Document:

EXHIBIT 10.2

                              AMENDED AND RESTATED

                     AMERIPATH, INC. 1998 STOCK OPTION PLAN

         WHEREAS, PathSOURCE, Inc., a Delaware corporation ("PathSOURCE")
adopted the PathSOURCE, Inc. 1998 Stock Option Plan, effective as of April 14,
1999, to award incentive and nonqualified stock options to certain officers,
other key employees, non-employee directors, and independent contractors of
PathSOURCE; and

         WHEREAS, pursuant to that certain Agreement and Plan of Merger, dated
as of May 30, 2000 by and among Pathology Consultants of America, Inc. d/b/a
Inform DX ("Inform DX"), PCA Merger Corp., a wholly owned subsidiary of Inform
DX, PathSOURCE, and the shareholders of PathSOURCE, Inform DX assumed the
PathSOURCE, Inc. 1998 Stock Option Plan and all of the stock options outstanding
thereunder; and

         WHEREAS, pursuant to that certain Agreement and Plan of Merger, dated
as of November 7, 2000 by and among Ameripath, Inc., a Delaware corporation (the
"Company"), AMP Merger Corp., a wholly owned subsidiary of the Company, and
Inform DX, the Company assumed the PathSOURCE, Inc. 1998 Stock Option Plan and
all of the stock options outstanding thereunder; and

         WHEREAS, the Board of Directors of the Company (the "Board") believes
that in an effort to avoid confusion and to ease administration of the
PathSOURCE, Inc. 1998 Stock Option Plan in the future, it is in the Company's
best interest to amend and restate the PathSOURCE, Inc. 1998 Stock Option Plan
to (i) revise the name of the PathSOURCE, Inc. 1998 Stock Option Plan to
substitute Ameripath, Inc. in place of PathSOURCE, Inc.; (ii) revise the
definition of "Company" in the PathSOURCE, Inc. 1998 Stock Option Plan to
substitute Ameripath, Inc. in place of PathSOURCE, Inc., and (iii) substitute
the shares of Company's common stock to be issuable under the PathSOURCE, Inc.
1998 Stock Option Plan in place of the shares of Inform DX's common stock;

         NOW, THEREFORE, the Amended and Restated Ameripath, Inc. 1998 Stock
Option Plan is hereby amended and restated in its entirety under the following
terms and conditions:

       1. Purpose. This Amended and Restated Ameripath, Inc. 1998 Stock Option
Plan (the "Plan") is intended to provide a means whereby the Company may,
through the grant of Incentive stock options and nonqualified stock options
(collectively, the "Options") to purchase non-voting common stock of the Company
("Common Stock") to officers and other key employees ("Key employees"),
non-employee directors, and independent contractors of the Company and other
"Related Corporations" (as defined below), attract and retain such Key
Employees, non-employee directors, and independent contractors and motivate them
to exercise their beat efforts on behalf of the enterprise.

                  For purposes of the Plan, a "Related Corporation" shall mean
either a "subsidiary corporation" of the Company, as defined in Section 424(f)
of the Internal Revenue Code of 1986, as amended (the "Code"), or the "parent
corporation" of the Company, as defined in Section 424(e) of the Code. Further,
as used in the Plan, (i) the term "ISO" shall mean an option which, at the time
such option is granted, qualifies as an Incentive stock option within the
meaning of Section 422 of the Code unless the "Option Agreement" (as defined in
Section 8 hereof) states that the option will not be treated as an ISO; and (ii)
the term "NQSO" shall mean a nonqualified stock option, i.e., an option which,
at the time such option is granted, does not meet the definition of "ISO" in the
preceding clause (i), whether or not such NQSO is designated as an NQSO in the
Option Agreement.

       2. Administration.

         (a) The Plan shall be administered by the Company's Compensation
Committee (the "Committee"), the members of which shall be appointed by, and
shall serve at the pleasure of, the Company's Board of Directors (the "Board").
The Board shall change the membership of the Committee, to the extent necessary,
so that on and

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after such date (the "Offering Date"), if any, as the Company first registers
equity securities under Section 12 of the Securities Exchange Act of. 1934, as
amended (the "Exchange Act"), the Committee shall consist solely of not fewer
than two "non-employee directors" (within the meaning of Rule 16b-3(b)(3) under
the Exchange Act, or any successor thereto) of the Company who are also "outside
directors" (within the meaning of Treas. Reg. ss. 1.162-27(e)(3), or any
successor thereto) of the Company. Each member of the Committee, while serving
as such, shall be deemed to be acting in his or her capacity as a director of
the Company.

         (b) In the event a committee has not been established In accordance
with subsection (a) above, or cannot be constituted to vote on the grant of an
Option (for example, because of state laws governing corporate self-dealing),
the entire Board shall serve as the Committee for all purposes of the Plan;
provided, however, that a member of the Board shall not participate in a vote
approving the grant of an Option to himself or herself to the extent provided
under the laws of the State of Delaware governing corporate self-dealing.

                  The Committee shall have full authority, subject to the terms
of the Plan, to select the Key Employees, non-employee directors, and
independent contractors to be granted Options under the Plan, to grant Options
on behalf of the Company, and to set the date of grant and the other terms of
such Options. The Committee may correct any defect, supply any omission, end
reconcile any inconsistency in the Plan and in any Option granted hereunder in
the manner and to the extent it deems desirable. The Committee may also, in its
discretion, adjust the price of an Option, or cancel an Option and grant a new
Option to replace the canceled Option; provided, that if the Committee changes
the price of an Option or replaces an Option, the resulting Option shall be
treated as a new Option granted on the date of such change or replacement and
shall comply with the terms of the Plan as such. The Committee also shall have
the authority to establish such rules and regulations, not inconsistent with the
provisions of the Plan, for the proper administration of the Plan, to amend,
modify, or rescind any such rules and regulations, and to make such
determinations and interpretations under, or in connection with, the Plan, as it
deems necessary or advisable. All such rules, regulations, determinations, and
interpretations shall be binding and conclusive upon the Company and all Related
corporations, their shareholders, and all Key Employees, non-employee directors,
and independent contractors, upon their respective legal representatives,
beneficiaries, successors, and assigns, and upon all other persons claiming
under or through any of them.

                  No member of the Board or the Committee shall be liable for
any action or determination made in good faith with respect to the Plan or any
Option granted under it.

       3. Eligibility. The class of employees who shall be eligible to receive
Options under the Plan shall be the Key Employees (including any directors who
also are officers or key employees), non-employee directors, and independent
contractors of the Company or a Related Corporation. Key Employees shall be
eligible to receive ISOs and NQSOs. Non-employee directors and independent
contractors shall be eligible to receive only NQSOs. More than one Option may be
granted to a Key Employee, non-employee director, or independent contractor
under the Plan. A Key Employee, non-employee director, or independent contractor
who has been granted an Option under the Plan shall hereinafter be referred to
as an "Optionee."

       4. Stock. Options may be granted under the Plan to purchase up to a
maximum of 80,000 shares of Common Stock, par value $ 0.01 per share; provided,
however, that no Key Employee shall receive Options for more than 16,066 shares
of the Common Stock under this Plan. Both of the limits on the number of shares
in the preceding sentence shall be subject to adjustment as hereinafter
provided. Shares issuable under the Plan may be authorized but unissued shares
or reacquired shares, and the Company may purchase shares required for this
purpose, from time to time, if it deems such purchase to be advisable. If any
Option granted under the Plan expires, or if any such Option is canceled for any
reason whatsoever (including, without limitation, the Optionee's surrender
thereof), without having been exercised, the shares subject to the unexercised
portion of the Option shall continue to be available for the granting of Options
under the Plan as fully as if the shares had never been subject to an Option.
However, (i) if an Option is canceled, the shares of Common Stock covered by the
canceled Option shall be counted against the maximum number of shares specified
above for which Options may be granted to a single Key Employee, and (ii) if the
exercise price of an Option is reduced after the date of grant, the transaction
shall be treated as a cancellation of the original Option and the grant of a new
Option for purposes of such maximum.

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       5. Granting of Options. From time to time until the expiration or earlier
suspension or discontinuance of the Plan, the Committee may, on behalf of the
Company, grant to Key Employees, non-employee directors, and independent
contractors such Options as it determines are warranted; provided, however,
that. grants of ISOs and NQSOs shall be separate and not in tandem, and further
provided that non-employee directors and independent contractors shall not be
eligible to receive ISOs under the Plan. In making any determination as to
whether a Key Employee, non-employee director, or independent contractor shall
be granted an Option, the type of Option to be granted, the number of shares to
be covered by the Option, and other terms of the Option, the Committee shall
take into account the duties of the Key Employee, non-employee director, or
independent contractor, his or her present and potential contributions to the
success of the Company or a Related Corporation, the tax implications to the
Company and the Key Employee, non-employee director, or independent contractor
of any Option granted, end such other factors as the Committee may deem relevant
in accomplishing the purposes of the Plan. Moreover, the Committee may provide
in the Option that said Option may be exercised only if certain conditions, as
determined by the Committee, are fulfilled.

       6. Annual Limit.

         (a) ISOs. The aggregate fair market value (determined under Section
7(b) hereof as of the date the ISO is granted) of the Common Stock with respect
to which ISOs are exercisable for the first time by a Key Employee during any
calendar year (counting lSOs under this Plan and under any other stock option
plan of the Company or a Related Corporation) shall not exceed $100,000. If an
Option intended as an ISO is granted to a Key Employee and the Option may not be
treated in whole or in part as an ISO pursuant to the $100,000 limitation, the
Option shall be treated as an ISO to the extent it may be so treated under the
limitation and as an NQSO as to the remainder. For purposes of determining
whether an ISO would cause the limitation to be exceeded, lSOs shall be taken
into account in the order granted

         (b) NQSOs. The annual limits set forth above for ISOs shall not apply
to NQSOs.

       7. Terms and Conditions of Options. Options granted pursuant to the Plan
shall include expressly or by reference the following terms and conditions, as
well as such other provisions not Inconsistent with the provisions of the Plan
(and, for lSOs granted under the Plan, the provisions of Section 422(b) of the
Code) as the Committee shall deem desirable.

         (a) Number of Shares. The Option shall state the number of shares of
Common Stock to which the Option pertains.

         (b) Price. The Option shall state the Option price which shall be
determined and fixed by the Committee in its discretion but, in the case of an
ISO, shall not be less than the higher of 100 percent (110 percent in the case
of a more-than 10 percent shareholder, as provided in subsection (j) below) of
the fair market value of the optioned shares of Common Stock on the date the ISO
is granted, or the par value thereof, and, in the case of an NQSO, shall not be
less than the higher of 100 percent of the fair market value of the optioned
shares of Common Stock on the date the NQSO is granted, or the par value
thereof.

         The fair market value of a share of Common Stock shall be arrived at by
a good faith determination of the Committee and shall be -

                           (i) if there are sales of Common Stock on a national
         securities exchange or in an over-the-counter market on the date of
         grant, then the mean between the highest and lowest quoted selling
         price on the date of grant;

                           (ii) if there are no such sales of Common Stock on
         the date of grant but there are such sales on dates within a reasonable
         period both before and after the date of grant, then the weighted
         average of the means between the highest and lowest selling price on
         the nearest date before and the nearest date after the date of grant;

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                           (iii) if actual sales are not available during a
         reasonable period beginning before and ending after the date of grant,
         then the mean between the bid and asked price on the date of grant as
         reported by the National Quotation Bureau; or

                           (iv) if (i) through (iii) are not applicable, such
         other method of determining fair market value as shall be authorized by
         the Code, or the rules or regulations thereunder, and adopted by the
         Committee.

         Where the fair market value of the optioned shares of Common Stock is
determined under (ii) above, the average of the means between the highest and
lowest sales on the nearest date before and the nearest date after the date of
grant shall be weighted inversely by the respective numbers of trading days
between the selling dates and the date of grant (i.e. the valuation date), in
accordance with Treas. Reg. ss. 20.2031-2(b)(1), or any successor thereto.

         (c) Term.

                           (i) ISOs. Subject to earlier termination as provided
         in subsections (e), (f), and (g) below and in Section 10 hereof, the
         term of each ISO shall be not more than 10 years (five years in the
         case of a more-than-10 percent shareholder, as provided in subsection
         (j) below) from the date of grant.

                           (ii) NQSOs. Subject to earlier termination as
         provided in subsections (e), (f), and (g) below and in Section 10
         hereof, the term of each NQSO shall be not more than 10 years from the
         date of grant.

         (d) Exercise. Options shall be exercisable in such installments and on
such dates as the Committee may specify. In the case of new Options granted to
an Optionee to replace options (whether granted under the Plan or otherwise)
held by the Optionee or in the case of Options repriced by the Committee, the
new or repriced Options may be made exercisable, if so determined by the
Committee, in its discretion, at the earliest date the original Options were
exercisable. However, unless the Option price is not decreased, the new or
repriced Options may not be exercised earlier than six months from the date of
grant of the new Options or the repricing of the original Options. Further, the
Committee may accelerate the exercise date of any outstanding Options, in its
discretion, if it deems such acceleration to be desirable.

                  Any exercisable Options may be exercised at any time up to the
expiration or termination of the Option. Exercisable Options may be exercised,
in whole or in part and from time to time, by giving written notice of exercise
to the Company at its principal office, specifying the number of shares to be
purchased and accompanied by payment in full of the aggregate Option exercise
price, for such shares. Only full shares shall be Issued under the Plan, and any
fractional share which might otherwise be issuable upon exercise of an Option
granted hereunder shall be forfeited.

         The Option price shall be payable in the case of an ISO, if the
Committee in its discretion causes the original Option Agreement so to provide,
and in the case of an NQSO, if the Committee in its discretion so determines at
or prior to the time of exercise --

                           (i) in cash or its equivalent;

                           (ii) by delivering a properly executed notice of
         exercise of the Option to the Company and a broker, with irrevocable
         instructions to the broker promptly to deliver to the Company the
         amount of sale or loan proceeds necessary to pay the exercise price of
         the Option; or

                           (iii) in any combination of paragraphs (1) and (2)
         above.

         (e) Termination of Employment or Service. If an Optionee's employment
by or service with the Company is terminated by the Optionee or by his or her
employer prior to the expiration date fixed for his or her Option for any reason
other than death or disability, and if following such termination the Optionee
is not employed

<PAGE>

by the Company or any Related Corporation, such Option may be exercised, to the
extent of the number of shares with respect to which the Optionee could have
exercised it on the date of such termination, or to any greater extent permitted
by the Committee, by the Optionee at any time prior to the earliest of (i) the
expiration date specified in such Option, (ii) one month after the date of such
termination, if the termination was not for "Cause" (as defined below) (unless
the Option Agreement provides a later expiration date in the case of such a
termination), and (iii) the date of such termination, if the termination was for
Cause (unless the Option Agreement provides a later expiration date in the case
of such a termination).

                  The term "Cause" shall mean the Optionee has -

                           (i) materially failed to perform his or her stated
                  duties and not cured such failure (if curable) within 15 days
                  of his or her receipt of written notice of the failure;

                           (ii) demonstrated his or her personal dishonesty;

                           (iii) engaged in willful misconduct;

                           (iv) engaged in a breach of fiduciary duty involving
                  personal profit;

                           (v) willfully violated any law, rule, or regulation,
                  or final cease and desist order (other than traffic violations
                  or similar offenses); or

                           (vi) engaged In other serious misconduct of such a
                  nature that the continued employment or service of the
                  Optionee may reasonably be expected to affect the "Ameripath
                  Group" (as defined in Section 13(e) hereof) adversely.

         (f) Disability. If an Optionee becomes disabled (within the meaning of
Section 22(e)(3) of the Code) during his or her employment by or service with
the Company and, prior to the expiration date fixed for his or her Option, his
or her employment or service is terminated as a consequence of such disability,
such Option may be exercised, to the extent of the number of shares with respect
to which the Optionee could have exercised it on the date of such termination,
or to any greater extent permitted by the Committee, by the Optionee at any time
prior to the earlier of (i) the expiration date specified in such Option, or
(ii) three months after the date of such termination (unless the Option
Agreement provides a later expiration date in the case of such a termination).
In the event of the Optionee's legal disability, such Option may be exercised by
the Optionee's legal representative.

         (g) Death. If an Optionee dies during his or her employment by or
service with the Company, and prior to the expiration date fixed for his or her
Option, or if an Optionee whose employment or service is terminated for any
reason, dies following his or her termination of employment or service but prior
to the earlier of (i) the expiration date fixed for his or her Option, or (ii)
the expiration of the period determined under subsections (e) and (f) above
(including any extension of such period provided in the Option Agreement), such
Option may be exercised, to the extent of the number of shares with respect to
which the Optionee could have exercised it on the date of his or her death, or
to any greater extent permitted by the Committee, by the Optionee's estate,
personal representative, or beneficiary who acquired the right to exercise such
Option by bequest or inheritance or by reason of the death of the Optionee. Such
post-death exercise may occur at any time prior to the earlier of (i) the
expiration date specified in such Option, or (ii) three months after the date of
the Optionee's death (unless the Option Agreement provides a later expiration
date In the case of death).

         (h) Non-transferability; Registration. No ISO and (except as otherwise
provided in any Option Agreement) no NQSO shall be assignable or transferable by
the Optionee other than by will or by the laws of descent and distribution, and
(subject to the preceding clause) during the lifetime of the Optionee shall be
exercisable only by him or her or by his or her guardian or legal
representative. If the Optionee is married at the time of exercise and if the
Optionee so requests at the time of exercise, the certificate or certificates
shall be registered in the name of the Optionee and the Optionee's spouse,
jointly, with right of survivorship.

<PAGE>

         (i) Rights as a Shareholder. An Optionee shall have no rights as a
shareholder with respect to any shares covered by his or her Option until the
issuance of a stock certificate to him or her for such shares.

         (j) More-Than-Ten-Percent Shareholder. If the Key Employee owns more
than 10 percent of the total combined voting power of all shares of stock of the
Company or of a Related Corporation (after applying the attribution rules of
Section 424(d) of the Code) at the time an ISO is granted to him or her, the
Option price for the ISO shall be not less than 110 percent of the fair market
value (as determined under subsection (b) above) of the optioned shares of
Common Stock on the date the ISO is granted, and such ISO, by its terms, shall
not be exercisable after the expiration of five years from the date the ISO is
granted. The conditions set forth in this subsection shall not apply to NQSOs.

         (k) Listing and Registration of Shares. Each Option shall be subject to
the requirement that, if at any time the Committee shall determine, in its
discretion, that the listing, registration, or qualification of the shares of
Common Stock covered thereby upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting of
such Option or the purchase of shares of Common Stock thereunder, or that action
by the Company or by the Optionee should be taken in order to obtain an
exemption from any such requirement, no such Option may be exercised, in whole
or in part, unless and until such listing, registration, qualification, consent,
approval, or action shall have been effected, obtained, or taken under
conditions acceptable to the Committee. Without limiting the generality of the
foregoing, each Optionee or his or her legal representative or beneficiary may
also be required to give satisfactory assurance that such person is an eligible
purchaser under applicable securities laws, and that the shares purchased upon
exercise of an Option are being purchased for investment and not with a view to
distribution; certificates representing such shares may be legended accordingly.

         (l) Withholding and Use of Shares to Satisfy Tax Obligations. The
obligation of the Company to deliver shares of Common Stock upon the exercise of
any Option (or cash in lieu thereof) shall be subject to applicable federal,
state, and local tax withholding requirements. The Committee shall adopt such
withholding rules as it deems necessary to carry out the provisions of this
subsection.

       8. Option Agreements -- Other Provisions. Options granted under the Plan
shall be evidenced by written documents ("Option Agreements") in such form as
the Committee shall from time to time approve, and containing such provisions
not inconsistent with the provisions of the Plan (and, for ISOs granted pursuant
to the Plan, not inconsistent with Section 422(b) of the Code), as the Committee
shall deem advisable. The Option Agreements shall specify whether the Options is
an ISO or NQSO. Each Optionee shall enter into, and be bound by, an Option
Agreement as soon as practicable after the grant of an Option.

       9. Capital Adjustments. The number of shares which may be issued under
the Plan, and the maximum number of shares with respect to which Options may be
granted to any Key Employee under the Plan, both as stated in Section 4 hereof,
and the number of shares issuable upon exercise of outstanding Options under the
Plan (as well as the Option price per share under such outstanding Options)
shall, subject to the provisions of Section 424(a) of the Code, be adjusted as
may be deemed appropriate by the Committee, to reflect any stock dividend, stock
split, share combination, or similar change in the capitalization of the
Company. In the event any such change in capitalization cannot be reflected in a
straight mathematical adjustment of the number of shares issuable upon the
exercise of outstanding Options (and a straight mathematical adjustment of the
exercise price thereof), the Committee shall make such adjustments as are
appropriate to reflect most nearly such straight mathematical adjustment. Such
adjustments shall be made only as necessary to maintain the proportionate
interest of Optionees, and preserve, without exceeding, the value of Options.

       10. Certain Corporate Transactions. In the event of a corporate
transaction such as, for example, a merger, consolidation, acquisition of
property or stock, separation, reorganization, or liquidation, each outstanding
Option shall be assumed by the surviving or successor corporation; provided,
however, that, in the event of a proposed corporate transaction, the Committee
may terminate all or a portion of the outstanding Options, effective upon the
closing of the corporate transaction, if It determines that such termination is
in the best interests of the Company. If the Committee decides so to terminate
outstanding Options, the Committee shall give each Optionee

<PAGE>

holding an Option to be terminated not less than seven days' notice prior to any
such termination, and any Option which is to be so terminated may be exercised
(if and only to the extent that it is then exercisable) up to, and including the
time of such termination. Further, as provided in Section 7(d) hereof, the
Committee, in its discretion, may accelerate, in whole or in part, the date on
which any or all Options become exercisable.

                  The Committee also may, in its discretion, change the terms of
any outstanding Option to reflect any such corporate transaction, provided that,
in the case of ISOs, such change would not constitute a "modification" under
Section 424(h) of the Code, unless the Key Employee consents to the change.

       11. Exercise Upon Change in Control.

         (a) Notwithstanding any other provision of this Plan, but subject to
subsection (c) below, all outstanding Options shall become fully vested and
exercisable upon a Change in Control, except to the extent the Option Agreement
provides otherwise. After a Change in Control, any shares of Common Stock issued
(either before or after the Change in Control) pursuant to the exercise of
Options that were granted under this Plan shall not be subject to the
restrictions of Sections 13, 14, and 15.

         (b) "Change in Control" shall be deemed to have taken place if -

                           (i) any person or entity, including a "group" (within
                  the meaning of Rule 13d-1 under the Exchange Act), but
                  excluding Questor Partners Fund, L.P., any affiliate of such
                  Fund, and any group of which either such Fund or any affiliate
                  may be a member, becomes the beneficial owner of shares of the
                  Company having 50 percent or more of the total number of votes
                  that may be cast for the election of directors of the Company;
                  or

                           (ii) thirty percent or more of the common shares of
                  the Company is sold to the public in a firm commitment
                  underwritten public offering pursuant to an effective
                  registration statement (other than a registration statement on
                  Form S-4, S-8, or any similar form) filed under the Securities
                  Act of 1933, as amended (the "Act"), which results in an
                  active trading market in such common shares (e.g., such common
                  shares are listed on a national securities exchange or on
                  NASDAQ).

         (c) The exercise of an Option shall be accelerated under subsection (a)
above only to the extent the amount includible in the Optionee's gross income
for federal income tax purposes as a result of such accelerated exercise (or, in
the case of an ISO, the amount that would be so includible upon a disqualifying
disposition of the shares so acquired), does not, either alone or together with
other payments and benefits the Optionee has the right to receive from the
Company, constitute a "parachute payment" under Section 280G of the Code. If
necessary, the acceleration shall be limited, in a manner determined by the
Optionee, in order not to violate the foregoing rule. Notwithstanding the
foregoing, the restrictions set forth in this subsection shall be inapplicable
if (i) before the Change in Control, no stock in the Company is readily
tradeable on an established securities market or otherwise, and (ii) the
accelerated exercise is approved by the persons who own, immediately before the
Change in Control, more than 75 percent of the voting power of all the
outstanding stock of the Company.

       12. Amendment or Termination of the Plan.

         (a) In General. The Board, pursuant to a written resolution, from time
to time may suspend or terminate the Plan or amend it, and the Committee may
amend any outstanding Options in any respect whatsoever; except that, without
the approval of the shareholders (given in the manner set forth in subsection
(b) below)--

                           (i) no amendment may be made which would -

                           (A) change the class of employees  eligible to
         participate in the Plan with respect to ISOs;

<PAGE>

                           (B) except as permitted under Section 9 hereof,
         Increase the maximum number of shares of Common Stock with respect to
         which ISOs may be granted under the Plan; or

                           (C) extend the duration of the Plan under Section 22
         hereof with respect to any lSOs granted hereunder.

                           (ii) on and after the Offering Date, no amendment may
                  be mode which would constitute a modification of the material
                  terms of the "performance goal," within the meaning of Treas.
                  Reg.ss.1.162-27(e)(4)(vi) or any successor thereto (to the
                  extent compliance with Section 162(m) of the Code is desired).

         Notwithstanding the foregoing, no such suspension, discontinuance, or
amendment shall materially impair the rights of any holder of an outstanding
Option without the consent of such holder.

         (b) Manner of Shareholder Approval. The approval of shareholders must
comply with all applicable provisions of the corporate charter and bylaws of the
Company, and applicable state law prescribing the method and degree. of
shareholder approval required for the issuance of corporate stock or options.

       13. Company's Right to Repurchase Common Stock. Any shares of Common
Stock issued pursuant to the exercise of Options under this Plan shall be
subject to this Section until the earliest to occur of (i) the dissolution of
the Company, (ii) the Company's initial underwritten public offering ("IPO") of
Common Stock registered under the Act, or (iii) a Change in Control. Common
Stock certificates issued on exercise of an Option may include a legend setting
forth restrictions on transfer and any other legend required by the Committee.

         (a) Termination of Employment or Service or Bankruptcy. Upon
termination of an Optionee's employment by or service with the "Ameripath Group"
(as defined below) for any reason or upon the adjudication of the Optionee as
bankrupt, the taking of any voluntary action by the Optionee or any involuntary
action against the Optionee seeking an adjudication of the Optionee as bankrupt,
or the seeking of any relief by or against the Optionee under any provision of
the Bankruptcy Code (collectively, "Bankruptcy"), the Company shall have the
right, but not the obligation, to purchase all, or any whole number of shares
less than all, of the shares of Common Stock then owned by the Optionee or the
Optionee's "Estate" (as defined below) (the "Repurchase Right"). The Repurchase
Right shall not be available during the six-month period after the Optionee
purchases such shares. The per share purchase price of the shares pursuant to
the Repurchase Right shall be the fair market value (as defined In Section 7(b))
as of the end of the last calendar quarter immediately preceding the earlier of
the date of the Optionee's termination of employment or service or Bankruptcy
(provided, however, that if the six-month period after the Optionee purchased
such shares has not yet elapsed at such valuation time, the fair market value
shall be determined as of the end of the calendar quarter in which such
six-month period ends). The Repurchase Right shall expire 90 calendar days after
the Optionee or the Optionee's Estate has given the Company notice of the
Optionee or the Optionee's Estate's desire to have the Company repurchase shares
of Common Stock then owned by the Optionee or the Optionee's Estate, unless the
Company has given written notice to the Optionee or the Optionee's Estate of its
exercise of the Repurchase Right prior to the expiration of such 90-day period.

         (b) Assignment. The Company may assign all or any portion of its
Repurchase Right under this Section to one or more persons (each an
"Assignee" and collectively the "Assignees").

         (c) Closing. Closing with respect to the Repurchase Right shall take
place at the principal office of the "Employer" (as defined below) within 45
days of the Company's receipt or delivery of written notice of the Optionee's
termination of employment or service or Bankruptcy.

         (d) Tender Requirements at Closing. At the closing, the Optionee or the
Optionee's Estate shall present to the Company and/or its Assignee(s), as the
case may be, share certificates for all shares of Common Stock to be acquired,
such share certificates to be in proper form for transfer. Such shares of Common
Stock shall be transferred free of all liens and encumbrances or adverse claims
of any kind or character. The Company and/or its Assignee(s), upon receipt of a
proper tender from the Optionee or the Optionee's Estate, shall tender payment
of the purchase price in cash or by official bank check (or such other form of
consideration as may be mutually agreed

<PAGE>

upon by the parties). Anything herein to the contrary notwithstanding, it is
acknowledged by each Optionee that the Company may be restricted from tendering
payment of the purchase price in cash or otherwise as a result of limitations
under applicable law or under agreements to which the Company is a party. In
such event, the Company shall have the option to make payment in the form of a
subordinated note or through other means as may be permissible or otherwise
defer payment of the purchase price to the earliest date upon which such
limitations no longer apply.

         (e) Definitions. For purposes of this Section, the terms hereinafter
set forth shall have the following definitions unless otherwise specifically
stated.

                           (i) Employer. The term "Employer" shall mean the
                  member of the Ameripath Group that employs the Optionee at any
                  particular time.

                           (ii) Estate. The term "Estate" shall mean and include
                  the deceased Optionee's executor, administrator or similar
                  personal representative (if one has qualified and is then
                  acting), and the Optionee's surviving spouse, heirs,
                  beneficiaries, devisees, and legatees to the extent, if any,
                  that their action is required in order to effect a full and
                  complete transfer of the deceased Optionee's shares pursuant
                  to the terms of this Plan. The general agent of the persons
                  and entities comprising an Optionee's Estate shall be the
                  Optionee's duly appointed and qualified personal
                  representative, executor or administrator, or his or her
                  surviving spouse where no such representative is appointed,
                  and all notices and communications hereunder shall be effected
                  to and through such general agent.

                           (iii) Ameripath Group. The term "Ameripath Group"
                  shall mean any Related Corporation and the entities
                  controlling, controlled by, or under common control with such
                  Related Corporation.

       14. Restrictions on the Transferability of Common Stock. An Optionee and
his or her beneficiaries shall not sell or otherwise transfer, or pledge or
otherwise encumber (collectively "Transfer"), whether voluntarily or by
operation of law, any shares of Common Stock owned by him or her, whether or not
issued pursuant to the exercise of Options that were granted under this Plan,
except in accordance with the terms and conditions of this Section until the
earliest to occur of (i) the dissolution of the Company, (ii) the Company's IPO
of Common Stock registered under the Act, or (iii) a Change in Control. Any
Transfer in violation of this Section shall be null and void and of no force and
effect. An Optionee (or, if applicable, beneficiary) shall be entitled to
Transfer Common Stock only at the time and to the extent provided below:

         (a) Transfers with Consent. A transfer or disposition may be made if
approved by the Company, subject to paragraph (d) below.

         (b) Transfers to Family Members. Subject to paragraph (d) below, each
Optionee shall be permitted to transfer (whether by purchase, assignment, gift,
bequest, devise, levy, execution, or other means of transfer) all or any portion
of his or her shares of Common Stock to (i) his or her spouse or any lineal
descendant, (ii) any custodian, guardian, or other representative for his or her
spouse or any lineal descendant, and/or (iii) the trustee of any trust created
for the benefit of the Optionee, his or her spouse and/or lineal descendants
(collectively the "Permitted Family Transferees"), provided that each and every
such Permitted Family Transferee executes a written acknowledgment satisfactory
in form and substance to the Company that (i) all shares of Common Stock held by
the Permitted Family Transferee will, notwithstanding the transfer to such
Permitted Family Transferee, be deemed for all purposes of this Plan to be owned
by the transferring Optionee, and (ii) he, she, or it agrees to be bound by all
of the terms of this Plan.

         (c) Transfers Under Other Sections. Subject to paragraph (d) below, a
transfer may be made pursuant to the provisions of Section 13.

         (d) General Restrictions on Transferability. Upon the exercise of
Options under this Plan, each Optionee shall acknowledge his or her
understanding that he or she must bear the economic risk of the shares of

<PAGE>

Common Stock acquired through such exercise for an indefinite period of time
because (i) shares of Common Stock issued under the Plan will not be registered
under the Act and applicable state securities laws; (ii) except as otherwise set
forth herein, the shares of Common Stock may not be sold, transferred, pledged,
or otherwise disposed of without the consent of the Company and an opinion of
counsel for or satisfactory to the Company that registration under the Act or
any applicable state securities laws is not required; (iii) the Company neither
has an obligation to register the shares of Common Stock issued under the Plan
nor has agreed to do so in the future; (iv) the exemption provided in Rule 144
under the Act is not presently available for the resale of any shares of Common
Stock, and there is no assurance that such exemption will be available at any
time in the future with respect to any proposed transfer of shares of Common
Stock; and (v) the Company is under no obligation to perfect any exemption for
resale of shares of Common Stock. Each Optionee shall also acknowledge his or
her understanding that transfers of shares of Common Stock issued under this
Plan will be subject to the limitations set forth elsewhere in this Plan.

       15. Other Restrictions on the Common Stock.

         (a) (intentionally omitted)

         (b) Lock-Up. By exercising Options under this Plan, each Optionee
thereby agrees to execute and deliver a customary "lock-up" agreement,
restricting the transfer of such Optionee's shares of Common Stock, whether or
not acquired upon exercise of Options under this Plan, for not more than 180
days, in connection with an IPO and each other underwritten public offering of
the Company's securities.

       16. Legend. All certificates representing shares of Common Stock issued
to Optionees pursuant to the exercise of Options under this Plan shall bear the
following legend with respect to the restrictions imposed on the Common Stock
pursuant to Sections 13, 14, and 15. On the face of each such certificate there
shall appear the following statement:

                  "SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
                  RESTRICTIONS. SEE REVERSE SIDE."

On the reverse side of each such certificate, the following statement shall
appear:

                  "RESTRICTIONS ON THE RIGHT TO OWN OR TRANSFER THE SHARES OF
                  COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE BEEN IMPOSED
                  PURSUANT TO THE AMENDED AND RESTATED AMERIPATH, INC. 1998
                  STOCK OPTION PLAN. THE COMPANY SHALL FURNISH THE HOLDER HEREOF
                  A COPY OF SUCH PLAN WITHOUT CHARGE UPON WRITTEN REQUEST TO THE
                  COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS OR REGISTERED
                  OFFICE."

       17. Rights. Neither the adoption of the Plan nor any action of the Board
or the Committee shall be deemed to give any individual any right to be granted
an Option, or any other right hereunder, unless and until the Committee shall
have granted such individual an Option, and then his or her rights shall be only
such as are provided by the Option Agreement. Notwithstanding any provisions of
the Plan or the Option Agreement with an Optionee, the Company or any Related
Corporation shall have the right, in its discretion but subject to any
employment or service contract entered into with the Optionee, to retire the
Optionee at any time pursuant to its retirement rules or otherwise to terminate
his or her employment or service at any time for any reason whatsoever.

       18. Indemnification of Board and Committees. Without limiting any other
rights of indemnification which they may have from the Company and any Related
Corporation, the members of the Board and the members of the Committee shall be
indemnified by the Company against all costs and expenses reasonably incurred by
them in connection with any claim, action, suit, or proceeding to which they or
any of them may be a party by reason of any action taken or failure to act
under, or in connection with, the Plan, or any Option granted thereunder, and

<PAGE>

against all amounts paid by them in settlement thereof (provided such settlement
is approved by legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit, or proceeding, except a
judgment based upon a finding of willful misconduct or recklessness on their
part. Upon the making or institution of any such claim, action, suit, or
proceeding, the Board or Committee member shall notify the Company in writing,
giving the Company an opportunity, at its own expense, to handle and defend the
same before such Board or Committee member undertakes to handle it on his or her
own behalf. The provisions of this Section shall not give members of the Board
or the Committee greater rights than they would have under the Company's by-laws
or Delaware law.

       19. Application of Funds. Any cash received in payment for shares upon
exercise of en Option shall be added to the general funds of the Company.

       20. Effective Date. This Plan first became effective on April 14, 1999
(the date the Plan was adopted by the Board of Pathsource), and the Plan, as
amended and restated herein shall be effective as of November 30, 2000.

       21. No Obligation to Exercise Option. The granting of an Option shall
impose no obligation upon an Optionee to exercise such Option.

       22. Termination of Plan. Unless earlier terminated as provided in the
Plan, the Plan and all authority granted hereunder shall terminate absolutely at
12:00 midnight on April 13, 2009, and no Options hereunder shall be granted
thereafter. Nothing contained in this Section, however, shall terminate or
affect the continued existence of rights created under Options issued hereunder
and outstanding on the date set forth in the preceding sentence, which by their
terms extend beyond such date.

       23. Governing Law. The Plan shall be governed by the applicable Code
provisions to the maximum extent possible. Otherwise, the laws of the State of
Delaware shall govern the operation of, and the rights of Optionees under, the
Plan, and Options granted thereunder.<PAGE>

                                                                     EXHIBIT 4.1

                               ROCKETCHIPS,INC.

                            1996 STOCK OPTION PLAN

1.   PURPOSE

     The purpose of this 1996 Stock Option Plan is to promote the interests of
RocketChips, Inc., a Minnesota corporation, by providing employees of the
Company and certain independent contractors and consultants with an opportunity
to acquire a proprietary interest in the Company, and thereby develop a stronger
incentive to contribute to the Company's continued success and growth.  In
addition, the opportunity to acquire a proprietary interest in the Company by
the offering and availability of stock options will assist the Company in
attracting and retaining key personnel, independent contractors and consultants
of outstanding ability.

2.   DEFINITIONS

     Wherever used in the Plan, the following terms have the meanings set forth
below:

     2.1  "Act" means the Securities Act of 1933, as amended.

     2.2  "Board" means the Board of Directors of the Company.

     2.3  "Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.

     2.4  "Committee" means the Committee which may be designated from time to
time by the Board to administer the Plan pursuant to Section 3.5.

     2.5  "Company" means RocketChips, Inc. and any Subsidiary thereof.

     2.6  "Incentive Stock Option" or "ISO" means the stock option which is
intended to qualify as an incentive stock option as defined in Section 422 of
the Code.

     2.7  "Non-Statutory Stock Option" or "NSO" means a stock option that is not
intended to, or does not, qualify as an incentive stock option as defined in
Section 422 of the Code.

     2.8  "Option" means, where required by the context of the Plan, an ISO or a
NSO granted pursuant to the Plan.

     2.9  "Optionee" means a Participant in the Plan who has been granted one or
more Options under the Plan.

     2.10 "Participant" means an individual described in Section 5 of this Plan
who may be granted Options under the Plan.
<PAGE>

     2.11  "Plan" means this 1996 Stock Option Plan.

     2.12  "Stock" means the Common Stock, $.01 par value, of the Company.

     2.13  "Subsidiary" means any corporation, other than the Company, in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns 50% or
more of the voting stock in one of the other corporations in such chain.

3.   ADMINISTRATION

     3.1  The Plan shall be administered by the Board, which shall have full
power, subject to the provisions of the Plan, to grant Options, construe and
interpret the Plan, establish rules and regulations with respect to the Plan and
Options granted hereunder, and perform all other acts, including the delegation
of administrative responsibilities, that it believes reasonable and necessary.

     3.2  The Board shall have the sole discretion, subject to the provisions of
the Plan, to determine the Participants eligible to receive Options pursuant to
the Plan and the amount, type, and terms of any Options and the terms and
conditions of option agreements relating to any Option.  On a case by case
basis, the Board, in its sole discretion, may: (i) accelerate the schedule of
the time or times when an Option granted under the Plan may be exercised; and
(ii) extend the duration of any Option granted under the Plan.

     3.3  The Board may correct any defect, supply any omission, or reconcile
any inconsistency in the Plan or in any Option granted hereunder in the manner
and to the extent it shall deem necessary to carry out the terms of the Plan.

     3.4  Any decision made, or action taken, by the Board arising out of or in
connection with the interpretation and administration of the Plan shall be
final, conclusive and binding upon all Optionees.

     3.5  The Board may designate a Committee from time to time to administer
the Plan.  If designated, the Committee shall be composed of not less than two
persons (who need not be members of the Board) who are appointed from time to
time by the Board. If the Board has appointed a Committee pursuant to this
Section 3.5, then the Committee may administer the Plan and exercise all of the
rights and powers granted to the Board hereunder, including, without limitation,
the right to grant Options pursuant to the Plan and to establish the Option
price as provided in the Plan.

4.   SHARES SUBJECT TO THE PLAN

     4.1  Number.  The total number of shares of Stock reserved for issuance
upon exercise of Options under the Plan is 1,400,000.  Such shares shall consist
of authorized but unissued Stock.  If any Option granted under the Plan lapses
or terminates for any reason before being completely exercised, the shares
covered by the unexercised portion of such Option may again be made subject to
Options under the Plan.

                                       2
<PAGE>

     4.2  Changes in Capitalization.  In the event of any change in the
outstanding shares of Stock of the Company by reason of any stock dividend,
split, recapitalization, reorganization, merger, consolidation, combination,
exchange of shares, or rights offering to purchase stock at a price
substantially below fair market value, or other similar corporate change, the
aggregate number of shares which may be subject to Options under the Plan and
the terms of any outstanding Option, including the number and kind of shares
subject to such Options and the purchase price per share thereof, shall be
appropriately adjusted by the Board, consistent with such change and in such
manner as the Board, in its sole discretion, may deem equitable to prevent
substantial dilution or enlargement of the rights granted to or available for
Optionees.  Notwithstanding the preceding sentence, in no event shall any
fraction of a share of Stock be issued upon the exercise of an Option.

5.   ELIGIBLE PARTICIPANTS

     The following persons are Participants eligible to participate in the Plan:

     5.1  Incentive Stock Options.  Incentive Stock Options may be granted only
to employees of the Company or any Subsidiary, including officers and directors
who are also employees of the Company or any Subsidiary; provided, however, that
officers who are not employed full-time shall not be eligible for Incentive
Stock Options.

     5.2  Non-Statutory Stock Options.  Non-statutory stock options may be
granted to (i) any employee of the Company or any Subsidiary, including any
officer or director who is also an employee of the Company or any Subsidiary;
and (ii) any consultant to, or other independent contractor of, the Company.

6.   GRANT OF OPTIONS

     6.1  Discretionary Grants.  Subject to the terms, conditions, and
limitations set forth in this Plan, the Company, by action of its Board, may
from time to time grant Options to purchase shares of the Company's Stock to
those eligible Participants as may be selected by the Board, in such amounts and
on such other terms as the Board in its sole discretion shall determine.  In
making stock option grants the Board shall specify in each stock option
agreement the vesting schedule which shall apply to each such grant.

     6.2  Limitations.  Options specified in Section 6.1 above may be (i)
"Incentive Stock Options" so designated by the Board and which, when granted,
are intended to qualify as incentive stock options as defined in Section 422 of
the Code; (ii) "Non-Statutory Stock Options" so designated by the Board and
which, when granted, are not intended to, or do not, qualify as incentive stock
options under Section 422 of the Code; or (iii) a combination of both.  The date
on which the Board approves the granting of an Option shall be the date of grant
of such Option, unless a different date is specified by the Board on such date
of approval.  Notwithstanding the foregoing, with respect to the grant of any
Incentive Stock Option under the Plan, the aggregate fair market value of Stock
(determined as of the date the Option is granted) with respect to which
Incentive Stock Options are exercisable for the first time by an Optionee in any
calendar year (under all such stock option plans of the Company or Subsidiaries)
shall not exceed $100,000.  Each grant of an Option under the Plan

                                       3
<PAGE>

shall be evidenced by a written stock option agreement between the Company and
the Optionee setting forth the terms and conditions, not inconsistent with the
Plan, under which the Option so granted may be exercised pursuant to the Plan
and containing such other terms with respect to the Option as the Board in its
sole discretion may determine.

7.   OPTION PRICE AND FORM OF PAYMENT

     7.1  Incentive Stock Options.  The purchase price for a share of Stock
subject to an Incentive Stock Option granted hereunder shall not be less than
100% of the fair market value of the Stock at the time the option is granted
Notwithstanding the foregoing, in the case of an Incentive Stock Option granted
to any Optionee then owning more than 10% of the voting power of all classes of
the Company's Stock, the purchase price per share of the Stock subject to such
Option shall not be less than 110% of the fair market value of the Stock on the
date of grant of the Incentive Stock Option, determined as provided in Section
7.3.

     7.2  Non-Statutory Stock Options.  The purchase price for a share of Stock
subject to a Non-Statutory Stock Option shall be not less than 100% of the fair
market value of the Stock.

     7.3  Determination of Fair Market Value.  For purposes of this Section 7,
the "fair market value" of the Stock shall be determined as follows:

          (a) if the Stock of the Company is listed or admitted to unlisted
     trading privileges on a national securities exchange, the fair market value
     on any given day shall be the closing sale price for the Stock, or if no
     sale is made on such day, the closing bid price for such day on such
     exchange;

          (b) if the Stock is not listed or admitted to unlisted trading
     privileges on a national securities exchange, the fair market value on any
     given day shall be the closing sale price for the Stock as reported on the
     NASDAQ National Market System on such day, or if no sale is made on such
     day, the closing bid price for such day as entered by a market maker for
     the Stock;

          (c) if the Stock is not listed on a national securities exchange, is
     not admitted to unlisted trading privileges on any such exchange, and is
     not eligible for inclusion in the NASDAQ National Market System, the fair
     market value on any given day shall be the average of the closing
     representative bid and asked prices as reported by the National Quotation
     Bureau, Inc. or, if the Stock is not quoted on the National Association of
     Securities Dealers Automated Quotations System, then as reported in any
     publicly available compilation of the bid and asked prices of the Stock in
     any over-the-counter market on which the Stock is traded; or

          (d) if there exists no public trading market for the Stock, the fair
     market value on any given day shall be an amount determined in good faith
     by the Board in such manner as it may reasonably determine in its
     discretion, provided that such amount shall not be less than the book value
     per share as reasonably determined by the Board as of the date of
     determination or less than the par value of the Stock.

                                       4
<PAGE>

     7.4  Payment of Purchase Price.  Except as provided herein, the purchase
price of each share of Stock purchased upon the exercise of any Option shall be
paid:

          (a) in United States dollars in cash or by check, bank draft or money
     order payable to the order of the Company; or

          (b) at the discretion of the Board, through the delivery of shares of
     Stock, having initially or as a result of successive exchanges of shares,
     an aggregate fair market value (as determined in the manner provided under
     this Plan) equal to the aggregate purchase price for the Stock as to which
     the Option is being exercised; or

          (c) at the discretion of the Board, by a combination of both (a) and
     (b) above; or

          (d) by such other method as may be permitted in the written stock
     option agreement between the Company and the Optionee.

If payment by tendering stock is authorized, the Board shall determine
procedures for tendering Stock as payment upon exercise of an Option and may
impose such additional limitations and prohibitions on the use of Stock as
payment upon the exercise of an Option as it deems appropriate.

     If the Board in its sole discretion so agrees, the Company may finance the
amount payable by an Optionee upon exercise of any Option upon such terms and
conditions as the Board may determine at the time such Option is granted under
this Plan.

8.   EXERCISE OF OPTIONS

     8.1  Manner of Exercise.  An Option, or any portion thereof, shall be
exercised by delivering a written notice of exercise to the Board and paying to
the Company the full purchase price of the Stock to be acquired upon the
exercise of the Option.  Until certificates for the Stock acquired upon the
exercise of an Option are issued to an Optionee, such Optionee shall not have
any rights as a shareholder of the Company with respect to such stock.

     8.2  Limitations and Conditions on Exercise of Options.  In addition to any
other limitations or conditions contained in this Plan or that may be imposed by
the Board from time to time or in the stock option agreement to be entered into
with respect to Options granted hereunder, the following limitations and
conditions shall apply to the exercise of Options granted under this Plan:

          8.2.1  No Incentive Stock Option may be exercisable by its terms after
     the expiration of ten (10) years from the date of the grant thereof.

          8.2.2  No Incentive Stock Option granted pursuant to the Plan to an
     eligible Participant then owning more than 10% of the voting power of all
     classes of the Company's stock may be exercisable by its terms after the
     expiration of five years from the date of the grant thereof.

                                       5
<PAGE>

9.   INVESTMENT PURPOSES

     Unless a registration statement under the Act is in effect with respect to
Stock to be purchased upon exercise of Options to be granted under the Plan, the
Company shall require that an Optionee agree with and represent to the Company
in writing that he or she is acquiring such shares of Stock for the purpose of
investment and with no present intention to transfer, sell or otherwise dispose
of such shares of Stock other than by transfers which may occur by will or by
the laws of descent and distribution, and no shares of Stock may be transferred
unless, in the opinion of counsel to the Company, such transfer would be in
compliance with applicable securities laws.  In addition, unless a registration
statement under the Act is in effect with respect to the Stock to be purchased
under the Plan, each certificate representing any shares of Stock issued to an
Optionee hereunder shall have endorsed thereon a legend in substantially the
following form:

     THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED WITHOUT
     REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
     "ACT") AND WITHOUT REGISTRATION UNDER ANY APPLICABLE STATE
     SECURITIES LAWS, IN RELIANCE UPON EXEMPTION(S) CONTAINED THEREIN.
     NO TRANSFER OF THESE SHARES OR ANY INTEREST THEREIN MAY BE MADE
     EXCEPT PURSUANT TO EFFECTIVE REGISTRATION STATEMENTS UNDER SAID
     LAWS UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
     SATISFACTORY TO IT THAT SUCH TRANSFER OR DISPOSITION DOES NOT
     REQUIRE REGISTRATION UNDER SAID LAWS AND, FOR ANY SALES UNDER
     RULE 144 OF THE ACT, SUCH EVIDENCE AS IT SHALL REQUEST FOR
     COMPLIANCE WITH THAT RULE, OR APPLICABLE STATE SECURITIES LAWS.

10.  TRANSFERABILITY OF OPTIONS

     Except as otherwise provided by the Board, no Option granted under the Plan
shall be transferable by an Optionee (whether by sale, assignment, hypothecation
or otherwise) other than by will or the laws of descent and distribution.

11.  TERMINATION OF EMPLOYMENT

     11.1  Generally.  Except as otherwise provided in this Section 11, if an
Optionee's employment with the Company or Subsidiary is terminated (hereinafter
"Termination") other than by death or Disability (as hereinafter defined), the
Optionee may exercise any Option granted under the Plan, to the extent the
Optionee was vested in and entitled to exercise the Option at the date of
Termination, or until the term of the Option has expired, whichever date is
earlier.

     11.2  Termination for Cause.  If the employment of an Optionee is
terminated by the Company or a Subsidiary for cause, then the Board shall have
the right to cancel any Options granted to the Optionee under the Plan.

                                       6
<PAGE>

     11.3  Suspension or Termination for Misconduct.  If the Board reasonably
believes that an Optionee has committed an act of misconduct, it may suspend the
Optionee's right to exercise any Option pending a determination by the Board.
If the Board determines that an Optionee has committed an act of embezzlement,
fraud, dishonesty, nonpayment of an obligation owed to the Company, breach of
fiduciary duty or deliberate disregard of the Company's rules resulting in loss,
damage or injury to the Company, or if an Optionee makes an unauthorized
disclosure of any Company trade secret or confidential information, engages in
any conduct constituting unfair competition with respect to the Company, or
induces any party to breach a contract with the Company, neither the Optionee
nor the Optionee's estate or any permitted assignee shall be entitled to
exercise any Option whatsoever.  In making such determination, the Board shall
act fairly and shall give the Optionee an opportunity to appear and present
evidence on the Optionee's behalf at a hearing before the Board.

12.  AMENDMENT AND TERMINATION OF PLAN

     12.1  The Board, may at any time and from time to time, insofar as
permitted by law, suspend or terminate the Plan or amend it in such respects as
it determines may be in the best interests of the Company.

     12.2  No amendment, suspension or termination of this Plan shall, without
the Optionee's consent, alter or impair any of the rights or obligations under
any Option theretofore granted to him or her under the Plan.

     12.3  The Board may amend the Plan, subject to the limitations cited above,
in such manner as it deems necessary to permit the granting of Incentive Stock
Options meeting the requirements of future amendments to the Code.

     12.4  In the event of the proposed dissolution or liquidation of the
Company, each Option will terminate immediately prior to the consummation of
such proposed action, unless otherwise provided by the Board.  The Board may, in
the exercise of its sole discretion in such instance, declare that any Option
shall terminate as of a date fixed by the Board and give each Optionee the right
to exercise his or her Option as to all or any part of the Option, including
Stock as to which the Option would not otherwise be exercisable.

13.  CHANGE IN CONTROL PROVISIONS

     13.1  Impact of Event.  Notwithstanding any other provision of the Plan to
the contrary, in the event of a Change in Control (as defined in 13.2), any
Options outstanding as of the date such Change in Control is determined to have
occurred and not then exercisable and vested shall become fully exercisable and
vested in the fullest extent of the original grant.

     13.2  Definition of Change in Control.  For purposes of the Plan, a "Change
in Control" shall mean the happening of any of the following events:

           (a) The acquisition by any individual, entity or group (within the
     meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person") of
     beneficial ownership (within the meaning of Rule 13d-3 promulgated under
     the Exchange Act) of thirty percent

                                       7
<PAGE>

     (30%) or more of either (1) the then outstanding shares of Common Stock of
     the Company or (2) the combined voting power of the then outstanding voting
     securities of the Company entitled to vote generally in the election of
     directors; provided, however, that the following acquisitions shall not
     constitute a Change in Control: (i) any acquisition directly from the
     Company; (ii) any acquisition by the Company; (iii) any acquisition by a
     Person including the participant or with whom or with which the participant
     is affiliated; (iv) any acquisition by a Person or Persons one or more of
     which is a member of the Board or an officer of the Company or an affiliate
     of any of the foregoing on the Effective Date, (v) any acquisition by any
     employee benefit plan (or related trust) sponsored or maintained by the
     Company or any corporation controlled by the Company; or (vi) any
     acquisition by any corporation pursuant to a transaction described in
     clauses (A), (B) and (C) of paragraph (c) of this Section 13.2; or

          (b)  During any period of twenty-four (24) consecutive months,
     individuals who, as of the beginning of such period, constituted the entire
     Board cease for any reason to constitute at least a majority of the Board,
     unless the election, or nomination for election, by the Company's
     shareholders, of each new director was approved by a vote of at least two-
     thirds (2/3rds) of the Continuing Directors, as hereinafter defined, in
     office on the date of such election or nomination for election for the new
     director.  For purposes hereof, "Continuing Director" shall mean (i)  any
     member of the Board at the close of business on the Effective Date, or (ii)
     any member of the Board who succeeded any Continuing Director described in
     clause (i) above if such successor's election, or nomination for election,
     by the Company's shareholders, was approved by a vote of at least two-
     thirds (2/3rds) of the  Continuing Directors then still in office.  The
     term "Continuing Director" shall not, however, include any individual whose
     initial assumption of office occurs as a result of either an actual or
     threatened election contest (as such term is used in Rule 14a-11 of
     Regulation 14A of the Exchange Act) or other actual or threatened
     solicitation of proxies or consents by or on behalf of a person other than
     the Board.

          (c)  Approval by the shareholders of the Company of a reorganization,
     merger or consolidation, in each case, unless, following such
     reorganization, merger or consolidation, (A) more than 60% of the then
     outstanding securities having the right to vote in the election of
     directors of the corporation resulting from such reorganization, merger or
     consolidation is then beneficially owned, directly or indirectly, by all or
     substantially all of the individuals and entities who were the beneficial
     owners of the outstanding securities having the right to vote in the
     election of directors of the Company immediately prior to such
     reorganization, merger or consolidation, (B) no Person (excluding the
     Company, any employee benefit plan (or related trust) of the Company or
     such corporation resulting from such reorganization, merger or
     consolidation and any Person beneficially owning, immediately prior to such
     reorganization, merger or consolidation, directly or indirectly, 30% or
     more of the then outstanding securities having the right to vote in the
     election of directors of the Company) beneficially owns, directly or
     indirectly, 30% or more of the then outstanding securities having the right
     to vote in the election of the corporation resulting from such
     reorganization, merger or consolidation, and (C) at least a majority of the
     members of the board of directors of the corporation resulting from such
     reorganization, merger or consolidation are

                                       8
<PAGE>

     Continuing Directors at the time of the execution of the initial agreement
     providing for such reorganization, merger or consolidation; or

          (d) Approval by the shareholders of the Company of the sale or other
     disposition of all or substantially all of the assets of the Company, other
     than to a corporation, with respect to which following such sale or other
     disposition, (A) more than 60% of the then outstanding securities having
     the right to vote in the election of directors of such corporation is then
     beneficially owned, directly or indirectly, by all or substantially all of
     the individuals and entities who were the beneficial owners of the
     outstanding securities having the right to vote in the election of
     Directors of the Company immediately prior to such sale or other
     disposition of such outstanding securities, (B) no Person (excluding the
     Company and any employee benefit plan (or related trust) of the Company or
     such corporation and any Person beneficially owning, immediately prior to
     such sale or other disposition, directly or indirectly, 30% or more of the
     outstanding securities having the right to vote in the election of
     Directors of the Company) beneficially owns, directly or indirectly, 30% or
     more of the then outstanding securities having the right to vote in the
     election of directors of such corporation, and (C) at least a majority of
     the members of the board of directors of such corporation are Continuing
     Directors at the time of the execution of the initial agreement or action
     of the Board providing for such sale or other disposition of assets of the
     Company.

14.  MISCELLANEOUS PROVISIONS

     14.1  No Right to Continued Employment.  No person shall have any claim or
right to be granted an Option under the Plan, and the grant of an Option under
the Plan shall not be construed as giving an Optionee the right to continued
employment with the Company.  The Company further expressly reserves the right
at any time to dismiss an Optionee or reduce an Optionee's compensation with or
without cause, free from any liability, or any claim under the Plan, except as
provided herein or in a stock option agreement.

     14.2  Transfer of Stock and Payment of Withholding Taxes.  The Company
shall have the right to require that payment or provision for payment of any and
all withholding taxes due upon the grant or exercise of an Option hereunder or
the disposition of any Stock or other property acquired upon exercise of an
Option be made by an Optionee.  Stock acquired upon exercise of an Incentive
Stock Option may not be disposed of by the Optionee before the later of two
years from the date of grant or one year from the date of exercise unless
adequate provision is made for payment to the Company of funds sufficient for
payment of any withholding and other taxes required by any governmental
authority in respect of the disposition of such stock.  The Company may place a
legend on certificates restricting the transfer of Stock issued pursuant to
Incentive Stock Options in order to obtain compliance with tax withholding
requirements.  In connection therewith, the Board shall have the right to
establish such rules and regulations or impose such terms and conditions in any
agreement relating to an Option granted hereunder with respect to such tax
withholding as the Board may deem necessary and appropriate.

     14.3  Governing Law.  The Plan shall be administered in the State of
Minnesota, and the validity, construction, interpretation, and administration of
the Plan and all rights relating to the Plan

                                       9
<PAGE>

shall be determined solely in accordance with the laws of such state, unless
controlled by applicable federal law, if any.

15.  EFFECTIVE DATE

     The effective date of the Plan is October 1, 1996 subject, however, to
approval of this Plan by shareholders of the Company in the manner prescribed by
law not later than October 1, 1997.  No Option may be granted after October 1,
2006; provided, however, that the Plan and all outstanding Options shall remain
in effect until such outstanding Options have expired or been canceled.

                                       10

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