Document:

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                                                                    EXHIBIT 10.3

                            VIVID TECHNOLOGIES, INC.

                   1996 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN

        1. Purpose. The purpose of this 1996 Nonemployee Director Stock Option
Plan is to attract and retain the services of experienced and knowledgeable
independent directors of the Corporation for the benefit of the Corporation and
its stockholders and to provide additional incentives for such independent
directors to continue to work for the best interests of the Corporation and its
stockholders through continuing ownership of its common stock.

        2. Definitions. As used herein, each of the following terms has the
indicated meaning:

        "Affiliate" means any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated association or other entity (other
than the Corporation) that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the
Corporation including, without limitation, any member of an affiliated group of
which the Corporation is a common parent corporation as provided in Section 1504
of the Internal Revenue Code of 1986, as amended,.

        "Corporation" means Vivid Technologies, Inc.

        "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

        "Eligible Director" means each director of the Corporation who is not
then an employee of the Corporation.

        "Fair Market Value" means the last sale price of the Shares as reported
on the National Association of Securities Dealers Automated Quotation System
("NASDAQ") or on a national securities exchange on which the Shares may be
traded on the date of the granting of the Option. If the Shares are not publicly
traded, the fair market value shall mean the fair market value of the Shares as
determined by the Board of Directors.

        "Option" means the contractual right to purchase Shares upon the
specific terms set forth in this Plan.

        "Option Exercise Period" means the period commencing on the date of
grant of an Option pursuant to this Plan and ending ten years from the date of
grant.

        "Plan" means this Vivid Technologies, Inc. 1996 Nonemployee Director
Stock Option Plan.

        "Shares" means the Common Stock, $.01 par value, of the Corporation.
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        3. Stock Subject to the Plan. The aggregate number of Shares that may be
issued and sold under the Plan shall be 125,000 shares. The Shares to be issued
upon exercise of Options granted under this Plan shall be made available, at the
discretion of the Board of Directors, from (i) treasury Shares and/or Shares
reacquired by the Corporation for such purposes, including Shares purchased in
the open market, (ii) authorized but unissued Shares, and (iii) Shares
previously reserved for issuance upon exercise of Options which have expired or
been terminated. If any Option granted under this Plan shall expire or terminate
for any reason without having been exercised in full, the unpurchased Shares
covered thereby shall become available for grant as additional Options under the
Plan so long as it shall remain in effect.

        4. Administration of the Plan. The Plan shall be administered by the
Board of Directors of the Corporation (the "Board"). The Board shall, subject to
the provisions of the Plan, grant options under the Plan and shall have the
power to construe the Plan, to determine all questions as to eligibility, and to
adopt and amend such rules and regulations for the administration of the Plan as
it may deem desirable. The Board may delegate any and all of its authority
hereunder to one or more Committees of the Board.

        5. Eligibility; Grant of Options. Each Eligible Director will be granted
an Option to purchase 10,000 shares of Common Stock (the "Initial Option")
effective on the date he or she is first elected to the Board; provided, however
that no Eligible Director elected to the Board prior to October 10, 1996 shall
receive an Initial Option. In addition, each Eligible Director who has served as
a Director for a full fiscal year will be entitled to receive options to
purchase an additional 2,500 shares of Common Stock (the "Additional Options")
on June 30 of each year (provided the Director continues to be an Eligible
Director on that date) until the Director has received Additional Options to
purchase 25,000 shares of Common Stock.

        6.      Terms of Options and Limitations Thereon.

                (a) Option Agreement. Each Option granted under this Plan shall
be evidenced by an option agreement between the Corporation and the Option
holder and shall be upon such terms and conditions not inconsistent with this
Plan as the Board may determine. Each Option shall explicitly state that it is
not intended to be an "incentive stock option" as that term is defined in
Section 422A of the Internal Revenue Code.

                (b) Price. The price at which any Shares may be purchased
pursuant to the exercise of an Option shall be the Fair Market Value of the
Shares on the date of grant, but in no event shall the price be less than the
par value of the Shares.

                (c) Exercise of Options. Subject to Paragraph 7 of this Plan,
each Option granted under this Plan may be exercised in full at one time or in
part from time to time only during the Option Exercise Period by the giving of
written notice, signed by the person or persons exercising the Option, to the
Corporation stating the numbers of Shares with respect to which the Option is
being exercised, accompanied by full payment for such Shares pursuant to section
7(b) hereof; provided, however, (i) if a person to whom an Option has been
granted is permanently disabled or dies during the Option Exercise Period, the
portion of such Option then exercisable, as

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provided in Paragraph 7(a) shall be exercisable by him or her or by the
executors, administrators, legatees or distributees of his or her estate during
the 12 months following his or her or death or permanent disability and, (ii) if
a person to whom an Option has been granted ceases to be a director of the
Corporation for any cause other than death or permanent disability, the portion
of Option then exercisable shall be exercisable during the thirty (30) day
period following the date such person ceased to be a director, but, in any
event, only to the extent vested pursuant to Paragraph 7(a) hereof.

                (d) Non-Assignability. No Option or right or interest in an
Option shall be assignable or transferable by the holder except by will or the
laws of descent and distribution and during the lifetime of the holder shall be
exercisable only by him or her.

        7.      Vesting; Payment.

                (a) Subject to Paragraph 8 of this Plan, Options granted under
this Plan may be exercised as follows: (i) the Initial Options may be exercised
during the Option Exercise Period at the rate of 20% per year, commencing one
year after the date of grant, such that the Option may be exercised in full from
and after five years from the date of grant, and (ii) the Additional Options may
be exercised during the Option Exercise Period at any time after six months from
the date of grant.

                (b) If a person to whom an Option is granted ceases to be an
Eligible Director, then each Option issued to said person shall be exercisable,
during the remainder of the Option Exercise Period or such shorter period as
specified in subparagraph 6(c), only as to the number of Shares as to which the
Option was exercisable immediately prior to said termination of affiliation,
unless otherwise determined by the Board of Directors.

                (c) The purchase price of Shares upon exercise of an Option
shall be paid by the Option holder in full upon exercise and may be paid (i) in
cash or, if the Corporation's shares are traded on NASDAQ or a national
securities exchange; (ii) by delivery of Shares having a Fair Market Value on
the date of exercise equal to the purchase price, or (iii) any combination of
cash and Shares.

                (d) No Shares shall be issued or transferred upon exercise of
any Option under this Plan unless and until all legal requirements applicable to
the issuance or transfer of such shares and such other requirements as are
consistent with the Plan have been complied with to the satisfaction of the
Board, including without limitation those described in Paragraph 10 hereof.

        8.      Stock Adjustments.

                (a) If the Corporation is a party to any "Change in Control"
event, then all Options outstanding as of the date of the Change in Control
event and not then exercisable shall become fully exercisable to the full extent
of the original grant; provided, however, that if the rights granted under this
Paragraph 8(a) would cause an otherwise eligible transaction to be ineligible
for pooling of interest accounting treatment or the Board determines that such
rights

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would otherwise have an adverse effect on the Corporation, then the Board shall
have the power to make arrangements, which shall be binding upon the holders of
unexpired Options, for the substitution of new options for, or the assumption by
another corporation of, any unexpired Options then outstanding hereunder. For
purposes of the Plan, a "Change in Control" event shall include the following:

        (x) (i) An acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person") of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of the then outstanding shares of common stock of
the Corporation (the "Outstanding Corporation Common Stock") or the combined
voting power of the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors (the "Outstanding
Corporation Voting Securities") or (ii) the approval by the stockholders of the
Corporation of a reorganization, merger, consolidation, complete liquidation or
dissolution of the Corporation, the sale or disposition of all or substantially
all of the assets of the Corporation or similar corporate transaction (in each
case referred to in this Paragraph 8(a) as a "Corporate Transaction") or, if
consummation of such Corporate Transaction is subject, at the time of such
approval by stockholders, to the consent of any government or governmental
agency, the obtaining of such consent (either explicitly or implicitly);
excluding, however, the following: (i) any acquisition by, or consummation of a
Corporate Transaction with, any subsidiary of the Corporation or by an employee
benefit plan (or related trust) sponsored or maintained by the Corporation or an
Affiliate, (ii) the acquisition by, or consummation of a Corporate Transaction
with, any Person who beneficially owned, immediately prior to such acquisition
or Corporate Transaction, directly or indirectly, 20% or more of the Outstanding
Corporation Common Stock or Outstanding Corporation Voting Securities, or (iii)
any Corporate Transaction, if more than a majority of the beneficial ownership
of the Outstanding Corporation Voting Securities after the Corporate Transaction
is held directly or indirectly by Persons who held directly or indirectly the
beneficial ownership of the Outstanding Corporation Voting Securities before the
Corporate Transaction; or

        (y) A change in the composition of the Board of Directors such that the
individuals who, as of October 9, 1996, constitute the Board (such Board shall
be hereinafter referred to as the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, for purposes of
this Paragraph 8(a), that any individual who becomes a member of the Board
subsequent to such date whose election, or nomination for election by the
Corporation's stockholders, was approved by a vote of at least a majority of
those individuals who are members of the Board and who were also members of the
Incumbent Board (or deemed to be such pursuant to this proviso) shall be
considered as though such individual were a member of the Incumbent Board; but,
provided, further, that any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board shall not be so considered as a member
of the Incumbent Board.

                (b) If by reason of recapitalization, reclassification, stock
split-up, combination of shares, separation (including a spin-off) or dividend
on the Stock payable in Shares, the

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outstanding Shares of the Corporation are increased or decreased or changed into
or exchanged for a different number or kind of shares or other securities of the
Corporation, the Board shall conclusively determine the appropriate adjustment
in the exercise prices of outstanding Options and in the number and kind of
shares as to which outstanding Options shall be exercisable.

                (c) In the event of a transaction of the type described in
Paragraphs (a) and (b) above, the total number of Shares on which Options may be
granted under this Plan shall be appropriately adjusted by the Board.

        9. No Rights Other Than Those Expressly Created. No person affiliated
with the Corporation or other person shall have any claim or right to be granted
an Option hereunder. Neither this Plan nor any action taken hereunder shall be
construed as (i) giving any Option holder any right to continue to be affiliated
with the Corporation, (ii) giving any Option holder any equity or interest of
any kind in any assets of the Corporation, or (iii) creating a trust of any kind
or a fiduciary relationship of any kind between the Corporation and any such
person. No Option holder shall have any of the rights of a stockholder with
respect to Shares covered by an Option until such time as the Option has been
exercised and Shares have been issued to such person.

        10. Miscellaneous.

                (a) Withholding of Taxes. Pursuant to applicable federal, state,
local or foreign laws, the Corporation may be required to collect income or
other taxes upon the grant of an Option to, or exercise of an Option by, a
holder. The Corporation may require, as a condition to the exercise of an
Option, that the recipient pay the Corporation, at such time as the Board
determines, the amount of any taxes which the Board may determine is required to
be withheld.

                (b) Securities Law Compliance. Upon exercise of an Option, the
holder shall be required to make such representations and furnish such
information as may, in the opinion of counsel for the Corporation, be
appropriate to permit the Corporation to issue or transfer the Shares in
compliance with the provisions of applicable federal or state securities laws.
The Corporation, in its discretion, may postpone the issuance and delivery of
Shares upon any exercise of an Option until completion of such registration or
other qualification of such Shares under any federal or state laws, or stock
exchange listing, as the Corporation may consider appropriate. The Corporation
is not obligated to register or qualify the Shares under federal or state
securities laws and may refuse to issue such Shares if neither registration nor
exemption therefrom is practical. The Board may require that prior to the
issuance or transfer of any Shares upon exercise of an Option, the recipient
enter into a written agreement to comply with any restrictions on subsequent
disposition that the Board or the Corporation deems necessary or advisable under
any applicable federal and state securities laws. Certificates representing the
Shares issued hereunder may be legended to reflect such restrictions.

                (c) Indemnity. The Board shall not be liable for any act,
omission, interpretation, construction or determination made in good faith in
connection with its responsibilities with respect to the Plan, and the
Corporation hereby agrees to indemnify the members of the Board, in respect of
any claim, loss, damage, or expense (including counsel fees)

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arising from any such act, omission, interpretation, construction or
determination to the full extent permitted by law.

        11. Effective Date; Amendment; Termination.

                (a) The effective date of this Plan shall be the date of the
approval of stockholders of the Corporation holding at least a majority of the
voting stock of the Corporation.

                (b) The date of grant of any Option granted hereunder shall be
the date upon which the Eligible Director to whom the Option is granted becomes
a director of the Corporation.

                (c) The Board, or any Committee who has been delegated the
authority to do so, may at any time, and from time to time, amend, suspend or
terminate this Plan in whole or in part. Except as provided herein, no
amendment, suspension or termination of this Plan may adversely affect the
rights of any person under an Option that has been granted to such person
without such person's consent.

                (d) This Plan shall terminate ten years from its effective date,
and no Option shall be granted under this Plan thereafter, but such termination
shall not affect the validity of Options granted prior to the date of
termination.

Dates of Board of Director Adoption: October 8, 1996.

Dates of Stockholder Adoption: October    , 1996.

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                                                                    EXHIBIT 10.4

                            VIVID TECHNOLOGIES, INC.

                           1999 EQUITY INCENTIVE PLAN

SECTION 1.  PURPOSE

         The purpose of the Vivid Technologies, Inc. 1998 Equity Incentive Plan
(the "Plan") is to attract and retain employees, directors, advisors and
consultants, to provide an incentive for them to assist Vivid Technologies, Inc.
(the "Corporation") to achieve long-range performance goals, and to enable them
to participate in the long-term growth of the Corporation.

SECTION 2.  DEFINITIONS

(a)  "Affiliate" means any business entity in which the Corporation owns
     directly or indirectly 50% or more of the total combined voting power or
     has a significant financial interest as determined by the Committee.

(b)  "Annual Meeting" means the annual meeting of shareholders or special
     meeting in lieu of annual meeting of shareholders at which one or more
     directors are elected.

(c)  "Award" means any Option, Stock Appreciation Right, Performance Share,
     Restricted Stock, or Stock Award awarded under the Plan.

(d)  "Award Share" means a share of Common Stock awarded to an employee,
     director, advisor or consultant without payment therefor.

(e)  "Board" means the Board of Directors of the Corporation.

(f)  "Code" means the Internal Revenue Code of 1986, as amended from time to
     time.

(g)  "Committee" means the Compensation Committee of the Board, or such other
     committee of not less than two members of the Board appointed by the Board
     to administer the Plan, provided that the members of such Committee must be
     Non-Employee Directors as defined in Rule 16b-3(b) promulgated under the
     Securities Exchange Act of 1934, as amended.

(h)  "Common Stock" or "Stock" means the Common Stock, par value $.01 per share,
     of the Corporation.

(i)  "Corporation" means Vivid Technologies, Inc.

(j)  "Designated Beneficiary" means the beneficiary designated by a Participant,
     in a manner determined by the Board, to receive amounts due or exercise
     rights of the Participant in the event of the Participant's death. In the
     absence of an effective designation by a Participant, Designated
     Beneficiary shall mean the Participant's estate.

(k)  "Eligible Director" means each director of the Corporation who is not then
     an employee of the Corporation or affiliated with any holder of more than
     5% of the outstanding voting stock of the Corporation.

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(l)  "Fair Market Value" means, with respect to Common Stock, the last sale
     price of the Common Stock as reported on the National Association of
     Securities Dealers Automated Quotation System ("NASDAQ") or on a national
     securities exchange on which the Common Stock may be traded on the date of
     the granting of the Award, or if such date is not a business day, the first
     business day preceding such grant. If the Common Stock is not publicly
     traded, the fair market value shall mean the fair market value of the
     Common Stock as determined by the Board of Directors.

(m)  "Incentive Stock Option" means an option to purchase shares of Common
     Stock, awarded to a Participant under Section 6, which is intended to meet
     the requirements of Section 422 of the Code or any successor provision.

(n)  "Nonqualified Stock Option" means an option to purchase shares of Common
     Stock, awarded to a Participant under Section 6, which is not intended to
     be an Incentive Stock Option.

(o)  "Option" means an Incentive Stock Option or a Nonqualified Stock Option.

(p) "Participant" means a person selected by the Board to receive an Award
     under the Plan.

(q) "Performance Cycle" or "Cycle" means the period of time selected by the
     Board during which performance is measured for the purpose of determining
     the extent to which an award of Performance Shares has been earned.

(r)  "Performance Shares" mean shares of Common Stock which may be earned by the
     achievement of performance goals, awarded to a Participant under Section 8.

(s)  "Restricted Period" means the period of time selected by the Board during
     which an award of Restricted Stock may be forfeited to the Corporation.

(t)  "Restricted Stock" means shares of Common Stock subject to forfeiture,
     awarded to a Participant under Section 9.

(u)  "Stock Appreciation Right" or "SAR" means a right to receive any excess in
     value of shares of Common Stock over the reference price, awarded to a
     Participant under Section 7.

(v)  "Stock Award" means an award of Common Stock, including an Award Share, or
     an award of Common Stock and other rights granted as units that are valued
     in whole or in part by reference to, or otherwise based on, the value of
     Common Stock, awarded to a Participant under Section 10.

SECTION 3.  ADMINISTRATION

         The Plan shall be administered by the Board, or if the Board so
determines, by the Committee. The Committee shall serve at the pleasure of the
Board, which may from time to time, and in its sole discretion, discharge any
member, appoint additional new members in substitution for those previously
appointed and/or fill vacancies however caused. A majority of the Committee
shall constitute a quorum and the acts of a majority of the members present at
any meeting at which a quorum is present shall be deemed the action of the
Committee. The Board, including the Committee, shall have authority to adopt,
alter and repeal such administrative rules, guidelines and practices governing
the operation of the Plan as it shall from time to time consider

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advisable, and to interpret the provisions of the Plan. The Board's decisions
shall be final and binding. To the extent permitted by applicable law, the Board
may delegate to the Committee the power to make Awards to Participants and all
determinations under the Plan with respect thereto.

SECTION 4.  ELIGIBILITY

         All employees and, in the case of Awards other than Incentive Stock
Options, directors, advisors and consultants of the Corporation or any Affiliate
capable of contributing significantly to the successful performance of the
Corporation, other than a person who has irrevocably elected not to be eligible,
are eligible to be Participants in the Plan.

SECTION 5.  STOCK AVAILABLE FOR AWARDS

(a)  Subject to adjustment under subsection (b), the maximum aggregate number of
     shares of Common Stock available for issuance under the Plan is 300,000
     shares. If any Award in respect of shares of Common Stock expires or is
     terminated unexercised or is forfeited for any reason or settled in a
     manner that results in fewer shares outstanding than were initially
     awarded, including without limitation the surrender of shares in payment
     for the Award or any tax obligation thereon, the shares subject to such
     Award or so surrendered, as the case may be, to the extent of such
     expiration, termination, forfeiture or decrease, shall again be available
     for award under the Plan, subject, however, in the case of Incentive Stock
     Options, to any limitation required under the Code. Common Stock issued
     through the assumption or substitution of outstanding grants from an
     acquired corporation shall not reduce the shares available for Awards under
     the Plan. Shares issued under the Plan may consist in whole or in part of
     authorized but unissued shares or treasury shares.

(b)  In the event that the Board determines that any stock dividend,
     extraordinary cash dividend, creation of a class of equity securities,
     recapitalization, reorganization, merger, consolidation, split-up,
     spin-off, combination, exchange of shares, warrants or rights offering to
     purchase Common Stock at a price substantially below fair market value, or
     other similar transaction affects the Common Stock such that an adjustment
     is required in order to preserve the benefits or potential benefits
     intended to be made available under the Plan, then the Board, subject, in
     the case of Incentive Stock Options, to any limitation required under the
     Code, shall equitably adjust any or all of (i) the number and kind of
     shares in respect of which Awards may be made under the Plan, (ii) the
     number and kind of shares subject to outstanding Awards, and (iii) the
     award, exercise or conversion price with respect to any of the foregoing,
     and if considered appropriate, the Board may make provision for a cash
     payment with respect to an outstanding Award, provided that the number of
     shares subject to any Award shall always be a whole number.

SECTION 6.  STOCK OPTIONS

(a)  Subject to the provisions of the Plan, the Board may award Incentive Stock
     Options and Nonqualified Stock Options and determine the number of shares
     to be covered by each Option, the option price therefor and the conditions
     and limitations applicable to the exercise of the Option. The terms and
     conditions of Incentive Stock Options shall be subject to and comply with
     Section 422 of the Code, or any successor provision, and any regulations
     thereunder.

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(b)  The Board shall establish the option price at the time each Option is
     awarded.

(c)  Each Option shall be exercisable at such times and subject to such terms
     and conditions as the Board may specify in the applicable Award or
     thereafter. The Board may impose such conditions with respect to the
     exercise of Options, including conditions relating to applicable federal or
     state securities laws, as it considers necessary or advisable.

(d)  No shares shall be delivered pursuant to any exercise of an Option until
     payment in full of the option price therefor is received by the
     Corporation. Such payment may be made in whole or in part in cash or, to
     the extent permitted by the Board at or after the award of the Option, by
     delivery of a note or shares of Common Stock owned by the optionholder,
     including Restricted Stock, valued at their Fair Market Value on the date
     of delivery, by the reduction of the shares of Common Stock that the
     optionholder would be entitled to receive upon exercise of the Option, such
     shares to be valued at their Fair Market Value on the date of exercise,
     less their option price (a so-called "cashless exercise"), or such other
     lawful consideration as the Board may determine. In addition, to the extent
     permitted by the Board, an optionholder may engage in a successive exchange
     (or series of exchanges) in which the shares of Common Stock that such
     optionholder is entitled to receive upon the exercise of an Option may be
     simultaneously utilized as payment for the exercise of an additional Option
     or Options.

(e)  The Board may provide for the automatic award of an Option upon the
     delivery of shares to the Corporation in payment of an Option for up to the
     number of shares so delivered.

(f)  In the case of Incentive Stock Options the following additional conditions
     shall apply to the extent required under Section 422 of the Code for the
     options to qualify as Incentive Stock Options:

     (i)  Such options shall be granted only to employees of the Corporation,
          and shall not be granted to any person who owns stock that possesses
          more than ten percent of the total combined voting power of all
          classes of stock of the Corporation or of its parent or subsidiary
          corporation (as those terms are defined in Section 422(b) of the
          Internal Revenue Code of 1986, as amended, and the regulations
          promulgated thereunder), unless, at the time of such grant, the
          exercise price of such option is at least 110% of the fair market
          value of the stock that is subject to such option and the option shall
          not be exercisable more than five years after the date of grant;

     (ii) The option price with respect to Incentive Stock Options shall not be
          less than 100% of the Fair Market Value of the Common Stock on the
          date of award.

     (iii) Such options shall, by their terms, be transferable by the
          optionholder only by the laws of descent and distribution, and shall
          be exercisable only by such optionholder during his lifetime.

     (iv) Such options shall not be granted more than ten years from the
          effective date of the Plan and shall not be exercisable more than ten
          years from the date of grant.

     (v)  To the extent that the aggregate Fair Market Value of Common Stock
          with respect to which Incentive Stock Options (determined without
          regard to this section) are

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          exercisable for the first time by any employee Participant during any
          calendar year exceeds $100,000 (or such other amount as may be
          proscribed by the Code), such Incentive Stock Options shall be treated
          as options which are not Incentive Stock Options.

SECTION 7.  STOCK APPRECIATION RIGHTS

         Subject to the provisions of the Plan, the Board may award SARs in
tandem with an Option (at or after the award of the Option), or alone and
unrelated to an Option. SARs in tandem with an Option shall terminate to the
extent that the related Option is exercised, and the related Option shall
terminate to the extent that the tandem SARs are exercised.

SECTION 8.  PERFORMANCE SHARES

(a)  Subject to the provisions of the Plan, the Board may award Performance
     Shares and determine the number of such shares for each Performance Cycle
     and the duration of each Performance Cycle. There may be more than one
     Performance Cycle in existence at any one time, and the duration of
     Performance Cycles may differ from each other. Unless otherwise determined
     by the Board, the payment value of Performance Shares shall be equal to the
     Fair Market Value of the Common Stock on the date the Performance Shares
     are earned or, in the discretion of the Board, on the date the Board
     determines that the Performance Shares have been earned.

(b)  The Board shall establish performance goals for each Cycle, for the purpose
     of determining the extent to which Performance Shares awarded for such
     Cycle are earned, on the basis of such criteria and to accomplish such
     objectives as the Board may from time to time select. During any Cycle, the
     Board may adjust the performance goals for such Cycle as it deems equitable
     in recognition of unusual or non-recurring events affecting the
     Corporation, changes in applicable tax laws or accounting principles, or
     such other factors as the Board may determine.

(c)  As soon as practicable after the end of a Performance Cycle, the Board
     shall determine the number of Performance Shares which have been earned on
     the basis of performance in relation to the established performance goals.
     The payment values of earned Performance Shares shall be distributed to the
     Participant or, if the Participant has died, to the Participant's
     Designated Beneficiary, as soon as practicable thereafter. The Board shall
     determine, at or after the time of award, whether payment values will be
     settled in whole or in part in cash or other property, including Common
     Stock or Awards.

SECTION 9.  RESTRICTED STOCK

(a)  Subject to the provisions of the Plan, the Board may award shares of
     Restricted Stock and determine the duration of the Restricted Period during
     which, and the conditions under which, the shares may be forfeited to the
     Corporation and the other terms and conditions of such Awards. Shares of
     Restricted Stock may be issued for no cash consideration or such minimum
     consideration as may be required by applicable law.

(b)  Shares of Restricted Stock may not be sold, assigned, transferred, pledged
     or otherwise encumbered, except as permitted by the Board, during the
     Restricted Period. Shares of

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     Restricted Stock shall be evidenced in such manner as the Board may
     determine. Any certificates issued in respect of shares of Restricted Stock
     shall be registered in the name of the Participant and unless otherwise
     determined by the Board, deposited by the Participant, together with a
     stock power endorsed in blank, with the Corporation. At the expiration of
     the Restricted Period, if the Corporation holds such certificates, the
     Corporation shall deliver such certificates to the Participant or if the
     Participant has died, to the Participant's Designated Beneficiary.

SECTION 10.  STOCK AWARDS

(a)  Subject to the provisions of the Plan, the Board may award Stock Awards
     subject to such terms, restrictions, conditions, performance criteria,
     vesting requirements and payment rules, if any, as the Board shall
     determine.

(b)  Shares of Common Stock awarded in connection with a Stock Award shall be
     issued for no cash consideration or such minimum consideration as may be
     required by applicable law. Such shares of Common Stock may be designated
     as Award Shares by the Board.

SECTION 11.  OPTIONS GRANTED TO NON-EMPLOYEE DIRECTORS

(a)  Unless otherwise determined by the Board, each Eligible Director shall
     automatically be granted a Nonqualified Option to acquire 10,000 shares of
     Common Stock effective as of the date he or she is first elected to the
     Board or, with respect to Eligible Directors serving on the Board as of the
     Effective Date of the Plan, as of the date of the 1999 Annual Meeting of
     the Corporation, in each case, the option price for which shall be the Fair
     Market Value of the Common Stock on such date and the expiration of which
     shall be the tenth anniversary thereof. Each Nonqualified Option issued
     pursuant to this Section 11(a) shall become exercisable in 20% installments
     beginning on January 1 of the first year after the grant date, and on
     January 1 of each year thereafter, until such option is fully exercisable
     on January 1 of the fifth year following the grant date.

(b)  Unless otherwise determined by the Board, each Eligible Director who has
     served as a Director for six months shall automatically be granted a
     Nonqualified Option to acquire 2,500 shares of Common Stock as of January 1
     of each year, beginning with a Nonqualified Option granted as of the date
     of the 1999 Annual Meeting, the option price for which shall be the Fair
     Market Value of the Common Stock on such date and the expiration of which
     shall be the tenth anniversary thereof. Each Nonqualified Option granted
     pursuant to this Section 11(b) may be exercised on and after the date that
     is six months after the date of grant.

(c)  In addition, the Board may provide for such other terms and conditions of
     the Options granted pursuant to this Section 11 as it may determine in its
     sole discretion and as shall be set forth in the applicable Option
     agreements, including, without limitation, acceleration of exercise upon a
     change of control, termination of the Options, and the effect on such
     Options of the death, retirement or other termination of service as a
     director of the option holder. Notwithstanding the foregoing, nothing
     herein shall preclude the Board from granting Awards to such non-employee
     directors in addition to, or in substitution for, those provided for in
     this Section 11.

                                       6
<PAGE>   7

SECTION 12.  GENERAL PROVISIONS APPLICABLE TO AWARDS

(a)  Documentation. Each Award under the Plan shall be evidenced by a written
     document delivered to the Participant specifying the terms and conditions
     thereof and containing such other terms and conditions not inconsistent
     with the provisions of the Plan as the Board considers necessary or
     advisable to achieve the purposes of the Plan or comply with applicable tax
     and regulatory laws and accounting principles.

(b)  Securities Laws. The Participant shall make such representations and
     furnish such information as may, in the opinion of counsel for the
     Corporation, be appropriate to permit the Corporation to issue or transfer
     the Stock in compliance with the provisions of applicable federal or state
     securities laws. The Corporation, in its discretion, may postpone the
     issuance and delivery of any Stock until completion of such registration or
     other qualification of such shares under any federal or state laws, or
     stock exchange listing as the Corporation may consider appropriate. The
     Corporation may require that prior to the issuance or transfer of Stock,
     the Participant enter into a written agreement to comply with any
     restrictions on subsequent disposition that the Corporation deems necessary
     or advisable under any applicable federal and state securities laws.
     Certificates of Stock issued hereunder may be legended to reflect such
     restrictions.

(c)  Board Discretion. Each type of Award may be made alone, in addition to or
     in relation to any other type of Award. The terms of each type of Award
     need not be identical, and the Board need not treat Participants uniformly.
     Except as otherwise provided by the Plan or a particular Award, any
     determination with respect to an Award may be made by the Board at the time
     of award or at any time thereafter. Without limiting the foregoing, an
     Award may be made by the Board, in its discretion, to any 401(k), savings,
     pension, profit sharing or other similar plan of the Corporation in lieu of
     or in addition to any cash or other property contributed or to be
     contributed to such plan.

(d)  Settlement. The Board shall determine whether Awards are settled in whole
     or in part in cash, Common Stock, other securities of the Corporation,
     Awards, other property or such other methods as the Board may deem
     appropriate. The Board may permit a Participant to defer all or any portion
     of a payment under the Plan, including the crediting of interest on
     deferred amounts denominated in cash and dividend equivalents on amounts
     denominated in Common Stock. If shares of Common Stock are to be used in
     payment pursuant to an Award and such shares were acquired upon the
     exercise of a stock option (whether or not granted under this Plan), such
     shares must have been held by the Participant for at least six months.

(e)  Dividends and Cash Awards. In the discretion of the Board, any Award under
     the Plan may provide the Participant with (i) dividends or dividend
     equivalents payable currently or deferred with or without interest, and
     (ii) cash payments in lieu of or in addition to an Award.

(f)  Termination of Employment. The Board shall determine the effect on an Award
     of the disability, death, retirement or other termination of employment of
     a Participant and the extent to which, and the period during which, the
     Participant's legal representative, guardian or Designated Beneficiary may
     receive payment of an Award or exercise rights thereunder. The Board shall
     have complete discretion, exercisable either at the time the Award is made
     or at any time while the Award remains outstanding, to accelerate the
     vesting of any Award or any part of any Award remaining unvested upon the
     termination of employment of a Participant or

                                       7
<PAGE>   8

     to extend the period of time for which an Option is to remain exercisable
     following the termination of employment of a Participant, provided,
     however, that in no event shall such Option be exercisable after the
     specified expiration date of such Option.

(g)  Change in Control. In order to preserve a Participant's rights under an
     Award in the event of a Change in Control of the Corporation, the Board in
     its discretion may, at the time an Award is made or at any time thereafter,
     take one or more of the following actions: (i) provide for the acceleration
     of any time period relating to the exercise or realization of the Award,
     (ii) provide for the purchase of the Award for an amount of cash or other
     property that could have been received upon the exercise or realization of
     the Award had the Award been currently exercisable or payable, (iii) adjust
     the terms of the Award in a manner determined by the Board to reflect the
     Change in Control, (iv) cause the Award to be assumed, or new rights
     substituted therefor, by another entity, or (v) make such other provision
     as the Board may consider equitable and in the best interests of the
     Corporation, provided that, in the case of an action taken with respect to
     an outstanding Award, the Participant's consent to such action shall be
     required unless the Board determines that the action, taking into account
     any related action, would not materially and adversely affect the
     Participant. Unless otherwise provided in any Award, for purposes hereof a
     "Change in Control" of the Corporation shall mean: (i) the acquisition by
     any individual, entity or group (within the meaning of Section 13(d)(3) or
     14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
     Act")) of beneficial ownership (within the meaning of Rule 13d-3
     promulgated under the Exchange Act) of 20% or more of the then outstanding
     shares of common stock of the Corporation (the "Outstanding Corporation
     Common Stock"); provided, however, that any acquisition by the Corporation
     or its subsidiaries, or any employee benefit plan (or related trust) of the
     Corporation or its subsidiaries of 20% or more of Outstanding Corporation
     Common Stock shall not constitute a Change in Control; and provided,
     further, that any acquisition by a corporation with respect to which,
     following such acquisition, more than 50% of the then outstanding shares of
     common stock of such corporation, is then beneficially owned, directly or
     indirectly, by all or substantially all of the individuals and entities who
     were the beneficial owners of the Outstanding Corporation Common Stock
     immediately prior to such acquisition in substantially the same proportion
     as their ownership, immediately prior to such acquisition, of the
     Outstanding Corporation Common Stock, shall not constitute a Change in
     Control; or (ii) any transaction which results in the Continuing Directors
     (as defined in the Certificate of Incorporation of the Corporation)
     constituting less than a majority of the Board; or (iii) consummation by
     the Corporation of (i) a reorganization, merger or consolidation, in each
     case, with respect to which all or substantially all of the individuals and
     entities who were the beneficial owners of the Outstanding Corporation
     Common Stock immediately prior to such reorganization, merger or
     consolidation do not, following such reorganization, merger or
     consolidation, beneficially own, directly or indirectly, more than 50% of
     the then outstanding shares of common stock of the corporation resulting
     from such a reorganization, merger or consolidation or (ii) the sale or
     other disposition of all or substantially all of the assets of the
     Corporation, excluding a sale or other disposition of assets to a
     subsidiary of the Corporation.

(h)  Withholding. The Corporation shall have the power and the right to deduct
     or withhold, or require a Participant to remit to the Corporation an amount
     sufficient to satisfy federal, state and local taxes (including the
     Participant's FICA obligation) required to be withheld with respect to an
     Award or any dividends or other distributions payable with respect thereto.
     In the Board's discretion, such tax obligations may be paid in whole or in
     part in shares of

                                       8
<PAGE>   9

     Common Stock, including shares retained from the Award creating the tax
     obligation, valued at their Fair Market Value on the date of delivery. The
     Corporation and its Affiliates may, to the extent permitted by law, deduct
     any such tax obligations from any payment of any kind otherwise due to the
     Participant.

(i)  Amendment of Award. The Board may amend, modify or terminate any
     outstanding Award, including substituting therefor another Award of the
     same or a different type, changing the date of exercise or realization and
     converting an Incentive Stock Option to a Nonqualified Stock Option,
     provided that the Participant's consent to such action shall be required
     unless the Board determines that the action, taking into account any
     related action, would not materially and adversely affect the Participant.

(j)  Awards Not Transferable. Except as otherwise provided by the Board, Awards
     under the Plan are not transferable other than as designated by the
     participant by will or by the laws of descent and distribution.

SECTION 13.  MISCELLANEOUS

(a)  No Right To Employment. No person shall have any claim or right to be
     granted an Award, and the grant of an Award shall not be construed as
     giving a Participant the right to continued employment. The Corporation
     expressly reserves the right at any time to dismiss a Participant free from
     any liability or claim under the Plan, except as expressly provided in the
     applicable Award.

(b)  No Rights As Shareholder. Subject to the provisions of the applicable
     Award, no Participant or Designated Beneficiary shall have any rights as a
     shareholder with respect to any shares of Common Stock to be distributed
     under the Plan until he or she becomes the holder thereof. A Participant to
     whom Common Stock is awarded shall be considered the holder of the Stock at
     the time of the Award except as otherwise provided in the applicable Award.

(c)  Effective Date. Subject to the approval of the shareholders of the
     Corporation, the Plan shall be effective on February 24, 1999 (the
     "Effective Date"). Prior to such approval, Awards may be made under the
     Plan expressly subject to such approval. Awards under the Plan may be made
     for a period of ten years commencing on the Effective Date. The period
     during which an Award may be exercise may extend beyond that time as
     provided herein.

(d)  Amendment of Plan. The Board may amend, suspend or terminate the Plan or
     any portion thereof at any time, provided that no amendment shall be made
     without shareholder approval if such approval is necessary to comply with
     any applicable requirement of the laws of the jurisdiction of incorporation
     of the Corporation, any applicable tax requirement, any applicable rules or
     regulation of the Securities and Exchange Commission, including Rule
     16(b)-3 (or any successor rule thereunder), or the rules and regulations of
     The Nasdaq Stock Market or any other exchange or stock market over which
     the Corporation's securities are listed.

(e)  Governing Law. The provisions of the Plan shall be governed by and
     interpreted in accordance with the laws of the jurisdiction of
     incorporation of the Corporation.

                                       9
<PAGE>   10

(f)  Indemnity. Neither the Board nor the Committee, nor any members of either,
     nor any employees of the Corporation or any parent, subsidiary, or other
     affiliate, shall be liable for any act, omission, interpretation,
     construction or determination made in good faith in connection with their
     responsibilities with respect to this Plan, and the Corporation hereby
     agrees to indemnify the members of the Board, the members of the Committee,
     and the employees of the Corporation and its parent or subsidiaries in
     respect of any claim, loss, damage, or expense (including reasonable
     counsel fees) arising from any such act, omission, interpretation,
     construction or determination to the full extent permitted by law.

                                       10

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