Document:

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                                                                    EXHIBIT 10.2

                           CHANGE IN CONTROL AGREEMENT
                     AMENDED AND RESTATED AS OF JUNE 4, 2002

         This CHANGE IN CONTROL AGREEMENT ("Agreement"), effective as of January
1, 2000 (the "Effective Date"), by and between Southwest Bancorporation of
Texas, Inc., a Texas corporation (the "Company"), and Paul B. Murphy, Jr. (the
"Executive");

                              W I T N E S S E T H:
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         WHEREAS, the Executive is a senior executive of the Company's
wholly-owned subsidiary, Southwest Bank of Texas National Association (the
"Bank") and has made and/or is expected to make or continue to make major
contributions to the profitability, growth and financial strength of the Company
and the Bank;

         WHEREAS, references herein to the Executive's employment by the Company
shall also mean his or her employment by the Bank, and references herein to
payments of any nature to be made by the Company to the Executive shall mean
that either the Company will make such payments or it will cause the Bank to
make such payments to the Executive;

         WHEREAS, the Company desires to assure itself of both present and
future continuity of management in the event of a Change in Control (as defined
hereafter) and desires to establish certain minimum compensation rights of its
key senior executives, including the Executive, applicable in the event of a
Change in Control;

         WHEREAS, the Company wishes to ensure that its senior executives are
not practically disabled from discharging their duties upon a Change in Control;

         WHEREAS, this Agreement is not intended to alter materially the
compensation and benefits which the Executive could reasonably expect to receive
from the Company or the Bank absent a Change in Control and, accordingly,
although effective and binding as of the date hereof, this Agreement shall
become operative only upon the occurrence of a Change of Control; and

         WHEREAS, the Executive is willing to render services to the Company and
the Bank on the terms and subject to the conditions set forth in this Agreement;

         NOW, THEREFORE, the Company and the Executive agree as follows:

         1.       OPERATION OF AGREEMENT.

                  a) This Agreement shall be effective and binding as of the
         Effective Date, but, anything in this Agreement to the contrary
         notwithstanding, this Agreement shall not be operative unless and until
         there shall have occurred a Change in Control. For purposes of this
         Agreement, a "Change in Control" shall have occurred if at any time
         during the Term (as that term is hereafter defined) any of the
         following events shall occur:

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                           (i) The Company is merged, consolidated or
                  reorganized into or with or sells all or substantially all of
                  its assets to another corporation or other legal person, and
                  as a result of such merger, consolidation, reorganization or
                  sale (i) less than a majority of the combined voting power of
                  the then-outstanding securities of such corporation or person
                  immediately after such transaction are held in the aggregate
                  by the holders of Voting Stock (as that term is hereinafter
                  defined) of the Company immediately prior to such transaction
                  and (ii) it is intended that persons serving as Directors of
                  the Company immediately prior to the transaction will
                  constitute none of or less than a majority of the Directors of
                  the other corporation or legal person after consummation of
                  the transaction; or

                           (ii) If during any one (1) year period, individuals
                  who at the beginning of any such period constitute the
                  Directors of the Company cease for any reason to constitute at
                  least a majority thereof, unless the election, or the
                  nomination for election by the Company's shareholders, of each
                  Director of the Company first elected during such period was
                  approved by a vote of at least two-thirds of the Directors of
                  the Company then still in office who were Directors of the
                  Company at the beginning of any such period.

                  (b) Upon occurrence of a Change in Control at any time during
         the Term, this Agreement shall become immediately operative.

                  (c) The period during which this Agreement shall be in effect
         (the "Term") shall commence as of the date hereof and shall expire as
         of the later of (i) the close of business on December 31, 2002 and (ii)
         the expiration of the Period of Employment (as that term is hereinafter
         defined); provided, however, that (A) commencing on December 31, 2002
         and the last day of each of the Company's Fiscal Years thereafter, the
         Term of this Agreement shall automatically be extended for an
         additional year unless, not later than the last day of the immediately
         preceding September, the Company or the Executive shall have given
         notice that it or he, as the case may be, does not wish to have the
         Term extended and (B) subject to Section 9 hereof, if, prior to a
         Change in Control, the Executive ceases for any reason to be an
         employee of the Company, thereupon the Term shall be deemed to have
         expired and this Agreement shall immediately terminate and be of no
         further effect.

         2.       EMPLOYMENT; PERIOD OF EMPLOYMENT.

                  (a) Subject to the terms and conditions of this Agreement,
         upon the occurrence of a Change in Control, the Company shall continue
         the Executive in its employ and the Executive shall remain in the
         employ of the Company for the period set forth in Section 2(b) hereof
         (the "Period of Employment"), in the position and with substantially
         the same duties and responsibilities that he had immediately prior to
         the Change in Control, or to which the Company and the Executive may
         hereafter mutually agree in writing. Throughout the Period of
         Employment, the Executive shall devote

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         substantially all of his time during normal business hours (subject to
         vacations, sick leave and other absences in accordance with the
         policies of the Company as in effect for senior executives immediately
         prior to the Change in Control) to the business and affairs of the
         Company, but nothing in this Agreement shall preclude the Executive
         from devoting reasonable periods of time during normal business hours
         to (i) serving as a director, trustee or member of or participant in
         any organization or business so long as such activity would not
         constitute Competitive Activity (as that term is hereafter defined) if
         conducted by the Executive after the Executive's Termination Date (as
         that term is hereafter defined), (ii) engaging in charitable and
         community activities, or (iii) managing his personal investments.

                  (b) The Period of Employment shall commence on the date of an
         occurrence of a Change in Control and, subject only to the provisions
         of Section 4 hereof, shall continue until the earlier of (i) the
         expiration of the third anniversary of the occurrence of the Change in
         Control or (ii) the Executive's death; provided, however, that
         commencing on each anniversary of the Change of Control, the Period of
         Employment shall automatically be extended for an additional year
         unless, not later than 90 calendar days prior to such anniversary date,
         the Company or the Executive shall have given notice that it or he or
         she, as the case may be, does not wish to have the Term extended.

         3.       COMPENSATION DURING PERIOD OF EMPLOYMENT.

                  (a) Upon the occurrence of a Change in Control, the Executive
         shall receive during the Period of Employment (i) annual base salary at
         a rate not less than the Executive's annual fixed or base compensation
         payable monthly or otherwise as in effect for senior executives of the
         Company immediately prior to the occurrence of a Change in Control or
         such higher rate as may be determined from time to time by the Board of
         Directors of the Company (the "Board") or the Compensation Committee
         thereof (the "Committee") (which base salary at such rate is herein
         referred to as "Base Pay") and (ii) an annual cash bonus in an amount
         determined for the Executive in accordance with the Company's incentive
         compensation plan or plans in effect at the time of the Change in
         Control or in accordance with an annual bonus, incentive,
         profit-sharing, performance, discretionary pay or similar policy, plan,
         program or arrangement of the Company or any successor thereto
         providing benefits at least as great as the benefits payable thereunder
         prior to the Change in Control ("Incentive Pay"); provided, however,
         that nothing herein shall preclude a change in the mix between Base Pay
         and Incentive Pay so long as the aggregate cash compensation received
         by the Executive in any one calendar year is not reduced in connection
         therewith or as a result thereof and, provided further, however, that
         in no event shall any increase in the Executive's aggregate cash
         compensation or any portion thereof in any way diminish any other
         obligation of the Company under this Agreement.

                  (b) For his service pursuant to Section 2(a) hereof, during
         the Period of Employment the Executive shall, if and on the same basis
         as he participated therein immediately prior to the Change in Control,
         be a full participant in, and shall be entitled to the perquisites,
         benefits and service credit for benefits as provided under any and all

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         employee retirement income and welfare benefit policies, plans,
         programs or arrangements in which senior executives of the Company
         participate, including without limitation any stock option, stock
         purchase, stock appreciation, savings, pension, supplemental executive
         retirement or other retirement income or welfare benefit, deferred
         compensation, incentive compensation, group and/or executive life,
         accident, health, dental, medical/hospital or other insurance (whether
         funded by actual insurance or self-insured by the Company), disability,
         salary continuation, expense reimbursement and other employee benefit
         policies, plans, programs or arrangements that may now exist or any
         equivalent successor policies, plans, programs or arrangements that may
         be adopted hereafter by the Company providing perquisites, benefits and
         service credit for benefits at least as great as are payable thereunder
         prior to a Change in Control (collectively, "Employee Benefits");
         provided, however, that the Executive's rights thereunder shall be
         governed by the terms thereof and shall not be enlarged hereunder or
         otherwise affected hereby. Subject to the proviso in the immediately
         preceding sentence, if and to the extent such perquisites, benefits or
         service credit for benefits are not payable or provided under any such
         policy, plan, program or arrangement as a result of the amendment or
         termination thereof, then the Company shall itself pay or provide
         therefor. Nothing in this Agreement shall preclude improvement or
         enhancement of any such Employee Benefits, provided that no such
         improvement shall in any way diminish any other obligation of the
         Company under this Agreement.

                  (c) The Company has determined that the amounts payable
         pursuant to this Section 3 constitute reasonable compensation.
         Accordingly, notwithstanding any other provision hereof, unless such
         action would be expressly prohibited by applicable law, if any amount
         paid or payable pursuant to this Section 3 is subject to the excise tax
         imposed by Section 4999 of the Internal Revenue Code of 1986, as
         amended (the "Code"), the Company will pay to the Executive an
         additional amount in cash equal to the amount necessary to cause the
         aggregate remuneration received by the Executive under this Section 3,
         including such additional cash payment (net of all federal, state and
         local income taxes and all taxes payable as the result of the
         application of Sections 280G and 4999 of the Code) to be equal to the
         aggregate remuneration the Executive would have received under this
         Section 3, excluding such additional payment (net of all federal, state
         and local income taxes), as if Sections 280G and 4999 of the Code (and
         any successor provisions thereto) had not been enacted into law.

         4.       TERMINATION FOLLOWING A CHANGE IN CONTROL.

                  (a) In the event of the occurrence of a Change in Control,
         this Agreement may be terminated by the Company during the Period of
         Employment only upon the occurrence of one or more of the following
         events:

                           (i) If the Executive is unable to perform the
                  essential functions of his job (with or without reasonable
                  accommodation) because he has become permanently disabled
                  within the meaning of, and actually begins to receive
                  disability benefits pursuant to, the long-term disability plan
                  in effect for senior

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                  executives or, if applicable, employees of the Company
                  immediately prior to the Change in Control; or

                           (ii) For "Cause", which for purposes of this
                  Agreement shall mean that, prior to any termination pursuant
                  to Section 4(b) hereof, the Executive shall have committed:

                                    (A) Gross negligence or willful misconduct
                          in connection with his duties or in the course of his
                          employment with the Company;

                                    (B) an act of fraud, embezzlement or theft
                          in connection with his duties or in the course of his
                          employment with the Company;

                                    (C) intentional wrongful damage to property
                          of the Company;

                                    (D) intentional wrongful disclosure of
                          secret processes or confidential information of the
                          Company;

                                    (E) intentional wrongful engagement in any
                          Competitive Activity; or

                                    (F) an act leading to a conviction of a
                          felony or a misdemeanor involving moral turpitude.

                  For purposes of this Agreement, no act, or failure to act, on
         the part of the Executive shall be deemed "intentional" if it was due
         primarily to an error in judgment or negligence, but shall be deemed
         "intentional" only if done, or omitted to be done, by the Executive not
         in good faith and without reasonable belief that his action or omission
         was in the best interest of the Company. Notwithstanding the foregoing,
         the Executive shall not be deemed to have been terminated for "Cause"
         hereunder unless and until there shall have been delivered to the
         Executive a copy of a resolution duly adopted by the affirmative vote
         of not less than three-quarters of the Board then in office at a
         meeting of the Board called and held for such purpose (after reasonable
         notice to the Executive and an opportunity for the Executive, together
         with his counsel, to be heard before the Board), finding that, in the
         good faith opinion of the Board, the Executive had committed an act set
         forth above in this Section 4(a)(ii) and specifying the particulars
         thereof in detail. Nothing herein shall limit the right of the
         Executive or his beneficiaries to contest the validity or propriety of
         any such determination.

                  (b) in the event of the occurrence of a Change in Control,
         this Agreement may be terminated by the Executive during the Period of
         Employment with the right to benefits as provided in Section 5 hereof
         upon the occurrence of one or more of the following events:

                           (i) Any termination by the Company of the employment
                  of the Executive for any reason other than for Cause or as a
                  result of the death of the

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                  Executive or by reason of the Executive's disability and the
                  actual receipt of disability benefits in accordance with
                  Section 4(a)(i) hereof; or

                           (ii) Termination by the Executive of his employment
                  with the Company within three years after the Change in
                  Control upon the occurrence of any of the following events:

                                    (A) A reduction in the aggregate of the
                          Executive's Base Pay and Incentive Pay received from
                          the Company, or the termination of the Executive's
                          rights to any Employee Benefits to which he was
                          entitled immediately prior to the Change in Control or
                          a reduction in scope or value thereof without the
                          prior written consent of the Executive, any of which
                          is not remedied within 10 calendar days after receipt
                          by the Company of written notice from the Executive of
                          such change, reduction or termination, as the case may
                          be;

                                    (B) The liquidation, dissolution, merger,
                          consolidation or reorganization of the Company or
                          transfer of all or a significant portion of its
                          business and/or assets, unless the successor or
                          successors (by liquidation, merger, consolidation,
                          reorganization or otherwise) to which all or a
                          significant portion of its business and/or assets have
                          been transferred (directly or by operation of law)
                          shall have assumed all duties and obligations of the
                          Company under this Agreement pursuant to Section 11
                          hereof;

                                    (C) The Company requires the Executive to
                          have his principal location of work changed to any
                          location which is in excess of 50 miles from the
                          location thereof immediately prior to the Change of
                          Control or to travel away from his office in the
                          course of discharging his responsibilities or duties
                          hereunder significantly more (in terms of either
                          consecutive days or aggregate days in any calendar
                          year) than was required of him prior to the Change of
                          Control without, in either case, his prior consent;

                                    (D) Any material breach of this Agreement by
                          the Company or any successor thereto; or

                                    (E) The removal of the Executive as a
                          Director of the Company (or any successor thereto), if
                          the Executive shall have been a Director of the
                          Company immediately prior to the Change in Control.

                  (c) A termination by the Company pursuant to Section 4(a)
         hereof or by the Executive pursuant to Section 4(b) hereof shall not
         affect any rights which the Executive may have pursuant to any
         agreement, policy, plan, program or arrangement of the Company
         providing Employee Benefits, which rights shall be governed by the
         terms thereof. If this Agreement or the employment of the Executive is
         terminated under circumstances in which the Executive is not entitled
         to any payments under Sections 3 or

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         5 hereof, the Executive shall have no further obligation or liability
         to the Company hereunder with respect to his prior or any future
         employment by the Company.

         5.       SEVERANCE COMPENSATION.

                  (a) If, following the occurrence of a Change in Control, the
         Company shall terminate the Executive's employment during the Period of
         Employment other than pursuant to Section 4(a) hereof, or if the
         Executive shall terminate his employment pursuant to Section 4(b)
         hereof, the Company shall pay to the Executive the amount specified in
         Section 5(a)(i) hereof within ten business days after the date (the
         "Termination Date") that the Executive's employment is terminated (the
         effective date of which shall be the date of termination, or such other
         date that may be specified by the Executive if the termination is
         pursuant to Section 4(b) hereof):

                           (i) In lieu of any further payments to the Executive
                  for periods subsequent to the Termination Date, but without
                  affecting the rights of the Executive referred to in Section
                  5(b) hereof, a lump sum payment (the "Severance Payment") in
                  an amount equal to the present value (using a discount rate
                  required to be utilized for purposes of computations under
                  Section 280G of the Code or any successor provision thereto,
                  or if no such rate is so required to be used, a rate equal to
                  the then-applicable interest rate prescribed by the Pension
                  Benefit Guaranty Corporation for benefit valuations in
                  connection with non-multiemployer pension plan terminations
                  assuming the immediate commencement of benefit payments (the
                  "Discount Rate")) of the sum of (A) the aggregate Base Pay (at
                  the highest rate in effect during the Term prior to the
                  Termination Date) for three years, plus (B) the aggregate
                  Incentive Pay for three years (based upon the greatest amount
                  of Incentive Pay paid or payable to the Executive for any year
                  during the three calendar years preceding the year in which
                  the Termination Date occurs); provided, however, that the
                  Severance Payment shall be reduced so that the aggregate
                  "present value" (as determined under Section 280G of the Code
                  or any successor provision thereto) of the amount otherwise
                  payable hereunder, when added to the "present value" (as
                  determined under Section 280G of the Code or any successor
                  provision thereto) of any other "parachute payments" (as that
                  term is defined in Section 280G of the Code (without regard to
                  Section 280G(b)(2)(A)(ii) thereof) or any successor provision
                  thereto) from the Company shall not exceed an amount (the
                  "299% Amount") equal to 299% of the Executive's "base amount"
                  (as that term is defined in Section 280G of the Code or any
                  successor provision thereto) so that no portion of such
                  amounts received by the Executive shall be subject to the
                  excise tax imposed by Section 4999 of the Code if and only if
                  such reduction produces a better net after-tax position for
                  the Executive (taking into account any applicable excise tax
                  under Section 4999 of the Code and any other applicable taxes)
                  than the full payment of the Severance Payments and all other
                  payments and benefits provided for in this Agreement or
                  otherwise would have produced.

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                           (ii) The determination of whether any amount
                  otherwise payable under Section 5(a)(i) causes the 299% Amount
                  to be exceeded shall be made, if requested by the Executive or
                  the Company, by tax counsel selected by the Company and
                  reasonably acceptable to the Executive. The costs of obtaining
                  such determination shall be borne by the Company. The fact
                  that the Executive shall have his right to the Severance
                  Payment reduced as a result of the existence of the
                  limitations contained in this Section 5(a) shall not limit or
                  otherwise affect any rights of the Executive to any Employee
                  Benefit, or other right arising other than pursuant to this
                  Agreement. Without limiting the generality of the foregoing,
                  upon the Executive's termination of employment as provided in
                  this Section 5, the Company shall pay over to him all vested
                  benefits to which he is entitled under and in accordance with
                  the terms of the Company's employee savings, stock ownership,
                  supplemental executive retirement and similar Plans in the
                  event such payments are not otherwise made in accordance with
                  the terms of such plans.

                           (iii) Except to the extent that the payments or
                  benefits pursuant to this Section 5(a)(iii) would result in a
                  reduction of the amount of the Severance Payment because they
                  would exceed the 299% Amount, (A) for the remainder of the
                  Period of Employment the Company shall arrange to provide the
                  Executive with Employee Benefits substantially similar to
                  those which the Executive was receiving or entitled to receive
                  immediately prior to the Termination Date (and if and to the
                  extent that such benefits shall not or cannot be paid or
                  provided under any policy, plan, program or arrangement of the
                  Company solely due to the fact that the Executive is no longer
                  an officer or employee of the Company, then the Company shall
                  itself pay or provide for the payment to the Executive, his
                  dependents and beneficiaries, such Employee Benefits) and (B)
                  without limiting the generality of the foregoing, the
                  remainder of the Period of Employment shall be considered
                  service with the Company for the purpose of service credits
                  under the Company's retirement income, supplemental executive
                  retirement and other benefit plans of the Company applicable
                  to the Executive or his beneficiaries immediately prior to the
                  Termination Date. Without otherwise limiting the purposes or
                  effect of Section 6 hereof, Employee Benefits payable to the
                  Executive pursuant to this Section 5(a)(iii) by reason of any
                  "welfare benefit plan" of the Company (as the term "welfare
                  benefit plan" is defined in Section 3(1) of the Employee
                  Retirement Income Security Act of 1974, as amended) shall be
                  reduced to the extent comparable welfare benefits are actually
                  received by the Executive from another employer during such
                  period following the Executive's Termination Date until the
                  expiration of the Period of Employment.

                           (iv) Notwithstanding any provision of the Section
                  5(a) to the contrary, in the event the benefits intended to be
                  provided to the Executive pursuant to Section 5(a)(iii) hereof
                  are required to be reduced in whole or in part because the
                  value of such Employee Benefits, when added to the amount of
                  the Severance Payment under Section 5(a)(i), would exceed 299%
                  Amount, the Executive shall have the option to elect to
                  receive, in lieu of all or a portion of the Severance

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                  Payment provided in Section 5(a)(i) hereof, one or more
                  Employee Benefits, provided that (A) prior to the receipt of
                  any payment under Section 5(a)(i) hereof, the Executive
                  Benefit or Employee Benefits so elected to be received, and
                  (B) in no event shall the "aggregate present value of the
                  payments in the nature of "compensation" (as that phrase is
                  used in Section 280G of the Code) received by the Executive as
                  a result of the receipt of such Employee Benefits, when added
                  to the remaining portion of the Severance Payment, if any, to
                  be received by the Executive, exceed the 299% Amount.

                           (v) In addition to all other compensation due to the
                  Executive, the following shall occur immediately following the
                  occurrence of a Change in Control:

                                    (A) all Company stock options held by the
                           Executive immediately prior to a Change in Control,
                           but excluding the Company stock option granted to the
                           Executive with respect to 50,000 shares pursuant to
                           the Southwest Bancorporation of Texas, Inc. 1996
                           Stock Option Plan on June 4, 2002, shall become fully
                           exercisable, regardless of whether the vesting
                           conditions set forth in the relevant stock option
                           agreements have been satisfied in full; and

                                    (B) all restrictions on all restricted
                           Company stock grants to the Executive outstanding
                           immediately prior to a Change in Control, but
                           excluding the restricted Company stock grant to the
                           Executive with respect to 50,000 Restricted Shares
                           made pursuant to the Southwest Bancorporation of
                           Texas, Inc. Restricted Stock Plan on June 4, 2002,
                           shall be removed and the stock shall be freely
                           transferable, regardless of whether the conditions
                           set forth in the relevant restricted stock agreements
                           have been satisfied in full.

         (b) Upon written notice given by the Executive to the Company prior to
the receipt of any payment pursuant to Section 5(a) hereof, the Executive, at
his sole option, without reduction to reflect the present value of such amounts
as aforesaid, may elect to have all or any of the Severance Payment payable
pursuant to Section 5(a)(i) hereof paid to him on a quarterly or monthly basis
during the remainder of the Period of Employment.

         (c) There shall be no right of set-off or counterclaim in respect of
any claim, debt or obligation against any payment to or benefit for the
Executive provided for in this Agreement.

         (d) Without limiting the rights of the Executive at law or in equity,
if the Company fails to make any payment required to be made hereunder on a
timely basis, the Company shall pay interest on the amount thereof at an
annualized rate of interest equal to the then-applicable Discount Rate or, if
lesser, the highest rate allowed by applicable usury laws.

         6. NO MITIGATION OBLIGATION. The Company hereby acknowledges that it
will be difficult, and may be impossible, for the Executive to find reasonably
comparable employment

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following the Termination Date and that the noncompetition covenant contained in
Section 7 hereof will further limit the employment opportunities for the
Executive. Accordingly, the parties hereto expressly agree that the payment of
the severance compensation by the Company to the Executive in accordance with
the terms of this Agreement will be liquidated damages, and that the Executive
shall not be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise, nor shall any profits,
income, earnings or other benefits from any source whatsoever create any
mitigation, offset, reduction or any other obligation on the part of the
Executive hereunder or otherwise, except as expressly provided in Section
5(a)(iii) hereof.

         7. COMPETITIVE ACTIVITY. During a period ending one year following the
Termination Date, if the Executive shall have received or shall be receiving
benefits under Section 5(a) hereof, the Executive shall not, without the prior
written consent by the Company, directly or indirectly engage in the business of
commercial banking in competition with the business of the Company within Harris
County, Fort Bend County and Montgomery County, Texas and any other geographical
area served by the Company during the twelve (12) month period immediately
preceding termination of employment nor will the Executive engage, within this
geographical area, in the design, development, distribution, or sale of a
product or service in competition with any product or service being marketed or
planned by the Company at such time, the plans, designs or specifications of
which have been revealed to the Executive. The Executive acknowledges that these
limited prohibitions are reasonable as to time, geographical area and scope of
activities to be restrained and that the limited prohibitions do not impose a
greater restraint than is necessary to protect the Company's goodwill,
proprietary information and other business interests. "Competitive Activity"
shall mean the prohibitions set forth above in this Section 7, but shall not
include (i) the mere ownership of securities in any such enterprise and exercise
of rights appurtenant thereto or (ii) participation in management of any such
enterprise or business operation thereof other than in connection with the
competitive operation of such enterprise.

         8. LEGAL FEES AND EXPENSES. In the event of a breach of this Agreement
by the Company, it is the intent of the Company that the Executive not be
required to incur the expenses associated with the enforcement of his rights
under this Agreement by litigation or other legal action because the cost and
expense thereof would substantially detract from the benefits intended to be
extended to the Executive hereunder. Accordingly, if the Company fails to comply
with any of its obligations under this Agreement or in the event that the
Company or any other person takes any action to declare this Agreement void or
unenforceable, or institutes any litigation designed to deny, or to recover
from, the Executive the benefits intended to be provided to the Executive
hereunder, the Company irrevocably authorizes the Executive from time to time to
retain counsel of his choice, at the expense of the Company as hereafter
provided, to represent the Executive in connection with the initiation or
defense of any litigation or other legal action, whether by or against the
Company or any Director, officer, shareholder or other person affiliated with
the Company, in any jurisdiction. Notwithstanding any existing or prior
attorney-client relationship between the Company and such counsel, the Company
irrevocably consents to the Executive's entering into an attorney-client
relationship with such counsel (other than Vinson & Elkins L.L.P.), and in that
connection the Company and the Executive agree that a confidential relationship
shall exist between the Executive and such counsel. The Company

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shall pay or cause to be paid and shall be solely responsible for any and all
attorneys' and related fees and expenses incurred by the Executive as a result
of the Company's failure to perform this Agreement or any provision thereof or
as a result of the Company or any person contesting the validity or
enforceability of this Agreement or any provision thereof as aforesaid. If the
Company should prevail in any litigation regarding this Agreement, however, the
Company shall not be responsible for any attorneys and related fees and expenses
incurred by Employee in connection with such litigation.

         9. EMPLOYMENT RIGHTS. Nothing expressed or implied in this Agreement
shall create any right or duty on the part of the Company or the Executive to
have the Executive remain in the employment of the Company prior to any Change
in Control; provided, however, that any termination of employment of the
Executive or removal of the Executive as an Officer of the Company following the
commencement of any discussion with a third person that ultimately results in a
Change in Control shall be deemed to be a termination or removal of the
Executive after a Change in Control for purposes of this Agreement.

         10. WITHHOLDING OF TAXES. The Company may withhold from any amounts
payable under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or government regulation or ruling.

         11.      SUCCESSORS AND BINDING AGREEMENT.

                  (a) The Company shall require any successor (whether direct or
         indirect, by purchase, merger, consolidation, reorganization or
         otherwise) to all or substantially all of the business and/or assets of
         the Company to execute an agreement pursuant to which the successor
         expressly assumes all of the liabilities and obligations of the Company
         hereunder and agrees to perform this Agreement in the same manner and
         to the same extent the Company would be required to perform if no such
         succession had taken place. This Agreement shall be binding upon and
         inure to the benefit of the Company and any successor to the Company,
         including without limitation any persons acquiring directly or
         indirectly all or substantially all of the business and/or assets of
         the Company whether by purchase, merger, consolidation, reorganization
         or otherwise (and such successor shall thereafter be deemed the
         "company" for the purposes of this Agreement), but shall not otherwise
         be assignable, transferable or delegable by the Company.

                  (b) This Agreement shall inure to the benefit of and be
         enforceable by the Executive's personal or legal representatives,
         executors, administrators, successors, heirs, distributees and/or
         legatees.

                  (c) This Agreement is personal in nature and neither of the
         parties hereto shall, without the consent of the other, assign,
         transfer or delegate this Agreement or any rights or obligations
         hereunder except as expressly provided in Section 11(a) hereof. Without
         limiting the generality of the foregoing, the Executive's right to
         receive payments hereunder shall not be assignable, transferable or
         delegable, whether by pledge, creation of a security interest or
         otherwise, other than by a transfer by the Executive's will or by the
         laws of descent and distribution and, in the event of any attempted
         assignment

                                      -11-
<PAGE>

         or transfer contrary to this Section 11(c), the Company shall have no
         liability to pay any amount so attempted to be assigned, transferred or
         delegated.

                  (d) The Company and the Executive recognize that each party
         will have no adequate remedy at law for breach by the other of any of
         the agreements contained herein and, in the event of any such breach,
         the Company and the Executive hereby agree and consent that the other
         shall be entitled to a decree of specific performance, mandamus or
         other appropriate remedy to enforce performance of this Agreement.

         12. NOTICE. For all purposes of this Agreement, all communications
provided for herein shall be in writing and shall be deemed to have been duly
given when delivered or three business days after having been mailed by United
States registered or certified mail, return receipt requested, postage prepaid,
addressed to the Company (to the attention of the Secretary of the Company) at
its principal executive office and to the Executive at his principal residence,
or to such other address as any party may have furnished to the other in writing
and in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

         13. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Texas, without giving effect to the principles of conflict of laws of such
State.

         14. VALIDITY. If any provision of this Agreement or the application of
any provision hereof to any person or circumstances is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement and the
application of such provision to any other person or circumstances shall not be
affected, and the provision so held to be invalid, unenforceable or otherwise
illegal shall be reformed to the extent (and only to the extent) necessary to
make it enforceable, valid and legal.

         15. MISCELLANEOUS. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, expressed or implied with respect to the subject matter
hereof have been made by either party which are not set forth expressly in this
Agreement.

         16. PRIOR AGREEMENTS. This Agreement is voluntarily entered into and
supersedes and takes the place of any prior change in control, severance or
employment agreements between the parties hereto. The parties hereto expressly
agree and hereby declare that any and all prior change in control, severance or
employment agreements between the parties are terminated and of no force or
effect.

         17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same agreement.

                                      -12-
<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.

                                       SOUTHWEST BANCORPORATION OF TEXAS, INC.

                                       By: /s/ Walter E. Johnson
                                           -------------------------------------
                                           Chairman of the Board

                                       EXECUTIVE:

                                       /s/ Paul B. Murphy, Jr.
                                       -----------------------------------------
                                       Paul B. Murphy, Jr.

                                      -13-<PAGE>
                                                                     EXHIBIT 4.2

                             LARK TECHNOLOGIES, INC.

                             2002 STOCK OPTION PLAN

Lark Technologies, Inc., a Delaware corporation (the "Company"), sets forth
herein the terms of the 2002 Stock Option Plan (the "Plan") as follows:

         1. PURPOSE

Under the Plan, Awards may be granted to Eligible Persons to purchase shares of
the Company's capital stock. The Plan is designed to enable the Company to
attract, retain and motivate its employees, consultants and others by providing
for or increasing the proprietary interests of such persons in the Company.

         2. DEFINITIONS

For purposes of interpreting the Plan and related documents (including
Agreements), the following definitions shall apply:

2.1. "AFFILIATE" means the Company and any company or other trade or business
that is controlled by or under common control with the Company, determined in
accordance with the principles of Section 414(b) and 414(c) of the Code and the
regulations thereunder, or is an affiliate of the Company within the meaning of
Rule 405 of Regulation C under the Securities Act.

2.2. "AGREEMENT" means the award agreement under which the Grantee accepts the
Award terms and conditions and receives an Award pursuant to the Plan.

2.3. "AWARD" means individually, collectively or in tandem, an incentive award
granted under the Plan, whether in the form of Options, Restricted Stock Awards,
or performance shares, or such other form and subject to such terms as the
Committee may determine.

2.4. "AWARD PRICE" means the purchase price for each share of Common Stock
subject to an Award.

2.5. "BOARD" means the Board of Directors of the Company.

2.6. "CODE" means the Internal Revenue Code of 1986, as amended. Any section
thereof referenced in the Plan or an Agreement shall include the rules and
regulations thereunder, and any successor provisions thereto.

2.7. "COMMITTEE" means the Compensation Committee of the Board, which must
consist of no fewer than two members of the Board who satisfy the definition
under Rule 16b-3 of the Exchange Act for "nonemployee director".

2.8. "COMMON STOCK" means common stock, par value $0.001, issued by the Company.

2.9. "COMPANY" means Lark Technologies, Inc., a Delaware corporation, any
Affiliates and any other entity as determined by the Committee.

2.10. "EFFECTIVE DATE" means May 29, 2002, the date of adoption of the Plan by
the Board.

2.11. "ELIGIBLE PERSON" is defined in Section 5.

2.12. "EMPLOYER" means the Company.

                                      -1-
<PAGE>

2.13. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as now in effect
or as hereafter amended. Any section thereof referenced in the Plan or an
Agreement shall include the rules and regulations thereunder, and any successor
provisions thereto.

2.14. "FAIR MARKET VALUE" means the value of each share of Common Stock subject
to the Plan determined as follows: (a) if on the Grant Date or other
determination date the shares of Common Stock are listed on an established
national or regional stock exchange, are admitted to quotation on the National
Association of Securities Dealers Automated Quotation System, or are publicly
traded on an established securities market, the Fair Market Value of the shares
of Common Stock shall be the weighted average closing price of the shares of
Common Stock on such exchange or in such market over the 30 trading days
immediately preceding the Grant Date or such other determination date (or if
there are no such reported closing prices, the Fair Market Value shall be the
average of the mean between the highest bid and lowest asked prices or between
the high and low sale prices on such trading days); and (b) if the shares of
Common Stock are not listed on such an exchange, quoted on such System or traded
on such a market, Fair Market Value shall be determined by the Board or
Committee in good faith.

2.15. "GRANT DATE" means for a particular Award (i) the date as of which the
Committee approves the Award or (ii) any other date specified by the Committee,
if any.

2.16. "GRANTEE" means an individual to whom one or more Awards have been
granted.

2.17. "INCENTIVE STOCK OPTION" or "ISO" means an incentive stock option within
the meaning of Section 422 of the Code. Any Option that is not specifically
designated as an Incentive Stock Option shall under no circumstances be
considered an Incentive Stock Option.

2.18. "NONQUALIFIED STOCK OPTION" means any Option that does not qualify under
Section 422 of the Code.

2.19. "OPTION" means an option granted by the Company to purchase Common Stock
pursuant to the provisions of the Plan, including ISOs and Nonqualified Stock
Options.

2.20. "OPTION TERM" means the period defined under Section 12 herein.

2.21. "PLAN" means this Lark Technologies, Inc. 2002 Stock Option Plan, as
amended.

2.22. "RESTRICTED PERIOD" means the period of time from the date of grant of
Restricted Stock until the lapse of restrictions attached thereto under the
terms of the Agreement granting such Restricted Stock, pursuant to the
provisions of the Plan or by action of the Committee.

2.23. "RESTRICTED STOCK" shall mean an Award granted by the Committee entitling
the Grantee to acquire, at no cost or for a purchase price determined by the
Committee at the time of grant, shares of Common Stock which are subject to
restrictions in accordance with the provisions hereof.

2.24. "SECURITIES ACT" means the Securities Act of 1933, as now in effect or as
hereafter amended. Any section thereof referenced in the Plan or an Agreement
shall include the rules and regulations thereunder, and any successor provisions
thereto.

2.25. "STOCKHOLDER" means a holder of record of at least one share of the voting
stock of the Company.

2.26. "TERMINATION OF EMPLOYMENT" means that event when a person is no longer
employed by or continuously providing services to the Company or any Affiliate
as an employee, advisor, consultant or otherwise. The Committee may in its
discretion determine (a) whether any leave of absence constitutes a termination
of employment for purposes of the Plan; (b) the impact, if any, of any such
leave of absence on awards theretofore made under the Plan; and (c) when a
change in a nonemployee's association with the Company constitutes a termination
of employment for purposes of the Plan. Such determinations of the Committee
shall be final, binding and conclusive.

                                      -2-
<PAGE>

         3. ADMINISTRATION

3.1 ADMINISTRATION OF THE PLAN

The Plan shall be administered by the Board until such time as the Board
appoints the Committee as the administrator of the Plan.

3.2 SCOPE OF AUTHORITY

The Committee shall have the full power and authority to take all actions and to
make all determinations required or provided for under the Plan, any Award
granted or Agreement entered into hereunder, and all such other actions and
determinations not inconsistent with the specific terms and provisions of the
Plan deemed by the Committee to be necessary or appropriate to the
administration of the Plan, any Award or Agreement entered into hereunder.
Actions of the Committee shall be taken by the vote of a majority of its
members; provided, however, that the Plan shall be administered so that Awards
granted under the Plan will qualify for the benefits provided by Rule 16b-3 (or
any successor rule) under the Exchange Act and Section 162(m) of the Code, and
the regulations thereunder to the extent the Committee intends such grant to
qualify under Section 162(m). The interpretation and construction by the
Committee of any provision of the Plan or of any Award granted or Agreement
entered into hereunder shall be final and conclusive.

3.3 NO LIABILITY

No member of the Board or of the Committee shall be liable for any action or
determination made, or any failure to take or make an action or determination,
in good faith with respect to the Plan or any Option granted or Agreement
entered into hereunder.

         4. AWARDS; COMMON STOCK

4.1 Awards

Awards granted under the Plan may be Incentive Stock Options, Nonqualified Stock
Options, Restricted Stock and performance shares, all as more fully set forth
herein. No Incentive Stock Option may be granted to a person who is not an
employee of the Company on the date of grant. Unless otherwise specified in a
particular grant, Awards granted under the Plan are intended to qualify as
performance-based compensation for the purposes of Section 162(m) of the Code.

4.2 COMMON STOCK

The stock that may be issued pursuant to Awards granted under the Plan shall be
Common Stock, which shares may be treasury shares or authorized but unissued
shares. The number of shares of Common Stock that may be issued pursuant to
Awards granted under the Plan shall not exceed in the aggregate 2,000,000 shares
of Common Stock, which number of shares is subject to adjustment and increase.
If any Award expires, terminates or is terminated for any reason prior to
exercise in full, the shares of Common Stock that were subject to the
unexercised portion of such Award shall be available for future Awards granted
under the Plan. When the exercise price for an Award under this Plan is paid
with previously outstanding shares or with shares as to which the Award is being
exercised, as permitted in Section 12, only the number of shares of stock issued
net of the shares of stock tendered shall be deemed delivered for purposes of
determining the maximum number of shares of Stock available for delivery under
the Plan. Shares of stock delivered under the Plan in settlement, assumption or
substitution of outstanding awards (or obligations to grant future awards) under
the plans or arrangements of another entity shall not reduce the maximum number
of shares of stock available for delivery under the Plan, to the extent that
such settlement, assumption or substitution is as a result of the Company or an
Affiliate acquiring another entity (or an interest in another entity).

         5. ELIGIBILITY

Awards may be granted under the Plan to all current and former directors,
officers and executive, administrative, technical or professional employees of
the Company; to current and former consultants of the Company; and to any other
individual whose participation in the Plan is determined to be in the best
interests of the Company by the

                                      -3-
<PAGE>

Committee (collectively, "Eligible Persons"). An individual may hold more than
one Award, subject to such restrictions as are provided herein.

         6. EFFECTIVE DATE AND PLAN TERM

6.1 EFFECTIVE DATE

The Plan is effective as of May 29, 2002, the date of adoption by the Board,
subject to Stockholders' approval of the Plan within one year of such Effective
Date by a majority of the votes cast at a duly held meeting of the Stockholders
of the Company at which a quorum representing a majority of all outstanding
Common Stock is present, either in person or by proxy, and voting on the matter,
or by written consent in accordance with applicable state law and the Articles
of Incorporation and By-Laws of the Company and in a manner that satisfies the
requirements of Section 162(m) of the Code; provided, however, that upon
approval of the Plan by the Stockholders of the Company, all Awards granted
under the Plan on or after the Effective Date shall be fully effective as if the
Stockholders of the Company had approved the Plan on the Effective Date. If the
Stockholders fail to approve the Plan within one year of such Effective Date,
any Awards granted hereunder intended to be Incentive Stock Options shall be
Nonqualified Stock Options.

6.2 TERM

The Plan shall terminate on the date ten (10) years after the Effective Date.

         7. GRANT OF AWARDS

7.1 AWARDS

The Committee shall determine the type or types of Awards to be made to each
Grantee. Awards may be granted singly, in combination or in tandem subject to
restrictions set forth herein. Without limiting the foregoing, the Committee may
at any time amend the terms of outstanding Awards or issue new Awards in
exchange for the surrender and cancellation of outstanding Awards. The date on
which the Committee approves the Award shall be considered the date on which
such Award is granted, unless the Committee approves a separate grant date. The
terms and conditions of the Awards granted under this Section shall be
determined from time to time by the Committee, as set forth in the Agreement,
and the conditions herein.

7.2 NONQUALIFIED OPTIONS

The Award Price for each share of Common Stock issuable pursuant a Nonqualified
Stock Option shall be set by the Committee, but may not be less than par value.

7.3 INCENTIVE STOCK OPTIONS

The Award Price for each share of Common Stock issuable pursuant to an Incentive
Stock Option may not be less than the Fair Market Value on the Grant Date.

7.4 INCENTIVE STOCK OPTIONS - SPECIAL RULES

Options granted in the form of ISOs shall be subject to the following
provisions:

(a) No Incentive Option shall be granted pursuant to this plan more than ten
(10) years after the Effective Date.

(b) An Option shall constitute an ISO only to the extent that the aggregate Fair
Market Value (determined at the time the Option is granted) of the Common Stock
with respect to which ISOs are exercisable for the first time by any Grantee
during any calendar year under the Plan and all other plans of the Grantee's
employer Company and its parent and Affiliates does not exceed $100,000. This
limitation shall be applied by taking Options into account in the order in which
such Options were granted.

                                      -4-
<PAGE>

(c) If any Grantee to whom an ISO is to be granted pursuant to the provisions of
the Plan is, on the date of grant, an individual described in Section 422(b)(6)
of the Code, then the following special provisions shall be applicable to the
Option granted to such individual:

(i) the Award Price of shares subject to such ISO shall not be less than 110% of
the Fair Market Value of Common Stock on the date of grant; and

(ii) the Option shall not have a term in excess of five (5) years from the date
of grant.

(d) The Grantee shall not dispose of any shares of Common Stock issued upon the
exercise of an ISO until after the expiration of two years from the Grant Date
and one year from the date the shares are transferred to him.

7.5 CHANGES IN LAW

The Committee may establish rules with respect to, and may grant to Eligible
Persons, Options to comply with any amendment to the Code made after the
Effective Date.

         8. AGREEMENTS

All Awards granted pursuant to the Plan shall be evidenced by written Agreements
in such form or forms as the Committee shall from time to time determine.
Agreements covering Awards need not contain similar provisions; provided,
however, that all such Agreements shall comply with the terms of the Plan and
all applicable laws and regulations. By accepting an Award pursuant to the Plan,
a Grantee thereby agrees that the Award shall be subject to all of the terms and
provisions of the Plan and the applicable Agreement.

         9. RESTRICTED STOCK

The Committee may in its sole discretion grant Restricted Stock to Eligible
Persons, subject to the following provisions. At the time a grant of Restricted
Stock is made, the Committee shall establish a period of time (the "Restricted
Period") applicable to such Restricted Stock. Each grant of Restricted Stock may
be subject to a different Restricted Period. The Committee may, in its sole
discretion, at the time a grant of Restricted Stock is made, prescribe
restrictions in addition to or other than the expiration of the Restricted
Period, including the satisfaction of corporate or individual performance
objectives, which may be applicable to all or any portion of the Restricted
Stock. Such performance objectives shall be established in writing by the
Committee prior to the ninetieth day of the year in which the grant is made and
while the outcome is substantially uncertain. Performance objectives shall be
based on Common Stock price, market share, sales, earnings per share, return on
equity or costs.

Performance objectives may include positive results, maintaining the status quo
or limiting economic losses. The Committee also may, in its sole discretion,
shorten or terminate the Restricted Period or waive any other restrictions
applicable to all or a portion of the Restricted Stock. Restricted Stock may not
be sold, transferred, assigned, pledged or otherwise encumbered or disposed of
during the Restricted Period or prior to the satisfaction of any other
restrictions prescribed by the Committee with respect to such Restricted Stock.

9.1 RESTRICTIONS

A Common Stock certificate representing the number of shares of Restricted Stock
granted shall be held in custody by the Company for the Grantee's account. The
Grantee shall have all rights and privileges of a Stockholder as to such
Restricted Stock, including the right to receive dividends and the right to vote
such shares, except that subject to the provisions below, the following
restrictions shall apply: (i) the Grantee shall not be entitled to delivery of
the certificate until the expiration of the Restricted Period; (ii) none of the
shares of Restricted Stock may be sold, transferred, assigned, pledged or
otherwise encumbered or disposed of during the Restricted Period; and (iii) the
Grantee shall, if requested by the Company, execute and deliver to the Company a
Common Stock power endorsed in blank. If a Termination of Employment occurs with
respect to a Grantee prior to the expiration of the Restricted Period applicable
to such shares, shares of Restricted Stock still subject to restrictions shall
be forfeited unless otherwise determined by the Committee, and all rights of the
Grantee to such shares shall terminate without further obligation on the part of
the Company.

                                      -5-
<PAGE>

9.2 DELIVERY OF RESTRICTED SHARES

At the end of the Restricted Period, a Common Stock certificate for the number
of shares of Restricted Stock with respect to which the restrictions have lapsed
shall be delivered (less any amount in satisfaction of any withholding
obligation), free of all such restrictions, except applicable securities laws,
to the Grantee. The Company shall not be required to deliver any fractional
shares of Common Stock but shall pay, in lieu thereof, the Fair Market Value (as
of the date the restrictions lapse) of such fractional share to the Grantee.
Notwithstanding the foregoing, the Committee may authorize the delivery of the
Restricted Stock to a Grantee during the Restricted Period, in which event any
Common Stock certificates in respect of any shares of Restricted Stock thus
delivered to a Grantee during the Restricted Period applicable to such shares
shall bear an appropriate legend referring to the terms and conditions,
including the restrictions, applicable thereto.

         10. PERFORMANCE SHARES

The Committee may in its sole discretion grant performance share awards to such
individuals and under such terms and conditions as the Committee shall
determine, subject to the provisions of the Plan. Such an award shall entitle a
Grantee to acquire shares of Common Stock of the Company, or to be paid the
value thereof in cash, as the Committee shall determine, if specified
performance goals are met. Performance shares may be awarded independently of or
in connection with any other Award under the Plan. The Grantee of a performance
share award will have the rights of a shareholder only as to shares for which a
certificate has been issued pursuant to the award and not with respect to any
other shares subject to the award. Except as otherwise may be provided by the
Committee at any time prior to Termination of Employment, the rights of a
Grantee of a performance share award shall automatically terminate upon the
Grantee's Termination of Employment for any reason.

         11. AWARD PRICE

The purchase price of each share of Common Stock subject to an Award shall be
fixed by the Committee and stated in each Agreement.

         12. TERM, VESTING AND EXERCISE OF AWARDS

12.1 TERM

Each Award granted under the Plan shall terminate and all rights to purchase
Common Stock thereunder shall cease upon the expiration of ten (10) years from
the Grant Date, as otherwise provided herein, or on such date prior thereto as
may be fixed by the Committee and stated in the Agreement relating to such
Award; provided, however, that in the event the Grantee would otherwise be
ineligible to receive an Incentive Stock Option by reason of the provisions of
Sections 422(b)(6) and 424(d) of the Code (relating to Common Stock ownership of
more than 10 percent), an Option granted to such Grantee which is intended to be
an Incentive Stock Option shall in no event be exercisable after the expiration
of five years from the Grant Date (collectively, the "Option Term").

12.2 VESTING

Unless otherwise expressly provided herein or in an Agreement approved by the
Committee, Options granted hereunder shall become vested at the following
schedule so long as the Grantee has not experienced a Termination of Employment
prior to such anniversary date: no more than 25% of the total number of shares
optioned on the first anniversary of the Grant Date; no more than 50% of the
total number of shares optioned on the second anniversary of the Grant Date; no
more than 75% of the total number of shares optioned on the third anniversary of
the Grant Date; and 100% of the total number of shares optioned on and after the
fourth anniversary of the Grant Date. Options that have not vested may not be
exercised. All Awards that have not vested prior to Termination of Employment
shall terminate and be of no further force and effect upon such Termination of
Employment.

12.3 EXERCISE BY GRANTEE

Only the Grantee receiving an Award (or, in the event of the Grantee's legal
incapacity or incompetency, the Grantee's guardian or legal representative, and
in the case of the Grantee's death, the Grantee's estate) may exercise the
Award.

                                      -6-
<PAGE>

12.4 LIMITATIONS ON EXERCISE AND SALE; FORFEITURE

The Committee, subject to the terms and conditions of the Plan, may in its sole
discretion provide in an Agreement that an Option may not be exercised in whole
or in part for any period or periods of time during which such Option is
outstanding as the Committee shall determine (and as set forth in the Agreement
relating to such Option). Any such limitation on the exercise of an Option
contained in any Agreement may be rescinded, modified or waived by the
Committee, in its sole discretion, at any time and from time to time after the
date of grant of such Option. The Committee may also include such other terms
and conditions as it deems effect the purpose of the Plan and are in the best
interest of the Company.

12.5 METHOD OF EXERCISE

(a) An Award that is exercisable hereunder may be exercised by delivery to the
Company on any business day, at its principal office addressed to the attention
of the Committee (or such other person identified in an Agreement), of written
notice of exercise, which notice shall specify the number of shares for which
the Award is being exercised, and shall be accompanied by payment in full of the
Award Price of the shares of Common Stock for which the Award is being
exercised. Payment of the Award Price for the shares of Common Stock purchased
pursuant to the exercise of an Award shall be made, as determined by the
Committee and set forth in the Agreement pertaining to an Award, (i) in cash or
by check payable to the order of the Company; (ii) to the extent the Company is
not prohibited from purchasing or acquiring shares of Common Stock, through the
tender to the Company of shares of Common Stock, which shares shall be valued,
for purposes of determining the extent to which the Award Price has been paid
thereby, at their Fair Market Value on the date of exercise; or (iii) by a
combination of the methods described in Sections 12.5(a)(i) and (ii) hereof, or
such other method permitted by the Committee; provided, however, that the
Committee may in its discretion at any time impose such limitations or
prohibitions on the use of shares of Common Stock to exercise Awards as it deems
appropriate. If and while payment with Common Stock is permitted for the
exercise of an Award granted under this Plan in accordance with the foregoing
provision, the instrument evidencing the Award may also provide that, in lieu of
using previously outstanding shares therefor, the Grantee may pay the Award
Price by directing the Company to retain so many of the underlying shares as
have a market value on the date of exercise equal to the Award Price, and any
such exercise will cause the surrender and cancellation of the Award to the
extent of the shares so retained by the Company.

As soon as practical after receipt of the foregoing written notice of exercise,
full payment of the Award Price, and full payment of all amounts due to satisfy
any applicable tax withholding requirements (which the Grantee shall be required
to pay in cash, rather than by application of shares of Common Stock otherwise
deliverable upon exercise of the Award), the Company shall deliver to the
Grantee, in the Grantee's name, a certificate evidencing the number of shares of
Common Stock purchased upon exercise of the Award. Any attempt to exercise any
Award granted hereunder other than as set forth above shall be invalid and of no
force and effect.

An Agreement may provide that payment in full of the Award Price need not
accompany the written notice of exercise provided the notice directs that the
Common Stock certificate or certificates for the shares for which the Award is
exercised be delivered to a licensed broker acceptable to the Company as the
agent for the individual exercising the Award and, at the time such Common Stock
certificate or certificates are delivered, the broker tenders to the Company
cash (or cash equivalents acceptable to the Company) equal to the Award Price.

(b) Except as provided in Section 9.1, an individual holding or exercising an
Award shall have none of the rights of a Stockholder until the shares of Common
Stock covered thereby are fully paid and issued to such individual and, except
as provided in Section 20 hereof, no adjustment shall be made for dividends or
other rights for which the record date is prior to the date of such issuance.

12.6 FINANCIAL ASSISTANCE

The Company is vested with authority under this Plan to assist any employee to
whom an Award is granted hereunder in the payment of the Award Price payable on
exercise of the Award, by lending part or all of the amount of such Award Price
to such employee on such terms and at such rates of interest and upon such
security (or no security) as shall have been authorized by or under authority of
the Committee. The Company is under no obligation to provide such assistance,
however.

                                      -7-
<PAGE>

         13. TRANSFERABILITY OF AWARDS

Unless otherwise expressly provided in an Agreement, no Award granted under the
Plan may be sold, transferred, pledged, assigned, hypothecated or otherwise
alienated, other than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order, as defined under the Code or
the Employee Retirement Income Security Act, as amended, or the rules
thereunder. The designation of a beneficiary with respect to an Award shall not
constitute a transfer for purposes of this Section.

         14. TERMINATION OF EMPLOYMENT

In the case of Termination of Employment (other than a Dismissal for Cause),
unless otherwise provided in an Agreement and other than upon death or
Disability (as hereafter defined), Awards otherwise exercisable on the date of
the Termination of Employment will remain exercisable for a period equal to the
shorter of three (3) months or the remaining Award Term. If, on the date of the
Termination of Employment, the Grantee is not entitled to exercise the Grantee's
entire Award, the Common Stock covered by the unexercisable portion of the Award
shall revert to the Plan. If, after Termination of Employment, the Grantee does
not exercise the Award within the time prescribed, the Award shall terminate and
the Common Stock covered by such Award shall revert to the Plan. For purposes of
the Plan, a Termination of Employment with the Company or an Affiliate shall not
be deemed to occur if the Grantee is immediately thereafter employed with the
Company or any Affiliate.

Notwithstanding any other provision in this Plan or an Agreement, in the event
that a Grantee's employment is terminated by reason of a Dismissal for Cause,
the Award shall expire on the day immediately preceding the date of the first
event giving rise to a Dismissal for Cause. "Dismissal for Cause" means
Termination of Employment for: (a) theft or embezzlement of property of the
Company; (b) fraud or other wrongdoing against the Company; (c) commission of a
crime of moral turpitude; (d) receipt of consideration or acceptance of benefits
from, or the participation in business activities with, persons doing business
with the Company in violation of the business ethics of the Company; (e)
malicious destruction of property of the Company; (f) improper disclosure of
confidential information of the Company; (g) actively engaging in or working for
a business in competition with the Company while employed by the Company; or (h)
such other reason that has a material adverse effect on the Company. The
Committee shall have the sole discretion to determine whether a Termination of
Employment has occurred by reason of Dismissal for Cause.

         15. RIGHTS IN THE EVENT OF DEATH OR DISABILITY

15.1 DEATH

If a Grantee dies while employed by the Company or an Affiliate, the executors,
administrators, legatees or distributees of such Grantee's estate shall have the
right (subject to the general limitations on exercise set forth in Section 12
hereof), at any time within one (1) year (unless otherwise provided in an
Agreement) after the date of such Grantee's death and prior to the end of the
Award Term, to exercise any Award held by such Grantee at the date of such
Grantee's death, to the extent such Award was otherwise exercisable immediately
prior to such Grantee's death.

15.2 DISABILITY

If a Grantee experiences a Termination of Employment with the Company or an
Affiliate by reason of a "permanent and total disability" within the meaning of
Section 22(e)(3) of the Code ("Disability") of such Grantee, then such Grantee
shall have the right (subject to the general limitations on exercise set forth
in Section 12 hereof), at any time within one (1) year (unless otherwise
provided in an Agreement) after such Termination of Employment and prior to the
expiration of the Award Term, to exercise, in whole or in part, any Award held
by such Grantee at the date of such Termination of Employment, to the extent
such Award was exercisable immediately prior to such Termination of Employment.

                                      -8-
<PAGE>

         16. USE OF PROCEEDS

The proceeds received by the Company from the sale of Common Stock pursuant to
Awards granted under the Plan shall constitute general funds of the Company.

         17. SECURITIES LAWS

The Company shall not be required to sell or issue any Award or shares of Common
Stock under any Award if the sale or issuance of such Award or shares would
constitute a violation of any provisions of any law or regulation of any
governmental authority, including, without limitation, any federal or state
securities laws or regulations. If at any time the Company shall determine, in
its discretion, that the listing, registration or qualification of any shares
subject to the Award upon any securities exchange or under any state or federal
law, or the consent of any government regulatory body, is necessary or desirable
as a condition of, or in connection with, the issuance or purchase of shares,
the Award may not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company, and any delay
caused thereby shall in no way affect the date of termination of the Award.
Specifically in connection with the Securities Act, upon exercise of any Award,
unless a registration statement under the Securities Act is in effect with
respect to the shares of Common Stock covered by such Award, the Company shall
not be required to sell or issue such shares unless the Company has received
evidence satisfactory to the Company that the Grantee may acquire such shares
pursuant to an exemption from registration under the Securities Act. Any
determination in this connection by the Company shall be final and conclusive.
The Company may, but shall in no event be obligated, to register any securities
covered hereby pursuant to the Securities Act. The Company shall not be
obligated to take any affirmative action in order to cause the exercise of an
Award or the issuance of shares pursuant thereto to comply with any law or
regulation of any governmental authority. As to any jurisdiction that expressly
imposes the requirement that an Award shall not be exercisable unless and until
the shares of Common Stock covered by such Award are registered or are subject
to an available exemption from registration, the exercise of such Award (under
circumstances in which the laws of such jurisdiction apply) shall be deemed
conditioned upon the effectiveness of such registration or the availability of
such an exemption.

         18. EXCHANGE ACT: RULE 16b-3

18.1 GENERAL

The Plan is intended to comply with Rule 16b-3 (and any successor thereto)
("Rule 16b-3") under the Exchange Act. Any provision or action inconsistent with
Rule 16b-3 shall, to the extent permitted by law and determined to be advisable
by the Committee, be inoperative and void.

18.2 RESTRICTION ON TRANSFER OF COMMON STOCK

The Grantee of an ISO shall not dispose of any shares of Common Stock issued
upon the exercise of an ISO until after the expiration of two years from the
Grant Date and one year from the date the shares are transferred to him. In
addition, unless otherwise permitted under an exemption under Rule 16b-3, no
officer or other "insider" of the Company subject to Section 16 of the Exchange
Act shall be permitted to sell Common Stock (which such "insider" had received
upon exercise of an Award) during the six months immediately following the grant
of such Award.

         19. AMENDMENT AND TERMINATION

The Board may, at any time and from time to time, amend, suspend or terminate
the Plan or an Agreement governing any Award that has not vested. Except as
permitted under this Plan, no amendment, suspension or termination of the Plan
or an Agreement shall, without the consent of the Grantee, alter or impair
rights or obligations under any vested Award.

         20. EFFECT OF CHANGES IN CAPITALIZATION

20.1 CHANGES IN COMMON STOCK

If the shares of Common Stock are changed into or exchanged for a different
number or kind of shares or securities of the Company, whether through
reorganization, recapitalization, reclassification, stock dividend or other

                                      -9-
<PAGE>

distribution, split, reverse split, combination of interest, exchange of
interests, change in corporate structure or the like, an appropriate and
proportionate adjustment shall be made in the number and kind of shares of
Common Stock subject to the Plan and in the number, kind and per share exercise
price of shares of Common stock subject to unexercised Awards, or portions
thereof granted prior to any such change. In the event of any such adjustment in
an outstanding Award, the Grantee thereafter shall have the right to purchase
the number of shares of Common Stock under such Award at the per share price, as
so adjusted, which the Grantee could purchase at the total purchase price
applicable to the Award immediately prior to such adjustment.

20.2 REORGANIZATION WITH COMPANY SURVIVING

Subject to Section 19, if the Company shall be the surviving entity in any
reorganization, merger, consolidation or the like of the Company with one or
more other entities, any Award theretofore granted pursuant to the Plan shall
apply to the securities resulting immediately following such reorganization,
merger, consolidation or the like, with a corresponding proportionate adjustment
of the number of shares and Award Price per share so that the aggregate number
of shares and Award Price thereafter shall be the same as the aggregate share
number and Award Price immediately prior to such reorganization, merger,
consolidation or the like.

20.3 OTHER REORGANIZATIONS; SALE OF ASSETS OR COMMON STOCK

Unless otherwise provided in an Agreement, upon the dissolution or liquidation
of the Company, or upon a merger, consolidation or reorganization of the Company
with one or more other entities in which the Company is not the surviving
entity, or upon a sale of substantially all of the assets of the Company to
another entity, or upon any transaction (including, without limitation, a merger
or reorganization in which the Company is the surviving entity) approved by the
Board that results in any person or entity (other than persons who are holders
of Common Stock of the Company at the time the Plan is approved by the
Stockholders and other than an Affiliate) owning fifty percent (50%) or more of
the combined voting power of all classes of Common Stock of the Company (in any
event, each a "Liquidation Event"), the Plan and all Awards outstanding
hereunder shall terminate on the date of such transaction, except to the extent
provision is made in connection with such transaction for the continuation of
the Plan and/or the assumption of the Awards theretofore granted, or for the
substitution for such Awards of new awards covering the Common Stock of a
successor entity, or a parent or Affiliate thereof, with appropriate adjustments
as to the number and kinds of shares and exercise prices, in which event the
Plan and Awards theretofore granted shall continue in the manner and under the
terms so provided. In the event of any such Liquidation Event, each Grantee
shall have the right (subject to the general limitations on exercise set forth
in Section 12 hereof and except as otherwise specifically provided in the
Agreement relating to such Award), immediately prior to the occurrence of such
Liquidation Event and during such period occurring prior to such Liquidation
Event as the Committee in its sole discretion shall designate, to exercise such
Award in whole or in part, to the extent such Award was otherwise exercisable at
the time such Liquidation Event occurs. The Committee shall send written notice
of an event that will result in a Liquidation Event to all Grantees not later
than the time at which the Company gives notice thereof to its Stockholders.
Notwithstanding anything herein to the contrary, the Committee in its discretion
may provide for the acceleration of the vesting of any Award in the case of a
merger, a significant sale of the common stock or assets of the Company (as
determined by the Committee).

20.4 ADJUSTMENTS

Adjustments under this Section 20 relating to Common Stock or securities of the
Company shall be made by the Committee, whose determination in that respect
shall be final and conclusive. No fractional shares of Common Stock or units of
other securities shall be issued pursuant to any such adjustment, and any
fractions resulting from any such adjustment shall be eliminated in each case by
rounding downward to the nearest whole share or unit.

20.5 NO LIMITATIONS ON COMPANY

The grant of an Award pursuant to the Plan shall not affect or limit in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge,
consolidate, dissolve or liquidate, or to sell or transfer all or any part of
its business or assets.

                                      -10-
<PAGE>

         21. WITHHOLDING

The Company or an Affiliate may be obligated to withhold federal and local
income taxes and Social Security taxes to the extent that a Grantee realizes
income in connection with the exercise of an Award. The Company or an Affiliate
may withhold amounts needed to cover such taxes from payments otherwise due and
owing to a Grantee, and upon demand the Grantee will promptly pay to the Company
or an Affiliate having such obligation any additional amounts as may be
necessary to satisfy such withholding tax obligation. Such payment shall be made
in cash or cash equivalents. The Company may also withhold shares or amounts
payable to a Grantee pursuant to court order.

         22. DISCLAIMER OF RIGHTS

The existence of this Plan does not, and no provision in the Plan or in any
Award granted or Agreement entered into pursuant to the Plan shall be construed
to, create an employment contract; confer upon any individual the right to
receive an Award; permit a Grantee to remain in the employ of the Company or
alter a Grantee's status as an at-will employee; or allow the Grantee to
interfere in any way with the right and authority of the Company either to
increase or decrease the compensation of any individual at any time, or to
terminate any employment or other relationship between any individual and the
Company. The obligation of the Company to pay any benefits pursuant to the Plan
shall be interpreted as a contractual obligation to pay only those amounts
described herein, in the manner and under the conditions prescribed herein. The
Plan shall in no way be interpreted to require the Company to transfer any
amounts to a third party trustee or otherwise hold any amounts in trust or
escrow for payment to any Grantee or beneficiary under the terms of the Plan.

         23. NONEXCLUSIVITY

Neither the adoption of the Plan nor the submission of the Plan to the
Stockholders of the Company for approval shall be construed as creating any
limitations upon the right and authority of the Board to adopt such other
incentive compensation arrangements (which arrangements may be applicable either
generally to a class or classes of individuals or specifically to a particular
individual or individuals) as the Board in its discretion determines desirable,
including, without limitation, the granting of Common Stock options otherwise
than under the Plan.

         24. GOVERNING LAW

This Plan and all Agreements shall be executed and performed under, and all
Awards to be granted hereunder shall be provided under and governed by, the laws
of the State of Texas (but not including the choice of law rules thereof). Any
controversy, dispute or claim arising out of, in connection with, or in relation
to, the interpretation, performance or breach of this Plan or any Agreement
which cannot first be settled through ordinary negotiation between the parties
shall be submitted to binding and final arbitration conducted in Houston, Texas
by and in accordance with the then existing Rules for Commercial Arbitration of
the American Arbitration Association or any successor organization. Any such
arbitration shall be to a three member panel selected through the rules
governing selection and appointment of such panels of the American Arbitration
Association or any successor organization. The award rendered by the arbitrators
may be confirmed, entered and enforced as a judgment in any court of competent
jurisdiction; however, the parties otherwise waive any rights to appeal the
award except with regard to fraud by the panel. The arbitrators shall award the
party which substantially prevails in any arbitration proceeding recovery of
that party's attorneys' fees, the arbitrators' fees and all costs in connection
with the arbitration from the party who does not substantially prevail.

         25. BINDING EFFECT

Subject to all restrictions provided in this Plan and all applicable laws, this
Plan and all Agreements hereunder shall be binding on and inure to the benefit
of the parties hereto and their respective heirs, executors, administrators,
successors and assigns.

         26. MISCELLANEOUS REQUIREMENTS

26.1 OTHER AWARD PROVISIONS

Awards granted under the Plan shall contain such other terms and provisions that
are not inconsistent with this Plan as the Committee may authorize in its
discretion, providing for (a) special vesting schedules governing the

                                      -11-
<PAGE>

exercisability of an Award; (b) provisions for acceleration of such vesting
schedules in certain events; (c) arrangements whereby the Company may fulfill
any tax obligations for employees in connection with an Award; (d) provisions
imposing restrictions upon the transferability of stock acquired on exercise of
such Award, whether required by this Plan or applicable securities laws or
imposed for other reasons; and (e) provisions regarding the termination or
survival of any such Award upon the Grantee's death, retirement or other
termination of employment and the extent, if any, to which any such Award may be
exercised after such event. In interpreting any inconsistencies, gaps or
discrepancies between or among any documents, the Plan shall control over an
Agreement (unless there is an express specific exception in an Agreement to the
Plan), and an Agreement shall control over any letter or other notice or
document describing a grant of an Award.

26.2 CONSENTS

If the Committee shall at any time determine that any Consent (as hereafter
defined) is necessary or desirable as a condition of, or in connection with, the
granting of any Award under the Plan, the issuance or purchase of shares or
other rights thereunder, or the taking of any other action thereunder ("Plan
Action"), then such Plan Action shall not be taken, in whole or in part, unless
and until such Consent shall have been effected or obtained to the full
satisfaction of the Committee. "Consent" with respect to any Plan Action means
(a) any and all listings, registrations or qualifications in respect thereof
upon any securities exchange or under any federal, state or local law, rule or
regulation; (b) any and all written agreements and representations by the
Grantee with respect to the disposition of shares of Common Stock, or with
respect to any other matter, which the Committee shall deem necessary or
desirable to comply with the terms of any such listing, registration, or
qualification or to obtain an exemption from the requirement that any such
listing, qualification or registration be made; and (c) any and all other
consents, clearances and approvals in respect of a Plan Action.

26.3 NOTICE

Any notice required to be given to the Company hereunder shall be in writing and
shall be addressed to Corporate Secretary, Lark Technologies, Inc., 9441 W. Sam
Houston Parkway South, Suite 103, Houston, Texas 77099, or at such other address
the Company may hereafter designate to the Grantee. Any notice to be given to
the Grantee hereunder shall be addressed to the Grantee at the address set forth
beneath his/her signature hereto, or at such other address as the Grantee may
hereafter designate to the Company by notice as provided herein. A notice shall
be deemed to have been duly given when personally delivered or mailed by
registered mail or certified mail to the party entitled to receive it.

26.4 NOTICE OF SECTION 83(b) ELECTION AND DISQUALIFYING DISPOSITION

If any Grantee shall, in connection with the acquisition of Common Stock make
the election permitted under Section 83(b) of the Code (i.e., an election to
include in gross income in the year of transfer the amounts specified in Section
83(b)), such Grantee shall notify the Company within ten (10) days of filing the
notice of election with the Internal Revenue Service. Further, Grantee must
notify the Company of any disposition of any Common Stock issued pursuant to the
exercise of such Award under the circumstances described in Section 421(b) of
the Code (relating to certain disqualifying dispositions) within 10 days of such
disposition.

The Plan was duly adopted and approved by the Board on May 29, 2002, and was
duly adopted and approved by the Stockholders of the Company on August __, 2002.

                                      -12-

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