Document:

BORGWARNER INC.
                      2004 STOCK INCENTIVE PLAN
              NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

Stock Option Grant Awarded to _____________________

Column (1)	Column (2)	Column (3)	Column (4) 	Column (5) 	Column (6)
Date of	Number of	Exercise	Type of Stock 	Expiration	Cumulative
  	Shares Subject	Price Per:   	Option:	Date of	Percentage
         	             	Stock	Exercise Schedule
	Option			Option	of Stock Option:

M/D/Yr	# Shares  	$-- 	Non-Qualified	M/D/Yr	 _% on M/D/Yr
                   			Stock Option		 % on M/D/Yr

          1.    Grant of Stock Option.  Pursuant to
          Section 6 of the Borg Warner, Inc. 2004
          Stock Incentive Plan, (the "Plan"),
          BorgWarner Inc., a Delaware corporation,
          hereby grants to the individual named
          above, an employee of the Company or an
          Affiliate (the "Optionee"), an option to
          purchase from the Company the number of
          its shares of common stock, $.01 par
          value shown above in Column 2 of this
          Award Agreement, upon and subject to the
          terms and conditions set forth in the
          Plan and this Award Agreement (the
          "Shares").  Capitalized terms not defined
          herein shall have the meanings specified
          in the Plan.

          2.    Date of Grant.  The date of grant
          of this Stock Option is the date set
          forth above in Column 1.

          3.    Type of Stock Option.  This Stock
          Option is not intended to qualify as an
          incentive stock option within the meaning
          of section 422 of the Internal Revenue
          Code, and this Award Agreement shall be
          interpreted and treated consistently with
          the characterization of the Stock Option
          as a Non-Qualified Stock Option.

          4.    Stock Option Price.  The option
          price per share of Stock covered by the
          Stock Option shall be the price set forth
          above in Column 3 of this Award Agreement.

          5.    Expiration Date.  Unless the Stock
          Option is previously terminated pursuant
          to the terms of this Award Agreement and
          the Plan, the Stock Option granted by
          this Award Agreement shall terminate on
          the date shown above in Column 5 of this
          Award Agreement.

          6.    Exercise of Stock Option.

          A.    The Stock Option shall become
          exercisable as of the date set forth
          above in Column 6 according to the
          percentage shown for such date
          ("Exercisable Date"); provided that at
          all times during the period between Date
          of Grant and the Exercisable Date the
          Optionee has been employed by the Company
          or an Affiliate.  The Committee (as such
          term is defined in the Plan) has, in its
          sole discretion, the authority to, in
          whole or in part, accelerate the
          exercisability of the Stock Option.  The
          Stock Option may be exercised only to
          purchase whole Shares and in no case may
          a fraction of a Share be purchased.  The
          right of the Optionee to purchase Shares
          may be exercised in whole at any time or
          in part from time to time after (and to
          the extent) the Stock Option has become
          exercisable and prior to the tenth
          anniversary of the Date of Grant;
          provided, however, that no portion of the
          Stock Option shall be exercisable unless
          (except as hereinafter provided in this
          Section 6) the Optionee at the time of
          exercise is, and at all times from the
          Date of Grant has been employed by the
          Company or an Affiliate.  A Termination
          of Employment (as such term is defined in
          the Plan) shall not be deemed to have
          occurred if the transfer, promotion,
          reassignment or similar personnel move of
          the Optionee, at the request of the
          Company or an Affiliate, from any one
          entity within the Company or Affiliate to
          another entity within the Company or
          Affiliate results in the Optionee being
          immediately employed with such other
          entity.
          B.    If the Optionee dies while employed
          by the Company or an Affiliate, the
          Optionee's estate shall be permitted to
          exercise the Stock Option to the extent
          exercisable on the date of the Optionee's
          death or to the extent that the
          exercisability of the Stock Option may be
          accelerated by the Committee.  The Stock
          Option may be exercised for a period of
          one year from the date of such death or
          until the expiration of the Stock Option,
          whichever period is shorter.

          C.    If the Optionee incurs a
          Termination of Employment by reason of
          Disability or Retirement (as such terms
          are defined in the Plan), the Optionee
          shall be permitted to exercise the Stock
          Option to the extent exercisable at the
          time of the termination or to the extent
          that the exercisability of the Stock
          Option may be accelerated by the
          Committee.  The Stock Option may be
          exercised for a period of three years
          from the date of such termination or
          until the expiration of the Stock Option,
          whichever period is the shorter;
          provided, however, that if the three year
          period is the applicable period and the
          Optionee dies within such three year
          period, any unexercised Stock Option held
          by such Optionee shall, notwithstanding
          the expiration of such three year period,
          continue to be exercisable to the extent
          to which it was exercisable at the time
          of death for a period of twelve (12)
          months from the date of such death or
          until the expiration of the Stock Option,
          whichever period is the shorter.

          D.    If the Optionee incurs a
          Termination of Employment and such
          Termination of Employment is involuntary
          and without Cause (as such term is
          defined in the Plan), the Optionee shall
          be permitted to exercise the Stock Option
          to the extent exercisable at the time of
          the termination or to the extent that the
          exercisability of the Stock Option may be
          accelerated by the Committee.  The Stock
          Option may be exercised for a period of
          one year from the date of such
          termination or until the expiration of
          the Stock Option, whichever period is
          shorter; provided, however, that if the
          one year period is the applicable period
          and the Optionee dies within such one
          year period, any unexercised Stock Option
          held by such Optionee shall,
          notwithstanding the expiration of such
          one year period, continue to be
          exercisable to the extent to which it was
          exercisable at the time of death for a
          period of twelve (12) months from the
          date of such death or until the
          expiration of the Stock Option, whichever
          period is the shorter.

          E.    If the Optionee incurs a
          Termination of Employment for any reason
          other than as set forth in Sections 6(B),
          (C) and (D) above and such Termination of
          Employment is without Cause, the Optionee
          shall be permitted to exercise the Stock
          Option to the extent exercisable at the
          time of the Termination of Employment.
          The Stock Option may be exercised for a
          period of five (5) business days from the
          date of such termination or until the
          expiration of the Stock Option, whichever
          period is the shorter.

          F.    If the Optionee incurs a
          Termination of Employment which is for
          Cause, the Stock Option held by the
          Optionee shall terminate at the time of
          the Optionee's Termination of Employment.

          7.    Transferability of Stock Option.
          The Stock Option and this Stock Option
          Award Agreement shall be transferable by
          the Optionee:  (i) by will or by the laws
          of descent and distribution, (ii)
          pursuant to a qualified domestic
          relations order (as such term is
          described in the Plan), or (iii) pursuant
          to a gift to the Optionee's "immediate
          family" members (as such term is
          described in the Plan) directly or
          indirectly by means of a trust,
          partnership, or limited liability
          company, subject in the case of all
          transfers pursuant to clause (iii),
          above, to the review of the Committee or
          its designee.  A Stock Option shall be
          exercised, only by the Optionee, by the
          guardian or legal representative of the
          Optionee, or permitted transferee, it
          being understood that the terms "holder"
          and "Optionee" include any such guardian,
          legal representative or beneficiary or
          permitted transferee.  A permitted
          transferee may transfer a Stock Option
          only by will or by the laws of descent
          and distribution.

          8.    Exercise of Stock Option; Payment.

          A.    If the Optionee is then employed by
          the Company or an Affiliate and elects to
          exercise all or part of the Stock Option
          which is exercisable, he or she shall
          deliver to the Company a written notice,
          in a form acceptable to the Committee,
          specifying the number of Shares to be
          purchased under the Stock Option and an
          exercise date, not more than thirty days
          after the date of such notice, upon which
          such Shares shall be purchased and
          payment therefor shall be made.

          B.    If the Optionee's employment with
          the Company or an Affiliate is terminated
          for any of the reasons set forth in
          Section 6(B) through (E) above, then any
          election to exercise all or part of the
          Stock Option which is exercisable shall
          be done in the following manner:  the
          Optionee or his or her estate shall
          deliver to the Company a written notice,
          in a form acceptable to the Committee,
          specifying the number of Shares to be
          purchased under the Stock Option and an
          exercise date, within the exercise period
          set forth for such reason in Section 6(B)
          through (E) above and with respect to
          Section 6(B) through (D), not more than
          thirty days after the date of such
          notice, upon which such Stock Option
          Shares shall be purchased and payment
          therefor shall be made.

          C.    On the exercise date the Optionee
          has specified in the notice described in
          Section 8(A) or 8(B) above, the Optionee
          or his or her estate shall deliver to the
          Company (i) cash, certified or bank check
          or such other instrument as the Company
          may accept, made payable to the order of
          the Company in an amount equal to the
          product of the number of Shares specified
          to be purchased in such notice and the
          Option Price (the "Option Exercise
          Amount") and within five days thereafter
          payment, by cash, certified or bank check
          or such other instrument as the Company
          may accept, made payable to the order of
          the Company, in such amount as the
          Company in its sole discretion deems
          necessary to satisfy its liability to
          withhold federal, state or local income
          or other taxes incurred by reason of the
          exercise of the Stock Option or the
          transfer of Shares thereupon
          (collectively the "Applicable Tax"), or
          (ii) unrestricted Shares owned by the
          Optionee for more than six months prior
          to the exercise date, the value of which
          in whole Shares shall not exceed the
          Option Exercise Amount, and within 5 days
          thereafter unrestricted Shares owned by
          the Optionee, the value of which in whole
          Shares shall not exceed the Applicable
          Tax, the value of such Shares for the
          purpose of paying the Option Exercise
          Amount and the Applicable Tax
          (collectively the "Option Payment
          Amount") being the Fair Market Value (as
          such term is defined in the Plan) of the
          Shares on the exercise date, or (iii) a
          written request to the Company to
          withhold, from the number of Shares
          otherwise issuable upon the exercise of
          the Stock Option, that whole number of
          Shares having an aggregate Fair Market
          Value which does not exceed the
          Applicable Tax, or (iv) a combination of
          the above described forms of payment that
          equals the Option Payment Amount;
          provided that if the Optionee is subject
          to Section 16 of the Securities Exchange
          Act of 1934, as amended (the "Exchange
          Act"), then (y) such Optionee shall have
          the right to make payment of the Option
          Payment Amount only at the time and in
          the manner specified in Section 16 of the
          Exchange Act and the rules and
          regulations thereunder and (z) the
          Company shall have the right to retain or
          sell without notice, or to demand
          surrender of, Shares or Shares issuable
          upon the exercise of the Stock Option
          which have a Fair Market Value on the
          exercise date equal to the amount
          determined by the Company as necessary to
          satisfy any Applicable Tax.  Upon receipt
          in full of the Option Payment Amount
          (including in the case of payment by
          check, the receipt by the Company of
          collected funds), the Optionee or his or
          her estate shall be deemed to be the
          owner of Shares so purchased and
          certificates representing such Shares
          shall thereupon be delivered to the
          Optionee or his or her estate.  If the
          Company has entered into agreement(s)
          with one or more brokerage firms to
          enable the Optionee to facilitate payment
          for the Shares through such brokerage
          firm(s), the Optionee or his or her
          estate may make use of such coordinated
          procedure if he or she elects and if
          allowed by law.

          9.    Specific Restrictions Upon Shares.
          The Optionee hereby agrees with the
          Company as follows:

          A.    The Optionee shall acquire the
          Shares issuable upon the exercise of the
          Stock Option (the "Stock Option Shares")
          for investment purposes only and not with
          a view to resale or other distribution
          thereof to the public in violation of the
          Securities Act of 1933, as amended (the
          "1933 Act"), and shall not dispose of any
          Stock Option Shares in transactions
          which, in the opinion of counsel to the
          Company, violate the 1933 Act, or the
          rules and regulations thereunder, or any
          applicable state securities or "blue sky"
          laws;

          B.    If any Stock Option Shares shall be
          registered under the 1933 Act, no public
          offering (otherwise than on a national
          securities exchange, as defined in the
          Exchange Act) of any such Stock Option
          Shares shall be made by the Optionee (or
          any other person) under such
          circumstances that he or she (or such
          other person) may be deemed an
          underwriter, as defined in the 1933 Act;
          and

          C.    The Company shall have the
          authority to endorse upon the certificate
          or certificates representing the Stock
          Option Shares such legends referring to
          the foregoing restrictions.

          10.   Change in Control Cash Out.  During
          the sixty (60) day period from and after
          a Change in Control (as such term is
          defined in the Plan), the Optionee shall
          have the right, whether or not the Stock
          Option is fully exercisable and in lieu
          of the payment of the exercise price for
          the Shares being purchased under this
          Stock Option, to elect to surrender, by
          giving notice to the Company, all or part
          of this Stock Option to the Company and
          to receive cash, payable by the Company,
          within thirty (30) days of such notice,
          in an amount equal to the amount by which
          the Change in Control Price (as such term
          is defined in the Plan) per Share on the
          date of such election shall exceed the
          Option Price multiplied by the number of
          Shares surrendered under this Stock
          Option; less such amount as the Company
          deems necessary to satisfy its liability
          to withhold federal, state or local
          income or other taxes incurred by reason
          of the number of Shares surrendered;
          provided, however, that if the Change in
          Control is within six (6) months of the
          Date of Grant to an Optionee who is an
          officer or director of the Company and
          subject to Section 16(b) of the Exchange
          Act, then no such election shall be made
          by such Optionee with respect to this
          Stock Option prior to six (6) months from
          the Date of Grant.

          11.   Adjustments to Shares.  In the
          event of any merger, reorganization,
          consolidation, recapitalization, stock
          dividend, stock split, extraordinary
          distribution with respect to the Stock or
          other change in corporate structure
          affecting the Stock, the Committee or
          Board of Directors of the Company may
          make such substitution or adjustments in
          the aggregate number, kind and option
          price of shares subject to this Stock
          Option Award Agreement and/or such other
          substitutions or adjustments in the
          consideration receivable upon exercise as
          it may determine to be appropriate in its
          sole discretion.

          12.   Notices.  Any written notice
          required or permitted under this Stock
          Option Award Agreement shall be deemed
          given when delivered personally, as
          appropriate, either to the Optionee or to
          the Executive Compensation Department of
          the Company, or when deposited in a
          United States Post Office as registered
          mail, postage prepaid, addressed, as
          appropriate, either to the Optionee at
          his or her address set forth above or
          such other address as he or she may
          designate in writing to the Company, or
          to the Attention:  Executive
          Compensation, BorgWarner Inc., at its
          headquarters office or such other address
          as the Company may designate in writing
          to the Optionee.

          13.   Failure to Enforce Not a Waiver.
          The failure of the Company to enforce at
          any time any provision of this Stock
          Option Award Agreement shall in no way be
          construed to be a waiver of such
          provision or of any other provision hereof.

          14.   Governing Law.  All questions
          concerning the construction, validity and
          interpretation of this Stock Option Award
          Agreement shall be governed by and
          construed according to the internal law,
          and not the law of conflicts, of the
          State of Delaware, except that questions
          concerning the relative rights of the
          Company and the Optionee with respect to
          the Shares, shall be governed by the
          corporate law of the State of Delaware.

          15.   Provisions of Plan.  The Stock
          Option provided for herein is granted
          pursuant to the Plan, and said Stock
          Option and this Stock Option Award
          Agreement are in all respects governed by
          the Plan and subject to all of the terms
          and provisions thereof, whether such
          terms and provisions are incorporated in
          this Stock Option Award Agreement solely
          by reference or are expressly cited
          herein.  In the case of any conflict
          between the Plan and this Stock Option
          Award Agreement, the terms of the Plan
          shall control.
          IN WITNESS WHEREOF, the Company has
          executed this Stock Option Award
          Agreement in duplicate on the day and
          year first above written.

                        BORGWARNER INC.

                        By: Timothy M. Manganello
                 Chairman & Chief Executive Officer

          I acknowledge receipt of a copy of the
          Plan (either as an attachment hereto or
          that has been previously received by me)
          and that I have carefully read this Stock
          Option Award Agreement and the Plan.  I
          agree to be bound by all of the
          provisions set forth in this Stock Option
          Award Agreement and the Plan.

          Date
                                            Employee's
                                            Signature
          SS# (U.S. Employees Only)   Print Name
          Home Street Address        City, State,
                                     Zip, CountryEXHIBIT 10.1

                                  ISO AGREEMENT

     THIS  AGREEMENT  is  entered  into as of the  Grant  Date  (as  defined  in
paragraph 1) by and between the Participant and Microtek Medical Holdings,  Inc.
(the "Company");

                                WITNESSETH THAT:

     WHEREAS,  the Company  maintains  the 1999  Long-Term  Incentive  Plan (the
"Plan"), which is incorporated into and forms a part of this Agreement,  and the
Participant  has been  selected  by the  committee  administering  the Plan (the
"Committee") to receive an Incentive Stock Option Award under the Plan;

     NOW,  THEREFORE,  IT  IS  AGREED,  by  and  between  the  Company  and  the
Participant, as follows:

     1. TERMS OF AWARD.  The following  terms used in this Agreement  shall have
the meanings set forth in this paragraph 1:

     (a)  The "Participant" is ___________.

     (b)  The "Grant Date" is ___________.

     (c)  The number of "Covered Shares" shall be ___________ shares of Stock.

     (d)  The "Exercise Price" is $___________ per share.

Other  terms used in this  Agreement  are  defined  pursuant  to  paragraph 8 or
elsewhere in this Agreement.

     2. AWARD AND EXERCISE  PRICE.  This  Agreement  specifies  the terms of the
option (the  "Option")  granted to the  Participant  to  purchase  the number of
Covered  Shares  of Stock  at the  Exercise  Price  per  share  as set  forth in
paragraph 1. The Option is intended to constitute an "incentive stock option" as
that term is used in Code  Section  422. To the extent that the  aggregate  Fair
Market Value  (determined  at the time of grant) of Shares with respect to which
incentive  stock options are  exercisable  for the first time by the Participant
during any  calendar  year  under all plans of the  Company  and its  affiliates
exceeds  $100,000,  the  options or  portions  thereof  which  exceed such limit
(according to the reverse order in which they were granted)  shall be treated as
nonstatutory  stock options.  It should be understood that there is no assurance
that this Option will, in fact, be treated as an incentive stock option.

     3. DATE OF EXERCISE.  Subject to the  limitations  of this  Agreement,  the
Option shall be  exercisable  on a cumulative  basis  according to the following
schedule,  with respect to each  installment  shown in the schedule on and after
the "Vesting Date" (defined as set forth below) applicable to such installment:

<PAGE>

<TABLE>
<CAPTION>
<S>                                                          <C>
------------------------------------------------------------ ---------------------------------------------------------
                                                                                   VESTING DATE
                                                                                  APPLICABLE TO
                        INSTALLMENT                                                INSTALLMENT
------------------------------------------------------------ ---------------------------------------------------------

------------------------------------------------------------ ---------------------------------------------------------

------------------------------------------------------------ ---------------------------------------------------------

------------------------------------------------------------ ---------------------------------------------------------

------------------------------------------------------------ ---------------------------------------------------------
</TABLE>

An installment shall not become exercisable on the otherwise  applicable Vesting
Date if the Participant's Date of Termination (as defined in the Plan) occurs on
or before such Vesting Date.  Notwithstanding  the foregoing  provisions of this
paragraph  3, the Option  shall  become  exercisable  with respect to all of the
Covered  Shares  (to the  extent it is not then  otherwise  exercisable)  upon a
Change of Control  (as  defined in the  Plan),  except  that it shall not become
exercisable (a) if the  exercisability of this Option would result in an "excess
parachute  payment" within the meaning of Section 280G of the Code as determined
by the  Committee  based on  information  available  to it at said time,  (b) if
following  such  Change  of  Control  this  Option  shall  remain  in  effect in
accordance  with  its  terms  (subject  to  such  adjustments  as may be made in
accordance with Section 4.2(c) of the Plan), or (c) if the Company exercises its
rights  under  the  following  sentence.  The  Company  shall  have  the  right,
exercisable in the sole discretion of the Company by notice to Participant  upon
or in anticipation of any merger of the Company with or into another corporation
or exchange of  outstanding  capital  stock of the Company for capital  stock of
another  corporation,  to require Participant to purchase,  within ten days from
the date of such notice,  all or any portion of the  remaining  Shares which are
subject  to this  Option  and which the  Participant  shall not have  previously
purchased in accordance with this Option to the extent  Participant shall desire
to do so in the manner otherwise  provided in this Option, and this Option shall
terminate  as to any  shares not so  purchased  as of the date which is ten days
after the date of such notice from the Company to Participant.

     4.  EXPIRATION.  The Option shall not be  exercisable  after the  Company's
close of business on the Expiration  Date (or, if the  Expiration  Date is not a
date in which the Company is open for business, the next regular business day of
the Company). The "Expiration Date" shall be earliest to occur of:

     (a) the ___________-year anniversary of the Grant Date;

     (b) if the  Participant's  Date of  Termination  occurs by reason of death,
Disability, Early Retirement or Retirement, the ___________-month anniversary of
such Date of Termination;

     (c) if Participant's Date of Termination occurs for Cause, then the Date of
Termination; or

     (d) if the Participant's  Date of Termination occurs for reasons other than
Cause, death, Disability,  Early Retirement or Retirement, the ___________-month
anniversary of such Date of Termination.

In the event  Participant's  Date of  Termination  occurs  for  Cause,  then the
Company  shall have the right,  exercisable  at the  election  of the Company by
written  notice to  Participant  given within thirty days  following the Date of
Termination,  to purchase  all of the Covered  Shares  previously  purchased  by
Participant for a purchase price equal to the Exercise Price.

                                       2
<PAGE>

     5. METHOD OF OPTION  EXERCISE.  Subject to this Agreement and the Plan, the
Option may be exercised in whole or in part by filing a written  notice with the
Secretary of the Company or his designee at its corporate  headquarters prior to
the  Company's  close of  business on the  Expiration  Date.  Such notice  shall
specify the number of shares of Stock which the Participant  elects to purchase,
and shall be  accompanied  by payment of the  Exercise  Price for such shares of
Stock indicated by the  Participant's  election.  Payment shall be by cash or by
check payable to the Company. Except as otherwise provided by the Committee, (i)
all or a  portion  of the  Exercise  Price  may be  paid by the  Participant  by
delivery  of shares of Stock  owned by the  Participant  and  acceptable  to the
Committee  having an  aggregate  Fair  Market  Value  (valued  as of the date of
exercise) that is equal to the amount of cash that would  otherwise be required;
and (ii) the Participant may pay the Exercise Price by authorizing a third party
to sell shares of Stock (or a sufficient  portion of the shares)  acquired  upon
exercise of the Option and remit to the Company a sufficient portion of the sale
proceeds to pay the entire Exercise Price and any tax withholding resulting from
such  exercise.  The Option  shall not be  exercisable  if and to the extent the
Company  determines that such exercise would violate applicable state or Federal
securities laws or the rules and regulations of any securities exchange on which
the Stock is traded. If the Company makes such a determination, it shall use all
reasonable efforts to obtain compliance with such laws, rules or regulations. In
making any  determination  hereunder,  the  Company  may rely on the  opinion of
counsel for the Company.  Any  certificate  representing  shares of Stock issued
upon  exercise of this Option shall contain such legends as the Company shall in
its discretion require.

     6. WITHHOLDING.  All deliveries and distributions  under this Agreement are
subject  to  withholding  of  all  applicable  taxes.  At  the  election  of the
Participant,  and subject to such rules and limitations as may be established by
the Committee from time to time, such  withholding  obligations may be satisfied
through the surrender of shares of Stock which the Participant  already owns, or
to which the Participant is otherwise entitled under the Plan.

     7.  TRANSFERABILITY.  Except as otherwise provided in this paragraph 7, the
Option is not  transferable  other than as designated by the Participant by will
or by the laws of descent and distribution,  and during the Participant's  life,
may be exercised only by the Participant.  However,  the  Participant,  with the
approval of the Committee (which shall be in the Committee's  sole  discretion),
may  transfer  the  Option  for no  consideration  to or for the  benefit of the
Participant's  Immediate Family (including,  without limitation,  to a trust for
the benefit of the Participant's Immediate Family or to a partnership or limited
liability  company  for  one or  more  members  of the  Participant's  Immediate
Family),  subject  to  such  limits  as the  Committee  may  establish,  and the
transferees  shall remain subject to all the terms and conditions  applicable to
the Option prior to such  transfer.  The foregoing  right to transfer the Option
shall apply to the right to consent to amendments to this  Agreement and, in the
discretion of the Committee, shall also apply to the right to transfer ancillary
rights  associated with the Option.  The term "Immediate  Family" shall mean the
Participant's spouse, parents, children,  stepchildren,  adoptive relationships,
sisters,  brothers and grandchildren (and, for this purpose,  shall also include
the Participant).

     8.  DEFINITIONS.  For  purposes of this  Agreement,  the terms used in this
Agreement shall be subject to the following:

     (a) Disability.  The Participant shall be considered to have a "Disability"
during the period in which the  Participant is unable,  by reason of a medically
determinable  physical  or  mental  impairment,   to  engage  in  his  customary
employment with the Company or a Related Company for a duration of not less than
120 days, all as determined in the sole discretion of the Committee.

                                       3
<PAGE>

     (b)  Cause.  "Cause"  shall  mean (i) the  Board of  Directors  shall  have
determined, in good faith, that Participant misappropriated,  stole or embezzled
assets of the Company, or (ii) Participant shall have been convicted of a felony
or a crime involving moral turpitude.

     (c) Plan Definitions. Except where the context clearly implies or indicates
the contrary, a word, term, or phrase used in the Plan is similarly used in this
Agreement.

     9. HEIRS AND SUCCESSORS. This Agreement shall be binding upon, and inure to
the  benefit  of, the  Company and its  successors  and  assigns.  If any rights
exercisable by the Participant or benefits  deliverable to the Participant under
this Agreement have not been exercised or delivered,  respectively,  at the time
of the  Participant's  death, such rights shall be exercisable by the Designated
Beneficiary, and such benefits shall be delivered to the Designated Beneficiary,
in  accordance  with  the  provisions  of  this  Agreement  and  the  Plan.  The
"Designated Beneficiary" shall be the beneficiary or beneficiaries designated by
the  Participant  in a writing filed with the Committee in such form and at such
time  as the  Committee  shall  require.  If a  deceased  Participant  fails  to
designate a beneficiary,  or if the Designated  Beneficiary does not survive the
Participant,  any rights that would have been exercisable by the Participant and
any  benefits  distributable  to  the  Participant  shall  be  exercised  by  or
distributed to the legal  representative of the estate of the Participant.  If a
deceased  Participant  designates a beneficiary  but the Designated  Beneficiary
dies  before the  Designated  Beneficiary's  exercise  of all rights  under this
Agreement  or before the  complete  distribution  of benefits to the  Designated
Beneficiary  under  this  Agreement,  then  any  rights  that  would  have  been
exercisable  by the  Designated  Beneficiary  shall be  exercised  by the  legal
representative  of the estate of the  Designated  Beneficiary,  and any benefits
distributable  to the Designated  Beneficiary  shall be distributed to the legal
representative of the estate of the Designated Beneficiary.

     10.  ADMINISTRATION.  The authority to manage and control the operation and
administration  of this  Agreement  shall be  vested in the  Committee,  and the
Committee  shall have all powers with  respect to this  Agreement as it has with
respect to the Plan.  Any  interpretation  of the Agreement by the Committee and
any decision  made by it with  respect to the  Agreement is final and binding on
all persons.

     11.  PLAN  GOVERNS.  Notwithstanding  anything  in  this  Agreement  to the
contrary, the terms of this Agreement shall be subject to the terms of the Plan,
a copy of which  may be  obtained  by the  Participant  from the  office  of the
Secretary of the Company;  and this Agreement is subject to all interpretations,
amendments, rules and regulations promulgated by the Committee from time to time
pursuant to the Plan.

     12.  NOT  AN  EMPLOYMENT  CONTRACT.  The  Option  will  not  confer  on the
Participant any right with respect to continuance of employment or other service
with the Company or any Related  Company,  nor will it interfere in any way with
any right the Company or any Related  Company would  otherwise have to terminate
or modify the terms of such  Participant's  employment  or other  service at any
time.

     13. NOTICES. Any written notices provided for in this Agreement or the Plan
shall be in  writing  and shall be  deemed  sufficiently  given if  either  hand
delivered or if sent by fax or overnight courier, or by postage paid first class
mail.  Notices sent by mail shall be deemed  received  three business days after
mailed but in no event later than the date of actual  receipt.  Notices shall be
directed,  if to the Participant,  at the Participant's address indicated by the
Company's records,  or if to the Company,  at the Company's  principal executive
office.

     14.  FRACTIONAL  SHARES.  In lieu of issuing a fraction of a share upon any
exercise of the Option  resulting  from an adjustment of the Option  pursuant to
paragraph  4.2(c) of the Plan or otherwise,  the Company will be entitled to pay
to the  Participant an amount equal to the fair market value of such  fractional
share.

                                       4
<PAGE>

     15. NO RIGHTS AS SHAREHOLDER.  The Participant shall not have any rights of
a shareholder  with respect to the shares  subject to the Option,  until a stock
certificate  has been duly issued  following  exercise of the Option as provided
herein.

     16.  AMENDMENT.  This Agreement may be amended by written  agreement of the
Participant and the Company, without the consent of any other person.

     IN WITNESS  WHEREOF,  the Participant has executed this Agreement,  and the
Company has caused these  presents to be executed in its name and on its behalf,
all as of the Grant Date.

                                        PARTICIPANT

                                        ________________________________________

                                        MICROTEK MEDICAL HOLDINGS, INC.

                                        By: ____________________________________
                                        Its: ___________________________________

                                       5

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