Document:

Amendment to 1997 Stock Option Plan

 
EXHIBIT
4.3(v) 
 
FOURTH AMENDMENT TO

PRIORITY HEALTHCARE CORPORATION 
1997 STOCK OPTION AND INCENTIVE PLAN 
 
WHEREAS, the Board of Directors of Priority Healthcare Corporation (the “Company”) adopted the Priority Healthcare Corporation 1997 Stock Option and Incentive Plan (the “Plan”) on
August 25, 1997; and 
 
WHEREAS, the Plan was
approved by the then sole shareholder of the Company on August 25, 1997, and further approved by the shareholders of the Company for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended, on May 21, 1998; and 
 
WHEREAS, the Plan was first amended by the Board of Directors
of the Company in certain respects not requiring shareholder approval, effective as of September 15, 1998; and 
 
WHEREAS, the Plan was further amended by the Board of Directors and the shareholders of the Company effective May 10, 1999; and

 
WHEREAS, the Plan was further amended by the
Board of Directors and the shareholders of the Company effective May 21, 2001; and 
 
WHEREAS, the Company now desires to further amend the Plan. 
 
NOW, THEREFORE, the Plan is hereby amended as follows: 
 
1. Section 5 of the Plan is hereby amended to read in its entirety as follows: 
 
5. Shares Subject to Plan. Subject to
adjustment by the operation of Section 11 hereof, the maximum number of Shares with respect to which Awards may be made under the Plan is 7,900,000 Shares. The number of Shares which may be granted under the Plan to any Participant during any
calendar year of the Plan under all forms of Awards shall not exceed 300,000 Shares. The Shares with respect to which Awards may be made under the Plan may either be authorized and unissued shares or unissued shares heretofore or hereafter
reacquired and held as treasury shares. With respect to any Option which terminates or is surrendered for cancellation or with respect to Restricted Stock which is forfeited, new Awards may be granted under the Plan with respect to the number of
Shares as to which such termination or forfeiture has occurred. 
 
2. This Fourth Amendment to the Plan shall become effective upon its approval by the Board of Directors and shareholders of the Company. 
 
Approved by the Board of Directors of Priority 
Healthcare Corporation as of February 19, 2003 
 
Approved by the Shareholders of Priority Healthcare 
Corporation as of May 19, 2003<PAGE>

                                                                     EXHIBIT 4.2

                          THE 2003 INCENTIVE AWARD PLAN

                                       OF

                             GEN-PROBE INCORPORATED

                  Gen-Probe Incorporated, a Delaware corporation, has adopted
The 2003 Incentive Award Plan of Gen-Probe Incorporated (the "Plan"), effective
May 29, 2003, for the benefit of its eligible Employees, Consultants and
Directors.

                  The purposes of the Plan are as follows:

                  (1) To provide an additional incentive for Directors,
Employees and Consultants (as such terms are defined below) to further the
growth, development and financial success of the Company by personally
benefiting through the ownership of Company stock and/or rights which recognize
such growth, development and financial success.

                  (2) To enable the Company to obtain and retain the services of
Directors, Employees and Consultants considered essential to the long range
success of the Company by offering them an opportunity to own stock in the
Company and/or rights which will reflect the growth, development and financial
success of the Company.

                                   ARTICLE I.

                                   DEFINITIONS

                  1.1.     General. Whenever the following terms are used in the
Plan they shall have the meanings specified below, unless the context clearly
indicates otherwise.

                  1.2.     Administrator. "Administrator" shall mean the entity
that conducts the general administration of the Plan as provided herein. With
reference to the administration of the Plan with respect to Options and shares
of Restricted Stock granted to Independent Directors, the term "Administrator"
shall refer to the Board. With reference to the administration of the Plan with
respect to any other Awards, the term "Administrator" shall refer to the
Committee, except to the extent the Board has assumed the authority for
administration of the Plan as provided in Section 9.2.

                  1.3.     Award. "Award" shall mean an Option, a Restricted
Stock award or a Stock Appreciation Right which may be awarded or granted under
the Plan (collectively, "Awards").

                  1.4.     Award Agreement. "Award Agreement" shall mean a
written agreement executed by an authorized officer of the Company and the
Holder, which shall contain such terms and conditions with respect to an Award,
as the Administrator shall determine, consistent with the Plan.

                  1.5.     Award Limit. "Award Limit" shall mean Five Hundred
Thousand (500,000) shares of Common Stock, as adjusted pursuant to Section 10.3
of the Plan.

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                  1.6.     Board. "Board" shall mean the Board of Directors of
the Company.

                  1.7.     Change in Control. "Change in Control" shall mean a
change in ownership or control of the Company effected through any of the
following transactions:

                  (a)      any person or related group of persons (other than
the Company or a person that, prior to such transaction, directly or indirectly
controls, is controlled by, or is under common control with, the Company)
directly or indirectly acquires beneficial ownership (within the meaning of Rule
13d-3 under the Exchange Act) of securities possessing more than fifty percent
(50%) of the total combined voting power of the Company's outstanding securities
pursuant to a tender or exchange offer for securities of the Company;

                  (b)      there is a change in the composition of the Board
over a period of thirty-six (36) consecutive months (or less) such that a
majority of the Board members (rounded up to the nearest whole number) ceases,
by reason of one or more proxy contests for the election of Board members, to be
comprised of individuals who either (i) have been Board members continuously
since the beginning of such period or (ii) have been elected or nominated for
election as Board members during such period by at least a majority of the Board
members described in clause (i) who were still in office at the time such
election or nomination was approved by the Board;

                  (c)      a merger or consolidation of the Company with any
other corporation (or other entity), other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or another
entity) more than 66-2/3% of the combined voting power of the voting securities
of the Company or such surviving entity outstanding immediately after such
merger or consolidation; provided, however, that a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no person acquires more than 25% of the combined voting power of the
Company's then outstanding voting securities shall not constitute a Change in
Control; or

                  (d)      a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
of the Company's assets.

                  1.8.     Code. "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.

                  1.9.     Committee. "Committee" shall mean the Board, or
Compensation Committee of the Board, or another committee or subcommittee of the
Board, appointed as provided in Section 9.1.

                  1.10.    Common Stock. "Common Stock" shall mean the Common
Stock of the Company, par value $0.0001 per share.

                  1.11.    Company. "Company" shall mean Gen-Probe Incorporated,
a Delaware corporation.

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                  1.12.    Consultant. "Consultant" shall mean any consultant or
adviser (other than an Employee) if:

                  (a)      the consultant or adviser renders bona fide services
to the Company;

                  (b)      the services rendered by the consultant or adviser
are not in connection with the offer or sale of securities in a capital-raising
transaction and do not directly or indirectly promote or maintain a market for
the Company's securities; and

                  (c)      the consultant or adviser is a natural person who has
contracted directly with the Company to render such services.

                  1.13.    Director. "Director" shall mean a member of the
Board, whether such Director is an Employee or an Independent Director.

                  1.14.    DRO. "DRO" shall mean a domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.

                  1.15.    Employee. "Employee" shall mean any officer or other
employee (as defined in accordance with Section 3401(c) of the Code) of the
Company, or of any corporation which is a Subsidiary.

                  1.16.    Exchange Act. "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended.

                  1.17.    Fair Market Value. "Fair Market Value" shall mean, as
of any date, the value of the Common Stock determined as follows:

                  (a)      If the Common Stock is listed on any established
stock exchange or traded on The Nasdaq National Market or the Nasdaq SmallCap
Market, the Fair Market Value of a share of Common Stock shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or market (or the exchange or market with the greatest
volume of trading in the Common Stock) on the last market trading day prior to
the day of determination, as reported by The Nasdaq Stock Market or such other
source as the Board deems reliable.

                  (b)      In the absence of such markets for the Common Stock,
the Fair Market Value shall be determined in good faith by the Board.

                  1.18.    Holder. "Holder" shall mean a person who has been
granted or awarded an Award.

                  1.19.    Incentive Stock Option. "Incentive Stock Option"
shall mean an Option which conforms to the applicable provisions of Section 422
of the Code and which is designated as an Incentive Stock Option by the
Administrator.

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                  1.20.    Independent Director. "Independent Director" shall
mean a member of the Board who is not an Employee.

                  1.21.    Non-Qualified Stock Option. "Non-Qualified Stock
Option" shall mean an Option not intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.

                  1.22.    Option. "Option" shall mean a stock option granted
under Article IV of the Plan. An Option granted under the Plan shall, as
determined by the Administrator, be either a Non-Qualified Stock Option or an
Incentive Stock Option; provided, however, that Options granted to Independent
Directors and Consultants shall be Non-Qualified Stock Options.

                  1.23.    Performance Criteria. "Performance Criteria" shall
mean the following business criteria with respect to the Company, any Subsidiary
or any division or operating unit: (a) net income, (b) pre-tax income, (c)
operating income, (d) cash flow, (e) earnings per share, (f) return on equity,
(g) return on invested capital or assets, (h) cost reductions or savings, (i)
funds from operations, (j) appreciation in the Fair Market Value of Common Stock
and (k) earnings before any one or more of the following items: interest, taxes,
depreciation or amortization.

                  1.24.    Plan. "Plan" shall mean The 2003 Incentive Award Plan
of Gen-Probe Incorporated.

                  1.25.    Restricted Stock. "Restricted Stock" shall mean
Common Stock awarded under Article VII of the Plan.

                  1.26.    Rule 16b-3. "Rule 16b-3" shall mean that certain Rule
16b-3 under the Exchange Act, as such Rule may be amended from time to time.

                  1.27.    Section 162(m) Employee. "Section 162(m) Employee"
shall mean any Employee designated by the Administrator as an Employee whose
compensation for the fiscal year in which the Employee is so designated or a
future fiscal year may be subject to the limit on deductible compensation
imposed by Section 162(m) of the Code.

                  1.28.    Securities Act. "Securities Act" shall mean the
Securities Act of 1933, as amended.

                  1.29.    Stock Appreciation Right. "Stock Appreciation Right"
shall mean a stock appreciation right granted under Article VIII of the Plan.

                  1.30.    Subsidiary. "Subsidiary" shall mean any corporation
in an unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain then owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.

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                  1.31.    Substitute Award. "Substitute Award" shall mean an
Option granted under the Plan upon the assumption of, or in substitution for,
outstanding equity awards previously granted by another company or entity in
connection with a corporate or similar transaction, such as a merger,
combination, consolidation or acquisition of property or stock; provided,
however, that in no event shall the term "Substitute Award" be construed to
refer to an option granted in connection with the cancellation and repricing of
an Option.

                  1.32.    Termination of Consultancy. "Termination of
Consultancy" shall mean the time when the engagement of a Holder as a Consultant
to the Company or a Subsidiary is terminated for any reason, with or without
cause, including, but not by way of limitation, by resignation, discharge,
death, disability or retirement; but excluding terminations where there is a
simultaneous engagement by or commencement of employment with the Company or any
Subsidiary or a parent corporation thereof (within the meaning of Section 422 of
the Code). The Administrator, in its absolute discretion, shall determine the
effect of all matters and questions relating to Termination of Consultancy,
including, but not by way of limitation, the question of whether a Termination
of Consultancy resulted from a discharge for cause, and all questions of whether
a particular leave of absence constitutes a Termination of Consultancy.
Notwithstanding any other provision of the Plan, the Company or any Subsidiary
has an absolute and unrestricted right to terminate a Consultant's service at
any time for any reason whatsoever, with or without cause, except to the extent
expressly provided otherwise in writing.

                  1.33.    Termination of Directorship. "Termination of
Directorship" shall mean the time when a Holder who is an Independent Director
ceases to be a Director for any reason, including, but not by way of limitation,
a termination by resignation, removal, failure to be re-elected, death,
disability or retirement. The Board, in its sole and absolute discretion, shall
determine the effect of all matters and questions relating to Termination of
Directorship with respect to Independent Directors.

                  1.34.    Termination of Employment. "Termination of
Employment" shall mean the time when the employee-employer relationship between
a Holder and the Company or any Subsidiary is terminated for any reason, with or
without cause, including, but not by way of limitation, a termination by
resignation, discharge, death, disability or retirement; but excluding (a)
terminations where there is a simultaneous reemployment or continuing employment
of a Holder by the Company or any Subsidiary or a parent corporation thereof
(within the meaning of Section 422 of the Code), (b) at the discretion of the
Administrator, terminations which result in a temporary severance of the
employee-employer relationship, and (c) at the discretion of the Administrator,
terminations which are followed by the simultaneous establishment of a
consulting relationship by the Company or a Subsidiary with the former employee.
The Administrator, in its absolute discretion, shall determine the effect of all
matters and questions relating to Termination of Employment, including, but not
by way of limitation, the question of whether a Termination of Employment
resulted from a discharge for cause, and all questions of whether a particular
leave of absence constitutes a Termination of Employment; provided, however,
that, with respect to Incentive Stock Options, unless otherwise determined by
the Administrator in its discretion, a leave of absence, change in status from
an employee to an independent contractor or other change in the
employee-employer relationship shall constitute a Termination of Employment if,
and to the extent that, such leave of absence, change in status or

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<PAGE>

other change interrupts employment for the purposes of Section 422(a)(2) of the
Code and the then applicable regulations and revenue rulings under said Section.

                                   ARTICLE II.

                             SHARES SUBJECT TO PLAN

                  2.1.     Shares Subject to Plan.

                  (a)      The shares of stock subject to Awards shall be Common
Stock, subject to Section 10.3 of the Plan. The aggregate number of such shares
which may be issued upon exercise of such Options or rights or upon any such
Awards under the Plan shall not exceed three million seven hundred fifty
thousand (3,750,000); provided, however that the aggregate number of shares of
Common Stock which may issued as shares of Restricted Stock under the Plan shall
not exceed twenty percent (20%) of the total number of shares of Common Stock
issuable hereunder. The shares of Common Stock issuable upon exercise of such
Options or rights or upon any such Awards may be either previously authorized
but unissued shares or treasury shares.

                  (b)      The maximum number of shares of Common Stock which
may be subject to Awards granted under the Plan to any individual in any
calendar year shall not exceed the Award Limit. To the extent required by
Section 162(m) of the Code, shares subject to Options that are canceled continue
to be counted against the Award Limit.

                  2.2.     Add-Back of Options and Other Rights. If any Option,
or other right to acquire shares of Common Stock under any other Award under the
Plan, expires or is canceled without having been fully exercised, or is
exercised in whole or in part for cash as permitted by the Plan, the number of
shares of Common Stock subject to such Option or other right but as to which
such Option or other right was not exercised prior to its expiration or
cancellation may again be optioned, granted or awarded hereunder, subject to the
limitations of Section 2.1. Furthermore, any shares subject to Awards which are
adjusted pursuant to Section 10.3 and become exercisable with respect to shares
of stock of another corporation shall be considered cancelled and may again be
optioned, granted or awarded hereunder, subject to the limitations of Section
2.1. Shares of Common Stock which are delivered by the Holder or withheld by the
Company upon the exercise of any Award under the Plan, in payment of the
exercise price thereof or tax withholding thereon, may again be optioned,
granted or awarded hereunder, subject to the limitations of Section 2.1. If any
shares of Restricted Stock are surrendered by the Holder or repurchased by the
Company pursuant to Section 7.4 or 7.5 hereof, such shares may again be
optioned, granted or awarded hereunder, subject to the limitations of Section
2.1. Notwithstanding the provisions of this Section 2.2, no shares of Common
Stock may again be optioned, granted or awarded if such action would cause an
Incentive Stock Option to fail to qualify as an "incentive stock option" under
Section 422 of the Code.

                                  ARTICLE III.

                               GRANTING OF AWARDS

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                  3.1.     Award Agreement. Each Award shall be evidenced by an
Award Agreement. Award Agreements evidencing Awards intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 162(m) of the Code. Award Agreements evidencing
Incentive Stock Options shall contain such terms and conditions as may be
necessary to meet the applicable provisions of Section 422 of the Code.

                  3.2.     Provisions Applicable to Section 162(m) Employees.

                  (a)      The Committee, in its discretion, may determine
whether an Award is to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code.

                  (b)      Notwithstanding anything in the Plan to the contrary,
the Committee may grant any Award to a Section 162(m) Employee that vests or
becomes exercisable or payable upon the attainment of performance goals which
are related to one or more of the Performance Criteria, including Restricted
Stock the restrictions to which lapse upon the obtainment of performance goals
which are related to one or more of the Performance Criteria.

                  (c)      To the extent necessary to comply with the
performance-based compensation requirements of Section 162(m)(4)(C) of the Code,
with respect to any Award granted under Article VII which may be granted to one
or more Section 162(m) Employees, no later than ninety (90) days following the
commencement of any fiscal year in question or any other designated fiscal
period or period of service (or such other time as may be required or permitted
by Section 162(m) of the Code), the Committee shall, in writing, (i) designate
one or more Section 162(m) Employees, (ii) select the Performance Criteria
applicable to the fiscal year or other designated fiscal period or period of
service, (iii) establish the various performance targets, in terms of an
objective formula or standard, and amounts of such Awards, as applicable, which
may be earned for such fiscal year or other designated fiscal period or period
of service, and (iv) specify the relationship between Performance Criteria and
the performance targets and the amounts of such Awards, as applicable, to be
earned by each Section 162(m) Employee for such fiscal year or other designated
fiscal period or period of service. Following the completion of each fiscal year
or other designated fiscal period or period of service, the Committee shall
certify in writing whether the applicable performance targets have been achieved
for such fiscal year or other designated fiscal period or period of service. In
determining the amount earned by a Section 162(m) Employee, the Committee shall
have the right to reduce (but not to increase) the amount payable at a given
level of performance to take into account additional factors that the Committee
may deem relevant to the assessment of individual or corporate performance for
the fiscal year or other designated fiscal period or period of service.

                  (d)      Furthermore, notwithstanding any other provision of
the Plan, any Award that is granted to a Section 162(m) Employee and is intended
to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code shall be subject to any additional limitations set
forth in Section 162(m) of the Code (including any amendment to Section 162(m)
of the Code) or any regulations or rulings issued thereunder that are
requirements for qualification as performance-based compensation as described in
Section 162(m)(4)(C) of the Code, and the Plan and such Awards shall be deemed
amended to the extent necessary to conform to such requirements.

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<PAGE>

                  3.3.     Limitations Applicable to Section 16 Persons.
Notwithstanding any other provision of the Plan, the Plan, and any Award granted
or awarded to any individual who is then subject to Section 16 of the Exchange
Act, shall be subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 of the Exchange Act) that are requirements for the application of
such exemptive rule. To the extent permitted by applicable law, the Plan and
Awards granted or awarded hereunder shall be deemed amended to the extent
necessary to conform to such applicable exemptive rule.

                  3.4.     At-Will Employment. Nothing in the Plan or in any
Award Agreement hereunder shall confer upon any Holder any right to continue in
the employ of, or as a Consultant for, the Company or any Subsidiary, or as a
Director of the Company, or shall interfere with or restrict in any way the
rights of the Company and any Subsidiary, which are hereby expressly reserved,
to discharge any Holder at any time for any reason whatsoever, with or without
cause, except to the extent expressly provided otherwise in a written employment
or consulting agreement between the Holder and the Company and any Subsidiary.

                                   ARTICLE IV.

                        GRANTING OF OPTIONS TO EMPLOYEES,
                      CONSULTANTS AND INDEPENDENT DIRECTORS

                  4.1.     Eligibility. Any Employee or Consultant selected by
the Committee pursuant to Section 4.4(a)(i) shall be eligible to be granted an
Option. Any Independent Director selected by the Board pursuant to Section
4.5(a)(i) shall be eligible to be granted an Option. All grants shall be made at
the discretion of the Committee or the Board, as the case may be, and no person
shall be entitled to a grant of an Option as a matter of right.

                  4.2.     Disqualification for Stock Ownership. No person may
be granted an Incentive Stock Option under the Plan if such person, at the time
the Incentive Stock Option is granted, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any then existing Subsidiary or parent corporation (within the
meaning of Section 422 of the Code) unless such Incentive Stock Option conforms
to the applicable provisions of Section 422 of the Code.

                  4.3.     Qualification of Incentive Stock Options. No
Incentive Stock Option shall be granted to any person who is not an Employee.

                  4.4.     Granting of Options to Employees and Consultants.

                  (a)      The Committee shall from time to time, in its
absolute discretion, and subject to applicable limitations of the Plan:

                           (i)      Select from among the Employees or
         Consultants (including Employees or Consultants who have previously
         been granted Awards under the Plan) such of them as in its opinion
         should be granted Options;

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                           (ii)     Subject to the Award Limit, determine the
         number of shares of Common Stock to be subject to such Options granted
         to the selected Employees or Consultants;

                           (iii)    Subject to Section 4.3, determine whether
         such Options are to be Incentive Stock Options or Non-Qualified Stock
         Options and whether such Options are to qualify as performance-based
         compensation as described in Section 162(m)(4)(C) of the Code; and

                           (iv)     Determine the terms and conditions of such
         Options, consistent with the Plan; provided, however, that the terms
         and conditions of Options intended to qualify as performance-based
         compensation as described in Section 162(m)(4)(C) of the Code shall
         include, but not be limited to, such terms and conditions as may be
         necessary to meet the applicable provisions of Section 162(m) of the
         Code.

                  (b)      Upon the selection of an Employee or Consultant to be
granted an Option, the Committee shall instruct the Secretary of the Company to
issue the Option and may impose such conditions on the grant of the Option as it
deems appropriate, and the Committee shall authorize one or more of the officers
of the Company to prepare, execute and deliver the Award Agreement with respect
to such Option.

                  (c)      Any Incentive Stock Option granted under the Plan may
be modified by the Committee, with the consent of the Holder, to disqualify such
Option from treatment as an "incentive stock option" under Section 422 of the
Code.

                  4.5.     Granting of Options to Independent Directors.

                  (a)      Subject to Section 4.5(b), the Board shall from time
to time, in its absolute discretion, and subject to applicable limitations of
the Plan:

                           (i)      Determine whether to grant Options to
         Independent Directors, and, in the event Options are so granted, select
         from among the Independent Directors (including Independent Directors
         who have previously been granted Awards under the Plan) such of them as
         in its opinion should be granted Options;

                           (ii)     Subject to the Award Limit, determine the
         number of shares of Common Stock to be subject to such Options granted
         to the selected Independent Directors; and

                           (iii)    Determine the terms and conditions of such
         Options, consistent with the Plan.

                  (b)      Upon the selection of an Independent Director to be
granted an Option, and the grant of an Option to an Independent Director, the
Board shall instruct the Secretary of the Company to issue the Option and may
impose such conditions on the grant of the Option as it deems appropriate, and
the Board shall authorize one or more

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officers of the Company to prepare, execute and deliver the Award Agreement with
respect to such Option.

                  4.6.     Options in Lieu of Cash Compensation. Options may be
granted under the Plan to Employees and Consultants in lieu of cash bonuses that
would otherwise be payable to such Employees and Consultants and to Independent
Directors in lieu of directors' fees that would otherwise be payable to such
Independent Directors, pursuant to such policies that may be adopted by the
Administrator from time to time.

                                   ARTICLE V.

                                TERMS OF OPTIONS

                  5.1.     Option Price. The price per share of the shares of
Common Stock subject to each Option granted to Employees and Consultants shall
be set by the Committee; provided, however, that such price shall be no less
than 100% of the Fair Market Value of a share of Common Stock on the date the
Option is granted, and:

                  (a)      in the case of Incentive Stock Options, such price
shall not be less than 100% of the Fair Market Value of a share of Common Stock
on the date the Option is modified, extended or renewed for purposes of Section
424(h) of the Code; and

                  (b)      in the case of Incentive Stock Options granted to an
individual then owning (within the meaning of Section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary or parent corporation thereof (within the meaning of
Section 422 of the Code), such price shall not be less than 110% of the Fair
Market Value of a share of Common Stock on the date the Option is granted (or
the date the Option is modified, extended or renewed for purposes of Section
424(h) of the Code).

                  5.2.     Option Term. The term of an Option granted to an
Employee or Consultant shall be set by the Committee in its absolute discretion;
provided, however, that the term shall not be more than ten (10) years from the
date the Option is granted; and, provided, further, that, in the case of
Incentive Stock Options, the term shall not be more than five (5) years from the
date the Incentive Stock Option is granted if the Incentive Stock Option is
granted to an individual then owning (within the meaning of Section 424(d) of
the Code) more than 10% of the total combined voting power of all classes of
stock of the Company or any Subsidiary or parent corporation thereof (within the
meaning of Section 422 of the Code). Except as limited by requirements of
Section 422 of the Code and regulations and rulings thereunder applicable to
Incentive Stock Options, the Committee may extend the term of any outstanding
Option in connection with any Termination of Employment or Termination of
Consultancy of the Holder, or amend any other term or condition of such Option
relating to such a termination; provided, however, that the term shall not be
more than ten (10) years from the date the Option is granted.

                  5.3.     Option Vesting

                  (a)      The period during which the right to exercise, in
whole or in part, an Option granted to an Employee or a Consultant vests in the
Holder shall be set by the Committee and the Committee may determine that an
Option may not be exercised in whole or in part for a

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specified period after it is granted. At any time after grant of an Option, the
Committee may, in its absolute discretion and subject to whatever terms and
conditions it selects, accelerate the period during which an Option granted to
an Employee or Consultant vests and becomes exercisable.

                  (b)      No portion of an Option granted to an Employee or
Consultant which is unexercisable at Termination of Employment or Termination of
Consultancy, as applicable, shall thereafter become exercisable, except as may
be otherwise provided by the Committee either in the Award Agreement or by
action of the Committee following the grant of the Option.

                  (c)      To the extent that the aggregate Fair Market Value of
stock with respect to which "incentive stock options" (within the meaning of
Section 422 of the Code, but without regard to Section 422(d) of the Code) are
exercisable for the first time by a Holder during any calendar year (under the
Plan and all other incentive stock option plans of the Company and any parent or
subsidiary corporation (within the meaning of Section 422 of the Code) of the
Company), exceeds $100,000, such Options or other options shall be treated as
non-qualified stock options to the extent required by Section 422 of the Code.
The rule set forth in the preceding sentence shall be applied by taking Options
or other options into account in the order in which they were granted. For
purposes of this Section 5.3(c), the Fair Market Value of stock shall be
determined as of the time the Option or other options with respect to such stock
is granted.

                  5.4.     Terms of Options Granted to Independent Directors.
The price per share of the shares subject to each Option granted to an
Independent Director shall equal 100% of the Fair Market Value of a share of
Common Stock on the date the Option is granted. The period during which the
right to exercise, in whole or in part, an Option granted to an Independent
Director vests in the Holder shall be set by the Administrator and the
Administrator may determine that an Option may not be exercised in whole or in
part for a specified period after it is granted. The term of each Option granted
to an Independent Director shall be determined by the Administrator and shall be
no greater than ten (10) years from the date the Option is granted. No portion
of an Option which is unexercisable at Termination of Directorship shall
thereafter become exercisable. Options granted to Independent Directors under
Section 4.5 shall be subject to such other terms and conditions as are
determined by the Administrator.

                  5.5.     Substitute Awards. Notwithstanding the foregoing
provisions of this Article V to the contrary, in the case of an Option that is a
Substitute Award, the price per share of the shares subject to such Option may
be less than the Fair Market Value per share on the date of grant, provided,
that the excess of:

                  (a)      the aggregate Fair Market Value (as of the date such
Substitute Award is granted) of the shares subject to the Substitute Award; over

                  (b)      the aggregate exercise price thereof; does not exceed
the excess of;

                  (c)      the aggregate fair market value (as of the time
immediately preceding the transaction giving rise to the Substitute Award, such
fair market value to be determined by the

                                       11
<PAGE>

Administrator) of the shares of the predecessor entity that were subject to the
grant assumed or substituted for by the Company; over

                  (d)      the aggregate exercise price of such shares.

                  5.6.     Restrictions on Common Stock.

                  The Administrator may, in its sole discretion, provide under
the terms of an Option that shares of Common Stock purchased upon exercise of
such Option shall be subject to repurchase from the Holder by the Company, or
shall be subject to such restrictions as the Administrator shall provide, which
restrictions may include, without limitation, restrictions concerning voting
rights and transferability and restrictions based on duration of employment with
the Company and the Subsidiaries, Company performance and individual
performance; provided, however, that, by action taken before or after the Common
Stock is purchased upon exercise of the Option, the Administrator may, on such
terms and conditions as it may determine to be appropriate, terminate the
Company's repurchase right or remove any or all of the restrictions imposed by
the terms of the Award Agreement. The Company's right to repurchase the Common
Stock from the Holder then subject to the right shall provide that immediately
upon a Termination of Employment, a Termination of Consultancy, or a Termination
of Directorship, as applicable, and for such period as the Administrator shall
determine, the Company shall have the right to purchase the Common Stock at a
price per share equal to the price paid by the Holder for such Common Stock, or
such other price as is determined by the Administrator; provided, however, that,
in the event of a Change in Control, such right of repurchase shall terminate
immediately prior to the effective date of such Change in Control. Shares of
Common Stock purchased upon the exercise of an Option may not be sold,
transferred or encumbered until any repurchase right and any and all
restrictions are terminated or expire. The Secretary of the Company or such
other escrow holder as the Administrator may appoint shall retain physical
custody of each certificate representing such shares of Common Stock until the
repurchase right and any and all of the restrictions imposed under the Award
Agreement with respect to the shares evidenced by such certificate terminate,
expire or shall have been removed. In order to enforce the restrictions imposed
upon shares of Common Stock hereunder, the Administrator shall cause a legend or
legends to be placed on certificates representing all shares of Common Stock
that are still subject to any repurchase right or restrictions under Award
Agreements, which legend or legends shall make appropriate reference to the
conditions imposed thereby. If a Holder makes an election under Section 83(b) of
the Code, or any successor section thereto, to be taxed with respect to the
Common Stock as of the date of transfer of the Common Stock rather than as of
the date or dates upon which the Holder would otherwise be taxable under Section
83(a) of the Code, the Holder shall deliver a copy of such election to the
Company immediately after filing such election with the Internal Revenue
Service.

                                   ARTICLE VI.

                               EXERCISE OF OPTIONS

                  6.1.     Partial Exercise. An exercisable Option may be
exercised in whole or in part. However, an Option shall not be exercisable with
respect to fractional shares and the

                                       12
<PAGE>

Administrator may require that, by the terms of the Option, a partial exercise
be with respect to a minimum number of shares.

                  6.2.     Manner of Exercise. All or a portion of an
exercisable Option shall be deemed exercised upon delivery of all of the
following to the Secretary of the Company or his office:

                  (a)      A written notice complying with the applicable rules
established by the Administrator stating that the Option, or a portion thereof,
is exercised. The notice shall be signed by the Holder or other person then
entitled to exercise the Option or such portion of the Option;

                  (b)      Such representations and documents as the
Administrator, in its absolute discretion, deems necessary or advisable to
effect compliance with all applicable provisions of the Securities Act and any
other federal or state securities laws or regulations. The Administrator may, in
its absolute discretion, also take whatever additional actions it deems
appropriate to effect such compliance including, without limitation, placing
legends on share certificates and issuing stop-transfer notices to agents and
registrars;

                  (c)      In the event that the Option shall be exercised
pursuant to Section 10.1 by any person or persons other than the Holder,
appropriate proof of the right of such person or persons to exercise the Option;
and

                  (d)      Full cash payment to the Secretary of the Company for
the shares with respect to which the Option, or portion thereof, is exercised.
However, the Administrator, may in its sole and absolute discretion (i) allow a
delay in payment up to thirty (30) days from the date the Option, or portion
thereof, is exercised; (ii) allow payment, in whole or in part, through the
delivery of shares of Common Stock which have been owned by the Holder for at
least six months, duly endorsed for transfer to the Company with a Fair Market
Value on the date of delivery equal to the aggregate exercise price of the
Option or exercised portion thereof; (iii) allow payment, in whole or in part,
through the surrender of shares of Common Stock then issuable upon exercise of
the Option having a Fair Market Value on the date of Option exercise equal to
the aggregate exercise price of the Option or exercised portion thereof; (iv)
allow payment, in whole or in part, through the delivery of a notice that the
Holder has placed a market sell order with a broker with respect to shares of
Common Stock then issuable upon exercise of the Option, and that the broker has
been directed to pay a sufficient portion of the net proceeds of the sale to the
Company in satisfaction of the Option exercise price, provided that payment of
such proceeds is then made to the Company upon settlement of such sale; or (v)
allow payment through any combination of the consideration provided in the
foregoing subparagraphs (ii), (iii) and (iv).

                  6.3.     Conditions to Issuance of Stock Certificates. The
Company shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following conditions:

                  (a)      The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed;

                                       13
<PAGE>

                  (b)      The completion of any registration or other
qualification of such shares under any state or federal law, or under the
rulings or regulations of the Securities and Exchange Commission or any other
governmental regulatory body which the Administrator shall, in its absolute
discretion, deem necessary or advisable;

                  (c)      The obtaining of any approval or other clearance from
any state or federal governmental agency which the Administrator shall, in its
absolute discretion, determine to be necessary or advisable;

                  (d)      The lapse of such reasonable period of time following
the exercise of the Option as the Administrator may establish from time to time
for reasons of administrative convenience; and

                  (e)      The receipt by the Company of full payment for such
shares, including payment of any applicable withholding tax, which in the
discretion of the Administrator may be in the form of consideration used by the
Holder to pay for such shares under Section 6.2(d).

                  6.4.     Rights as Stockholders. Holders shall not be, nor
have any of the rights or privileges of, stockholders of the Company in respect
of any shares purchasable upon the exercise of any part of an Option unless and
until certificates representing such shares have been issued by the Company to
such Holders.

                  6.5.     Ownership and Transfer Restrictions. The
Administrator, in its absolute discretion, may impose such restrictions on the
ownership and transferability of the shares purchasable upon the exercise of an
Option as it deems appropriate. Any such restriction shall be set forth in the
respective Award Agreement and may be referred to on the certificates evidencing
such shares. The Holder shall give the Company prompt notice of any disposition
of shares of Common Stock acquired by exercise of an Incentive Stock Option
within (a) two years from the date of granting (including the date the Option is
modified, extended or renewed for purposes of Section 424(h) of the Code) such
Option to such Holder or (b) one year after the transfer of such shares to such
Holder.

                  6.6.     Limitations on Exercise of Options Granted to
Independent Directors. No Option granted to an Independent Director may be
exercised to any extent by anyone after the first to occur of the following
events:

                  (a)      The expiration of 12 months from the date of the
Holder's death;

                  (b)      The expiration of 12 months from the date of the
Holder's Termination of Directorship by reason of his or her permanent and total
disability (within the meaning of Section 22(e)(3) of the Code);

                  (c)      The expiration of three months from the date of the
Holder's Termination of Directorship for any reason other than such Holder's
death or his or her permanent and total disability, unless the Holder dies
within said three-month period; or

                  (d)      The expiration of 10 years from the date the Option
was granted.

                                       14
<PAGE>

                  6.7.     Additional Limitations on Exercise of Options.
Holders may be required to comply with any timing or other restrictions with
respect to the settlement or exercise of an Option, including a window-period
limitation, as may be imposed in the discretion of the Administrator.

                                  ARTICLE VII.

                            AWARD OF RESTRICTED STOCK

                  7.1.     Eligibility. Subject to the Award Limit, Restricted
Stock may be awarded to any Employee or Consultant who the Committee determines
should receive such an Award.

                  7.2.     Award of Restricted Stock.

                  (a)      The Committee may from time to time, in its absolute
discretion:

                           (i)      Select from among the Employees or
         Consultants (including Employees or Consultants who have previously
         been granted other Awards under the Plan) such of them as in its
         opinion should be awarded Restricted Stock; and

                           (ii)     Determine the purchase price, if any, and
         other terms and conditions applicable to such Restricted Stock,
         consistent with the Plan.

                  (b)      The Committee shall establish the purchase price, if
any, and form of payment for Restricted Stock; provided, however, that such
purchase price shall be no less than the par value of the Common Stock to be
purchased, unless otherwise permitted by applicable state law. In all cases,
legal consideration shall be required for each issuance of Restricted Stock.

                  (c)      Upon the selection of an Employee or Consultant to be
awarded Restricted Stock, the Committee shall instruct the Secretary of the
Company to issue such Restricted Stock and may impose such conditions on the
issuance of such Restricted Stock as it deems appropriate, and the Committee
shall authorize one or more officers of the Company to prepare, execute and
deliver the Award Agreement with respect to such Restricted Stock.

                  7.3.     Rights as Stockholders. Subject to Section 7.4, upon
delivery of the shares of Restricted Stock to the escrow holder pursuant to
Section 7.6, the Holder shall have, unless otherwise provided by the Committee,
all the rights of a stockholder with respect to said shares, subject to the
restrictions in his Award Agreement, including the right to receive all
dividends and other distributions paid or made with respect to the shares;
provided, however, that in the discretion of the Committee, any extraordinary
distributions with respect to the Common Stock shall be subject to the
restrictions set forth in Section 7.4.

                  7.4.     Restriction. All shares of Restricted Stock issued
under the Plan (including any shares received by holders thereof with respect to
shares of Restricted Stock as a result of stock dividends, stock splits or any
other form of recapitalization) shall, in the terms of each individual Award
Agreement, be subject to such restrictions as the Committee shall

                                       15
<PAGE>

provide, if any, which restrictions may include, without limitation,
restrictions concerning voting rights and transferability and restrictions based
on duration of employment with the Company, Company performance and individual
performance; provided, however, that, except with respect to shares of
Restricted Stock granted to Section 162(m) Employees, by action taken after the
Restricted Stock is issued, the Committee may, on such terms and conditions as
it may determine to be appropriate, remove any or all of the restrictions
imposed by the terms of the Award Agreement. Restricted Stock may not be sold or
encumbered until all restrictions are terminated or expire. If no consideration
was paid by the Holder upon issuance, a Holder's rights in unvested Restricted
Stock shall lapse, and such Restricted Stock shall be surrendered to the Company
without consideration, upon Termination of Employment or, if applicable, upon
Termination of Consultancy with the Company; provided, however, that the
Committee in its sole and absolute discretion may provide that such rights shall
not lapse in the event of a Termination of Employment following a "change of
ownership or control" (within the meaning of Treasury Regulation Section
1.162-27(e)(2)(v) or any successor regulation thereto) of the Company or because
of the Holder's death or disability; provided, further, except with respect to
shares of Restricted Stock granted to Section 162(m) Employees, the Committee in
its sole and absolute discretion may provide that no such lapse or surrender
shall occur in the event of a Termination of Employment, or a Termination of
Consultancy, without cause or following any Change in Control of the Company or
because of the Holder's retirement, or otherwise.

                  7.5.     Repurchase of Restricted Stock. The Committee shall
provide in the terms of each individual Award Agreement that the Company shall
have the right to repurchase from the Holder the Restricted Stock then subject
to restrictions under the Award Agreement immediately upon a Termination of
Employment or, if applicable, upon a Termination of Consultancy between the
Holder and the Company, at a cash price per share equal to the price paid by the
Holder for such Restricted Stock; provided, however, that the Committee in its
sole and absolute discretion may provide that no such right of repurchase shall
exist in the event of a Termination of Employment following a "change of
ownership or control" (within the meaning of Treasury Regulation Section
1.162-27(e)(2)(v) or any successor regulation thereto) of the Company or because
of the Holder's death or disability; provided, further, that, except with
respect to shares of Restricted Stock granted to Section 162(m) Employees, the
Committee in its sole and absolute discretion may provide that no such right of
repurchase shall exist in the event of a Termination of Employment or a
Termination of Consultancy without cause or following any Change in Control of
the Company or because of the Holder's retirement, or otherwise.

                  7.6.     Escrow. The Secretary of the Company or such other
escrow holder as the Committee may appoint shall retain physical custody of each
certificate representing Restricted Stock until all of the restrictions imposed
under the Award Agreement with respect to the shares evidenced by such
certificate expire or shall have been removed.

                  7.7.     Legend. In order to enforce the restrictions imposed
upon shares of Restricted Stock hereunder, the Committee shall cause a legend or
legends to be placed on certificates representing all shares of Restricted Stock
that are still subject to restrictions under Award Agreements, which legend or
legends shall make appropriate reference to the conditions imposed thereby.

                  7.8.     Section 83(b) Election. If a Holder makes an election
under Section 83(b)

                                       16
<PAGE>

of the Code, or any successor section thereto, to be taxed with respect to the
Restricted Stock as of the date of transfer of the Restricted Stock rather than
as of the date or dates upon which the Holder would otherwise be taxable under
Section 83(a) of the Code, the Holder shall deliver a copy of such election to
the Company immediately after filing such election with the Internal Revenue
Service.

                  7.9.     Restricted Stock in Lieu of Cash Compensation.
Notwithstanding anything herein to the contrary, shares of Restricted Stock may
be granted to Independent Directors in lieu of directors' fees which would
otherwise be payable to such Independent Directors pursuant to such policies as
may be adopted by the Administrator from time to time.

                                   ARTICLE VIII.

                            STOCK APPRECIATION RIGHTS

                  8.1.     Grant of Stock Appreciation Rights. A Stock
Appreciation Right may be granted to any Employee or Consultant selected by the
Committee. A Stock Appreciation Right may be granted (a) in connection and
simultaneously with the grant of an Option, (b) with respect to a previously
granted Option, or (c) independent of an Option. A Stock Appreciation Right
shall be subject to such terms and conditions not inconsistent with the Plan as
the Committee shall impose and shall be evidenced by an Award Agreement.

                  8.2.     Coupled Stock Appreciation Rights.

                  (a)      A Coupled Stock Appreciation Right ("CSAR") shall be
related to a particular Option and shall be exercisable only when and to the
extent the related Option is exercisable.

                  (b)      A CSAR may be granted to the Holder for no more than
the number of shares subject to the simultaneously or previously granted Option
to which it is coupled.

                  (c)      A CSAR shall entitle the Holder (or other person
entitled to exercise the Option pursuant to the Plan) to surrender to the
Company unexercised a portion of the Option to which the CSAR relates (to the
extent then exercisable pursuant to its terms) and to receive from the Company
in exchange therefor an amount determined by multiplying the difference obtained
by subtracting the Option exercise price from the Fair Market Value of a share
of Common Stock on the date of exercise of the CSAR by the number of shares of
Common Stock with respect to which the CSAR shall have been exercised, subject
to any limitations the Committee may impose.

                  8.3.     Independent Stock Appreciation Rights.

                  (a)      An Independent Stock Appreciation Right ("ISAR")
shall be unrelated to any Option and shall have a term set by the Committee. An
ISAR shall be exercisable in such installments as the Committee may determine.
An ISAR shall cover such number of shares of Common Stock as the Committee may
determine. The exercise price per share of Common Stock subject to each ISAR
shall be set by the Committee. An ISAR is exercisable only while

                                       17
<PAGE>

the Holder is an Employee or Consultant; provided that the Committee may
determine that the ISAR may be exercised subsequent to Termination of Employment
or Termination of Consultancy without cause, or following a Change in Control of
the Company, or because of the Holder's retirement, death or disability, or
otherwise.

                  (b)      An ISAR shall entitle the Holder (or other person
entitled to exercise the ISAR pursuant to the Plan) to exercise all or a
specified portion of the ISAR (to the extent then exercisable pursuant to its
terms) and to receive from the Company an amount determined by multiplying the
difference obtained by subtracting the exercise price per share of the ISAR from
the Fair Market Value of a share of Common Stock on the date of exercise of the
ISAR by the number of shares of Common Stock with respect to which the ISAR
shall have been exercised, subject to any limitations the Committee may impose.

                  8.4.     Payment and Limitations on Exercise.

                  (a)      Payment of the amounts determined under Section
8.2(c) and 8.3(b) above shall be in cash, in Common Stock (based on its Fair
Market Value as of the date the Stock Appreciation Right is exercised) or a
combination of both, as determined by the Committee. To the extent such payment
is effected in Common Stock it shall be made subject to satisfaction of all
provisions of Section 6.3 above pertaining to Options.

                  (a)      Holders of Stock Appreciation Rights may be required
to comply with any timing or other restrictions with respect to the settlement
or exercise of a Stock Appreciation Right, including a window-period limitation,
as may be imposed in the discretion of the Committee.

                                       18
<PAGE>

                                  ARTICLE IX.

                                 ADMINISTRATION

                  9.1.     Committee. The Committee shall be the Compensation
Committee of the Board, unless the Board specifically assumes the functions of
the Committee or appoints another committee to assume such functions.

                  9.2.     Duties and Powers of Committee. It shall be the duty
of the Committee to conduct the general administration of the Plan in accordance
with its provisions. The Committee shall have the power to interpret the Plan
and the Award Agreements, and to adopt such rules for the administration,
interpretation, and application of the Plan as are consistent therewith, to
interpret, amend or revoke any such rules and to amend any Award Agreement
provided that the rights or obligations of the Holder of the Award that is the
subject of any such Award Agreement are not affected adversely. Any such
interpretations and rules with respect to Incentive Stock Options shall be
consistent with the provisions of Section 422 of the Code. In its absolute
discretion, the Board may at any time and from time to time assume any and all
rights and duties of the Committee under the Plan, except with respect to
matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations
or rules issued thereunder, are required to be determined in the sole discretion
of the Committee. Notwithstanding the foregoing, the full Board, acting by a
majority of its members in office, shall conduct the general administration of
the Plan with respect to Options granted to Independent Directors.

                  9.3.     Majority Rule; Unanimous Written Consent. The
Committee shall act by a majority of its members in attendance at a meeting at
which a quorum is present or by a memorandum or other written instrument signed
by all members of the Committee.

                  9.4.     Compensation; Professional Assistance; Good Faith
Actions. Members of the Committee shall receive such compensation, if any, for
their services as members as may be determined by the Board. All expenses and
liabilities which members of the Committee incur in connection with the
administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers, or other persons. The Committee, the Company and the
Company's officers and Directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee or the Board in good
faith shall be final and binding upon all Holders, the Company and all other
interested persons. No members of the Committee or Board shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan or Awards, and all members of the Committee and the Board
shall be fully protected by the Company in respect of any such action,
determination or interpretation.

                                   ARTICLE X.

                            MISCELLANEOUS PROVISIONS

                  10.1.    Not Transferable. No Award under the Plan may be
sold, pledged, assigned or transferred in any manner other than by will or the
laws of descent and distribution

                                       19
<PAGE>

or, subject to the consent of the Administrator, pursuant to a DRO, unless and
until such Award has been exercised, or the shares underlying such Award have
been issued, and all restrictions applicable to such shares have lapsed. No
Award or interest or right therein shall be liable for the debts, contracts or
engagements of the Holder or his successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment or
any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.

                  During the lifetime of the Holder, only he may exercise an
Option or other Award (or any portion thereof) granted to him under the Plan,
unless it has been disposed of with the consent of the Administrator pursuant to
a DRO. After the death of the Holder, any exercisable portion of an Option or
other Award may, prior to the time when such portion becomes unexercisable under
the Plan or the applicable Award Agreement, be exercised by his personal
representative or by any person empowered to do so under the deceased Holder's
will or under the then applicable laws of descent and distribution.

                  Notwithstanding the foregoing provisions of this Section 10.1,
the Administrator, in its sole discretion, may determine to grant a
Non-Qualified Stock Option which, by its terms as set forth in the applicable
Award Agreement, may be transferred by the Holder, in writing and with prior
written notice to the Administrator, to any one or more Permitted Transferees
(as defined below), subject to the following terms and conditions: (a) a
Non-Qualified Stock Option transferred to a Permitted Transferee shall not be
assignable or transferable by the Permitted Transferee other than by will or the
laws of descent and distribution; (b) any Non-Qualified Stock Option which is
transferred to a Permitted Transferee shall continue to be subject to all the
terms and conditions of the Non-Qualified Stock Option as applicable to the
original Holder (other than the ability to further transfer the Non-Qualified
Stock Option); and (c) the Holder and the Permitted Transferee shall execute any
and all documents requested by the Administrator, including, without limitation,
documents to: (i) confirm the status of the transferee as a Permitted
Transferee, (ii) satisfy any requirements for an exemption for the transfer
under applicable federal and state securities laws and (iii) evidence the
transfer. For purposes of this Section, "Permitted Transferee" shall mean, with
respect to a Holder, any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing the Holder's household (other than a
tenant or employee), a trust in which these persons (or the Holder) control the
management of assets, and any other entity in which these persons (or the
Holder) owns more than fifty percent (50%) of the voting interests, or any other
transferee specifically approved by the Administrator after taking into account
any state or federal tax or securities laws applicable to transferable
Non-Qualified Stock Options.

                  10.2.    Amendment, Suspension or Termination of the Plan.

                  (a)      Except as otherwise provided in this Section 10.2,
the Plan may be wholly or partially amended or otherwise modified, suspended or
terminated at any time or from time to time by the Board. However, without
approval of the Company's stockholders given within

                                       20
<PAGE>

twelve months before or after the action by the Board, no action of the Board
may, except as provided in Section 10.3, increase the limits imposed in Section
2.1 on the maximum number of shares that may be issued under the Plan.

                  (b)      No amendment, suspension or termination of the Plan
shall, without the consent of the Holder alter or impair any rights or
obligations under any Award theretofore granted or awarded, unless the Award
itself otherwise expressly so provides.

                  (c)      No Awards may be granted or awarded during any period
of suspension or after termination of the Plan, and in no event may any Option
be granted under the Plan after the first to occur of the following events:

                           (i)      The expiration of ten years from the date
         the Plan is adopted by the Board; or

                           (ii)     The expiration of ten years from the date
         the Plan is approved by the Company's stockholders under Section 10.5.

                  10.3.    Changes in Common Stock or Assets of the Company,
Acquisition or Liquidation of the Company and Other Corporate Events.

                  (a)      Subject to Section 10.3(d), in the event that the
Administrator determines that any dividend or other distribution (whether in the
form of cash, Common Stock, other securities, or other property),
recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Company, or
exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of the
Company, or other similar corporate transaction or event, in the Administrator's
sole discretion, affects the Common Stock such that an adjustment is determined
by the Administrator to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to an Award, then the Administrator shall, in
such manner as it may deem equitable, adjust any or all of:

                           (i)      the number and kind of shares of Common
         Stock (or other securities or property) with respect to which Awards
         may be granted or awarded (including, but not limited to, adjustments
         of the limitations in Section 2.1 on the maximum number and kind of
         shares which may be issued and adjustments of the Award Limit);

                           (ii)     the number and kind of shares of Common
         Stock (or other securities or property) subject to outstanding Awards;
         and

                           (iii)    the grant or the exercise price with respect
         to any Award.

                  (b)      Subject to Sections 10.3(d) and 10.4, in the event of
any transaction or event described in Section 10.3(a) or any unusual or
nonrecurring transactions or events affecting the Company, any affiliate of the
Company, or the financial statements of the Company or any

                                       21
<PAGE>

affiliate, or of changes in applicable laws, regulations, or accounting
principles, the Administrator, in its sole and absolute discretion, and on such
terms and conditions as it deems appropriate, either by the terms of the Award
or by action taken prior to the occurrence of such transaction or event (any
such action applied to Employees and former Employees to be applied uniformly)
and either automatically or upon the Holder's request, is hereby authorized to
take any one or more of the following actions whenever the Administrator
determines that such action is appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to any Award under the Plan, to facilitate such
transactions or events or to give effect to such changes in laws, regulations or
principles:

                           (i)      to provide for either the cancellation of
         any such Award for an amount of cash equal to the amount that could
         have been attained upon the exercise of such Award or realization of
         the Holder's rights had such Award been currently exercisable or
         payable or fully vested, or the replacement of such Award with other
         rights or property selected by the Administrator in its sole
         discretion;

                           (ii)     to provide that the Award cannot vest, be
         exercised or become payable after such event;

                           (iii)    to provide that such Award shall be
         exercisable as to all shares covered thereby, notwithstanding anything
         to the contrary in Section 5.3 or 5.4 or the provisions of such Award;

                           (iv)     to provide that such Award be assumed by the
         successor or survivor corporation, or a parent or subsidiary thereof,
         or shall be substituted for by similar options, rights or awards
         covering the stock of the successor or survivor corporation, or a
         parent or subsidiary thereof, with appropriate adjustments as to the
         number and kind of shares and prices;

                           (v)      to make adjustments in the number and type
         of shares of Common Stock (or other securities or property) subject to
         outstanding Awards, and in the number and kind of outstanding
         Restricted Stock, and/or in the terms and conditions of (including the
         grant or exercise price), and the criteria included in, outstanding
         Awards and Awards which may be granted in the future; and

                           (vi)     to provide that, for a specified period of
         time prior to such event, the restrictions imposed under an Award
         Agreement upon some or all shares of Restricted Stock or Common Stock
         may be terminated and some or all shares of such Restricted Stock or
         Common Stock may cease to be subject to repurchase after such event.

                  (c)      Subject to Sections 10.3(d), 3.2 and 3.3, the
Administrator may, in its discretion, include such further provisions and
limitations in any Award, Award Agreement or certificate, as it may deem
equitable and in the best interests of the Company.

                  (d)      With respect to Awards that are granted to Section
162(m) Employees and are intended to qualify as performance-based compensation
under Section 162(m)(4)(C), no

                                       22
<PAGE>

adjustment or action described in this Section 10.3 or in any other provision of
the Plan shall be authorized to the extent that such adjustment or action would
cause such Award to fail to so qualify under Section 162(m)(4)(C) or any
successor provisions thereto. No adjustment or action described in this Section
10.3 or in any other provision of the Plan shall be authorized to the extent
that such adjustment or action would cause the Plan to violate Section 422(b)(1)
of the Code. Furthermore, no such adjustment or action shall be authorized to
the extent such adjustment or action would result in short-swing profits
liability under Section 16 or violate the exemptive conditions of Rule 16b-3
unless the Administrator determines that the Award is not to comply with such
exemptive conditions. The number of shares of Common Stock subject to any Award
shall always be rounded to the next whole number.

                  (e)      The existence of the Plan, any Award Agreement and
the Awards granted hereunder shall not affect or restrict in any way the right
or power of the Company or the stockholders of the Company to make or authorize
any adjustment, recapitalization, reorganization or other change in the
Company's capital structure or its business, any merger or consolidation of the
Company, any issue of stock or of options, warrants or rights to purchase stock
or of bonds, debentures, preferred or prior preference stocks whose rights are
superior to or affect the Common Stock or the rights thereof or which are
convertible into or exchangeable for Common Stock, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

                  10.4.    Change in Control. Notwithstanding any other
provision of the Plan, in the event of a Change in Control, each outstanding
Award shall, immediately prior to the effective date of the Change in Control,
automatically become fully exercisable for all of the shares of Common Stock at
the time subject to such Award and may be exercised for any or all of those
shares as fully-vested shares of Common Stock.

                  10.5.    Approval of Plan by Stockholders. The Plan shall be
submitted for the approval of the Company's stockholders within twelve months
after the date of the Board's initial adoption of the Plan. Awards may be
granted or awarded prior to such stockholder approval; provided, however, that
such Awards shall not be exercisable nor shall such Awards vest prior to the
time when the Plan is approved by the stockholders; and provided, further, that
if such approval has not been obtained at the end of said twelve-month period,
all Awards previously granted or awarded under the Plan shall thereupon be
canceled and become null and void. In addition, if the Board determines that
Awards other than Options or Stock Appreciation Rights which may be granted to
Section 162(m) Employees should continue to be eligible to qualify as
performance-based compensation under Section 162(m)(4)(C) of the Code, the
Performance Criteria must be disclosed to and approved by the Company's
stockholders no later than the first stockholder meeting that occurs in the
fifth year following the year in which the Company's stockholders previously
approved the Performance Criteria.

                  10.6.    Tax Withholding. The Company shall be entitled to
require payment in cash or deduction from other compensation payable to each
Holder of any sums required by federal, state or local tax law to be withheld
with respect to the issuance, vesting, exercise or payment of any Award. The
Administrator may in its discretion and in satisfaction of the foregoing
requirement allow such Holder to elect to have the Company withhold shares of

                                       23
<PAGE>

Common Stock otherwise issuable under such Award (or allow the return of shares
of Common Stock) having a Fair Market Value equal to the sums required to be
withheld. Notwithstanding any other provision of the Plan, the number of shares
of Common Stock which may be withheld with respect to the issuance, vesting,
exercise or payment of any Award (or which may be repurchased from the Holder of
such Award within six months after such shares of Common Stock were acquired by
the Holder from the Company) in order to satisfy the Holder's federal and state
income and payroll tax liabilities with respect to the issuance, vesting,
exercise or payment of the Award shall be limited to the number of shares which
have a Fair Market Value on the date of withholding or repurchase equal to the
aggregate amount of such liabilities based on the minimum statutory withholding
rates for federal and state tax income and payroll tax purposes that are
applicable to such supplemental taxable income.

                  10.7.    Forfeiture Provisions. Subject to the limitations of
applicable law, pursuant to its general authority to determine the terms and
conditions applicable to Awards under the Plan, the Administrator shall have the
right to provide, in the terms of Awards made under the Plan, or to require a
Holder to agree by separate written instrument, that if (a)(i) the Holder at any
time, or during a specified time period, engages in any activity in competition
with the Company, or which is inimical, contrary or harmful to the interests of
the Company, as further defined by the Administrator or (ii) the Holder incurs a
Termination of Employment, Termination of Consultancy or Termination of
Directorship for cause, then (b) (i) any proceeds, gains or other economic
benefit actually or constructively received by the Holder upon any exercise of
the Award, or upon the receipt or resale of any Common Stock underlying any
Award, must be paid to the Company, and (ii) the Award shall terminate and any
unexercised portion of the Award (whether or not vested) shall be forfeited.

                  10.8.    Effect of Plan upon Options and Compensation Plans.
The adoption of the Plan shall not affect any other compensation or incentive
plans in effect for the Company or any Subsidiary. Nothing in the Plan shall be
construed to limit the right of the Company (a) to establish any other forms of
incentives or compensation for Employees, Directors or Consultants of the
Company or any Subsidiary or (b) to grant or assume options or other rights or
awards otherwise than under the Plan in connection with any proper corporate
purpose including but not by way of limitation, the grant or assumption of
options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation,
partnership, limited liability company, firm or association.

                  10.9.    Compliance with Laws. The Plan, the granting and
vesting of Awards under the Plan and the issuance and delivery of shares of
Common Stock and the payment of money under the Plan or under Awards granted or
awarded hereunder are subject to compliance with all applicable federal and
state laws, rules and regulations (including but not limited to state and
federal securities law and federal margin requirements) and to such approvals by
any listing, regulatory or governmental authority as may, in the opinion of
counsel for the Company, be necessary or advisable in connection therewith. Any
securities delivered under the Plan shall be subject to such restrictions, and
the person acquiring such securities shall, if requested by the Company, provide
such assurances and representations to the Company as the Company may deem
necessary or desirable to assure compliance with all applicable legal
requirements. To the extent permitted by applicable law, the Plan and Awards
granted or awarded hereunder shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.

                                       24
<PAGE>

                  10.10.   Inability to Obtain Authority. The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of share of Common Stock hereunder, shall relieve the Company
of any liability in respect of the failure to issue or sell such shares of
Common Stock as to which such requisite authority shall not have been obtained.

                  10.11.   Reservation of Shares. The Company, during the term
of this Plan, shall at all times reserve and keep available such number of
shares of Common Stock as shall be sufficient to satisfy the requirements of the
Plan.

                  10.12.   Titles. Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of the
Plan.

                  10.13.   Governing Law. The Plan and any agreements hereunder
shall be administered, interpreted and enforced under the internal laws of the
State of California without regard to conflicts of laws thereof.

                                      * * *

                  I hereby certify that the foregoing Plan was duly adopted by
the Board of Directors of Gen-Probe Incorporated on March 3rd, 2003, and amended
on May 13, 2003.

                  Executed on this 13th day of May, 2003.

                                                   /s/ R. William Bowen

                                                   -----------------------------
                                                   R. William Bowen
                                                   Secretary

                                      * * *

                  I hereby certify that the foregoing Plan was duly approved by
the stockholders of Gen-Probe Incorporated on May 29, 2003.

                  Executed on this 29th day of May, 2003.

                                                   /s/ R. William Bowen

                                                  -----------------------------
                                                   R. William Bowen
                                                   Secretary

                                       25

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