Document:

INTERNATIONAL GAME TECHNOLOGY
                             1993 STOCK OPTION PLAN

            (Amended and Restated Effective as of August 27, 1996)
    (Composite Plan Document Incorporating Amendments 1998-I and 1998-II)

                            I. THE PLAN

 .1       Purpose

         The  purpose of this Plan is to promote  the  success of the Company by
providing an additional means through the grant of Awards to attract,  motivate,
retain and reward key employees,  including officers,  whether or not directors,
of the  Company  with  Awards  and  incentives  for high  levels  of  individual
performance  and improved  financial  performance of the Company and to attract,
motivate and retain experienced and knowledgeable  independent directors through
the benefits provided under Article VII.  "Corporation" means International Game
Technology,  a Nevada  corporation,  and "Company" means the Corporation and its
Subsidiaries,  collectively. These terms and other capitalized terms are defined
in Article VIII.

 .2       Administration and Authorization; Power and Procedure

(a)  Committee.  This Plan shall be  administered  by and all Awards to Eligible
Employees  shall be authorized by the  Committee.  Action of the Committee  with
respect to the administration of this Plan shall be taken pursuant to a majority
vote or by written consent of its members.

(b) Plan Awards;  Interpretation;  Powers of  Committee.  Subject to the express
provisions of this Plan, the Committee shall have the authority:

  (i)    to determine from among those persons eligible the  particular Eligible
         Employees who will receive any Awards;

  (ii)   to grant  Awards to Eligible  Employees,  determine  the price at which
         securities  will be offered or awarded and the amount of  securities to
         be offered or awarded to any of such  individuals,  and  determine  the
         other specific terms and conditions of such Awards  consistent with the
         express limits of this Plan, and establish the installments (if any) in
         which such Awards shall become  exercisable or shall vest, or determine
         that no delayed  exercisability  or vesting is required,  and establish
         the events of termination or reversion of such Awards;

  (iii)  to approve the forms of Award Agreements (which need not  be  identical
         either as to type of Award or as among Participants);

  (iv)   to construe and  interpret  this Plan and any  agreements  defining the
         rights and obligations of the Company and Participants under this Plan,
         further define the terms used in this Plan,  and  prescribe,  amend and
         rescind rules and regulations  relating to the  administration  of this
         Plan;
<PAGE>

  (v)    to cancel,  modify, or waive the Corporation's  rights with respect to,
         or modify,  discontinue,  suspend,  or terminate any or all outstanding
         Awards  held by Eligible  Employees,  subject to any  required  consent
         under Section 6.6;

  (vi)   to accelerate or extend the exercisability or extend the term of any or
         all such outstanding Awards within the maximum ten-year term of Awards
         under Section 1.6; and

  (vii)  to make  all  other  determinations  and  take  such  other  action  as
         contemplated  by this Plan or as may be necessary or advisable  for the
         administration of this Plan and the effectuation of its purposes.

Notwithstanding  the  foregoing,  the  provisions  of Article  VII  relating  to
Non-Employee  Director  Options  shall be automatic  and, to the maximum  extent
possible, self-effectuating.

(c)  Binding   Determinations.   Any  action  taken  by,  or  inaction  of,  the
Corporation,  any Subsidiary, the Board or the Committee relating or pursuant to
this Plan shall be within the  absolute  discretion  of that  entity or body and
shall be  conclusive  and binding  upon all  persons.  No member of the Board or
Committee, or officer of the Corporation or any Subsidiary,  shall be liable for
any such action or inaction of the entity or body, of another  person or, except
in  circumstances  involving  bad faith of himself or herself.  Subject  only to
compliance with the express  provisions  hereof, the Board and Committee may act
in their absolute  discretion in matters within their authority  related to this
Plan.

(d) Reliance on Experts.  In making any determination or in taking or not taking
any action under this Plan, the Committee or the Board,  as the case may be, may
obtain and may rely upon the advice of experts,  including professional advisors
to the Corporation. No director, officer or agent of the Company shall be liable
for any such action or determination taken or made or omitted in good faith.

(e)  Delegation.  The  Committee  may  delegate  ministerial,  non-discretionary
functions to a third-party  administrator  or to individuals who are officers or
employees of the Company.

 .3       Participation

         Awards may be granted by the  Committee  only to those persons that the
Committee determines to be Eligible Employees. An Eligible Employee who has been
granted an Award may, if otherwise eligible, be granted additional Awards if the
Committee  shall so determine.  Non-Employee  Directors shall not be eligible to
receive any Options except for Nonqualified Stock Options granted  automatically
without action of the Committee under the provisions of Article VII.

<PAGE>

 .4       Shares Available for Awards; Share Limits

         Subject to the provisions of Section 6.2, the capital stock that may be
delivered  under this Plan shall be shares of the  Corporation's  authorized but
unissued  Common  Stock and any  shares of its  Common  Stock  held as  treasury
shares. The shares may be delivered for any lawful consideration.

(a) Share  Limits.  The  maximum  number of shares of Common  Stock  that may be
delivered pursuant to all Awards,  including Incentive Stock Options, granted to
Eligible  Employees  under  this Plan  shall not exceed  8,000,000  shares.  The
maximum  number of shares of Common Stock that may be delivered to  Non-Employee
Directors  in respect of Options  granted  under the  provisions  of Article VII
shall not exceed  500,000  shares.  The maximum number of shares of Common Stock
subject to Options and Stock  Appreciation  Rights  that are granted  during any
calendar year to any individual shall not exceed 1,000,000  shares.  The maximum
number of shares  of Common  Stock  that may be  delivered  to  Participants  in
respect of time-based  Restricted  Stock Awards and Stock Bonuses  granted,  for
nominal or no  consideration  other  than the  amount of the par value  thereof,
under the  provisions  of Article IV and Section  5.3,  respectively,  shall not
exceed  500,000  shares in the  aggregate.  The limit in the foregoing  sentence
shall not apply to shares  delivered  in  respect  of  compensation  earned  but
deferred.  Each of the foregoing numerical limits shall be subject to adjustment
as contemplated by Section 6.2.

(b) Share  Reservation;  Replenishment  and Reissue of Unvested Awards. No Award
may be granted under this Plan unless,  on the date of grant, the sum of (i) the
maximum number of shares issuable at any time pursuant to such Award,  plus (ii)
the number of shares that have previously been issued pursuant to Awards granted
under this Plan, other than reacquired  shares available for reissue  consistent
with any applicable legal  limitations,  plus (iii) the maximum number of shares
that may be issued at any time after such date of grant  pursuant to Awards that
are  outstanding  on such date,  does not exceed the  applicable  share limit(s)
under Section 1.4(a). Shares that are subject to or underlie Awards which expire
or for any reason are cancelled or terminated,  are forfeited,  fail to vest, or
for any other  reason are not paid or  delivered  under  this  Plan,  as well as
reacquired  shares,  shall  again,  except to the extent  prohibited  by law, be
available for subsequent  Awards under the Plan. Except as limited by law, if an
Award is or may be settled only in cash,  such Award need not be counted against
any of the limits under this Section 1.4.

 .5       Grant of Awards

         Subject to the express  provisions of this Plan,  the  Committee  shall
determine the number of shares of Common Stock subject to each Award,  the price
(if any) to be paid for the shares or the Award and, in the case of  Performance
Share Awards, in addition to matters  addressed in Section 1.2(b),  the specific
objectives, goals and performance criteria (such as an increase in sales, market
value,  earnings or book value over a base period,  the years of service  before
vesting,  the relevant job  classification  or level of  responsibility or other
factors)  that further  define the terms of the  Performance  Share Award.  Each
Award shall be evidenced by an Award Agreement signed by the Corporation and, if
required by the Committee,  by the  Participant.  The Award  Agreement shall set
forth  the  material  terms  and  conditions  of the  Award  established  by the
Committee consistent with the specific provisions of this Plan.

<PAGE>

 .6       Award Period

         Each Award and all executory  rights or  obligations  under the related
Award Agreement shall expire on such date (if any) as shall be determined by the
Committee,  but in the case of Options or other  rights to acquire  Common Stock
not later than ten (10) years after the Award Date.

 .7       Limitations on Exercise and Vesting of Awards

(a) Exercise.  Unless the Committee expressly provides otherwise, no Award shall
be  exercisable  or shall vest until at least six months after the initial Award
Date,  and  once  exercisable  an  Award  shall  remain  exercisable  until  the
expiration or earlier termination of the Award.

(b) Procedure.  Any  exercisable  Award shall be deemed to be exercised when the
Secretary of the Corporation  receives  written notice of such exercise from the
Participant,  together  with the required any payment  made in  accordance  with
Section 2.2(b) or 7.3, as the case may be.

(c)  Fractional  Shares/Minimum  Issue.  Fractional  share  interests  shall  be
disregarded,  but may be accumulated.  The Committee,  however, may determine in
the case of Eligible  Employees  that cash,  other  securities or other property
will be paid or transferred in lieu of any fractional share interests.  No fewer
than 100 shares may be purchased on exercise of any Award at one time unless the
number  purchased is the total number at the time  available for purchase  under
the Award.

 .8       Acceptance of Notes to Finance Exercise

         The Corporation may, with the Committee's approval,  accept one or more
notes from any Eligible  Employee in connection  with the exercise or receipt of
any  outstanding  Award;  provided  that any such note  shall be  subject to the
following terms and conditions:

(a) The principal of the note shall not exceed the amount required to be paid to
the  Corporation  upon the  exercise or receipt of one or more Awards  under the
Plan  and  the  note  shall  be  delivered   directly  to  the   Corporation  in
consideration of such exercise or receipt.

(b) The initial term of the note shall be determined by the Committee;  provided
that the term of the note, including extensions, shall not exceed a period of 10
years.

(c) The note shall provide for full recourse to the  Participant  and shall bear
interest at a rate  determined by the Committee but not less than the applicable
imputed interest rate specified by the Code.

<PAGE>

(d) If the  employment  of the  Participant  terminates,  the  unpaid  principal
balance of the note shall become due and payable on the 10th  business day after
such termination;  provided,  however, that if a sale of such shares would cause
such Employee Participant to incur liability under Section 16(b) of the Exchange
Act, the unpaid  balance  shall become due and payable on the 10th  business day
after the first day on which a sale of such shares  could have been made without
incurring  such  liability  assuming for these  purposes that there are no other
transactions by the Employee Participant subsequent to such termination.

(e) If required by the Committee or by applicable law, the note shall be secured
by a pledge  of any  shares  or  rights  financed  thereby  in  compliance  with
applicable law.

(f) The terms,  repayment  provisions,  and collateral release provisions of the
note and the pledge  securing the note shall conform with  applicable  rules and
regulations of the Federal Reserve Board as then in effect.

 .9       No Transferability

(a) Limit On Exercise and Transfer.  Unless otherwise  expressly provided in (or
pursuant to) this Section 1.9, by applicable law and by the Award Agreement,  as
the same may be amended,  (i) all Awards are  non-transferable  and shall not be
subject in any manner to sale, transfer, anticipation,  alienation,  assignment,
pledge,   encumbrance  or  charge;   Awards  shall  be  exercised  only  by  the
Participant;  and (ii) shares  issuable  pursuant to an Award shall be delivered
only to (or for the account of) the Participant.

(b)  Exceptions.  The  Committee  may permit  Awards to be  exercised by certain
persons or entities  related to the  Participant,  including  but not limited to
members of the Participant's family, charitable institutions, or trusts or other
entities  whose   beneficiaries   or  beneficial   owners  are  members  of  the
Participant's family and/or charitable institutions, or to such other persons or
entities as may be approved by the  Committee,  pursuant to such  conditions and
procedures as the  Committee may  establish.  Any  permitted  transfer  shall be
subject to the condition that the Committee receive evidence  satisfactory to it
that the  transfer is being made for estate  and/or tax  planning  purposes on a
gratuitous  or donative  basis and  without  consideration  (other than  nominal
consideration).

(c)  Further  Exceptions  to Limits  On  Transfer.  The  exercise  and  transfer
restrictions in Section 1.9(a) shall not apply to:

  (i)    transfers to the Corporation,

  (ii)   the  designation of a beneficiary  to receive  benefits in the event of
         the Participant's  death or, if the Participant has died,  transfers to
         or exercise by the Participant's  beneficiary,  or, in the absence of a
         validly  designated  beneficiary,  transfers  by  will  or the  laws of
         descent and distribution,

  (iii)  transfers pursuant to a QDRO if approved or ratified by the Committee,

<PAGE>

  (iv)   if the Participant has suffered a Total Disability, permitted transfers
         or exercises on behalf of the Participant by his or her legal
         representative, or

  (v)    the  authorization by the Committee of "cashless  exercise"  procedures
         with third  parties  who provide  financing  for the purpose of (or who
         otherwise facilitate) the exercise of Awards consistent with applicable
         laws and the express authorization of the Committee.

(d)  Limitations  on  Incentive  Stock  Options  and  Restricted  Stock  Awards.
Notwithstanding  the foregoing,  Incentive  Stock Options and  Restricted  Stock
Awards shall be subject to any and all applicable  transfer  restrictions  under
the Code.

                              II. EMPLOYEE OPTIONS

 .1       Grants

         One or more  Options may be granted  under this Article to any Eligible
Employee.  Each  Option  granted  may be  either  an  Option  intended  to be an
Incentive Stock Option,  or an Option not so intended,  and such intent shall be
indicated in the applicable Option Agreement.

 .2       Option Price

(a) Pricing Limits.  The purchase price per share of the Common Stock covered by
each Option shall be  determined  by the  Committee at the time of the Option is
granted,  but in the case of Incentive Stock Options shall not be less than 100%
(110% in the case of a  Participant  who owns or is deemed to own under  Section
424(d)  of the Code  more than 10% of the  total  combined  voting  power of all
classes  of stock of the  Corporation)  of the Fair  Market  Value of the Common
Stock on the Award Date.

(b) Payment  Provisions.  The purchase price of any shares purchased on exercise
of an Option  granted  under this  Article  shall be paid in full at the time of
each purchase in one or a combination of the following  methods:  (i) in cash or
by  electronic  funds  transfer;  (ii) by  check  payable  to the  order  of the
Corporation; (iii) if authorized by the Committee or specified in the applicable
Option  Agreement,  by a promissory note of the Participant  consistent with the
requirements  of Section  1.8;  (iv) by notice and third  party  payment in such
manner as may be authorized by the  Committee;  or (v) by the delivery of shares
of Common Stock of the Corporation  already owned by the Participant,  provided,
however,   that  the  Committee  may  in  its  absolute   discretion  limit  the
Participant's ability to exercise an Option by delivering such shares. Shares of
Common Stock used to satisfy the exercise  price of an Option shall be valued at
their Fair Market Value on the date of exercise.

<PAGE>

 .3       Limitations on Grant and Terms of Incentive Stock Options

(a) $100,000  Limit.  To the extent that the  aggregate  "Fair Market  Value" of
stock with respect to which Incentive Stock Options first become  exercisable by
a Participant  in any calendar year exceeds  $100,000,  taking into account both
Common  Stock  subject  to  Incentive  Stock  Options  under this Plan and stock
subject to Incentive  Stock  Options under all other plans of the Company or any
parent corporation, such options shall be treated as nonqualified stock options.
For this purpose,  the "Fair Market Value" of the stock subject to options shall
be determined as of the date the options were  optioned.  In reducing the number
of options treated as Incentive  Stock Options to meet the $100,000  limit,  the
most recently  granted options shall be reduced first. To the extent a reduction
of  simultaneously  granted options is necessary to meet the $100,000 limit, the
Committee may, in the manner and to the extent permitted by law, designate which
shares of Common  Stock are to be treated  as shares  acquired  pursuant  to the
exercise of an Incentive Stock Option.

(b) Option Period.  Each Incentive Stock Option and all rights  thereunder shall
expire no later than ten years after the Award Date.

(c) Other Code Limits. There shall be imposed in any Award Agreement relating to
Incentive  Stock  Options  such  terms and  conditions  as from time to time are
required in order that the Option be an "incentive stock option" as that term is
defined in Section 422 of the Code.

 .4       Limits on 10% Holders

         No Incentive Stock Option may be granted to any person who, at the time
the Option is  granted,  owns (or is deemed to own under  Section  424(d) of the
Code) shares of outstanding  Common Stock  possessing more than 10% of the total
combined  voting  power of all classes of stock of the  Corporation,  unless the
exercise  price of such Option is at least 110% of the Fair Market  Value of the
stock  subject  to the Option  and such  Option by its terms is not  exercisable
after the expiration of five years from the date such Option is granted.

 .5       Cancellation and Regrant/Waiver of Restrictions

         Subject to Section 1.4 and Section 6.6 and the specific  limitations on
Options  contained in this Plan,  the Committee from time to time may authorize,
generally or in specific cases only,  for the benefit of any Eligible  Employee,
any  adjustment in the exercise  price,  the number of shares  subject to or the
term of, an Option granted under this Article by  cancellation of an outstanding
Option and a subsequent  regranting of an Option, by amendment,  by substitution
of an  outstanding  Option,  by waiver or by other  legally  valid  means.  Such
amendment or other action may result  among other  changes in an exercise  price
which is higher or lower than the exercise or purchase  price of the original or
prior Option,  provide for a greater or lesser  number of shares  subject to the
Option, or provide for a longer or shorter vesting or exercise period.

                         III. STOCK APPRECIATION RIGHTS

 .1       Grants

         In its discretion,  the Committee may grant a Stock  Appreciation Right
to any Eligible Employee either  concurrently with the grant of another Award or
in respect of an outstanding Award, in whole or in part, or independently of any
other  Award.  Any  Stock  Appreciation  Right  granted  in  connection  with an
Incentive  Stock  Option  shall  contain such terms as may be required to comply
with the provisions of Section 422 of the Code and the  regulations  promulgated
thereunder, unless the holder otherwise agrees.

<PAGE>

 .2       Exercise of Stock Appreciation Rights

(a)  Exercisability.  Unless  the Award  Agreement  or the  Committee  otherwise
provides,  a  Stock  Appreciation  Right  related  to  another  Award  shall  be
exercisable  at such time or times,  and to the extent,  that the related  Award
shall be exercisable.

(b) Effect on Available Shares. To the extent that a Stock Appreciation Right is
exercised,  the number of underlying shares of Common Stock therefore subject to
a related Award shall be charged against the maximum amount of Common Stock that
may be  delivered  pursuant  to Awards  under  this  Plan.  The number of shares
subject  to  the  Stock  Appreciation  Right  and  the  related  Option  of  the
Participant  shall be reduced by the number of underlying shares as to which the
exercise related, unless the Award Agreement otherwise provides.

(c) Stand-Alone SARs. A Stock  Appreciation  Right granted  independently of any
other Award shall be  exercisable  pursuant to the terms of the Award  Agreement
but in no event earlier than six months after the Award Date, except in the case
of death or Total Disability.

 .3       Payment

(a) Amount.  Unless the Committee otherwise  provides,  upon exercise of a Stock
Appreciation Right and the attendant  surrender of an exercisable portion of any
related Award, the Participant shall be entitled to receive payment of an amount
determined by multiplying

  (i)    the difference  obtained by subtracting the exercise price per share of
         Common  Stock under the related  Award (if  applicable)  or the initial
         share  value  specified  in the Award from the Fair  Market  Value of a
         share of Common Stock on the date of exercise of the Stock Appreciation
         Right, by

  (ii)   the number of shares with respect to which the Stock Appreciation Right
         shall have been exercised.

(b) Form of Payment. The Committee, in its sole discretion,  shall determine the
form in which payment shall be made of the amount determined under paragraph (a)
above,  either solely in cash,  solely in shares of Common Stock (valued at Fair
Market Value on the date of exercise of the Stock Appreciation Right), or partly
in such  shares  and  partly in cash,  provided  that the  Committee  shall have
determined that such exercise and payment are consistent with applicable law. If
the Committee  permits the  Participant to elect to receive cash or shares (or a
combination  thereof) on such  exercise,  any such election  shall be subject to
such conditions as the Committee may impose.

<PAGE>

                          IV. RESTRICTED STOCK AWARDS

 .1       Grants

         The  Committee  may, in its  discretion,  grant one or more  Restricted
Stock Awards to any Eligible  Employee.  Each  Restricted  Stock Award Agreement
shall  specify  the  number  of  shares  of  Common  Stock to be  issued  to the
Participant,  the date of such issuance,  the consideration for such shares (but
not less than the minimum lawful  consideration  under  applicable state law) by
the  Participant,  the  extent to which the  Participant  shall be  entitled  to
dividends, voting and other rights in respect of the shares prior to vesting and
the  restrictions  imposed on such shares and the conditions of release or lapse
of such  restrictions.  Such restrictions shall not lapse earlier than 12 months
after the Award Date, except to the extent the Committee may otherwise  provide.
Stock  certificates  evidencing  shares of Restricted Stock pending the lapse of
the restrictions  ("restricted  shares") shall bear a legend making  appropriate
reference  to the  restrictions  imposed  hereunder  and  shall  be  held by the
Corporation  or  by  a  third  party  designated  by  the  Committee  until  the
restrictions  on such shares  shall have lapsed and the shares shall have vested
in accordance with the provisions of the Award and Section 1.7. Upon issuance of
the  Restricted  Stock Award,  the  Participant  may be required to provide such
further  assurance  and  documents as the  Committee  may require to enforce the
restrictions.

 .2       Restrictions

(a)  Pre-Vesting  Restraints.  Except  as  provided  in  Section  4.1  and  1.9,
restricted  shares  comprising  any  Restricted  Stock  Award  may not be  sold,
assigned,  transferred,  pledged or otherwise disposed of or encumbered,  either
voluntarily or involuntarily,  until the restrictions on such shares have lapsed
and the shares have become vested.

(b) Dividend and Voting  Rights.  Unless  otherwise  provided in the  applicable
Award  Agreement,  a  Participant  receiving a  Restricted  Stock Award shall be
entitled to cash  dividend and voting  rights for all shares  issued even though
they are not vested, provided that such rights shall terminate immediately as to
any restricted shares which cease to be eligible for vesting.

(c)  Cash  Payments.  If the  Participant  shall  have  paid  or  received  cash
(including any dividends) in connection  with the  Restricted  Stock Award,  the
Award  Agreement  shall  specify  whether  and to what extent such cash shall be
returned (with or without an earnings factor) as to any restricted  shares which
cease to be eligible for vesting.

 .3       Return to the Corporation

         Unless the Committee otherwise  expressly  provides,  restricted shares
that remain subject to  restrictions at the time of termination of employment or
are subject to other  conditions to vesting that have not been  satisfied by the
time specified in the  applicable  Award  Agreement  shall not vest and shall be
returned to the  Corporation  in such manner and on such terms as the  Committee
shall therein provide.
<PAGE>

                 V. PERFORMANCE SHARE AWARDS AND STOCK BONUSES

 .1       Grants of Performance Share Awards.

         The Committee may, in its discretion, grant Performance Share Awards to
Eligible  Employees based upon such factors as the Committee shall deem relevant
in light of the specific type and terms of the award.  An Award  Agreement shall
specify the  maximum  number of shares of Common  Stock (if any)  subject to the
Performance Share Award, the consideration (but not less than the minimum lawful
consideration)  to be  paid  for  any  such  shares  as may be  issuable  to the
Participant, the duration of the Award and the conditions upon which delivery of
any  shares or cash to the  Participant  shall be based.  The  amount of cash or
shares or other property that may be deliverable pursuant to such Award shall be
based upon the degree of  attainment  over a  specified  period (a  "performance
cycle")  as may be  established  by the  Committee  of  such  measure(s)  of the
performance  of the Company (or any part thereof) or the  Participant  as may be
established  by the  Committee.  The  Committee  may provide for full or partial
credit,  prior to completion of such performance  cycle or the attainment of the
performance   achievement   specified  in  the  Award,   in  the  event  of  the
Participant's  death, or Total Disability,  a Change in Control Event or in such
other  circumstances  as the Committee  consistent with Section  6.10(c)(2),  if
applicable, may determine.

 .2       Special Performance-Based Share Awards.

         Without  limiting the generality of the  foregoing,  and in addition to
Options and Stock  Appreciation  Rights  granted under other  provisions of this
Plan  which  are  intended  to  satisfy  the  exception  for  "performance-based
compensation"  under  Section  162(m) of the Code (with such Awards  hereinafter
referred to as a "Qualifying Option" or a "Qualifying Stock Appreciation Right,"
respectively),  other  performance-based  awards  within the  meaning of Section
162(m)  of  the  Code  ("Performance-Based  Awards"),  whether  in the  form  of
restricted stock,  performance stock, phantom stock, Cash-Based Awards, or other
rights,  the grant,  vesting,  exercisability or payment of which depends on the
degree of  achievement  of the  Performance  Goals  relative  to  preestablished
targeted  levels for the  Corporation or the  Corporation and one or more of its
Subsidiaries,  may  be  granted  under  this  Plan.  Any  Qualifying  Option  or
Qualifying Stock Appreciation Right shall be subject only to the requirements of
subsections  (a) and  (c)  below  in  order  for  such  Awards  to  satisfy  the
requirements  for  Performance-Based  Awards under this  Section  5.2.  With the
exception of any Qualifying  Option or Qualifying Stock  Appreciation  Right, an
Award that is intended to satisfy the  requirements of this Section 5.2 shall be
designated as a Performance-Based Award at the time of grant.

(a) Eligible Class. The eligible class of persons for  Performance-Based  Awards
under this Section shall be the executive officers of the Corporation.

(b)  Performance  Goal   Alternatives.   The  specific   performance  goals  for
Performance-Based  Awards  granted  under this  Section  (other than  Qualifying
Options and Qualifying  Stock  Appreciation  Rights) shall be, on an absolute or
relative  basis,  one or more  of the  Performance  Goals,  as  selected  by the
Committee  in  its  sole  discretion.  The  Committee  shall  establish  in  the
applicable Award Agreement the specific  performance  target(s)  relative to the

<PAGE>

Performance  Goal(s) which must be attained  before the  compensation  under the
Performance-Based   Award  becomes  payable.   The  specific  targets  shall  be
determined  within the time period  permitted  under Section  162(m) of the Code
(and any regulations  issued  thereunder) so that such targets are considered to
be  preestablished  and so that the attainment of such targets is  substantially
uncertain  at the  time  of  their  establishment.  The  applicable  performance
measurement period may not be less than one nor more than 10 years.

(c) Maximum Performance-Based Award.  Notwithstanding any other provision of the
Plan to the contrary,  the maximum number of shares of Common Stock which may be
delivered pursuant to options,  stock appreciation  rights,  restricted stock or
other  share-based  awards that are granted as  Performance-Based  Awards to any
Participant  in any  calendar  year shall not exceed  1,000,000  shares,  either
individually  or in the aggregate,  subject to adjustment as provided in Section
6.2.  Awards that are  cancelled  during the year shall be counted  against this
limit to the extent  required by Section  162(m) of the Code.  In addition,  the
aggregate amount of compensation to be paid to any Participant in respect of any
Cash-Based Awards that are granted during any calendar year as Performance-Based
Awards shall not exceed $1,000,000.

(d)  Committee  Certification.  Before any  Performance-Based  Award  under this
Section 5.2 (other than  Qualifying  Options or  Qualifying  Stock  Appreciation
Rights) is paid,  the  Committee  must certify in writing  that the  Performance
Goal(s)  and any  other  material  terms  of the  Performance-Based  Award  were
satisfied; provided, however, that a Performance-Based Award may be paid without
regard to the satisfaction of the applicable  Performance Goal in the event of a
Change in Control Event in accordance with Section 6.2(d).

(e) Terms and  Conditions of Awards.  The Committee  will have the discretion to
determine the restrictions or other limitations of the individual Awards granted
under this Section 5.2  including  the  authority to reduce  Awards,  payouts or
vesting or to pay no Awards, in its sole discretion,  if the Committee preserves
such  authority  at the  time  of  grant  by  language  to  this  effect  in its
authorizing resolutions or otherwise.

(f) Adjustments for Changes in Capitalization and other Material Changes. In the
event of a change in  corporate  capitalization,  such as a stock split or stock
dividend, or a corporate transaction, such as a merger, consolidation,  spinoff,
reorganization  or similar event, or any partial or complete  liquidation of the
Corporation,  or any similar  event  consistent  with  regulations  issued under
Section 162(m) of the Code including, without limitation, any material change in
accounting   policies  or  practices   affecting  the  Corporation   and/or  the
Performance  Goals or targets,  then the Committee may make  adjustments  to the
Performance Goals and targets relating to outstanding  Performance-Based  Awards
to the extent such  adjustments  are made to reflect the  occurrence  of such an
event;  provided,  however, that adjustments described in this subsection may be
made only to the extent that the  occurrence  of an event  described  herein was
unforeseen  at  the  time  the  targets  for  a  Performance-Based   Award  were
established by the Committee.

<PAGE>

 .3       Grants of Stock Bonuses.

         The  Committee  may grant a Stock  Bonus to any  Eligible  Employee  to
reward  exceptional or special  services,  contributions  or achievements in the
manner and on such terms and  conditions  (including  any  restrictions  on such
shares) as determined  from time to time by the Committee.  The number of shares
so  awarded  shall be  determined  by the  Committee.  The Award may be  granted
independently or in lieu of a cash bonus.

 .4       Deferred Payments.

         The Committee may authorize for the benefit of any Eligible  Person the
deferral  of any  payment  of cash or  shares  that  may  become  due or of cash
otherwise  payable under this Plan, and provide for accredited  benefits thereon
based  upon  such  deferment,  at  the  election  or  at  the  request  of  such
Participant,  subject to the other terms of this Plan.  Such  deferral  shall be
subject  to  such  further  conditions,  restrictions  or  requirements  as  the
Committee may impose, subject to any then vested rights of Participants.

                              VI. OTHER PROVISIONS

 .1       Rights of Eligible Employees, Participants and Beneficiaries

(a) Employment Status.  Status as an Eligible Employee shall not be construed as
a  commitment  that any Award  will be granted  under  this Plan to an  Eligible
Employee or to Eligible Employees generally.

(b) No  Employment  Contract.  Nothing  contained  in this Plan (or in any other
documents  related to this Plan or to any Award)  shall confer upon any Eligible
Employee  or other  Participant  any right to  continue  in the  employ or other
service of the Company or constitute  any contract or agreement of employment or
other service,  nor shall  interfere in any way with the right of the Company to
change  such  person's  compensation  or  other  benefits  or to  terminate  the
employment of such person,  with or without cause, but nothing contained in this
Plan or any document  related  hereto  shall  adversely  affect any  independent
contractual right of such person without his or her consent thereto.

(c) Plan Not Funded.  Awards  payable under this Plan shall be payable in shares
or from the  general  assets of the  Corporation,  and no  special  or  separate
reserve,  fund or deposit  shall be made to assure  payment of such  Awards.  No
Participant, Beneficiary or other person shall have any right, title or interest
in any fund or in any specific asset (including  shares of Common Stock,  except
as  expressly  otherwise  provided)  of the  Company  by  reason  of  any  Award
hereunder.  Neither the  provisions of this Plan (or of any related  documents),
nor the creation or adoption of this Plan,  nor any action taken pursuant to the
provisions of this Plan shall create,  or be construed to create, a trust of any
kind or a  fiduciary  relationship  between  the  Company  and any  Participant,
Beneficiary or other person.  To the extent that a  Participant,  Beneficiary or
other  person  acquires  a  right  to  receive  payment  pursuant  to any  Award
hereunder,  such  right  shall be no  greater  than the  right of any  unsecured
general creditor of the Company.

<PAGE>

 .2       Adjustments; Acceleration

(a)  Adjustments.  If there  shall  occur any  extraordinary  dividend  or other
extraordinary  distribution  in respect of the Common Stock (whether in the form
of  cash,  Common  Stock,   other  securities,   or  other  property),   or  any
reclassification,  recapitalization, stock split (including a stock split in the
form  of  a  stock  dividend),  reverse  stock  split,  reorganization,  merger,
combination,  consolidation,  split-up,  spin-off,  combination,  repurchase, or
exchange of Common Stock or other securities of the Corporation,  or there shall
occur any other  like  corporate  transaction  or event in respect of the Common
Stock  on a sale  of  substantially  all the  assets  of the  Corporation  as an
entirety,  then the Committee  shall, in such manner and to such extent (if any)
as it deems appropriate and equitable (1)  proportionately  adjust any or all of
(i) the number and type of shares of Common  Stock (or other  securities)  which
thereafter may be made the subject of Awards  (including the specific maxima and
numbers of shares set forth elsewhere in this Plan), (ii) the number, amount and
type of shares of Common Stock (or other securities or property)  subject to any
or all outstanding Awards, (iii) the grant,  purchase,  or exercise price of any
or  all  outstanding  Awards,  (iv)  the  securities,  cash  or  other  property
deliverable  upon exercise of any  outstanding  Awards,  or (v) the  performance
standards  appropriate  to any  outstanding  Awards,  or (2) in the  case  of an
extraordinary     dividend    or    other    distribution,     recapitalization,
reclassification,  merger, reorganization,  consolidation,  combination, sale of
assets,  split up,  exchange,  or spin off, make provision for a cash payment or
for the  substitution or exchange of any or all outstanding  Awards or the cash,
securities  or  property  deliverable  to the  holder of any or all  outstanding
Options based upon the distribution or  consideration  payable to holders of the
Common  Stock of the  Corporation  upon or in respect of such  event;  provided,
however,  in each case,  that with respect to Incentive  Stock Options,  no such
adjustment shall be made which would cause the Plan to violate Section 424(a) of
the Code or any successor provisions thereto.

(b) Acceleration of Awards Upon Change in Control.  As to any Eligible  Employee
Participant,  unless prior to a Change in Control Event the Committee determines
that,  upon its  occurrence,  there shall be no  acceleration  of benefits under
Awards or determines  that only certain or limited  benefits under Options shall
be  accelerated  and the  extent  to which  they  shall be  accelerated,  and/or
establishes a different time in respect of such Change in Control Event for such
acceleration,  then upon the  occurrence  of a Change in Control  Event (i) each
Option and Stock Appreciation Right shall become immediately  exercisable,  (ii)
Restricted Stock shall  immediately  vest free of  restrictions,  and (iii) each
Performance  Share  Award shall  become  payable to the  Participant;  provided,
however,  that in no event shall any Award be  accelerated  as to any Section 16
Person to a date less than six months  after the Award Date of such  Award.  The
Committee may override the limitations on acceleration in this Section 3.2(b) by
express  provision in the Award Agreement and may accord any Eligible Employee a
right to refuse any  acceleration,  whether  pursuant to the Award  Agreement or
otherwise,  in such circumstances as the Committee may approve. Any acceleration
of Awards  shall  comply with  applicable  regulatory  requirements,  including,
without limitation, Section 422 of the Code.

<PAGE>

(c) Possible Early  Termination of  Accelerated  Awards.  If any Option or other
right to acquire Common Stock under this Plan (other than under Article VII) has
been fully accelerated as permitted by Section 6.2(b) but is not exercised prior
to (i) a  dissolution  of  the  Corporation,  or  (ii)  a  reorganization  event
described in Section 6.2(a) that the Corporation does not survive,  or (iii) the
consummation of an event described in Section 6.2(a) that results in a Change in
Control  Event  approved  by the Board,  such  Option or right  shall  thereupon
terminate,  subject  to any  provision  that  has  been  expressly  made  by the
Committee for the survival,  substitution,  exchange or other settlement of such
Option or right.

 .3       Effect of Termination of Employment

         The  Committee  shall  establish in respect of each Award granted to an
Eligible  Employee the effect of a  termination  of employment on the rights and
benefits  thereunder and in so doing may make distinctions  based upon the cause
of  termination.  In  addition,  in the  event  of,  or in  anticipation  of,  a
termination of employment with the Company for any reason,  other than discharge
for cause,  the Committee  may, in its  discretion,  increase the portion of the
Participant's Award available to the Participant,  or Participant's  Beneficiary
or Personal Representative, as the case may be, or, subject to the provisions of
Section 1.6, extend the  exercisability  period upon such terms as the Committee
shall  determine  and  expressly  set  forth  in or by  amendment  to the  Award
Agreement.

 .4       Compliance with Laws

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

 .5       Tax Withholding

(a) Cash or Shares.  Upon any exercise,  vesting or payment of any Award or upon
the  disposition of shares of Common Stock acquired  pursuant to the exercise of
an  Incentive   Stock  Option  prior  to  satisfaction  of  the  holding  period
requirements of Section 422 of the Code, the Company shall have the right at its
option  to  (i)  require  the   Participant  (or  Personal   Representative   or
Beneficiary,  as the case may be) to pay or provide for payment of the amount of
any taxes which the Company  may be  required to withhold  with  respect to such
Award event or payment or (ii) deduct from any amount payable in cash the amount
of any taxes which the Company may be required to withhold  with respect to such
cash  payment.  In any case where a tax is required to be withheld in connection
with the delivery of shares of Common Stock under this Plan,  the  Committee may
in its sole  discretion  grant  (either  at the time of the Award is  granted or
thereafter) to the  Participant  the right to elect,  pursuant to such rules and
subject  to  such  conditions  as the  Committee  may  establish,  to  have  the
Corporation  reduce  the  number  of  shares to be  delivered  by (or  otherwise
reacquire)  the  appropriate  number of shares  valued at their then Fair Market
Value, to satisfy such withholding obligation.

<PAGE>

(b) Tax Loans.  The  Committee  may, in its  discretion,  authorize a loan to an
Eligible  Employee  in the amount of any taxes which the Company may be required
to withhold with respect to shares of Common Stock  received (or disposed of, as
the case may be) pursuant to a transaction  described in  subsection  (a) above.
Such a loan shall be for a term,  at a rate of  interest  and  pursuant  to such
other terms and conditions as the Committee, under applicable law, may establish
and such loan need not comply with the provisions of Section 1.8.

 .6       Plan Amendment, Termination and Suspension

(a) Board Authorization.  The Board may, at any time, terminate or, from time to
time, amend,  modify or suspend this Plan, in whole or in part. No Awards may be
granted  during any  suspension of this Plan or after  termination of this Plan,
but the Committee  shall retain  jurisdiction  as to Awards then  outstanding in
accordance with the terms of this Plan.

(b) Stockholder  Approval.  Any amendment that would (i) materially increase the
benefits accruing to Participants under this Plan, (ii) materially  increase the
aggregate  number of  securities  that may be issued  under this Plan,  or (iii)
materially  modify the requirements as to eligibility for  participation in this
Plan, shall be subject to stockholder  approval only to the extent then required
by Section 422 of the Code or any other  applicable law, or deemed  necessary or
advisable by the Board.

(c) Amendment to Awards.  Without  limiting any other  express  authority of the
Committee under but subject to the express limits of this Plan, the Committee by
agreement or  resolution  may waive  conditions of or  limitations  on Awards to
Eligible  Employees  that the Committee in the prior  exercise of its discretion
has imposed, without the consent of a Participant, and may make other changes to
the terms and  conditions of Awards that do not affect in any manner  materially
adverse to the Employee  Participant,  his or her rights and  benefits  under an
Award.

(d)  Limitations on Amendments to Plan and Awards.  No amendment,  suspension or
termination of the Plan or change of or affecting any  outstanding  Award shall,
without  written  consent of the  Participant,  affect in any manner  materially
adverse  to the  Participant  any  rights  or  benefits  of the  Participant  or
obligations of the Corporation  under any Award granted under this Plan prior to
the effective date of such change. Changes contemplated by Section 6.2 shall not
be deemed to constitute changes or amendments for purposes of this Section 6.6.

 .7       Privileges of Stock Ownership

         Except as otherwise expressly authorized by the Committee or this Plan,
a Participant  shall not be entitled to any  privilege of stock  ownership as to
any shares of Common Stock not  actually  delivered to and held of record by him
or  her.  No  adjustment  will  be made  for  dividends  or  other  rights  as a
stockholders for which a record date is prior to such date of delivery.

<PAGE>

 .8       Effective Date of the Plan

         This Plan was originally effective as of September 22, 1992 ("Effective
Date"),  the date of Board  approval,  and was subject to  stockholder  approval
within 12 months  thereafter.  The Plan is hereby  amended  and  restated in its
entirety, effective as of August 27, 1996.

 .9       Term of the Plan

         No Award shall be granted more than ten years after the Effective  Date
of this Plan (the "termination  date").  Unless otherwise  expressly provided in
this Plan or in an applicable  Award  Agreement,  any Award granted prior to the
termination date may extend beyond such date, and all authority of the Committee
with respect to Awards  hereunder,  including  the  authority to amend an Award,
shall continue  during any suspension of this Plan and in respect of outstanding
Awards on such termination date.

 .10      Governing Law; Construction; Severability

(a) Choice of Law. This Plan, the Awards,  all documents  evidencing  Awards and
all other  related  documents  shall be governed by, and construed in accordance
with the laws of the State of Nevada.

(b)  Severability.  If any  provision  shall  be held by a  court  of  competent
jurisdiction to be invalid and unenforceable,  the remaining  provisions of this
Plan shall continue in effect.

(c)      Plan Construction.

  (1)   Rule 16b-3.  It is the intent of the Corporation  that  transactions in
        and  affecting  Awards  in the case of  Participants  who are or may be
        subject to Section 16 of the Exchange  Act satisfy any then  applicable
        requirements of Rule 16b-3 so that such persons will be entitled to the
        benefits of Rule 16b-3 or other exemptive rules under Section 16 of the
        Exchange Act in respect of these transactions and will not be subjected
        to avoidable liability thereunder.  If any provision of this Plan or of
        any  Award  would  otherwise  frustrate  or  conflict  with the  intent
        expressed  above,  that  provision  to the  extent  possible  shall  be
        interpreted and deemed amended so as to avoid such conflict, but to the
        extent of any remaining  irreconcilable conflict with such intent as to
        such persons in the circumstances, such provision shall be deemed void.

  (2)   Section  162(m).  It is the further  intent of the Company that Options
        and Stock  Appreciation  Rights with an exercise or base price not less
        than  Fair  Market  Value on the date of grant  and  Performance  Share
        Awards  under  Section 5.2 of the Plan that are granted to or held by a
        Section 16 Person shall qualify as performance-based compensation under
        Section  162(m)  of the  Code,  and  this  Plan  shall  be  interpreted
        consistent with such intent.

<PAGE>

 .11      Captions

         Captions and headings are given to the sections and subsections of this
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or  interpretation of
the Plan or any provision thereof.

 .12      Effect of Change of Subsidiary Status

         For purposes of this Plan and any Award hereunder,  if an entity ceases
to be a Subsidiary a termination of employment  shall be deemed to have occurred
with  respect to each  employee of such  Subsidiary  who does not continue as an
employee of another entity within the Company.

 .13      Non-Exclusivity of Plan

         Nothing in this Plan shall limit or be deemed to limit the authority of
the Board or the Committee to grant awards or authorize any other  compensation,
with  or  without  reference  to the  Common  Stock,  under  any  other  plan or
authority.

                       VII. NON-EMPLOYEE DIRECTOR OPTIONS

 .1       Participation

         Options  under  this  Article  VII shall be made  only to  Non-Employee
Directors.

 .2       Annual Option Grants

(a) Time of Initial Grant.  After approval of this Plan by the  stockholders  of
the  Corporation,  if any person who is not then an officer or  employee  of the
Company  shall  become a director  of the  Corporation,  there  shall be granted
automatically  to such person  (without any action by the Board of  Committee) a
Nonqualified Stock Option (the Award Date of which shall be the date such person
takes office) to purchase 10,000 shares.

(b)  Subsequent  Annual  Options.  In each  calendar year during the term of the
Plan,  commencing  in 1994,  there shall be granted  automatically  (without any
action by the  Committee or the Board) a  Nonqualified  Stock Option to purchase
4,000 shares of Common Stock to each Non-Employee  Director who is re-elected as
a director of the Corporation (the Award Date of which shall be the date of such
re-election).  In addition,  subject to stockholder  approval at the 1997 Annual
Stockholders  Meeting,  each person who is a Non-Employee Director on August 27,
1996 shall be granted on a one-time  basis without  further  action on Option to
purchase  2,000  shares of Common Stock (the Award Date of which shall be August
27,  1996,  the  date  of  Board  approval  of  this  amendment).   Furthermore,
notwithstanding  the first  sentence  of this  subsection  (b),  but  subject to
stockholder  approval at the 1997 Annual Stockholders  Meeting, in each calendar
year during the  remaining  term of the Plan,  (commencing  in 1997),  the grant
described in the first sentence of this subsection shall not be made and instead
there shall be granted automatically (without any action by the Committee or the
Board) a  Nonqualified  Stock Option to purchase 6,000 shares of Common Stock to
each  Non-Employee  Director who is re-elected as a director of the  Corporation
(the Award Date of which shall be the date of such re-election).

<PAGE>

(c) Maximum  Number of Shares.  Annual  grants that would  otherwise  exceed the
maximum  number of shares under  Section  1.4(a)  shall be prorated  within such
limitation. A Non-Employee Director shall not receive more than 50,000 shares on
exercise of all Options optioned under this Section 7.2.

 .3       Option Price

         The purchase price per share of the Common Stock covered by each Option
granted pursuant to Section 7.2 hereof shall be 100% of the Fair Market Value of
the Common  Stock on the Award Date.  The exercise  price of any Option  granted
under this Article shall be paid in full at the time of each purchase in cash or
by check or in shares of Common  Stock  valued at their Fair Market Value on the
date of  exercise  of the  Option,  or partly in such shares and partly in cash,
provided  that any such  shares  used in  payment  shall  have been owned by the
Participant at least six months prior to the date of exercise.

 .4       Option Period and Exercisability

         Each  Option   granted  under  this  Article  VII  and  all  rights  or
obligations  thereunder  shall  commence  on the Award Date and expire ten years
thereafter and shall be subject to earlier  termination as provided below.  Each
Option granted under Section 7.2 shall become exercisable at the rate of 33-1/3%
per year, on the first, second and third anniversaries of the Award Date.

 .5       Termination of Directorship

         If a  Non-Employee  Director's  services  as a member  of the  Board of
Directors  terminate by reason of death,  Disability  or  Retirement,  an Option
granted  pursuant to this Article  held by such  Participant  shall  immediately
become  and  shall  remain  exercisable  for two  years  after  the date of such
termination or until the expiration of the stated term of such Option, whichever
first occurs. If a Non-Employee  Director's services as a member of the Board of
Directors  terminate  for any other  reason,  any  portion of an Option  granted
pursuant to this Article which is not then  exercisable  shall terminate and any
portion of such  Option  which is then  exercisable  may be  exercised  within a
period of  thirty  (30) days  after  the date of such  termination  or until the
expiration of the stated term, whichever first occurs.

 .6       Adjustments

         Options  granted  under this Article VII shall be subject to adjustment
as provided in Section 6.2, but only to the extent that (a) such  adjustment and
the  Committee's  action in respect  thereof  satisfy  applicable  law, (b) such
adjustment in the case of a Change in Control Event is effected  pursuant to the
terms of a reorganization agreement approved by stockholders of the Corporation,
and (c) such  adjustment  is  consistent  with  adjustments  to Options  held by
persons other than executive officers or directors of the Corporation.

<PAGE>

 .7       Acceleration Upon a Change in Control Event

         Upon the occurrence of a Change in Control  Event,  each Option granted
under Section 7.2 hereof shall become  immediately  exercisable  in full. To the
extent that any Option granted under this Article VII is not exercised  prior to
(i) a dissolution of the  Corporation or (ii) a merger or other  corporate event
that the Corporation  does not survive,  and no provision is (or consistent with
the  provisions  of  Section  7.6 can be) made for the  assumption,  conversion,
substitution  or exchange of the Option,  the Option  shall  terminate  upon the
occurrence of such event.

                               VIII. DEFINITIONS

 .1       Definitions

(a)  "Award"  shall  mean an  award of any  Option,  Stock  Appreciation  Right,
Restricted Stock, Stock Bonus, Performance Share Award, Performance-Based Award,
Cash-Based Award,  dividend  equivalent or deferred payment right or other right
or security that would constitute a "derivative security" under Rule 16a-1(c) of
the Exchange Act, or any combination thereof, whether alternative or cumulative,
authorized by and granted under this Plan.

(b) "Award Agreement" shall mean any writing setting forth the terms of an Award
that has been authorized by the Committee.

(c) "Award  Date" shall mean the date upon which the  Committee  took the action
granting an Award or such later date as the  Committee  designates  as the Award
Date at the time of the Award or, in the case of Awards  under  Article VII, the
applicable dates set forth therein.

(d) "Award  Period" shall mean the period  beginning on an Award Date and ending
on the expiration date of such Award.

(e) "Beneficiary" shall mean the person,  persons, trust or trusts designated by
a Participant or, in the absence of a designation,  entitled by will or the laws
of the descent and  distribution to receive the benefits  specified in the Award
Agreement and under this Plan in the event of a Participant's  death,  and shall
mean the  Participant's  executor or  administrator  if no other  Beneficiary is
designated and able to act under the circumstances.

(f) "Board" shall mean the Board of Directors of the Corporation.

(g) "Cash-Based  Awards" shall mean Awards that, if paid,  must be paid in cash
and that are neither  denominated in nor have a value derived from the value of,
nor an exercise or conversion  privilege at a price related to, shares of Common
Stock.

(h) "Cash Flow" shall mean cash and cash equivalents derived from either (i) net
cash flow from operations or (ii) net cash flow from operations,  financings and
investing  activities,  as  determined  by the Committee at the time an Award is
granted.

(i) "Change in Control Event" shall mean any of the following:

<PAGE>

   (1)   Approval  by  the stockholders of the Corporation of the dissolution or
         liquidation of the Corporation;

   (2)   Approval by the  stockholders  of the  Corporation  of an  agreement to
         merge or consolidate, or otherwise reorganize, with or into one or more
         entities that are not Subsidiaries,  as a result of which less than 50%
         of the  outstanding  voting  securities  of the  surviving or resulting
         entity immediately after the  reorganization  are, or will be, owned by
         stockholders of the Corporation  immediately before such reorganization
         (assuming for purposes of such determination that there is no change in
         the record  ownership of the  Corporation's  securities from the record
         date for such approval until such  reorganization  and that such record
         owners hold no securities of the other parties to such reorganization):

   (3)   Approval  by  the  stockholders  of  the  Corporation  of  the  sale of
         substantially all  of  the Corporation's  business and/or  assets  to a
         person or entity which is not a Subsidiary;

   (4)   Any  "person  (as such term is used in  Section  13(d) and 14(d) of the
         Exchange Act) (other than a person having such ownership at the time of
         adoption of this Plan)  becomes the  "beneficial  owner" (as defined in
         Rule  13d-3  under  the  Exchange  Act),  directly  or  indirectly,  of
         securities  of  the  Corporation  representing  more  than  50%  of the
         combined voting power of the Corporation's then outstanding  securities
         entitled to then vote  generally  in the  election of  directors of the
         Corporation; or

   (5)   During any period not longer than two  consecutive  years,  individuals
         who at the  beginning  of such  period  constituted  the Board cease to
         constitute at least a majority  thereof,  unless the  election,  or the
         nomination for election by the Corporation's stockholders,  of each new
         Board  member was approved by a vote of at least  three-fourths  of the
         Board  members  then  still in office  who were  Board  members  at the
         beginning of such period  (including  for these  purposes,  new members
         whose election or nomination was so approved).

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

(k)  "Commission" shall mean the Securities and Exchange Commission.

(l)  "Committee"  shall mean the Board or a committee  appointed by the Board to
administer  this Plan,  which  committee  shall be comprised only of two or more
directors  or  such  greater  number  of  directors  as  may be  required  under
applicable  law,  each of whom (i) in respect of any decision at a time when the
Participant  affected by the  decision  may be subject to Section  162(m) of the
Code be an "outside director" within the meaning of Code Section 162(m) and (ii)
in  respect  of any  decision  at a time when the  Participant  affected  by the
decision  may be  subject  to  Section  16 under the  Exchange  Act,  shall be a
"Non-Employee Director" within the meaning of Rule 16b-3(b)(3).

<PAGE>

(m) "Common Stock" shall mean the Common Stock of the Corporation and such other
securities  or property as may become  subject to Awards,  or become  subject to
Awards, pursuant to an adjustment made under Section 6.2 of this Plan.
(n) "Company"  shall mean,  collectively,  the  Corporation  and its domestic or
foreign Subsidiaries or divisions.

(o)  "Corporation"   shall  mean   International   Game  Technology,   a  Nevada
corporation, and its successors.

(p) "Eligible Employee" shall mean an officer (whether or not a director) or key
executive,  administrative,  managerial, production, marketing or sales employee
of the Company.

(q) "ERISA" shall mean the Employee  Retirement  Income Security Act of 1974, as
amended.

(r) "Exchange  Act" shall mean the  Securities  Exchange Act of 1934, as amended
from time to time.

(s) "Fair  Market  Value" or any date  shall  mean (i) if the stock is listed or
admitted to trade on a national  securities  exchange,  the closing price of the
stock on the  Composite  Tape,  as published in the Western  Edition of The Wall
Street Journal, of the principal national securities exchange on which the stock
is so listed or admitted to trade,  on such date,  or, if there is no trading of
the stock on such date,  then the  closing  price of the stock as quoted on such
Composite  Tape on the next  preceding  date on which  there was trading in such
shares;  (ii) if the stock is not  listed  or  admitted  to trade on a  national
securities exchange,  the last price for the stock on such date, as furnished by
the National Association of Securities Dealers, Inc. ("NASD") through the NASDAQ
National  Market  Reporting  System or a similar  organization if the NASD is no
longer reporting such information,  (iii) if the stock is not listed or admitted
to trade on a national  securities  exchange and is not reported on the National
Market Reporting System,  the mean between the bid and asked price for the stock
on such date, as furnished by the NASD or a similar organization, or (iv) if the
stock is not listed or admitted to trade on a national securities  exchange,  is
not reported on the National Market Reporting System and if bid and asked prices
for the stock are not furnished by the NASD or a similar organization, the value
as established by the Committee at such time for purposes of this Plan.

(t)  "Incentive  Stock  Option"  shall mean an Option which is  designated as an
incentive  stock option within the meaning of Section 422 of the Code, the award
of which contains such provisions as are necessary to comply with that section.

(u)  "Nonqualified  Stock  Option"  shall mean an Option that is designated as a
Nonqualified  Stock Option and shall include any Option intended as an Incentive
Stock Option that fails to meet the applicable legal requirements  thereof.  Any
Option granted  hereunder  that is not  designated as an Incentive  Stock Option
shall be deemed to be designated a Nonqualified Stock Option under this Plan and
not an incentive stock option under the Code.

<PAGE>

(v) "Non-Employee Director" shall mean a member of the Board of Directors of the
Corporation who is not an officer or employee of the Company.

(w) "Non-Employee  Director  Participant" shall mean a Non-Employee Director who
has been granted an Option under the provisions of Article VII.

(x) "Option"  shall mean an option to purchase  Common Stock  granted under this
Plan. The Committee shall  designate any Option granted to an Eligible  Employee
as a Nonqualified  Stock Option or an Incentive  Stock Option.  Options  granted
under Article VII shall be Nonqualified Stock Options.

(y) "Participant"  shall mean an Eligible Employee who has been granted an Award
under this Plan and a  Non-Employee  Director  who has been  received  an Option
under Article VII of this Plan.

(z)  "Performance-Based  Award" shall mean an Award of a right to receive shares
of Common Stock or other  compensation  (including  cash) under Section 5.2, the
issuance or payment of which is contingent  upon,  among other  conditions,  the
attainment of performance objectives specified by the Committee.

(aa) "Performance Goals" shall mean EPS or ROE or Cash Flow or Total Stockholder
Return, and "Performance Goals" means any combination thereof.

(bb) "Performance  Share Award" shall mean an Award of a right to receive shares
of Common Stock made in accordance  with Section 5.1, the issuance or payment of
which is contingent upon, among other conditions,  the attainment of performance
objectives specified by the Committee.

(cc)  "Personal  Representative"  shall mean the person or persons who, upon the
disability or  incompetence  of a Participant,  shall have acquired on behalf of
the  Participant,  by legal  proceeding or otherwise,  the power to exercise the
rights or receive  benefits  under this Plan and who shall have become the legal
representative of the Participant.

(dd)  "Plan" shall mean this 1993 Stock Option Plan, as amended and restated.

(ee)  "QDRO"  shall  mean a  qualified  domestic  relations  order as defined in
Section  414(p) of the Code or Title I, Section  206(d)(3) of ERISA (to the same
extent  as  if  this  Plan  were  subject  thereto),  or  the  applicable  rules
thereunder.

(ff) "Restricted Stock Award" shall mean an award of a fixed number of shares of
Common  Stock  to  the  Participant   subject,   however,  to  payment  of  such
consideration,  if any, and such forfeiture provisions,  as are set forth in the
Award Agreement.

(gg)  "Restricted  Stock"  shall  mean  shares  of  Common  Stock  awarded  to a
Participant under this Plan, subject to payment of such  consideration,  if any,
and such  conditions on vesting and such transfer and other  restrictions as are
established  in or  pursuant  to this Plan,  for so long as such  shares  remain
unvested under the terms of the applicable Award Agreement.

<PAGE>

(hh) "Retirement"  shall mean retirement with the consent of the Company,  or in
the case of a Non-Employee  Director,  a retirement or resignation as a director
after at least eight years service as a director.

(ii) "ROE" shall mean consolidated net income of the Corporation (less preferred
dividends), divided by the average consolidated common shareholders equity.

(jj)  "Rule  16b-3"  shall  mean Rule  16b-3 as  promulgated  by the  Commission
pursuant to the Exchange Act.

(kk)  "Section 16 Person"  shall mean a person  subject to Section  16(a) of the
Exchange Act.

(ll)  "Securities  Act" shall mean the  Securities  Act of 1933, as amended from
time to time.

(mm) "Stock Appreciation Right" shall mean a right to receive a number of shares
of Common Stock or an amount of cash, or a combination  of shares and cash,  the
aggregate amount or value of which is determined by reference to a change in the
Fair Market Value of the Common Stock that is authorized under this Plan.

(nn) "Stock  Bonus" shall mean an Award of shares of Common Stock  granted under
this Plan for no consideration  other than past services and without restriction
other  than  such  transfer  or other  restrictions  as the  Committee  may deem
advisable to assure compliance with law.

(oo) "Subsidiary" shall mean any corporation or other entity a majority of whose
outstanding  voting  stock or voting  power is  beneficially  owned  directly or
indirectly by the Corporation.

(pp) "Total  Disability" shall mean a "permanent and total disability within the
meaning  of  Section  22(e)(3)  of  the  Code  and  (except  in  the  case  of a
Non-Employee  Director)  such other  disabilities,  infirmities,  afflictions or
conditions as the Committee by rule may include.

(qq) "Total  Stockholder  Return" shall mean with respect to the  Corporation or
other entities (if measures on a relative  basis),  the (i) change in the market
price of its  common  stock (as  quoted in the  principal  market on which it is
traded as of the  beginning  and ending of the period) plus  dividends and other
distributions  paid,  divided by (ii) the beginning  quoted market price, all of
which is adjusted for any changes in equity structure, including but not limited
to stock splits and stock dividends.

<PAGE>

                          INTERNATIONAL GAME TECHNOLOGY
                             1993 STOCK OPTION PLAN

             (Amended and Restated Effective as of August 27, 1996)
      (Composite Plan Document Incorporating Amendments 1998-I and 1998-II)

<PAGE>

                                TABLE OF CONTENTS

                                                                          Page

                                             -i-

I.    THE PLAN..............................................................1
      1.1      Purpose......................................................1
      1.2      Administration and Authorization; Power and Procedure........1
      1.3      Participation................................................2
      1.4      Shares Available for Awards; Share Limits....................3
      1.5      Grant of Awards..............................................3
      1.6      Award Period.................................................4
      1.7      Limitations on Exercise and Vesting of Awards................4
      1.8      Acceptance of Notes to Finance Exercise......................4
      1.9      No Transferability...........................................5

II.   EMPLOYEE OPTIONS......................................................6
      2.1      Grants.......................................................6
      2.2      Option Price.................................................6
      2.3      Limitations on Grant and Terms of Incentive Stock Options....6
      2.4      Limits on 10% Holders........................................7
      2.5      Cancellation and Regrant/Waiver of Restrictions..............7

III.  STOCK APPRECIATION RIGHTS.............................................7
      3.1      Grants.......................................................7
      3.2      Exercise of Stock Appreciation Rights........................8
      3.3      Payment......................................................8

IV.   RESTRICTED STOCK AWARDS...............................................8
      4.1      Grants.......................................................8
      4.2      Restrictions.................................................9
      4.3      Return to the Corporation....................................9

V.    PERFORMANCE SHARE AWARDS AND STOCK BONUSES............................9
      5.1      Grants of Performance Share Awards...........................9
      5.2      Special Performance-Based Share Awards......................10
      5.3      Grants of Stock Bonuses.....................................11
      5.4      Deferred Payments...........................................11

VI.   OTHER PROVISIONS.....................................................12
      6.1      Rights of Eligible Employees, Participants and
               Beneficiaries...............................................12
      6.2      Adjustments; Acceleration...................................12
      6.3      Effect of Termination of Employment.........................13
      6.4      Compliance with Laws........................................14
      6.5      Tax Withholding.............................................14
      6.6      Plan Amendment, Termination and Suspension..................14
      6.7      Privileges of Stock Ownership...............................15
      6.8      Effective Date of the Plan..................................15
      6.9      Term of the Plan............................................15
      6.10     Governing Law; Construction; Severability...................16

<PAGE>

                            TABLE OF CONTENTS
                               (continued)

      6.11     Captions....................................................16
      6.12     Effect of Change of Subsidiary Status.......................16
      6.13     Non-Exclusivity of Plan.....................................16

VII.  NON-EMPLOYEE DIRECTOR OPTIONS........................................17
      7.1      Participation...............................................17
      7.2      Annual Option Grants........................................17
      7.3      Option Price................................................17
      7.4      Option Period and Exercisability............................18
      7.5      Termination of Directorship.................................18
      7.6      Adjustments.................................................18
      7.7      Acceleration Upon a Change in Control Event.................18

VIII. DEFINITIONS..........................................................18
      8.1      Definitions.................................................18

<PAGE><PAGE>   1

                                                                    EXHIBIT 4.19

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.

                                     AVIRON

               WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK

No. CSW- 5                                                         10,527 Shares

        FOR VALUE RECEIVED, AVIRON, a Delaware corporation (the "Company"), with
its principal office at 297 North Bernardo Avenue, Mountain View, CA 94043,
hereby certifies that Evans Vaccines Limited, or its assigns (the "Holder"), is
entitled, subject to the provisions of this Warrant, to purchase from the
Company, at any time after the Exercise Date (as defined below) and prior to the
Expiration Date (as defined below), Ten Thousand Five Hundred Twenty-Seven
(10,527) fully paid and nonassessable shares of Common Stock of the Company, at
an exercise price per share equal to forty-seven dollars and fifty cents
($47.50) (the "Exercise Price"). The term "Common Stock" shall mean the
aforementioned Common Stock of the Company, together with any other equity
securities that may be issued by the Company in addition thereto or in
substitution therefor as provided herein.

        The number of shares of Common Stock to be received upon the exercise of
this Warrant and the price to be paid for a share of Common Stock are subject to
adjustment from time to time as hereinafter set forth. The shares of Common
Stock deliverable upon such exercise, as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Shares."

        SECTION 1. EXERCISE OF WARRANT. This Warrant may be exercised in whole
or in part on any business day after the date hereof (the "Exercise Date") and
prior to the Expiration Date by presentation and surrender to the Company at its
principal office at the address set forth in the initial paragraph hereof (or at
such other address as the Company may hereafter notify the Holder in writing)
with the Purchase Form annexed hereto duly executed and accompanied by proper
payment of the Exercise Price in lawful money of the United States of America in
the form of a check, subject to collection, for the number of Warrant Shares
specified in the Purchase Form. If this Warrant should be exercised in part
only, the Company shall, upon surrender of this Warrant, execute and deliver a
new Warrant evidencing the rights of the Holder thereof to purchase the balance
of the Warrant Shares purchasable hereunder. Upon receipt by

<PAGE>   2

the Company of this Warrant and such Purchase Form, together with proper payment
of the Exercise Price, at such office, the Holder shall be deemed to be the
holder of record of the Warrant Shares, notwithstanding that the stock transfer
books of the Company shall then be closed or that certificates representing such
Warrant Shares shall not then be actually delivered to the Holder.

        SECTION 2. ISSUANCE OF NEW WARRANT. In the event of any exercise of the
rights represented by this Warrant, certificates for the Warrant Shares so
purchased shall be delivered to the Holder hereof as soon as practicable and,
unless this Warrant has been fully exercised or has expired, a new Warrant
representing the portion of the Warrant Shares, if any, with respect to which
this Warrant shall not then have been exercised shall also be issued to the
Holder hereof within a reasonable time. Such exercise shall be deemed to have
been made immediately prior to the close of business on the date of surrender of
this Warrant.

        SECTION 3. RESERVATION OF SHARES. The Company hereby agrees that at all
times there shall be reserved for issuance and delivery upon exercise of this
Warrant all shares of its Common Stock or other shares of capital stock of the
Company from time to time issuable upon exercise of this Warrant. All such
shares shall be duly authorized and, when issued upon such exercise in
accordance with the terms of this Warrant, shall be validly issued, fully paid
and nonassessable.

        SECTION 4. FRACTIONAL INTEREST. The Company will not issue a fractional
share of Common Stock upon exercise of this Warrant. Instead, the Company will
deliver its check for the current fair market value of the fractional share, as
determined in good faith by the Board of Directors of the Company.

        SECTION 5. ASSIGNMENT OR LOSS OF WARRANT.

                (a) Except as provided in Section 9, the Holder of this Warrant
shall be entitled, without obtaining the consent of the Company, to assign its
interest in this Warrant in whole or in part to any person or persons. Subject
to the provisions of Section 9, upon surrender of this Warrant to the Company or
at the office of its stock transfer agent or warrant agent, with the Assignment
Form annexed hereto duly executed and funds sufficient to pay any transfer tax,
the Company shall, without charge, execute and deliver a new Warrant or Warrants
in the name of the assignee or assignees named in such instrument of assignment
and, if the Holders entire interest is not being assigned, in the name of the
Holder, and this Warrant shall promptly be canceled.

                (b) Upon receipt of evidence satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of indemnification satisfactory to the Company, and
upon surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.

        SECTION 6. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof,
be entitled to any rights of a shareholder in the Company, either at law or
equity, and the rights of the Holder are limited to those expressed in this
Warrant. Nothing contained in this Warrant shall be

                                       2.
<PAGE>   3

construed as conferring upon the Holder hereof the right to vote or to consent
or to receive notice as a shareholder of the Company on any matters or with
respect to any rights whatsoever as a shareholder of the Company. No dividends
or interest shall be payable or accrued in respect of this Warrant or the
interest represented hereby or the Warrant Shares purchasable hereunder until,
and only to the extent that, this Warrant shall have been exercised in
accordance with its terms.

        SECTION 7. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number
and kind of securities purchasable upon the exercise of the Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:

                (a) RECLASSIFICATION OF OUTSTANDING SECURITIES; IN-KIND
DISTRIBUTION. In case of any reclassification, change or conversion of
securities of the class issuable upon exercise of this Warrant (other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination) or upon the payment
of a dividend in securities or property other than shares of Common Stock, the
Company shall execute a new Warrant (in form and substance reasonably
satisfactory to the Holder of this Warrant) providing that the Holder of this
Warrant shall have the right to exercise such new Warrant and upon such exercise
to receive, in lieu of each share of Common Stock theretofore issuable upon
exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable upon such reclassification or change
by a holder of one share of Common Stock. Such new Warrant shall provide for
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 7. The provisions of this subsection
(a) shall similarly apply to successive reclassification or changes.

                (b) SUBDIVISIONS OR COMBINATION OF SHARES. If the Company at any
time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Common Stock, the Exercise Price and the number of Warrant Shares
issuable upon exercise hereof shall be proportionately adjusted.

                (c) STOCK DIVIDENDS. If the Company at any time while this
Warrant is outstanding and unexpired shall pay a dividend payable in shares of
Common Stock (except any distribution specifically provided for in the foregoing
subsections (a) and (b)), then the Exercise Price shall be adjusted, from and
after the date of determination of shareholders entitled to receive such
dividend or distribution, to that price determined by multiplying the Exercise
Price in effect immediately prior to such date of determination by a fraction
(a) the numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution, and (b) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution and the number of
Warrant Shares subject to this Warrant shall be proportionately adjusted.

                (d) NOTICE OF RECORD DATE. In the event of any taking by the
Company of a record of its shareholders for the purpose of determining
shareholders who are entitled to receive payment of any dividend (other than a
cash dividend) or other distribution, any right to subscribe for, purchase or
otherwise acquire any share of any class or any other securities or property, or
to receive any other right, or for the purpose of determining shareholders who
are entitled to vote in connection with any proposed merger or consolidation of
the Company with or into any other

                                       3.
<PAGE>   4

corporation, or any proposed sale, lease or conveyance of all or substantially
all of the assets of the Company, or any proposed liquidation, dissolution or
winding up of the Company, the Company shall mail to the Holder of this Warrant,
at least ten days prior to the date specified therein, a notice specifying the
date on which any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend,
distribution or right.

                (e) NO ADJUSTMENT UPON EXERCISE OF WARRANTS. No adjustments
shall be made under any Section herein in connection with the issuance of
Warrant Shares upon exercise of the Warrants.

        SECTION 8. OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be
adjusted as required by the provisions of Section 7, the Company shall deliver
an officer's certificate showing the adjusted Exercise Price determined as
herein provided, setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each such officer's
certificate shall be signed by the chairman, president or chief financial
officer of the Company.

        SECTION 9. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933. This
Warrant may not be exercised and neither this Warrant nor any of the Warrant
Shares, nor any interest in either, may be sold, assigned, pledged,
hypothecated, encumbered or in any other manner transferred or disposed of, in
whole or in part, except in compliance with applicable United States federal and
state securities or Blue Sky laws and the terms and conditions hereof. Each
Warrant shall bear a legend in substantially the same form as the legend set
forth on the first page of this Warrant. Each certificate for Warrant Shares
issued upon exercise of this Warrant, unless at the time of exercise such
Warrant Shares are acquired pursuant to a registration statement that has been
declared effective under the Act, shall bear a legend substantially in the
following form:

        THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
        SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES
        LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
        TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
        AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
        PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE
        SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
        SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
        RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES
        LAWS.

Any certificate for any Warrant Shares issued at any time in exchange or
substitution for any certificate for any Warrant Shares bearing such legend
(except a new certificate for any Warrant Shares issued after the acquisition of
such Warrant Shares pursuant to a registration statement that has been declared
effective under the Act) shall also bear such legend unless, in the opinion of
counsel for the Company, the Warrant Shares represented thereby need no longer
be subject to

                                       4.
<PAGE>   5

the restriction contained herein. The provisions of this Section 9 shall be
binding upon all subsequent Holders of certificates for Warrant Shares bearing
the above legend and all subsequent Holders of this Warrant, if any. In addition
in connection with the issuance of this Warrant, the Holder specifically
represents to the Company by acceptance of this Warrant as follows:

                (a) The Holder is aware of the Company's business affairs and
financial condition, and has acquired information about the Company sufficient
to reach an informed and knowledgeable decision to acquire this Warrant. The
Holder is acquiring this Warrant for its own account for investment purposes
only and not with a view to, or for the resale in connection with, any
"distribution" thereof in violation of the Act.

                (b) The Holder understands that this Warrant has not been
registered under the Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of the Holder's
investment intent as expressed herein.

                (c) The Holder further understands that this Warrant must be
held indefinitely unless subsequently registered under the Act and qualified
under any applicable state securities laws, or unless exemptions from
registration and qualification are otherwise available.

                (d) The Holder is aware of the provisions of Rule 144
promulgated under the Act, which, in substance, permit limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non-public offering subject
to the satisfaction of certain conditions, if applicable, including, among other
things, the availability of certain public information about the Company, the
resale occurring not less than two years after the party has purchased and paid
for the securities to be sold; the sale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) and the amount of securities being sold during any
three month period not exceeding the specified limitations stated therein.

                (e) The Holder further understands that in the event all of the
requirements of Rule 144 are not satisfied, registration under the Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rule 144 is not exclusive, the
staff of the Securities and Exchange Commission (the "SEC") has expressed its
opinion that persons proposing to sell private placement securities other than
in a registered offering and otherwise than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales, and that such persons and their
respective brokers who participate in such transactions do so at their own risk.

        SECTION 10. EXPIRATION DATE. This Warrant shall expire and shall be
wholly void and have no effect after 5:00 p.m. (San Francisco time) on the date
(the "Expiration Date") which is the earlier of (a) one year following the date
hereof, or (b) the closing date of a merger or consolidation of the Company with
or into any other entity, including a reverse triangular merger involving the
Company (other than a merger or consolidation in which the Holders of the voting
power of the Company immediately prior to such consolidation or merger hold a
majority of the

                                       5.
<PAGE>   6

surviving or resulting entity immediately following such consolidation or
merger) (a "Change of Control"), provided that, if the last day on which this
Warrant may be exercised, or on which it may be exercised at a particular
Exercise Price, is a Sunday or a legal holiday or a day on which banking
institutions doing business in the city of San Francisco are authorized by law
to close, this Warrant may be exercised prior to 5:00 p.m. (San Francisco time)
on the next succeeding full business day with the same force and effect and at
the same Exercise Price as if exercised on such last day specified herein.

        SECTION 11. [INTENTIONALLY OMITTED.]

        SECTION 12. GOVERNING LAW. This Warrant is delivered in the State of
California and shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of that State.

        SECTION 13. MODIFICATION AND WAIVER. Neither this Warrant nor any term
hereof may be amended, waived, discharged or terminated other than by an
instrument in writing signed by the Company and by the Holder hereof.

        SECTION 14. NOTICES. Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof or the Company shall be
delivered or shall be sent by certified mail, postage prepaid, to each such
Holder at its address as shown on the books of the Company or to the Company at
the address indicated therefor in the first paragraph of this Warrant.

        SECTION 15. DESCRIPTIVE HEADINGS. The description headings of the
several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant.

        SECTION 16. ENTIRE AGREEMENT. This Warrant constitutes the entire
agreement between the parties pertaining to the subject matter herein and
supersedes all prior and contemporaneous agreements, representation and
undertakings of the parties.

        IN WITNESS WHEREOF, the Company has duly caused this Warrant to be
signed by its duly authorized officer and to be dated as of October 10, 2000.

                                       AVIRON

                                       By:
                                          --------------------------------------
                                          C. Boyd Clarke
                                          President and Chief Executive Officer

                                       6.
<PAGE>   7

                                SUBSCRIPTION FORM

        THE UNDERSIGNED, holder of this Warrant, (1) hereby irrevocably elects
to exercise the right of purchase represented by this Warrant for, and to
purchase thereunder, ________________ full Warrant Shares of the Common Stock of
Aviron provided for therein, (2) makes payment in full of the purchase price of
such Warrant Shares, (3) requests that certificates for such Warrant Shares be
issued in the name of

        ----------------------------------------------------------------
                         (Please print name and address)

        ----------------------------------------------------------------
           (Please insert social security or other identifying number)

and (4) if said number of shares shall not be all the shares purchasable
thereunder, requests that a new Warrant for the unexercised portion of this
Warrant be issued in the name of and delivered to:

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

        ----------------------------------------------------------------
                         (Please print name and address)

Dated:
      ----------------------------------

Signature:
          ------------------------------

By:
   -------------------------------------

<PAGE>   8

                                 ASSIGNMENT FORM

                                                   Dated _________, 20__

        FOR VALUE RECEIVED, ________________________________ hereby sells,

assigns and transfers unto _________________________________________________

(the "Assignee"),___________________________________________________________

                     (please type or print in block letters)

________________________________________________________________________________

                                (insert address)

its right to purchase up to ____ shares of Common Stock of AVIRON represented by

this Warrant and does hereby irrevocably constitute and appoint

____________________________ Attorney, to transfer the same on the books of the

Company, with full power of substitution in the premises.

        Signature ________________________________

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