Document:

<PAGE>   1
                                                                    Exhibit 10.4

                         EXECUTIVE EMPLOYMENT AGREEMENT

                           FOR DAVID L. BERSTEIN, J.D.

EMPLOYMENT AGREEMENT (the "Agreement") made as of August 1, 1993 between ARIAD
Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and David L.
Berstein, J.D. (the "Employee").

1.     EMPLOYMENT, DUTIES AND ACCEPTANCE.

       1.1    The Company hereby employs the employee, for the Term (as
              hereinafter defined), to render full-time services to the Company,
              and to perform such duties as he shall reasonably be directed by
              the Chief Executive Officer of the Company to perform. The
              Employee's title shall be designated by the Chief Executive
              Officer and initially shall be Vice President and Chief Patent
              Counsel.

       1.2    The Employee hereby accepts such employment and agrees to render
              the services described above.

       1.3    The principal place of employment of the Employee hereunder shall
              be in the greater Boston, Massachusetts area, or other locations
              reasonably acceptable to the Employee. The Employee acknowledges
              that for limited periods of time he may be required to provide
              services to the Company outside of the Boston, Massachusetts area.

       1.4    Notwithstanding anything to the contrary herein, although the
              Employee shall provide services as a full time employee, it is
              understood that the Employee may (a) have an academic appointment
              and (b) participate in professional activities (collectively,
              "Permitted Activities"); PROVIDED, HOWEVER, that such Permitted
              Activities do not interfere with the Employee's duties to the
              Company.

2.     TERM OF EMPLOYMENT.

       The term of the Employee's employment under this Agreement (the "Term")
       shall commence September 20, 1993 (the "Effective Date") and shall end on
       December 31, 1995 unless sooner terminated pursuant to Section 4 or 5 of
       this Agreement; PROVIDED that this Agreement shall automatically be
       renewed for successive one-year terms (the Term and, if the period of
       employment is so renewed, such additional period(s) of employment are
       collectively referred to herein as the "Term") unless terminated by
       written notice given by either party to the other at least 90 days prior
       to the end of the applicable Term.

<PAGE>   2

3.     COMPENSATION.

       3.1    As full compensation for all services to be rendered pursuant to
              this Agreement, the Company agrees to pay the Employee, during the
              Term, a salary at the fixed rate of $135,000 per annum during the
              first year of the Term and increased each year thereafter, by
              amounts, if any, to be determined by the Board of Directors of the
              Company (the "Board"), in its sole discretion, payable in equal
              semi-monthly installments, less such deductions or amounts to be
              withheld as shall be required by applicable law and regulations.

       3.2    Each year the Company shall pay the Employee a bonus of up to 30%
              of base salary, which bonus shall be determined annually by the
              Board. The bonus, if any, may be paid in the form of stock
              options, stock awards or cash, as determined by the Board.

       3.3    The Company shall pay or reimburse the Employee for all reasonable
              expenses actually incurred or paid by him during the Term in the
              performance of his services under this Agreement, upon
              presentation of expense statements or vouchers or such other
              supporting information as it may require.

       3.4    The Employee shall be eligible under any incentive plan, stock
              award plan, bonus, participation or extra compensation plan,
              pension, group health, disability and life insurance or other
              so-called "fringe" benefits which the Company provides for its
              executives. All options and stock awards granted to the Employee
              shall be subject to a vesting schedule which shall be determined
              by the Incentive Committee of the Board. The options and awards,
              if any, to be granted to the Employee shall also be subject to the
              terms of a stock option plan and certificate and stock award plan
              and certificate.

       3.5    The Company will grant the Employee an option to purchase 90,000
              shares of the Company's Common Stock at a purchase price of $2.50
              per share (the "Options"). The Employee agrees that all such
              Options shall be subject to a four-year vesting schedule, vesting
              in equal increments of 25% on each anniversary of the Effective
              Date. Any unvested Options shall be forfeited to the Company in
              the event (a) this Agreement is terminated by the Company for
              cause pursuant to Section 4 herein, or (b) either party elects not
              to renew this Agreement pursuant to Section 2 herein.

       3.6    The Options and any common stock purchased upon the exercise of
              any vested Options ("Option Stock") shall

<PAGE>   3

              not, without the Company's prior written consent, be transferable
              until the earlier of (a) March 31, 1996 and (b) one year after the
              Company's initial public offering; PROVIDED, HOWEVER, that in the
              event of the death of the Employee, any vested Options and any
              Option Stock shall be transferable to the legal representatives,
              legatees and distributees of the Employee, if such persons agree
              to be bound by the same restrictions applicable to such Options
              and Option Stock. In the event that the Company commences an
              initial public offering, the Employee will execute "lock-up"
              agreements with respect to the Option Stock and all other equity
              interests in the Company held by the Employee providing that the
              Employee will not sell Option Stock or any other equity interests
              for a period of one year after the closing of the initial public
              offering. If the Company elects, the certificates representing the
              Option Stock will be transferred to the Company to be held by the
              Company pursuant to an escrow agreement consistent with the terms
              set forth in this Section 3.6. This Section 3.6 shall survive the
              termination of this Agreement.

4.     TERMINATION BY THE COMPANY.

       The Company may terminate this Agreement, if any one or more of the
       following shall occur:

       (a)    The Employee shall die during the Term; PROVIDED, HOWEVER, the
              Employee's legal representatives shall be entitled to receive the
              compensation provided for hereunder to the last day of the month
              in which his death occurs.

       (b)    The Employee shall become physically or mentally disabled, whether
              totally or partially, so that he is unable substantially to
              perform his services hereunder for (i) a period of 180 consecutive
              days, or (ii) for shorter periods aggregating 180 days during any
              twelve month period.

       (c)    The Employee acts, or fails to act, in a manner that provides
              Cause for termination. For purposes of this Agreement, the term
              "Cause" means (i) the failure by the Employee to perform any of
              his material duties hereunder, (ii) the conviction of the Employee
              of any felony involving moral turpitude, (iii) any acts of fraud
              or embezzlement involving the Company or any of its Affiliates,
              (iv) violation of any federal, state or local law, or
              administrative regulation related to the business of the Company,
              (v) a conflict of interest, (vi) conduct that could result in
              publicity reflecting unfavorably on the Company in a material way,
              (vii) failure to comply with the written policies of the

<PAGE>   4

              Company, or (viii) a breach of the terms of this Agreement by the
              Employee.

              The Company shall provide the Employee written notice of
              termination pursuant to this Section 4.

5.     TERMINATION BY THE EMPLOYEE.

       5.1    The Employee may terminate this Agreement, if any one or more of
              the following shall occur:

              (a)    a material breach of the terms of this Agreement by the
                     Company and such breach continues for 30 days after the
                     Employee gives the company written notice of such breach;

              (b)    the Company shall make a general assignment for benefit of
                     creditors; or any proceeding shall be instituted by the
                     Company seeking to adjudicate it as bankrupt or insolvent,
                     or seeking liquidation, winding up, reorganization,
                     arrangement, adjustment, protection, relief, or composition
                     of it or its debts under law relating to bankruptcy,
                     insolvency or reorganization or relief of debtors, or
                     seeking entry of an order for relief or the appointment of
                     a receiver, trustee, or other similar official for it or
                     for any substantial part of its property or the Company
                     shall take any corporate action to authorize any of the
                     actions set forth above in this subsection 5(b);

              (c)    an involuntary petition shall be filed or an action or
                     proceeding otherwise commenced against the Company seeking
                     reorganization, arrangement or readjustment of the
                     Company's debts or for any other relief under the Federal
                     Bankruptcy Code, as amended, or under any other bankruptcy
                     or insolvency act or law, state or federal, now or
                     hereafter existing and remain undismissed or unstayed for a
                     period of 30 days; or

              (d)    a receiver, assignee, liquidator, trustee or similar
                     officer for the Company or for all or any part of its
                     property shall be appointed involuntarily.

6.     SEVERANCE.

       If (i) the Company terminates this Agreement without Cause or (ii) the
       Employee terminates this Agreement pursuant to Section 5.1(a), then: (1)
       except in the case of death or disability, the Company shall continue to
       pay Employee his current salary for the remaining period of the
       applicable Term; (2) all Options granted pursuant to Section 3.5 herein
       that would have vested during the Term shall vest immediately

<PAGE>   5

       prior to such termination; and (3) the Company shall continue to provide
       all benefits subject to COBRA at its expense for up to one year.

7.     OTHER BENEFITS.

       In addition to all other benefits contained herein, the Employee shall be
       entitled to:

       (a)    Vacation time of four weeks per year taken in accordance with the
              vacation policy of the Company during each year of the Term.

       (b)    After six years of employment, one three-month period of fully
              paid leave of absence in accordance with Company policies in place
              at that time; it being understood that such policies may restrict
              the Employee from taking such leave of absence until a time that
              is acceptable to the Company and may include other such
              limitations.

       (c)    Group health, disability and life insurance.

8.     CONFIDENTIALITY.

       8.1    The Employee acknowledges that, during the course of performing
              his services hereunder, the Company shall be disclosing
              information to the Employee related to the Company's Field of
              Interest, Inventions, projects and business plans, as well as
              other information (collectively, "Confidential Information"). The
              Employee acknowledges that the Company's business is extremely
              competitive, dependent in part upon the maintenance of secrecy,
              and that any disclosure of the Confidential Information would
              result in serious harm to the Company.

       8.2    The Employee agrees that the Confidential Information only shall
              be used by the Employee in connection with his activities
              hereunder as an employee of the Company, and shall not be used in
              any way that is detrimental to the Company.

       8.3    The Employee agrees not to disclose, directly or indirectly, the
              Confidential Information to any third person or entity, other than
              representatives or agents of the Company. The Employee shall treat
              all such information as confidential and proprietary property of
              the Company.

       8.4    The term "Confidential Information" does not include information
              that (a) is or becomes generally available to the public other
              than by disclosure in violation of this Agreement, (b) was within
              the relevant party's

<PAGE>   6

              possession prior to being furnished to such party, (c) becomes
              available to the relevant party on a noncon-fidential basis or (d)
              was independently developed by the relevant party without
              reference to the information provided by the Company.

       8.5    The Employee may disclose any Confidential Information that is
              required to be disclosed by law, government regulation or court
              order. If disclosure is required, the Employee shall give the
              Company advance notice so that the Company may seek a protective
              order or take other action reasonable in light of the
              circumstances.

       8.6    Upon termination of this Agreement, the Employee shall promptly
              return to the Company all materials containing Confidential
              Information, as well as data, records, reports and other property,
              furnished by the Company to the Employee or produced by the
              Employee in connection with services rendered hereunder.
              Notwithstanding such return or any of the provisions of this
              Agreement, the Employee shall continue to be bound by the terms of
              the confidentiality provisions contained in this Section 8 for a
              period of three years after the termination of this Agreement.

       8.7    In connection with his employment by the Company, the Employee
              hereby acknowledges that he may enter into more than one agreement
              with regard to (a) the confidentiality of certain books, records,
              documents and business, (b) rights to certain inventions,
              proprietary information, and writings, (c) publication of certain
              materials, and (d) other related matters (the "Confidential
              Matters") of the Company (the "Confidentiality Agreements").

              In order to clarify any potential conflicts between certain
              respective provisions of such Confidentiality Agreements, the
              Employee and the Company hereby agree that, as among such
              Confidentiality Agreements, the provision (or part thereof) in any
              such Confidentiality Agreement which affords the greatest
              protection to the Company with respect to the Confidential Matters
              shall control.

9.     INVENTIONS DISCOVERED BY THE EMPLOYEE WHILE PERFORMING SERVICES
       HEREUNDER. During the Term, the Employee shall promptly disclose to the
       Company any invention, improvement, discovery, process, formula, or
       method or other intellectual property, whether or not patentable, whether
       or not copyrightable (collectively, "Inventions") made, conceived or
       first reduced to practice by the Employee, either alone or jointly with
       others, while performing service hereunder. The Employee hereby assigns
       to the Company all of his right, title and interest in and to any such
       Inventions. During and

<PAGE>   7

       after the Term, the Employee shall execute any documents necessary to
       perfect the assignment of such Inventions to the Company and to enable
       the Company to apply for, obtain, and enforce patents and copyrights in
       any and all countries on such Inventions. The Employee hereby irrevocably
       designates the General Counsel to the Company as his agent and
       attorney-in-fact to execute and file any such document and to do all
       lawful acts necessary to apply for and obtain patents and copyrights and
       to enforce the Company's rights under this paragraph. This Section 9
       shall survive the termination of this Agreement.

10.    NON-COMPETITION AND NON-SOLICITATION.

       During the Term and for a period of one year following the date of
       termination or nonrenewal for any reason (other than termination pursuant
       to Section 5.1(a)):

       (a)    the Employee shall not in the United States or in any country in
              which the Employer shall then be doing business, directly or
              indirectly, enter the employ of, or render any services to, any
              person, firm or corporation engaged in any business competitive
              with the business of the Company or of any of its subsidiaries or
              affiliates of which the Employee may become an employee or officer
              during the Term; he shall not engage in such business on his own
              account; and he shall not become interested in any such business,
              directly or indirectly, as an individual, partner, shareholder,
              director, officer, principal, agent, employee, trustee,
              consultant, or any other relationship or capacity; provided,
              however, that nothing contained in this Section 10 shall be deemed
              to prohibit the Employee from acquiring, solely as an investment,
              shares of capital stock of any public corporation;

       (b)    neither the Employee nor any Affiliate of the Employee shall
              solicit or utilize, or assist any person in any way to solicit or
              utilize, the services, directly or indirectly, of any of the
              Company's directors, consultants, members of the Board of
              Scientific and Medical Advisors, officers or employees
              (collectively, "Associates of the Company"). This nonsolicitation
              and nonutilization provision shall not apply to Associates of the
              Company who have previously terminated their relationship with the
              Company.

       10.1   If the Employee commits a breach, or threatens to commit a breach,
              of any of the provisions of this Section 10, the Company shall
              have the following rights and remedies:

              10.1.1 The right and remedy to have the provisions of this
                     Agreement specifically enforced by any

<PAGE>   8

                     court having equity jurisdiction, it being acknowledged and
                     agreed that any such breach or threatened breach shall
                     cause irreparable injury to the Company and that money
                     damages shall not provide an adequate remedy to the
                     Company; and

              10.1.2 The right and remedy to require the Employee to account for
                     and pay over to the Company all compensation, profits,
                     monies, accruals, increments or other benefits
                     (collectively "Benefits") derived or received by the
                     Employee as the result of any transactions constituting a
                     breach of any of the provisions of the preceding paragraph,
                     and the Employee hereby agrees to account for and pay over
                     such Benefits to the Company.

                     Each of the rights and remedies enumerated above shall be
                     independent of the other, and shall be severally
                     enforceable, and all of such rights and remedies shall be
                     in addition to, and not in lieu of, any other rights and
                     remedies available to the Company under law or in equity.

       10.2   If any of the covenants contained in Section 8, 9 or 10, or any
              part thereof, is hereafter construed to be invalid or
              unenforceable, the same shall not affect the remainder of the
              covenant or covenants, which shall be given full effect without
              regard to the invalid portions.

       10.3   If any of the covenants contained in Section 8, 9 or 10, or any
              part thereof, is held to be unenforceable because of the duration
              of such provision or the area covered thereby, the parties agree
              that the court making such determination shall have the power to
              reduce the duration and/or area of such provision and, in its
              reduced form, such provision shall then be enforceable.

       10.4   The parties hereto intend to and hereby confer jurisdiction to
              enforce the covenants contained in Sections 8, 9 and 10 upon the
              courts of any state within the geographical scope of such
              covenants. In the event that the courts of any one or more of such
              states shall hold any such covenant wholly unenforceable by reason
              of the breadth of such scope or otherwise, it is the intention of
              the parties hereto that such determination not bar or in any way
              affect the Company's right to the relief provided above in the
              courts of any other states within the geographical scope of such
              covenants, as to breaches of such covenants in such other
              respective jurisdictions, the above covenants as they relate to
              each state being, for this purpose, severable into diverse and
              independent covenants.

<PAGE>   9

11.    INDEMNIFICATION.

       The Company shall indemnify the Employee, to the maximum extent permitted
       by applicable law, against all costs, charges and expenses incurred or
       sustained by him in connection with any action, suit or proceeding to
       which he may be made a party by reason of his being an officer, director
       or employee of the Company or of any subsidiary or affiliate of the
       Company. The Company shall provide, subject to its availability upon
       reasonable terms (which determination shall be made by the Board) at its
       expense, Directors and Officers insurance for the Employee in reasonable
       amounts. Determination with respect to (a) the availability of insurance
       upon reasonable terms and (b) the amount of such insurance coverage shall
       be made by the Board in its sole discretion.

12.    NOTICES.

       All notices, requests, consents and other communications required or
       permitted to be given hereunder shall be in writing and shall be deemed
       to have been duly given if sent by prepaid telegram (confirmed delivery
       by the telegram service), private overnight mail service (delivery
       confirmed by such service), registered or certified mail (return receipt
       requested), or delivered personally, as follows (or to such other address
       as either party shall designate by notice in writing to the other in
       accordance herewith):

If to the Company:
ARIAD Pharmaceuticals, Inc.
26 Landsdowne Street
Cambridge, MA  02139
Attention: Chief Executive Officer
Telephone: (617) 494-0400
Fax: (617) 494-8144

If to the Employee:

Mr. David L. Berstein
43 Hancock Street #2
Somerville, MA  02144

13.    GENERAL.

       13.1   This Agreement shall be governed by and construed and enforced in
              accordance with the laws of the Commonwealth of Massachusetts
              applicable to agreements made and to be performed entirely in
              Massachusetts.

       13.2   The Section headings contained herein are for reference purposes
              only and shall not in any way affect the meaning or interpretation
              of this Agreement.

<PAGE>   10

       13.3   This Agreement sets forth the entire agreement and understanding
              of the parties relating to the subject matter hereof, and
              supersedes all prior agreements, arrangements and understandings,
              written or oral, relating to the subject matter hereof. No
              representation, promise or inducement has been made by either
              party that is not embodied in this Agreement, and neither party
              shall be bound by or liable for any alleged representation,
              promise or inducement not so set forth.

       13.4   This Agreement and the Employee's rights and obligations hereunder
              may not be assigned by the Employee or the Company; PROVIDED,
              HOWEVER, the Company may assign this Agreement to an Affiliate or
              a successor-in-interest.

       13.5   This Agreement may be amended, modified, superseded, cancelled,
              renewed or extended, and the terms or covenants hereof may be
              waived, only by a written instrument executed by the parties
              hereto, or in the case of a waiver, by the party waiving
              compliance. The failure of a party at any time or times to require
              performance of any provision hereof shall in no manner affect the
              right at a later time to enforce the same. No waiver by a party of
              the breach of any term or covenant contained in this Agreement,
              whether by conduct or otherwise, in any one or more instances,
              shall be deemed to be, or construed as, a further or continuing
              waiver of any such breach, or a waiver of the breach of any other
              term or covenant contained in this Agreement.

14.    DEFINITIONS. As used herein the following terms have the following
       meaning:

       (a)    "Affiliate" means and includes any corporation or other business
              entity controlling, controlled by or under common control with the
              corporation in question.

       (b)    "Company's Field of Interest" means the discovery and development
              of pharmaceutical agents that target or intervene with
              intracellular regulatory and control mechanisms; associated
              diagnostic products; structure-based drug design; any artificial
              platelet product; gene therapy; and other related areas. The
              Company's Field of Interest may be changed at the Company's sole
              discretion from time to time.

       (c)    "person" means any natural person, corporation, partnership, firm,
              joint venture, association, joint stock company, trust,
              unincorporated organization, governmental body or other entity.

<PAGE>   11

       (d)    "Subsidiary" means any corporation or other business entity
              directly or indirectly controlled by the corporation in question.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                  ARIAD PHARMACEUTICALS, INC.

                                  By
                                     --------------------------------
                                     Harvey J. Berger, M.D.
                                     Chairman and
                                     Chief Executive Officer

                                  EMPLOYEE

                                  --------------------------------
                                  David L. Berstein, J.D.

<PAGE>   12

                     THIRD AMENDMENT TO EMPLOYMENT AGREEMENT

This THIRD AMENDMENT TO EMPLOYMENT AGREEMENT (the "Third Amendment") made as of
June 8, 2000 between ARIAD Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), and David Berstein, Esq. (the "Employee").

The Company and the Employee have entered into an Employment Agreement dated as
of August 3, 1993, as previously amended (the "Agreement"), and the parties
hereto desire to further amend certain provisions of the Agreement.

NOW, THEREFORE, in consideration of the premises set forth herein and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto agree to further amend the Agreement as follows:

I.     EMPLOYMENT, DUTIES AND ACCEPTANCE. The second sentence of Section 1.1 is
       hereby amended to read as follows:

       "The Employee's title shall be designated by the Chief Executive Officer
       and initially shall be Senior Vice President and Chief Patent Counsel.

II.    TERM OF EMPLOYMENT. The first sentence of Section 2 is hereby amended to
       read as follows:

       "The term of the Employee's employment under the Agreement is hereby
       extended to December 31, 2001 (the "Term"), unless sooner terminated
       pursuant to Section 4 or 5 of this Agreement; PROVIDED, however, that
       this Agreement shall automatically be renewed for successive one-year
       terms (the Term and, if the period of employment is so renewed, such
       additional period(s) of employment are collectively referred to herein as
       the "Term") unless terminated by written notice given by either party to
       the other at least 90 days prior to the end of the applicable Term."

III.   COMPENSATION. Section 3.1 is hereby replaced and amended in its entirety
       as follows:

       "3.1   As full compensation for all services to be rendered pursuant to
              this Agreement, the Company agrees to pay the Employee, during the
              Term, a salary at the fixed rate of $200,000 per annum during the
              first year of the Term and increased each year thereafter, by
              amounts, if any, to be determined by the Board of Directors of the
              Company (the "Board") in its sole discretion, payable in equal
              semi-monthly installments, less such deductions or amounts to be
              withheld as shall be required by applicable law and regulations."

<PAGE>   13

IV.    TERMINATION BY THE EMPLOYEE. Section 5 is hereby replaced and amended in
       its entirety as follows:

       "5.1   The Employee may terminate this Agreement, if any one or more of
              the following shall occur:

              (a)    a material breach of the terms of this Agreement by the
                     Company and such breach continues for 30 days after the
                     Employee gives the Company written notice of such breach;

              (b)    the Company shall make a general assignment for benefit of
                     creditors; or any proceeding shall be instituted by the
                     Company seeking to adjudicate it as bankrupt or insolvent,
                     or seeking liquidation, winding up, reorganization,
                     arrangement, adjustment, protection, relief, or composition
                     of it or its debts under law relating to bankruptcy,
                     insolvency or reorganization or relief of debtors, or
                     seeking entry of an order for relief of the appointment of
                     a receiver, trustee, or other similar official for it or
                     for any substantial part of its property or the Company
                     shall take any corporate action to authorize any of the
                     actions set forth above in this subsection 5.1(b);

              (c)    an involuntary petition shall be filed or an action or
                     proceeding otherwise commenced against the Company seeking
                     reorganization, arrangement or readjustment of the
                     Company's debts or for any other relief under the Federal
                     Bankruptcy Code, as amended, or under any other bankruptcy
                     or insolvency act or law, state or federal, now or
                     hereafter existing and remain undismissed or unstayed for a
                     period of 30 days;

              (d)    a receiver, assignee, liquidator, trustee or similar
                     officer for the Company or for all or any part of its
                     property shall be appointed involuntarily, or

              (e)    a Change in Control as defined in Section 14."

V.     SEVERANCE. Section 6 is hereby replaced and amended in its entirety as
       follows:

       "6.    If (i) the Company terminates this Agreement without Cause or (ii)
              the Employee terminates this Agreement pursuant to Section 5.1(a),
              then: (1) except in the case of death or disability, the Company
              shall continue to pay Employee his current salary for the
              remaining period of the applicable Term; (2) all options granted
              pursuant to this Agreement that would have vested during the Term
              shall vest immediately prior to such termination; (3)

<PAGE>   14

              the Company shall continue to provide all benefits subject to
              COBRA at its expense for up to one year.

              In the event of a consummation of a Change in Control of the
              Company, and if the Employee gives notice of termination within 90
              days after such occurrence, then (i) all stock, stock options,
              stock awards and similar equity rights granted to the Employee
              shall immediately vest and remain fully exercisable through their
              original term with all rights; and (ii) the Company shall continue
              to pay Employee his current salary for the shorter of (a) six
              months, or (b) the remaining period of the applicable Term."

VI.    DEFINITIONS. The definition of the Company's "Field of Interest" in
       Section 14 (b) of the Agreement is hereby amended to read as follows:

       "The `Company's Field of Interest' is the discovery, development and
       commercialization of pharmaceutical products based on (a) intervention in
       signal transduction pathways and (b) gene and cell therapy. The Company's
       Field of Interest may be changed at any time at the sole discretion of
       the Company."

       The definition of "Change in Control" shall be added as Section 14 (d) of
       the Agreement as follows:

       " 'Change in Control' means the occurrence of any of the following events
       (without the consent of the Employee):

       (i)    Any corporation, person or other entity makes a tender or exchange
              offer for shares of the Company's Common Stock pursuant to which
              such corporation, person or other entity acquires more than 50% of
              the issued and outstanding shares of the Company's Common Stock;

       (ii)   The stockholders of the Company approve a definitive agreement to
              merge or consolidate the Company with or into another corporation
              or to sell or otherwise dispose of all or substantially all of the
              Company's assets; or

       (iii)  Any person within the meaning of Section 3 (a) (9) or Section 13
              (d) of the Securities Exchange Act of 1934 acquires more than 50%
              of the combined voting power of Company's issued and outstanding
              voting securities entitled to vote in the election of the Board."

VII.   This Amendment shall be governed by and construed and enforced in
       accordance with the laws of the Commonwealth of Massachusetts applicable
       to agreements made and to be performed entirely in Massachusetts.

VIII.  Except as modified by this Third Amendment, the Agreement remains in full
       force and effect and unchanged.

<PAGE>   15

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.

                                     ARIAD PHARMACEUTICALS, INC.

                                     By:
                                        ------------------------------------
                                        Harvey J. Berger, M.D.
                                        Chairman and Chief Executive Officer

                                     EMPLOYEE

                                     --------------------------------------
                                     David Berstein, Esq.

<PAGE>   16

                        AMENDMENT TO EMPLOYMENT AGREEMENT

This AMENDMENT TO EMPLOYMENT AGREEMENT (the "Second Amendment") made as of
January 1, 1997, between ARIAD Pharmaceuticals, Inc., a Delaware corporation
(the "Company"), and David L. Berstein, J.D. (the "Employee").

The Company and the Employee have entered into an Employment Agreement dated as
of August 1, 1993 and amended as of March 2, 1994 (the "Agreement"), and the
parties hereto desire to further amend certain provisions of the Agreement.

NOW, THEREFORE, in consideration of the premises set forth herein and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto agree to further amend the Agreement as follows:

I.     TERM OF EMPLOYMENT. The first sentence of Section 2 is hereby amended to
       read as follows:

       "The term of the Employee's employment under the Agreement is hereby
       extended to December 31, 1999 (the "Term"), unless sooner terminated
       pursuant to Section 4 or 5 of this Agreement; PROVIDED, however, that
       this Agreement shall automatically be renewed for successive one-year
       terms (the Term and, if the period of employment is so renewed, such
       additional period(s) of employment are collectively referred to herein as
       the "Term") unless terminated by written notice given by either party to
       the other at least 90 days prior to the end of the applicable Term."

II.    COMPENSATION. Section 3.1 is hereby replaced and amended in its entirety
       as follows:

       "3.1   As full compensation for all services to be rendered pursuant to
              this Agreement, the Company agrees to pay the Employee, during the
              Term, a salary at the fixed rate of $160,000 per annum during the
              first year of the Term and increased each year thereafter, by
              amounts, if any, to be determined by the Board of Directors of the
              Company (the "Board") in its sole discretion, payable in equal
              semi-monthly installments, less such deductions or amounts to be
              withheld as shall be required by applicable law and regulations."

III.   DEFINITIONS. The definition of the Company's "Field of Interest" in
       Section 14 (b) of the Agreement is hereby amended to read as follows:

       "The Company's 'Field of Interest' is: the discovery, development and
       commercialization of pharmaceutical products based on (a) intervention in
       signal transduction pathways; (b) gene and cell

<PAGE>   17

       therapy; and (c) functional genomics. The Company's Field of Interest may
       be changed at the sole discretion of the Company from time to time."

IV.    This Amendment shall be governed by and construed and enforced in
       accordance with the laws of the Commonwealth of Massachusetts applicable
       to agreements made and to be performed entirely in Massachusetts.

V.     Except as modified by this Second Amendment, the Agreement remains in
       full force and effect and unchanged.

IN WITNESS WHEREOF, the parties have executed this Second Amendment as of the
date first written above.

                                      ARIAD PHARMACEUTICALS, INC.

                                      By:
                                         ----------------------------------
                                         Harvey J. Berger, M.D.
                                         Chairman and Chief Executive Officer

                                      EMPLOYEE

                                      ------------------------------------
                                      David L. Berstein, J.D.

<PAGE>   18

                        AMENDMENT TO EMPLOYMENT AGREEMENT

This AMENDMENT TO EMPLOYMENT AGREEMENT (the "Amendment") made as of March 2,
1994, between ARIAD Pharmaceuticals, Inc. a Delaware corporation (the
"Company"), and David L. Berstein, J.D. (the "Employee").

The Company and the Employee have entered into an Employment Agreement dated as
of August 1, 1993 (the "Agreement"), and the parties hereto desire to amend
certain provisions of the Agreement.

NOW, THEREFORE, in consideration of the premises set forth herein and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto agree as follows:

1.     SECTION 2. The Term of the Employee's employment under the Agreement is
       hereby extended to December 31, 1996.

2.     ARTICLE 3.

       2.1.   Section 3.6 is hereby replaced and amended in its entirety as
              follows:

              "3.6   All shares of the Company's Common Stock or Option Stock
                     (as defined below) owned by the Employee or with respect to
                     which the Employee has the power of disposition, shall not,
                     without the Company's prior written consent, be
                     transferable until the earlier of (a) March 31, 1996 and
                     (b) eighteen months after the Company's initial public
                     offering; PROVIDED, HOWEVER, that in the event of the death
                     of the Employee, any Common Stock or Option Stock shall,
                     subject to the terms of such Option Stock, be transferable
                     to the legal representatives, legatees and distributees of
                     the Employee, if such persons agree to be bound by the same
                     restrictions applicable to such security. "Option Stock"
                     shall mean all Options or any other options or rights to
                     acquire shares of the Company's Common Stock or any
                     securities convertible into or exchangeable or exercisable
                     into shares of the Company's Common Stock. In the event
                     that the Company commences an initial public offering, the
                     Employee will execute "lock-up" agreements withrespect to
                     the Common Stock or Option Stock held by the Employee
                     providing that the Employee will not sell the Common Stock
                     or Option Stock for a period of eighteen months after the
                     closing of the initial public offering.

<PAGE>   19

                     If the Company elects, the certificates representing the
                     Common Stock or OptionStock will be transferred to the
                     Company to be held by the Company pursuant to an escrow
                     agreement consistent with the terms set forth in this
                     Section 3.6. This Section 3.6 shall survive termination of
                     this Agreement."

       2.2.   Section 3.7 is hereby added to the Agreement to read in its
              entirety as follows:

              "3.7   Any shares of common stock ("Subsidiary Common Stock") of
                     any current or future subsidiary of the Company, including,
                     without limitation, ARIAD Gene Therapeutics, Inc., or any
                     Subsidiary Option Stock (as defined below) owned by the
                     Employee or with respect to which the Employee has the
                     power of disposition shall not, without the Company's
                     priorwritten consent, be transferable until eighteen months
                     after the applicable subsidiary's initial public offering;
                     PROVIDED, HOWEVER, that in the event of the death of the
                     Employee, all such Subsidiary Common Stock or Subsidiary
                     Option Stock shall, subject to the terms of such Subsidiary
                     Option Stock, be transferable to the legal representatives,
                     legatees, and distributees of the Employee, if such persons
                     agree to be bound by the same restrictions applicable to
                     such security. "Subsidiary Option Stock" shall mean all
                     options or rights to acquire shares of Subsidiary Common
                     Stock or any securities convertible into or exchangeable or
                     exercisable for shares of Subsidiary Common Stock. If the
                     Company elects, the certificates representing the
                     Subsidiary Common Stock or Subsidiary Option Stock will be
                     transferred to the Company to be held by the Company
                     pursuant to an escrow agreement consistent with the terms
                     set forth in this Section 3.7. This Section 3.7 shall
                     survive the termination of this Agreement."

3.     The definition of the "Company's Field of Interest" in Section 14 (b) of
       the Agreement is hereby amended to read as follows:

       "Company's Field of Interest means (1) the discovery, development and
       commercialization of pharmaceutical products, diagnostic products, or
       research reagents that target or intervene with intracellular regulatory
       or control mechanisms (e.g., signal transduction, gene transcription and
       protein trafficking); (2) gene therapy; (3) drug discovery based on
       molecular structure or diversity; (4) any platelet substitute product;
       and (5) other related areas. The Company's Field of Interest may be
       changed at the Company's sole discretion from time to time."

<PAGE>   20

4.     This Amendment shall be governed by and construed and enforced in
       accordance with the laws of the Commonwealth of Massachusetts applicable
       to agreements made and to be performed entirely in Massachusetts.

5.     Except as modified by this Amendment, the Agreement remains in full force
       and effect and unchanged.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.

                                       ARIAD PHARMACEUTICALS, INC.

                                       By:
                                          ------------------------------------
                                          Harvey J. Berger, M.D.
                                          Chairman and Chief Executive Officer

                                       EMPLOYEE

                                       -------------------------------------
                                       David L. Berstein, J.D.<PAGE>   1
                                IDEX CORPORATION
                              AMENDED AND RESTATED
                                STOCK OPTION PLAN
                              FOR OUTSIDE DIRECTORS

              IDEX Corporation, a corporation organized under the laws of the
State of Delaware (the "Company"), adopted the IDEX Corporation Stock Option
Plan For Outside Directors (the "Plan") effective April 24, 1990. The original
purposes of the Plan were as follows:

              (1)   To further the growth, development and financial success of
     the Company and its subsidiaries by providing additional incentives to
     Outside Directors (as defined below), by assisting them to become owners of
     capital stock of the Company and thus to benefit directly from its growth,
     development and financial success.

              (2)   To enable the Company to obtain and retain the services of
     the type of Outside Directors considered essential to the long-range
     success of the Company by providing and offering them an opportunity to
     become owners of capital stock of the Company under options.

              Under the original terms of the Plan, no options could be granted
more than ten years after its adoption by the Board (as defined below). As a
significant number of shares were still available for grant of options under the
Plan upon the original expiration date of the Plan, it is in the best interest
of the Company to continue the Plan and the grant of options to Outside
Directors thereunder. Therefore, the following constitutes an amendment,
restatement, continuation and extension of the Plan beyond its original term,
effective upon approval of this IDEX Corporation Amended and Restated Stock
Option Plan for Outside Directors by the stockholders of the Company, as
provided in Section 7.3 hereof.

                                   ARTICLE I

                                  DEFINITIONS

              Whenever the following terms are used in the Plan, they shall have
the meanings specified below.

              Board - the Board of Directors of the Company.

              Change in Control Event - a "Change of Control Event" shall mean
the occurrence of (a) any transaction or series of transactions which within a
12-month period constitute a change of management or control where (i) at least
51 percent of the then outstanding shares of Common Stock are (for cash,
property (including, without limitation, stock in any corporation), or
indebtedness, or any combination thereof) redeemed by the Company or purchased
by any person(s), firm(s) or entity(ies), or exchanged for shares in any other
corporation whether or not affiliated with the Company, or any combination of
such redemption, purchase or exchange, or (ii) at least 51 percent of the
Company's assets are purchased by any person(s), firm(s) or entity(ies) whether
or not affiliated with the Company for cash, property (including, without
limitation, stock in any corporation) or indebtedness or any combination

<PAGE>   2
thereof, or (iii) the Company is merged or consolidated with another corporation
regardless of whether the Company is the survivor (except any such transaction
solely for the purpose of changing the Company's domicile or which does not
change the ultimate beneficial ownership of the equity interests in the
Company), or (b) any substantial equivalent of any such redemption, purchase,
exchange, change, transaction or series of transactions, acquisition, merger or
consolidation constituting such a change of management or control. For purposes
hereof, the term "control" shall have the meaning ascribed thereto under the
Exchange Act and the regulations thereunder, and the term "management" shall
mean the chief executive officer of the Company. For purposes of clause (a)(ii)
above or as appropriate for purposes of clause (b) above, the Company shall be
deemed to include on a consolidated basis all subsidiaries and other affiliated
corporations or other entities with the same effect as if they were divisions.

              Code - the Internal Revenue Code of 1986, as amended.

              Committee - a committee consisting of each member of the
Compensation Committee of the Board who is then a disinterested person within
the meaning of Rule 16b-3.

              Common Stock - the Company's Common Stock, par value $.01 per
share.

              Company - IDEX Corporation and any corporation assuming, or
issuing new stock options in substitution for, Options.

              Director - a member of the Board.

              Exchange Act - the Securities Exchange Act of 1934, as amended.

              Fair Market Value - the "Fair Market Value" of a share of Common
Stock as of a given date shall be: (i) if Common Stock is traded on an exchange
then the closing price of a share of Common Stock as reported in the Wall Street
Journal for the first trading date immediate prior to such date during which a
sale occurred; or (ii) if Common Stock is not traded on an exchange but is
quoted on NASDAQ or a successor or other quotation system, (x) the last sales
price (if the Common Stock is then listed as a National Market Issue under the
NASD National Market System) or (y) the mean between the closing representative
bid and asked prices (in all other cases) for the Common Stock on the date
immediately prior to such date on which sales prices or bid and asked prices, as
applicable, are reported by NASDAQ or such successor quotation system; or (iii)
if such Common Stock is not publicly traded on an exchange and not quoted on
NASDAQ or a successor quotation system, the mean between the closing bid and
asked prices for the Common Stock on the day previous to such date, as
determined in good faith by the Committee; or (iv) if the Common Stock is not
publicly traded, the fair market value established by the Committee acting in
good faith.

              Officer - the President, any Vice President, the Secretary or any
Assistant Secretary of the Company.

              Option - an option to purchase Common Stock granted under the
Plan, which option shall not constitute an option that meets the requirements of
Section 422 of the Code.

              Optionee - an Outside Director to whom an Option is granted under
the Plan.

                                       2
<PAGE>   3
              Outside Director - a Director who is not then (i) a full-time
employee (as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Code) of the Company or of any
corporation that is then a Parent Corporation or a Subsidiary or (ii) a general
partner, limited partner or full-time employee of either KKR Associates, L.P. or
Kohlberg Kravis Roberts & Co., L.L.C.

              Parent Corporation - any corporation that owns, directly or
indirectly, more than 50% of the voting power of the shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
Directors.

              Retirement - the Termination of Service on or after the date the
Director attains age sixty (60).

              Rule 16b-3 - that certain Rule 16b-3, as such rule is then in
effect, that has been adopted by the Securities and Exchange Commission under
the Exchange Act, or any replacement rule adopted thereunder.

              Secretary - the Secretary of the Company.

              Securities Act - the Securities Act of 1933, as amended.

              Subsidiary - any corporation of which more than 50% of the total
voting power of the shares of capital stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors thereof is
owned, directly or indirectly, by the Company.

              Termination of Service - the effective time at which a person
serving as a Director ceases to be a member of the Board for any reason.

                                   ARTICLE II

                             SHARES SUBJECT TO PLAN

SECTION 2.1 - SHARES SUBJECT TO PLAN

              The shares of stock subject to Options shall be shares of the
Company's Common Stock. The aggregate number of such shares which may be issued
upon exercise of Options shall not exceed 337,500(1).

SECTION 2.2 - UNEXERCISED OPTIONS

              If any Option expires or is cancelled without having been fully
exercised, the number of shares subject to such Option, but as to which such
Option was not exercised prior to its expiration or cancellation, may again be
optioned hereunder, subject to the limitations of Section 2.1.

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

(1)  Reflects 3 for 2 stock splits occurring on January 31, 1995 and January 31,
     1997.

                                       3
<PAGE>   4
SECTION 2.3 - CHANGES IN COMPANY'S SHARES

              In the event that the outstanding shares of Common Stock are
hereafter changed into or exchanged for a different number or kind of shares or
other securities of the Company or of another corporation by reason of
reorganization, merger, consolidation, recapitalization, reclassification, stock
split, stock dividend or combination of shares, appropriate adjustments shall be
made by the Committee in the number and kind of shares for the purchase of which
Options may be granted, including adjustments of the limitation in Section 2.1
on the maximum number and kind of shares which may be issued upon exercise of
Options. In the event of an adjustment contemplated by this Section 2.3 in any
outstanding Options, the Committee shall make an appropriate and equitable
adjustment to the end that after such event the Optionee's proportionate
interest shall be maintained as before the occurrence of such event. Such
adjustment in any outstanding Options shall be made without change in the total
price applicable to the option or the unexercised portion of any Option (except
for any change in the aggregate price resulting from rounding off or share
quantities or prices) and with any necessary corresponding adjustment in the
Option price per share. In the event of a "spin-off" or other substantial
distribution of assets of the Company which has a material diminutive effect
upon Fair Market Value, the Committee may in its discretion make an appropriate
and equitable adjustment to the Option exercise price to reflect such
diminution. Any such adjustment made by the Committee shall be final and binding
upon all Optionees, the Company and all other interested persons.

                                  ARTICLE III

                               GRANTING OF OPTIONS

SECTION 3.1 - ELIGIBILITY

              Any person who (a) is an Outside Director on January 1, 2000 or
(b) thereafter becomes an Outside Director shall be granted Options under
Section 3.2.

SECTION 3.2 - GRANTING OF OPTIONS

              (a)  Subject to Section 2.1, Options shall be granted as follows:

                   (i)    Each person who first becomes an Outside Director
              between January 1, 2000 and April 18, 2000 shall receive, on the
              date that this Plan is approved by the Company's stockholders in
              accordance with Section 7.3, an Option to purchase 6,750 shares of
              Common Stock;

                   (ii)   Each person who first becomes an Outside Director on
              or after April 19, 2000 shall receive, as of the date on which
              such person first becomes an Outside Director, an Option to
              purchase 6,750 shares of Common Stock; provided, however, that
              each person who, immediately prior to becoming an

                                       4
<PAGE>   5
              Outside Director, was either (i) a full-time employee of the
              Company or any of its subsidiaries or (ii) a partner or full-time
              employee of either Kohlberg Kravis Roberts & Co., L.L.C. or KKR
              Associates, L.P., shall not receive such an option; and

                   (iii)  On the date of the first regularly scheduled meeting
              of the Board held in January of each year, commencing with the
              meeting held in January 2001, any person who is an Outside
              Director on such date shall receive an Option to purchase 4,500
              shares of Common Stock.

              (b)  The Committee shall instruct the Secretary or other
     authorized Officer to execute and deliver a stock option agreement
     (described in Section 4.1) to each person who becomes entitled to an Option
     under Section 3.2(a).

                                   ARTICLE IV

                                TERMS OF OPTIONS

SECTION 4.1 - OPTION AGREEMENT

              Each Option shall be evidenced by a written stock option
agreement, which shall be executed by the Optionee and an authorized Officer and
which shall contain such terms and conditions as the Committee shall determine,
consistent with the Plan.

SECTION 4.2 - OPTION PRICE

              The price of the shares subject to each Option shall be the Fair
Market Value of such shares on the date such Option is granted.

SECTION 4.3 - COMMENCEMENT OF EXERCISABILITY

              (a)  Subject to the provisions of Sections 4.3(b) and 4.3(c), each
     Option shall become fully vested and exercisable upon the first to occur of
     the following events:

                   (i)    the second anniversary of the date of such Option
              grant;

                   (ii)   the Optionee's becoming disabled (within the meaning
              of Section 22(e)(3) of the Code);

                   (iii)  the Optionee's Termination of Service because of his
              death or his Retirement; or

                   (iv)   the occurrence of a Change in Control Event.

              (b)  Notwithstanding the provisions of Section 4.3(a), no Option
     shall be exercisable in a manner that would disqualify the Plan from
     satisfying the requirements of Rule 16b-3, and, to the extent necessary, no
     Option shall be exercisable for at least 6

                                       5
<PAGE>   6
     months (or such other period as may be specified in such Rule) after the
     date such Option is granted.

              (c)  Except in the event of the subsequent determination of
     disability, at the time of Termination of Service under subsection
     4.3(a)(ii), no portion of an Option that is unexercisable on the date of
     the Optionee's Termination of Service shall thereafter become exercisable.

SECTION 4.4 - EXPIRATION OF OPTIONS

              No Option may be exercised to any extent by anyone after the first
to occur of the following events:

              (a)  the expiration of ten years from the date the Option was
     granted;

              (b)  the expiration of one year from the date of the Optionee's
     Termination of Service for any reason other than Retirement; provided,
     however, that Section 4.4(d) shall apply if the Optionee dies or becomes
     disabled (within the meaning of Section 22(e)(3) of the Code) prior to the
     expiration of such one-year period;

              (c)  the expiration of three years from the date of the Optionee's
     Termination of Service by reason of Retirement.

              (d)  if the Optionee dies or becomes disabled prior to the first
     anniversary of the Optionee's Termination of Service, the expiration of 1
     year from the earlier of (i) the date of the Optionee's death, or (ii) the
     date on which the Optionee becomes disabled (within the meaning of Section
     22(e)(3) of the Code).

SECTION 4.5 - RIGHTS TO CONTINUED SERVICE

              Nothing in the Plan or in any Stock Option Agreement hereunder
shall confer upon any Optionee any right to continue as a Director.

                                   ARTICLE V

                               EXERCISE OF OPTIONS

SECTION 5.1 - PERSONS ELIGIBLE TO EXERCISE

              (a)  Subject to Section 5.1(b) and (c) , during the lifetime of
     the Optionee, only he may exercise an Option (or any portion thereof)
     granted to him. After the death of the Optionee, any exercisable portion of
     an Option may, prior to the time when such portion becomes unexercisable
     under the Plan or the applicable Stock Option Agreement, be exercised by
     his personal representative or by any person empowered to do so under the
     deceased Optionee's will or under the then applicable laws of descent and
     distribution.

                                       6
<PAGE>   7
              (b)  Should the Optionee be determined under applicable law to
     have become a disabled person or the equivalent thereof, the Option may,
     prior to the time when the Option becomes unexercisable under the Plan or
     the applicable Stock Option Agreement, be exercised by the Optionee's
     guardian or by any other person empowered to do so under applicable laws of
     guardianship. For purposes of this Section 5.1(b), "disabled person" shall
     mean a person who (i) because of mental deterioration or physical
     incapacity is not fully able to manage his person or estate or (ii) is
     mentally ill and who because of his mental illness is not fully able to
     manage his person or estate.

              (c)  Notwithstanding the foregoing provisions of this Section 5.1,
     the Committee, in its sole discretion, may permit the Optionee with prior
     written notice to the Committee to transfer by gift, without the receipt of
     any consideration, to a member of the Optionee's immediate family, as
     defined in Rule 16a-1 under the Exchange Act, or to a trust for the
     exclusive benefit of, or any other entity owned solely by, such members,
     provided that an Option that has been so transferred shall continue to be
     subject to all of the terms and conditions of the Option Agreement as
     applicable to the Optionee, and the transferee shall execute any and all
     such documents requested by the Committee in connection with the transfer,
     including without limitation to evidence the transfer and to satisfy any
     requirements for an exemption for the transfer under applicable federal and
     state securities laws.

SECTION 5.2 - PARTIAL EXERCISE

              At any time and from time to time before any exercisable Option or
exercisable portion thereof becomes unexercisable under the Plan or the
applicable Stock Option Agreement, such Option or portion thereof may be
exercised in whole or in part; provided, however, that the Company shall not be
required to issue fractional shares and no Option may be exercised for less than
1,000 shares of Common Stock unless such exercise is the full exercise of the
exercisable portion of such Option.

SECTION 5.3 - MANNER OF EXERCISE

              An exercisable Option, or any exercisable portion thereof, may
be exercised solely by delivery to the Secretary or his office of all of the
following prior to the time when such Option or such portion becomes
unexercisable under the Plan or the applicable Stock Option Agreement:

              (a)  Notice in writing signed by the Optionee or other person then
     entitled to exercise such Option or portion thereof, stating that such
     Option or portion thereof is thereby exercised, such notice complying with
     all applicable rules established by the Committee;

              (b)  (i)    Full payment (in cash or by check) for the shares with
              respect to which such Option or portion thereof is thereby
              exercised;

                   (ii)   With the consent of the Committee, shares of Common
              Stock which have been owned by the Optionee for more than six
              months on the date of

                                       7
<PAGE>   8
              delivery and duly endorsed for transfer to the Company with a Fair
              Market Value on the date of delivery equal to the aggregate Option
              price of the shares with respect to which such Option or portion
              thereof is thereby exercised;

                   (iii)  To the extent permitted by law (including the then
              interpretations of Rule 16b-3), a "cashless exercise procedure"
              satisfactory to the Committee which permits the Optionee to
              deliver an exercise notice to a broker-dealer, who then sells
              Option shares, and delivers the proceeds of the sale, less
              commission, to the Company which delivers such proceeds, less the
              exercise price and withholding taxes to the Optionee; or

                   (iv)   Any combination of the consideration provided in the
              foregoing subsections (i), (ii) or (iii);

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

              (d)  In the event that the Option or portion thereof shall be
     exercised pursuant to Section 5.1 by any person or persons other than the
     Optionee, appropriate proof of the right of such person or persons to
     exercise the Option or portion thereof.

SECTION 5.4 - CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES

              The shares of Common Stock issuable and deliverable upon the
exercise of an Option or any portion thereof may be either previously authorized
but unissued shares or issued shares which have been reacquired by the Company.
The Company shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following conditions:

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

              (b)  The completion of any registration or other qualification of
     such shares, and the obtaining of any other approval or clearance from any
     state or federal governmental agency which the Committee shall, in its
     absolute discretion, determine to be necessary or advisable; and

              (c)  The payment to the Company of all amounts which it is
     required to withhold under federal, state or local law in connection with
     the exercise of the Option.

                                       8
<PAGE>   9
SECTION 5.5 - RIGHTS AS STOCKHOLDERS

              The holders of Options shall not be, nor have any of the rights or
privileges of, stockholders of the Company in respect of any shares purchasable
upon the exercise of an Option or any portion thereof unless and until
certificates representing such shares have been issued by the Company to such
holders.

                                   ARTICLE VI

                                 ADMINISTRATION

              It shall be the duty of the Committee to conduct the general
administration of the Plan in accordance with its provisions. The Committee
shall have the power to interpret the Plan and the Options, to adopt such rules
for the administration, interpretation and application of the Plan as are
consistent therewith, and to interpret, amend or revoke any such rules. No
member of the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any Option.

                                  ARTICLE VII

                                OTHER PROVISIONS

SECTION 7.1 - OPTIONS NOT TRANSFERABLE

              No Option or interest or right therein or part thereof shall be
liable for the debts, contracts or engagements of the Optionee or his successors
in interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means, whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that nothing in this Section 7.1 shall
prevent transfers by will, by the applicable laws of descent and distribution,
or as provided in Section 5.1(c).

SECTION 7.2 - AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN; MODIFICATION OF
OPTIONS

              (a)  The Plan may be amended or otherwise modified, suspended or
     terminated at any time and from time to time by the Board; provided,
     however, the provisions of Sections 3.1 (Eligibility), 3.2 (Granting of
     Options) and 4.2 (Option Price) shall not be modified more than once every
     six months, other than to comport with the changes in the Internal Revenue
     Code, the Employee Retirement Income Security Act or the rules thereunder;
     provided, further that without approval of the Company's stockholders given
     within 12 months after the action by the Board, the Board may not, except
     as provided in Section 2.3, increase any limit imposed in Section 2.1 on
     the Options, modify the eligibility requirements of Section 3.1, increase
     the number of Options granted or accelerate the timing of those grants
     under Section 3.2, reduce the minimum Option price requirements of Section
     4.2 or extend the limit imposed in this Section 7.2 on the

                                       9
<PAGE>   10
     period during which Options may be granted and such action by the Board
     shall become effective only after stockholder approval is obtained; and
     provided, further, that no amendment or modification may be made if such
     amendment or modification would disqualify the Plan from satisfying the
     requirements of the Securities Act or the Exchange Act or any regulation or
     rule promulgated by the Securities and Exchange Commission thereunder. None
     of the amendment, suspension or termination of the Plan shall, without the
     consent of the holder of the Option, alter or impair any rights or
     obligations under any Option theretofore granted. No Option may be granted
     during any period of suspension of the Plan, and in no event may any Option
     be granted under the Plan after April 19, 2009.

              (b)  An Option shall be subject in all events to the condition
     that, if at any time the Board shall determine, in its discretion, that the
     listing, registration or qualification of any of the Company's securities
     upon any securities exchange or under any law, regulation or other
     requirement of any governmental authority is necessary or desirable, or
     that any consent or approval from any governmental authority is necessary
     or desirable, then the Board may modify the terms of any Option granted
     under the Plan, without the consent of the Optionee, in any manner which
     the Board deems necessary or desirable in order to improve the Company's
     ability to obtain such listing, registration, qualification, consent or
     approval.

SECTION 7.3 - APPROVAL OF PLAN BY STOCKHOLDERS

              The amendment, restatement and continuation of the Plan will be
submitted for the approval of the Company's stockholders and shall be effective
only upon attainment of such approval.

SECTION 7.4 - EFFECT OF PLAN UPON OTHER OPTION AND COMPENSATION PLANS

              This Plan shall not affect any other compensation or incentive
plans in effect for the Company, any Parent Corporation or any Subsidiary.
Nothing in the Plan shall be construed to limit the right of the Company, any
Parent Corporation or any Subsidiary (a) to establish any other forms of
incentives or compensation for employees or (b) to grant or assume options
otherwise than under the Plan in connection with any proper corporate purpose,
including without limitation the grant or assumption of options in connection
with the acquisition by purchase, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, firm or association.

SECTION 7.5 - NO OBLIGATION TO REGISTER

              The Company shall not be deemed, by reason of the granting of
any Option, to have any obligation to register the shares of Common Stock
subject to such Option under the Securities Act or to maintain in effect any
registration of such shares which may be made at any time under the Securities
Act.

                                       10
<PAGE>   11
SECTION 7.6 - CONFORMANCE TO SECURITIES ACT AND EXCHANGE ACT

              The Plan is intended to conform to the provisions of the
Securities Act and the Exchange Act and any and all regulations and rules
promulgated by the Securities and Exchange Commission thereunder.
Notwithstanding anything herein to the contrary, the Plan shall be administered,
and Options shall be granted and may be exercised, only in such a manner as to
conform to the provisions of the Securities Act and Exchange Act and any and all
such regulations.

                                     * * * *

              I hereby certify that the foregoing Amended and Restated Stock
Option Plan for Outside Directors was duly adopted by the Board of Directors of
IDEX Corporation on January 25, 2000 and approved by the stockholders of the
IDEX Corporation on April 19, 2000

              Executed on this 19th day of April, 2000.

                                                 /s/ Frank J. Notaro
                                                 Secretary

Corporate Seal

                                       11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}]]