. The Company has adopted bylaws (the "Bylaws") providing for
indemnification of the directors, officers, employees and other agents of the
Company, including persons serving at the request of the Company in these
capacities with other corporations or enterprises, to the fullest extent
permitted under the Delaware General Company Law (the "GCL").

      5. The bylaws, and the GCL, by their non-exclusive nature, permit
contracts between the Company and its directors, officers, employees and other
agents with respect to indemnification.

      6. To induce the Agent to continue to serve as a director, officer,
employee or other agent of the Company or, at the request of the Company, other
corporations or enterprises, the Company has determined it to be in its best
interest to enter into this Agreement to indemnify the Agent to the fullest
extent permitted by law.

      NOW, THEREFORE, for and in consideration of the mutual covenants and
conditions contained herein, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Agent agree as follows:
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                          ARTICLE 1. AGREEMENT TO SERVE

      Agent will serve at the will of the Company as a director, officer,
employee or other agent of the Company or, at the request of the Company, other
corporations or enterprises, faithfully and to the best of her or his ability so
long as she or he is duly elected and qualified unless she or he is removed or
terminated in accordance with applicable law or until such time as she or he
tenders her or his resignation in writing.

                           ARTICLE 2. INDEMNIFICATION

      2.1 INDEMNITY OF AGENT. In consideration of the Agent's service to the
Company, the Company hereby agrees to hold harmless and indemnify Agent to the
full extent authorized or permitted by the provisions of the Bylaws and the GCL,
as same may be amended from time to time (but only to the extent that such
amendment permits the Company to provide broader indemnification rights than the
Bylaws or the GCL permitted before adoption of such amendment).

      2.2 ADDITIONAL INDEMNITY. Subject only to the exclusions set forth in
Paragraph 2.3, the Company hereby further agrees to hold harmless and indemnify
Agent against:

      (a)   any and all expenses (including attorneys' fees), fees, damages,
            judgments, fines and amounts paid in settlement actually and
            reasonably incurred by Agent in connection with any threatened,
            pending or completed action, suit or proceeding, whether civil,
            criminal, administrative or investigative (including an action by or
            on behalf of the Company) to which Agent is, was or at any time
            becomes a party, or is threatened to be made a party, by reason of
            the fact that Agent is, was or at any time becomes a director,
            officer, employee or agent of the Company, or is or was serving or
            at any time serves at the request of the Company as a director,
            officer, employee or agent of another company, partnership, joint
            venture, trust or other enterprise; and

      (b)   otherwise to the fullest extent as may be provided to Agent by the
            Company under the non-exclusivity provisions of the GCL and the
            Bylaws.

      2.3 LIMITATIONS ON ADDITIONAL INDEMNITY. No indemnity pursuant to
Paragraph 2.2 may be paid by the Company:

      (a)   if indemnity is not lawful (and, in this respect, both the Company
            and Agent have been advised that the Securities and Exchange
            Commission believes that indemnification for liabilities arising
            under the federal securities laws is against public policy and is,
            therefore, unenforceable and that claims for indemnification should
            be submitted to appropriate courts for adjudication);

      (b)   if judgment is rendered against Agent for an accounting of profits
            made from the purchase or sale by Agent of securities of the Company
            pursuant to the provisions of

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            Section 16(b) of the Securities Exchange Act of 1934 and amendments
            thereto or similar provisions of any federal, state or local law;

      (c)   if Agent's conduct is finally adjudged to have been knowingly
            fraudulent or deliberately dishonest, or to constitute willful or
            intentional misconduct;

      (d)   if Agent's conduct is established by a final judgment as
            constituting a breach of Agent's duty of loyalty to the Company or
            resulting in any personal profit or advantage to which Agent was not
            legally entitled;

      (e)   for which payment is actually made to Agent under a valid and
            collectible insurance policy or under a valid and enforceable
            indemnity clause, bylaw or agreement, except in respect of any
            excess beyond payment under such insurance, clause, bylaw or
            agreement; or

      (f)   in connection with any proceeding (or part thereof) initiated by
            Agent, or any proceeding by Agent against the Company or its
            directors, officers, employees or other agents, unless (i) such
            indemnification is expressly required to be made by law, or (ii) the
            proceeding was authorized by the Board of Directors of the Company.

      2.4 CONTRIBUTION. If the indemnification provided in Paragraphs 2.1 and
2.2 is unavailable and may not be paid to Agent for any reason other than those
set forth in Paragraph 2.3, then in respect to any threatened, pending or
completed action, suit or proceeding in which the Company is jointly liable with
Agent (or would be if joined in such action, suit or proceeding), the Company
shall contribute to the amount of expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
and paid or payable by Agent in such proportion as is appropriate to reflect (i)
the relative benefits received by the Company on the one hand and by Agent on
the other hand from the transaction from which such action, suite or proceeding
arose, and (ii) the relative fault of the Company on the one hand and of Agent
on the other hand in connection with the events that resulted in such expenses,
judgements, fines or settlement amounts, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and of Agent
on the other hand shall be determined by reference to, among other things, the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent the circumstances resulting in such expenses, judgments,
fines or settlement amounts. The Company agrees that it would not be just and
equitable if contribution pursuant to this Paragraph 2.4 were determined by pro
rata allocation or any other method of allocation that does not take account of
the foregoing equitable considerations.

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      2.5 CONTINUATION OF OBLIGATIONS.

      (a)   All agreements and obligations of the Company contained herein shall
            continue during the period Agent is a director, officer, employee or
            agent of the Company or (or is or was serving at the request of the
            Company as a director, officer, employee or agent of another
            corporation, partnership, joint venture, trust or other enterprise)
            and shall continue thereafter so long as Agent shall be subject to
            any possible claim or threatened, pending or completed action, suit
            or proceeding, whether civil, criminal or investigative, by reason
            of the fact that Agent was serving in any capacity referred to
            herein.

      (b)   If Agent is deceased and is entitled to indemnification under any
            provision of this Agreement, the Company shall indemnify Agent's
            estate and her or his spouse, heirs, administrators and executors
            against, and the Company shall, and does hereby agree to, assume any
            and all expenses (including attorneys' fees), penalties and fines
            actually and reasonably incurred by or for Agent or her or his
            estate, in connection with the investigation, defense, settlement or
            appeal of any such action, suit or proceeding. Further, when
            requested in writing by the spouse of Agent, and/or the heirs,
            executors or administrators of Agent's estate, the Company shall
            provide appropriate evidence of the Company's agreement set out
            herein, to indemnify Agent against and to itself assume such costs,
            liabilities and expenses.

      2.6 NOTIFICATION AND DEFENSE OF CLAIM. Not later than 30 days after
receipt by Agent of notice of the commencement of any action, suit or
proceeding, Agent must, if a claim in respect thereof is to be made against the
Company under this Agreement, notify the Company of the commencement thereof.
Agent's omission so to notify the Company will relieve the Company from any
liability that it may have to her or him under this Agreement. However, such
omission will not relieve the Company from any obligation it may have to Agent
other than under this Agreement.

      With respect to any such action, suit or proceeding as to which Agent
notifies the Company of the commencement thereof:

      (a)   The Company may participate therein at its own expense;

      (b)   Except as otherwise provided below, to the extent that it may wish,
            the Company, jointly with any other indemnifying party similarly
            notified, may assume the defense thereof, with counsel reasonably
            satisfactory to Agent. After notice from the Company to Agent of the
            Company's election to assume the defense as provided above, the
            Company will not be liable to Agent under this Agreement for any
            legal or other expenses subsequently incurred by Agent in connection
            with the defense thereof, other than reasonable costs of
            investigation or as otherwise provided below. Agent may employ
            counsel in such action, suit or proceeding, but the fees and
            expenses of such counsel incurred after notice from the Company of
            its assumption

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            of the defense thereof shall be at the expense of Agent unless (i)
            the employment of counsel by Agent has been authorized by the
            Company, (ii) Agent shall have reasonably concluded that there may
            be a conflict of interest between the Company and Agent in
            conducting the defense of such action or (iii) the Company shall not
            in fact have employed counsel to assume the defense of such action,
            in each of which cases the fees and expenses of counsel shall be at
            the expense of the Company. The Company may not assume the defense
            of any action, suit or proceeding brought by or on behalf of the
            Company or as to which Agent shall have made the conclusion provided
            for in (ii) above; and

      (c)   The Company shall not be required to indemnify Agent under this
            Agreement for any amounts paid in settlement of any action or claim
            effected without its written consent. The Company may not settle any
            action or claim in any manner that would impose any penalty or
            limitation on Agent without her or his written consent. Neither the
            Company nor Agent will unreasonably withhold its consent to any
            proposed settlement.

      2.7 ADVANCEMENT AND REPAYMENT OF EXPENSES.

      (a)   If Agent employs her or his own counsel pursuant to Paragraph
            2.6(b)(i) through (iii) above, the Company shall advance to Agent
            any and all reasonable expenses (including legal fees and expenses)
            incurred in investigating or defending any threatened or pending
            action, suit or proceeding, whether civil, criminal, administrative
            or investigative, within ten (10) days after receiving from Agent
            copies of invoices for such expenses and prior to any final
            disposition of any such action, suit or proceeding.

      (b)   Agent agrees that she or he will reimburse the Company for all
            reasonable expenses paid by the Company in defending any civil or
            criminal action, suit or proceeding against Agent if and only to the
            extent it shall be ultimately determined that Agent is not entitled,
            under the provisions of the GCL, the Bylaws, this Agreement or
            otherwise, to be indemnified by the Company for such expenses.

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      2.8   ENFORCEMENT.

      (a)   Any right to indemnification or advances granted by this Agreement
            to Agent shall be enforceable by or on behalf of Agent in any court
            of competent jurisdiction if (i) the claim for indemnification or
            advances is denied, in whole or in part, or (ii) no disposition of
            such claim is made within ninety (90) days of request therefor.
            Agent, in such enforcement action, if successful in whole or in
            part, shall be entitled to be paid also the expense of prosecuting
            her or his claim. It shall be a defense to any action for which a
            claim for indemnification is made under this Agreement (other than
            an action brought to enforce a claim for expenses pursuant to
            Section 2.7, provided that the required undertaking has been
            tendered to the Company) that Agent is not entitled to
            indemnification because of the limitations set forth in Section 2.3.
            Neither the failure of the Company (including its Board of Directors
            or its stockholders) to have made a determination prior to the
            commencement of such enforcement action that indemnification of
            Agent is proper in the circumstances, nor an actual determination by
            the Company (including its Board of Directors or its stockholders)
            that such indemnification is improper shall be a defense to the
            action or create a presumption at Agent is not entitled to
            indemnification under this Agreement or otherwise.

      (b)   The Company expressly confirms and agrees that it has entered into
            this Agreement and assumed the obligations imposed on the Company
            hereby to induce Agent to serve as a director, officer, employee or
            other agent of the Company or, at the request of the Company, other
            corporations or enterprises, and acknowledges that she or he is
            relying upon this Agreement in serving in such capacity.

      (c)   If Agent is required to bring any action to enforce rights or to
            collect moneys due under this Agreement and is successful in such
            action, the Company shall reimburse Agent for all of her or his
            reasonable fees and expenses in bringing and pursuing such action.

      2.9 SUBROGATION. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Agent, who shall execute all documents required and shall do all
acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.

      2.10 NON-EXCLUSIVITY OF RIGHTS. The rights conferred on Agent by this
Agreement shall not be exclusive of any other right which Agent may have or
hereafter acquire under any statute, provision of the Company's Certificate of
Incorporation or Bylaws, agreement, vote of stockholders or directors, or
otherwise, both as to action in her or his official capacity and as to action in
another capacity while holding office.

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                       ARTICLE 3. MISCELLANEOUS PROVISIONS

      3.1 SEPARABILITY. Each of the provisions of this Agreement is a separate
and distinct agreement and independent of the others, so that if any provision
of this Agreement is held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of any other provisions.

      3.2 BINDING EFFECT. This Agreement shall be binding upon Agent and upon
the Company, its successors and assigns, and shall inure to the benefit of
Agent, her or his heirs, personal representatives and assigns and to the benefit
of the Company, its successors and assigns. The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or
assetsCompany,expressly to assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to perform
if no such succession had taken place.

      3.3 AMENDMENT AND TERMINATION. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.

      3.4 GOVERNING LAW. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Delaware.

      3.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of which shall
together constitute a single instrument.

      3.6 HEADINGS. The headings of paragraphs in this Agreement are for
convenience only and shall not be deemed to constitute part of this Agreement or
affect the construction thereof.

      3.7 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given (i)
upon delivery if delivered by hand to the party to whom such communication was
directed or (ii) upon the third business day after the date on which such
communication was mailed if mailed by certified or registered mail with postage
prepaid:

      (a)   if to Agent, at the address indicated on the signature page
            hereof; and

      (b)   if to the Company, to:

            Tanox, Inc.
            10301 Stella Link
            Houston, Texas 77025
            Attn: President
            Facsimile: (713) 664-8914;

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or to such other address as may have been furnished to Agent by the Company as
provided in this paragraph.

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.EXHIBIT 10.2

                             TANOX BIOSYSTEMS, INC.

                             1987 STOCK OPTION PLAN

                             I. PURPOSE OF THE PLAN

      The Tanox Biosystems, Inc. 1987 Stock Option Plan (the "Plan") is intended
to provide a means whereby certain employees of Tanox Biosystems, Inc., a Texas
corporation (the "Company"), and its subsidiaries, if any, may develop a sense
of proprietorship and personal involvement in the development and financial
success of the Company, and to encourage them to remain with and devote their
best efforts to the business of the Company, thereby advancing the interests of
the Company and its shareholders. Accordingly, the Company may grant to certain
employees the option ("Option") to purchase shares of the $0.01 par value common
stock of the Company ("Stock"), in accordance with the terms and conditions of
the Plan. Options granted under the Plan may be either incentive stock options
("Incentive Stock Options") within the meaning of section 422A(b) of the
Internal Revenue Code of 1986, as amended (the "Code") or options which do not
constitute Incentive Stock Options.

                               II. ADMINISTRATION

      The Plan shall be administered by a Committee (the "Committee") of one or
more persons appointed by the Board of Directors of the Company (the "Board")
Members of the Committee shall be eligible to participate in the Plan or in any
other stock, stock option or stock appreciation rights plan of the Company or
any of its affiliates ("Company Stock Plan"). The Committee shall have sole
authority to select the employees who are to be granted Options from among those
eligible under the Plan and to establish the number of shares which may be
issued under each Option. The Committee is authorized to interpret the Plan and
may from time to time adopt such rules and regulations, not inconsistent with
the provisions of the Plan, as it may deem advisable to carry out the Plan.
Without intending to limit its authority, the Committee is specifically
authorized to adopt such limitations and requirements in connection with the
exercise of Options granted under the Plan and have such information prepared
for distribution to persons receiving such Options as may be necessary or
appropriate to qualify the exercise of such Options

                                  EXHIBIT "B"
<PAGE>
and issuance of the Stock pursuant thereto for exemption from registration under
applicable federal and state securities laws or, if desired, to register such
stock under such securities laws. All decisions made by the Committee in
selecting the employees to whom options shall be granted, in establishing the
number of shares which may be issued under each Option, and in construing the
provisions of the Plan shall be final. If a Committee is not appointed by the
Board, the Board shall act as the Committee for purposes of the Plan.

                             III. OPTION AGREEMENTS

      Each Option shall be evidenced by an option agreement ("Option Agreement")
and shall contain such terms and conditions, and may be exercisable for such
periods, as may be approved by the Committee. The terms and conditions of the
respective Option Agreements need not be identical. Also, an Option Agreement
may provide for the payment of the option price, in whole or in part, by the
delivery of a number of shares of Stock (plus cash if necessary) having a fair
market value equal to such option price; provided, that the shares of such Stock
delivered have been held for a sufficient period to meet criteria for "maturity"
established by the Committee acting upon advice of the independent certified
public accountants of the Company. For all purposes under the Plan, the fair
market value of a share of Stock on a particular date shall be determined by the
Committee in such manner as it deems appropriate. If the Stock is publicly
traded at the time a determination of its fair market value is required to be
made, fair market value of a share of Stock on a particular date shall be the
average between the closing bid and ask price of the Stock on the most recent
date the Stock was publicly traded. The Option and the rights granted under the
Option shall not be transferable other than by will or the laws of descent and
distribution, and shall be exercisable only by the optionee during the
optionee's lifetime or at optionee's death only by the optionee's guardian
or legal representative; subject, however, to any restrictions on transfer of,
or any options of the Company or other shareholders to reacquire, any shares
purchased by the optionee or the optionee's guardian or legal representative
under the terms of any buy-sell or other agreement which the Company may require
the optionee or the optionee's guardian or legal representative to execute prior
to exercise of the option rights hereunder.

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                           IV. ELIGIBILITY OF OPTIONEE

      Options may be granted only to individuals who are key employees,
officers, or directors of the Company or any subsidiary corporation, if any, (as
defined in section 425 of the Code) of the Company at the time the Option is
granted. Options may be granted to the same employee on more than one occasion.
Optionee shall not be required to exercise Options granted hereunder on more
than one occasion in the order that they were granted and may exercise Options
in such order as Optionee may determine. The aggregate fair market value
(determined on the basis of the fair market value of the Stock at the time of
the grant of the Incentive Stock Option) of Stock with respect to which such
Incentive Stock Options are first exercisable by an optionee during any calendar
year (under the Plan and any other incentive stock option plans of the Company
and any parent and subsidiary corporations) shall not exceed $100,000; however,
the value of Stock for which options may be granted to an optionee in any year
may exceed $100,000. Further, no Incentive Stock Option shall be granted to an
individual if, at the time the Option is granted, such individual owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or of its parent or any subsidiary corporation, within the
meaning of section 422A(b)(6) of the Code, unless (i) at the time such Option is
granted the option price is at least 110% of the fair market value of the Stock
subject to the Option and (ii) such Option by its terms is not exercisable after
the expiration of five years from the date of grant.

                          V. SHARES SUBJECT TO THE PLAN

      The aggregate number of shares which may be issued under Options granted
under the Plan shall not exceed 2,700,000 (as amend and adjusted respectively,
by resolution of the Board of Directors effective as of April 24, 1989, June 30,
1990, and March 31, 1997) shares of Stock. Such shares may consist of authorized
but unissued shares of Stock or previously issued shares of Stock reacquired by
the Company. Any of such shares which remain unissued and which are not subject
to outstanding Options at the termination of the Plan shall cease to be subject
to the Plan, but, until termination of the Plan, the Company shall at all times
make available a sufficient number of shares to meet the requirements of the
Plan. Should any Option expire or terminate prior to its exercise in full, the
shares previously subject to such Option may again be subject to an Option
granted under the Plan. The aggregate number of shares which may be issued under
the Plan shall be subject to adjustment as provided in

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Paragraph VIII hereof. Exercise of an Option in any manner, shall result in a
decrease in the number of shares of Stock which may thereafter be available,
both for purposes of the Plan and for sale to any one employee, by the number of
shares as to which the Option is exercised. Separate stock certificates shall be
issued by the Company for those shares acquired pursuant to the exercise of an
Incentive Stock Option and for those shares acquired pursuant to the exercise of
any Option which does not constitute an Incentive Stock Option.

                                VI. OPTION PRICE

      The purchase price of Stock issued under each Option shall be determined
by the Committee, but, in the case of an Incentive Stock Option, such purchase
price shall not be less than the fair market value of Stock subject to the
Option on the date the Option is granted.

                               VII. TERM OF PLAN

      The Plan shall be effective upon the date of its adoption by the Board of
Directors, provided the Plan is subsequently approved by the shareholders of the
Company within 12 months thereafter. Except with respect to Options then
outstanding, if not sooner terminated under the provisions of Paragraph IX
hereof, the Plan shall terminate upon and no further Options shall be granted
after the expiration of ten years from the date of its adoption by the Board of
Directors.

                    VIII. RECAPITALIZATION OR REORGANIZATION

      (a) The existence of the Plan and the Options granted hereunder shall not
affect in any way the right or power of the Board of Directors or the
shareholders of the Company to make or authorize (i) any adjustment,
recapitalization, reorganization, or other change in the Company's capital
structure or its business, (ii) any merger or consolidation of the Company,
(iii) any issue of debt or equity securities with priority to or affecting Stock
or the rights thereof, (iv) the dissolution or liquidation of the Company or any
sale or transfer of all or any part of its assets or business, or (v) any other
corporate act or proceeding. The Committee shall be authorized to increase the
number of shares

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which may be issued under this Plan, as set forth in Paragraph V, if necessary
to permit any adjustment in the number of shares under this Paragraph VIII, so
long as sufficient authorized, unissued and otherwise unencumbered shares are
available to permit such increase.

      (b) The shares with respect to which Options may be granted are shares of
Stock as presently constituted, but if, and whenever, prior to the expiration of
an Option previously granted, the Company shall effect a subdivision or
consolidation of shares of Stock or the payment of a stock dividend on Stock
without receipt of consideration by the Company, then the number of shares of
Stock with respect to which such Option may thereafter be exercised (i), in the
event of an increase in the number of outstanding shares, shall be
proportionately increased and the purchase price per share shall be
proportionately reduced and (ii), in the event of a reduction in the number of
outstanding shares, shall be proportionately reduced and the purchase price per
share shall be proportionately increased.

      (c) If the Company recapitalizes or otherwise changes its capital
structure, thereafter, upon any exercise of an Option previously granted, the
optionee shall be entitled to purchase under such Option, in lieu of the number
of shares of Stock as to which such Option shall then be exercisable, the number
and class of shares of stock and securities to which the optionee would have
been entitled pursuant to the terms of the recapitalization if, immediately
prior to such recapitalization, the optionee had been the holder of record of
the number of shares of Stock as to which such Option is then exercisable.

      If (i) the Company shall not be the surviving entity in any merger or
consolidation (or survives only as a subsidiary of another entity), (ii) the
Company is to sell all or substantially all of its assets to any other person or
entity (other than a wholly-owned subsidiary), (iii) any person or entity
(including a "group" as contemplated by Section 13(d)(3) of the Securities
Exchange Act of 1934) acquires or gains ownership or control of (including,
without limitation, power to vote) more than 50% of the outstanding shares of
Stock, (iv) the Company is to be dissolved and liquidated, or (v) as a result of
or in connection with a contested election of directors, the persons who were
directors of the Company before such election shall cease to constitute a
majority of the Board (each such

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event is referred to herein as a "Corporate Change"), then the Committee, acting
in its sole discretion without the consent or approval of any optionee, shall
effect one or more of the following alternatives (subject to the limitation set
forth in Paragraph IV as to the maximum amount of Stock as to which Incentive
Stock Options may first become exercisable in any calendar year), which may vary
among individual optionees:

            (1) acceleration of the time at which Options then outstanding may
      be exercised so that such Options may be exercised in full for a limited
      period of time on or before a specified date (before or after such
      Corporate Change) fixed by the Committee, after which specified date all
      unexercised Options and all rights of optionees thereunder shall
      terminate;

            (2) require the mandatory surrender to the Company by selected
      optionees of each outstanding Option held by such optionees (irrespective
      of whether such Options are then exercisable under the provisions of the
      Plan) as of a date, before or after such Corporate Change, specified by
      the Committee, and in such event the Committee shall cancel such Options
      as soon as reasonably possible and pay to each optionee an amount of cash
      equal to the excess of the fair market value of the aggregate shares
      subject to such Option over the aggregate option price of such shares;

            (3) make such adjustments to Options then outstanding as the
      Committee deems appropriate to reflect such Corporate Change; provided,
      however, that the Committee in its sole discretion, may determine that no
      adjustment is necessary to Options then outstanding; or

            (4) provide that, upon any subsequent exercise of an Option
      theretofore granted, the optionee shall be entitled to purchase under such
      Option, in lieu of the number of shares of Stock as to which such Option
      shall then be exercisable, the number and class of shares of stock and
      securities to which the optionee would have been entitled pursuant to the
      terms of the agreement of merger, consolidation or sale of assets and
      dissolution if, immediately prior to such merger, consolidation or sale of
      assets and dissolution, the optionee had been the holder of record of the
      number of shares of Stock as to which such Option is then exercisable.

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<PAGE>
      Such actions shall be taken and be effective as of a date selected by the
Committee within (a) ten days after the approval by the shareholders of the
Company of any such merger, consolidation, sale of assets or dissolution or (b)
thirty days of any such change of control, as provided in (i) through (v) above.
The Committee for purposes of the Corporate Changes described in (iii) and (v)
above shall be the Committee as constituted prior to the occurrence of such
Corporate Change.

      (d) Any adjustment provided for in Subparagraphs (b) and (c) above shall
be subject to any required shareholder action.

      (e) Except as otherwise provided in this Plan, the issuance by the
Company of shares of Stock, or any class of securities convertible into shares
of stock of any class, for cash, property, labor or services, upon direct sale,
upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities and, in any case, whether or not for fair value, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares of Stock subject to Options previously granted or the purchase
price per share.

                    IX. AMENDMENT OR TERMINATION OF THE PLAN

      The Board of Directors in its discretion may terminate the Plan at any
time with respect to any shares for which Options have not been granted prior to
such termination. The Board of Directors shall have the right to alter or amend
the Plan or any part of the Plan from time to time; provided, however, that no
change in any Option granted before such alteration or amendment may be made
which would impair the rights of the optionee without the consent of such
optionee; and provided, further, that the Board of Directors may not make any
alteration or amendment which would (i) materially increase the benefits
accruing to participants under the Plan, (ii) increase the aggregate number of
shares which may be issued pursuant to the provisions of the Plan, (iii) change
the class of employees eligible to receive Options under the Plan, or (iv)
extend the term of the Plan without the approval of the shareholders of the
Company.

                                       -7-

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