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                                                                    Exhibit 10.1

                           DIAMETRICS MEDICAL, INC.
                             AMENDED AND RESTATED
                            1990 STOCK OPTION PLAN
                           (as amended May 23, 2001)

1.   Purpose of Plan.
--------------------

     This Plan shall be known as the "DIAMETRICS MEDICAL, INC. 1990 STOCK OPTION
PLAN" and is hereinafter referred to as the "Plan." The purpose of the Plan is
to aid in maintaining and developing personnel capable of assuring the future
success of Diametrics Medical, Inc., a Minnesota corporation (the "Company"), to
offer such personnel additional incentives to put forth maximum efforts for the
success of the business, and to afford them an opportunity to acquire a
proprietary interest in the Company through stock options and other long-term
incentive awards as provided herein. Options granted under this Plan may be
either incentive stock options ("Incentive Stock Options") within the meaning of
Section 422 of the Internal Revenue Code of 1986 (the "Code"), or options which
do not qualify as Incentive Stock Options. Awards granted under this Plan shall
be SARs, restricted stock or performance awards as hereinafter described.

2.   Stock Subject to Plan.
--------------------------

     Subject to the provisions of Section 15 hereof, the stock to be subject to
options or other awards under the Plan shall be the Company's authorized but
unissued shares of Common Stock, par value $.01 per share. Such shares may be
either authorized but unissued shares, or issued shares which have been
reacquired by the Company. Subject to adjustment as provided in Section 15
hereof, the maximum number of shares on which options may be exercised or other
awards issued under this Plan shall be 4,450,000 shares. If an option or award
under the Plan expires, or for any reason is terminated or unexercised with
respect to any shares, such shares shall again be available for options or
awards thereafter granted during the term of the Plan.

3.   Administration of Plan.
---------------------------

     (a)  The Plan shall be administered by a committee (the "Committee") of two
or more members of the Board of Directors of the Company, none of whom shall be
officers or employees of the Company and all of whom shall be "disinterested
persons" with respect to the Plan within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
successor rule or regulation thereto. The members of any such committee shall be
appointed by and serve at the pleasure of the Board of Directors.

     (b)  The Committee shall have plenary authority in its discretion, but
subject to the express provisions of the Plan: (i) to determine the purchase
price of the Common Stock covered by each option or award, (ii) to determine the
employees to whom and the time or times at which such options and awards shall
be granted and the number of shares to be subject to each, (iii) to

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determine the form of payment to be made upon the exercise of an SAR or in
connection with performance awards, either cash, Common Stock of the Company or
a combination thereof, (iv) to determine the terms of exercise of each option
and award, (v) to accelerate the time at which all or any part of an option or
award may be exercised, (vi) to amend or modify the terms of any option or award
with the consent of the optionee, (vii) to interpret the Plan, (viii) to
prescribe, amend and rescind rules and regulations relating to the Plan, (ix) to
determine the terms and provisions of each option and award agreement under the
Plan (which agreements need not be identical), including the designation of
those options intended to be Incentive Stock Options, and (x) to make all other
determinations necessary or advisable for the administration of the Plan,
subject to the exclusive authority of the Board of Directors under Section 16
herein to amend or terminate the Plan.

     (c)  The Committee shall select one of its members as its Chairman and
shall hold its meetings at such times and places as it may determine. A majority
of its members shall constitute a quorum, provided that if the Committee is
comprised of no more than two members, all of its members must be present to
constitute a quorum. All determinations of the Committee shall be made by not
less than a majority of its members, provided that if the Committee is comprised
of no more than two members, such determinations may not be made by less than
all of its members. Any decision or determination reduced to writing and signed
by all of the members of the Committee shall be fully effective as if it had
been made by a majority vote at a meeting duly called and held. The grant of an
option or award shall be effective only if a written agreement shall have been
duly executed and delivered by and on behalf of the Company following such
grant. The Committee may appoint a Secretary and may make such rules and
regulations for the conduct of business as it shall deem advisable.

     (d)  The Chief Executive Officer of the Company shall have the authority,
as granted by the Committee pursuant to clause (ix) of subsection (b) of this
Section 3, to grant, pursuant to the Plan, options or other awards to eligible
persons who are not considered by the Company as its officers or directors for
purposes of Section 16 of the Securities Exchange Act of 1934, as amended. The
Chief Executive Officer of the Company shall provide information as to any
grants made pursuant to this subsection to the Committee at their next meeting.

4.   Eligibility.
----------------

     Incentive Stock Options may only be granted under this Plan to any full or
part-time employee (which term as used herein includes, but is not limited to,
officers and directors who are also employees) of the Company and of its present
and future subsidiary corporations within the meaning of Section 424(f) of the
Code (herein called "subsidiaries"). Full or part-time employees, consultants or
independent contractors to the Company or one of its subsidiaries shall be
eligible to receive options which do not qualify as Incentive Stock Options and
awards. In determining the persons to whom options and awards shall be granted
and the number of shares subject to each, the Committee may take into account
the nature of services rendered by the respective employees or consultant their
present and potential contributions to the success of the Company and such other
factors as the Committee in its discretion shall deem relevant. A person

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who has been granted an option or award under this Plan may be granted
additional options or awards under the Plan if the Committee shall so determine;
provided, however, that for Incentive Stock Options granted after December 31,
1986, to the extent the aggregate fair market value (determined at the time the
Incentive Stock Option is granted) of the Common Stock with respect to which all
Incentive Stock Options are exercisable for the first time by an employee during
any calendar year (under all plans described in subsection (d) of Section 422 of
the Code of his employer corporation and its parent and subsidiary corporations)
exceeds $100,000, such options shall be treated as options which do not qualify
as Incentive Stock Options. Nothing in the Plan or in any agreement thereunder
shall confer on any employee any right to continue in the employ of the Company
or any of its subsidiaries or affect, in any way, the right of the Company or
any of its subsidiaries to terminate his or her employment at any time.

5.   Price.
----------

     The option price for all Incentive Stock Options granted under the Plan
shall be determined by the Committee but shall not be less than 100% of the fair
market value of the Common Stock at the date of grant of such option. The option
price for options granted under the Plan which do not qualify as Incentive Stock
Options and, if applicable, the price for all awards shall also be determined by
the Committee. For purposes of the preceding sentence and for all other
valuation purposes under the Plan, the fair market value of shares of Common
Stock shall be (i) the closing price of the Common Stock as reported for
composite transactions if the Common Stock is then traded on a national
securities exchange, (ii) the last sale price if the Common Stock is then quoted
on the NASDAQ National Market System, or (iii) the average of the closing
representative bid and asked prices of the Common Stock as reported on NASDAQ on
the date as of which the fair market value is being determined. If on the date
of grant of any option or award hereunder the Common Stock is not traded on an
established securities market, the Committee shall make a good faith attempt to
satisfy the requirements of this Section 5 and in connection therewith shall
take such action as it deems necessary or advisable.

6.   Term.
---------

     Each option and award and all rights and obligations thereunder shall
expire on the date determined by the Committee and specified in the option or
award agreement. The Committee shall be under no duty to provide terms of like
duration for options or awards granted under the Plan, but the term of an
Incentive Stock Option may not extend more than ten (10) years from the date of
grant of such option and the term of options granted under the Plan which do not
qualify as Incentive Stock Options may not extend more than fifteen (15) years
from the date of granting of such option.

7.   Exercise of Option or Award.
--------------------------------

     (a)  The Committee shall have full and complete authority to determine
whether an option or award will be exercisable in full at any time or from time
to time during the term thereof, or to provide for the exercise thereof in such
installments, upon the occurrence of such

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events (such as termination of employment for any reason) and at such times
during the term of the option as the Committee may determine and specify in the
option or award agreement.

     (b)  The exercise of any option or award granted hereunder shall only be
effective at such time that the sale of Common Stock pursuant to such exercise
will not violate any state or federal securities or other laws. Only to the
extent required in order to comply with Rule 16b-3 under the Exchange Act, in
the case of an option or other award granted to a person considered by the
Company as one of its officers or directors for purposes of Section 16 of the
Exchange Act, the terms of the option or other award will require that such
shares are not disposed of by such officer or director for a period of at least
six months from the date of grant.

     (c)  An optionee or grantee electing to exercise an option or award shall
give written notice to the Company of such election and of the number of shares
subject to such exercise. The full purchase price of such shares shall be
tendered with such notice of exercise. Payment shall he made to the Company in
cash (including bank check, certified check, personal check, or money order),
or, at the discretion of the Committee and as specified by the Committee, (i) by
delivering certificates for the Company's Common Stock already owned by the
optionee or grantee having a fair market value as of the date of grant equal to
the full purchase price of the shares, or (ii) by delivering the optionee's or
grantee's promissory note, which shall provide for interest at a rate not less
than the minimum rate required to avoid the imputation of income, original issue
discount or a below-market-rate loan pursuant to Sections 483, 1274 or 7872 of
the Code or any successor provisions thereto, provided, however, that the
interest rate shall not be less than the market rate that would otherwise be
available to the optionee or grantee from a third-party lender on the date of
exercise of the option or award, as determined by the Committee, or (iii) a
combination of cash, the optionee's or grantee promissory note and such shares.
The fair market value of such tendered shares shall be determined as provided in
Section 5 herein. The optionee's or grantee's promissory note shall be a full
recourse liability of the optionee and may, at the discretion of the Committee,
be secured by a pledge of the shares being purchased. Until such person has been
issued the shares subject to such exercise, he or she shall possess no rights as
a shareholder with respect to such shares.

8.   Stock Appreciation Rights.
------------------------------

     (a)  Grant. At the time of grant of an option or award under the Plan (or
          -----
at any other time), the Committee, in its discretion, may grant a Stock
Appreciation Right ("SAR") evidenced by an agreement in such form as the
Committee shall from time to time approve. Any such SAR may be subject to
restrictions on the exercise thereof as may be set forth in the agreement
representing such SAR, which agreement shall comply with and be subject to the
following terms and conditions and any additional terms and conditions
established by the Committee that are consistent with the terms of the Plan.

     (b)  Exercise. An SAR shall be exercised by the delivery to the Company of
          --------
a written notice which shall state that the holder thereof elects to exercise
his or her SAR as to the number of shares specified in the notice and which
shall further state what portion, if any, of the SAR

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exercise amount (hereinafter defined) the holder thereof requests be paid to in
cash and what portion, if any, is to be paid in Common Stock of the Company. The
Committee promptly shall cause to be paid to such holder the SAR exercise amount
either in cash, in Common Stock of the Company, or any combination of cash and
shares as the Committee may determine. Such determination may be either in
accordance with the request made by the holder of the SAR or in the sole and
absolute discretion of the Committee. The SAR exercise amount is the excess of
the fair market value of one share of the Company's Common Stock on the date of
exercise over the per share exercise price in respect of which the SAR was
granted, multiplied by the number of shares as to which the SAR is exercised.
For the purposes hereof, the fair market value of the Company's shares of Common
Stock shall be determined as provided in Section 5 herein.

9.   Restricted Stock Awards.
----------------------------

     Awards of Common Stock subject to forfeiture and transfer restrictions may
be granted by the Committee. Any restricted stock award shall be evidenced by an
agreement in such form as the Committee shall from time to time approve, which
agreement shall comply with and be subject to the following terms and conditions
and any additional terms and conditions established by the Committee that are
consistent with the terms of the Plan:

     (a)  Grant of Restricted Stock Awards. Each restricted stock award made
          ---------------------------------
under the Plan shall be for such number of shares of Common Stock as shall be
determined by the Committee and set forth in the agreement containing the terms
of such restricted stock award. Such agreement shall set forth a period of time
during which the grantee must remain in the continuous employment of the Company
in order for the forfeiture and transfer restrictions to lapse. If the Committee
so determines, the restrictions may lapse during such restricted period in
installments with respect to specified portions of the shares covered by the
restricted stock award. The agreement may also, in the discretion of the
Committee, set forth performance or other conditions that will subject the
Common Stock to forfeiture and transfer restrictions. The Committee may, at its
discretion, waive all or any part of the restrictions applicable to any or all
outstanding restricted stock awards.

     (b)  Delivery of Common Stock and Restrictions. At the time of a restricted
          -----------------------------------------
stock award, a certificate representing the number of shares of Common Stock
awarded thereunder shall be registered in the name of the grantee. Such
certificate shall be held by the Company or any custodian appointed by the
Company for the account of the grantee subject to the terms and conditions of
the Plan, and shall bear such a legend setting forth the restrictions imposed
thereon as the Committee, in its discretion, may determine. The grantee shall
have all rights of a shareholder with respect to the Common Stock, including the
right to receive dividends and the right to vote such shares, subject to the
following restrictions: (i) the grantee shall not be entitled to delivery of the
stock certificate until the expiration of the restricted period and the
fulfillment of any other restrictive conditions set forth in the restricted
stock agreement with respect to such Common Stock; (ii) none of the shares of
Common Stock may be sold, assigned, transferred, pledged, hypothecated or
otherwise encumbered or disposed of during such restricted period or until after
the fulfillment of any such other restrictive conditions; and (iii) except as
otherwise

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determined by the Committee, all of the Common Stock shall be forfeited and all
rights of the grantee to such Common Stock shall terminate, without further
obligation on the part of the Company, unless the grantee remains in the
continuous employment of the Company for the entire restricted period in
relation to which such shares of Common Stock were granted and unless any other
restrictive conditions relating to the restricted stock award are met. Any
Common Stock, any other securities of the Company and any other property (except
for cash dividends) distributed with respect to the Common Stock subject to
restricted stock awards shall be subject to the same restrictions, terms and
conditions as such restricted Common Stock.

     (c)  Termination of Restrictions. At the end of the restricted period and
          ---------------------------
provided that any other restrictive conditions of the restricted stock award are
met, or at such earlier time as otherwise determined by the Committee, all
restrictions set forth in the agreement relating to the restricted stock award
or in the Plan shall lapse as to the restricted Common Stock subject thereto,
and a stock certificate for the appropriate number of shares of Common Stock,
free of the restrictions and the restricted stock legend, shall be delivered to
the grantee or his beneficiary or estate, as the case may be.

10.  Performance Awards.
-----------------------

     The Committee is further authorized to grant performance awards
("Performance Award"). Subject to the terms of this Plan and any applicable
award agreement, Performance Awards granted under the Plan (i) may be
denominated or payable in cash, Common Stock (including, without limitation,
restricted stock), other securities, other awards, or other property and (ii)
shall confer on the holder thereof rights valued as determined by the Committee,
in its discretion, and payable to, or exercisable by, the holder of the
Performance Awards, in whole or in part, upon the achievement of such
performance goals during such performance periods as the Committee, in its
discretion, shall establish. Subject to the terms of this Plan and any
applicable award agreement, the performance goals to be achieved during any
performance period, the length of any performance period, the amount of any
Performance Awards granted, and the amount of any payment or transfer to be made
by the grantee and by the Company under any Performance Awards shall be
determined by the Committee.

11.  Income Tax Withholding and Tax Bonuses.
-------------------------------------------

     (a)  In order to comply with all applicable federal or state income tax
laws or regulations, the Company may take such action as it deems appropriate to
ensure that applicable federal or state payroll, withholding, income or other
taxes, which are the sole and absolute responsibility of an optionee or grantee
under the Plan, are withheld or collected from such optionee or grantee at the
required tax withholding rate. In order to assist an optionee or grantee in
paying all federal and state taxes to be withheld or collected upon exercise of
an option or award which does not qualify as an Incentive Stock Option
hereunder, the Committee, in its absolute discretion and subject to such
additional terms and conditions as it may adopt, shall permit the optionee or
grantee to satisfy such tax obligation by (i) electing to have the Company
withhold a portion of the shares otherwise to be delivered upon exercise of such
option or award

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with a fair market value, determined in accordance with Section 5 herein, equal
to the required tax withholding or (ii) delivering to the Company Common Stock
other than the shares issuable upon exercise of such option or award with a fair
market value, determined in accordance with Section 5, equal to the required tax
withholding. The "required" tax withholding is the employer's minimum statutory
withholding based on minimum statutory withholding rates for federal and state
tax purposes, including employee payroll taxes, that are applicable to an
optionee's or grantee's taxable income generated upon exercise of an option or
award. Withholdings in excess of the required tax withholding are not allowed.

     (b)  The Committee shall have the authority, at the time of grant of an
option under the Plan or at any time thereafter, to approve tax bonuses to
designated optionees or grantees to be paid upon their exercise of options or
awards granted hereunder. The amount of any such payments shall be determined by
the Committee. The Committee shall have full authority in its absolute
discretion to determine the amount of any such tax bonus and the terms and
conditions affecting the vesting and payment thereafter.

12.  Additional Restrictions.
----------------------------

     The Committee shall have full and complete authority to determine whether
all or any part of the Common Stock of the Company acquired upon exercise of any
of the options or awards granted under the Plan shall be subject to restrictions
on the transferability thereof or any other restrictions affecting in any manner
the optionee's or grantee's rights with respect thereto, but any such
restriction shall be contained in the agreement relating to such options or
awards.

13.  Ten Percent Shareholder Rule.
---------------------------------

     Notwithstanding any other provision in the Plan, if at the time an option
is otherwise to be granted pursuant to the Plan the optionee owns directly or
indirectly (within the meaning of Section 424(d) of the Code) Common Stock of
the Company possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or its parent or subsidiary
corporations, if any (within the meaning of Section 422(b)(6) of the Code), then
any Incentive Stock Option to be granted to such optionee pursuant to the Plan
shall satisfy the requirements of Section 422(c)(5) of the Code, and the option
price shall be not less than 110% of the fair market value of the Common Stock
of the Company determined as described herein, and such option by its terms
shall not be exercisable after the expiration of five (5) years from the date
such option is granted.

14.  Non-Transferability.
------------------------

     No option may be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than (i) by will or by the laws of descent or
distribution, or (ii) in the case of options that are not Incentive Stock
Options, to members of the optionee's immediate family or to one or more trusts
for the benefit of the optionee or members of his or her immediate family,

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and the option may be exercised, during the lifetime of the Optionee, only by
the optionee or a permitted transferee.

15.  Dilution or Other Adjustments.
----------------------------------

     If there shall be any change in the Common Stock through merger,
consolidation, reorganization, recapitalization, dividend in the form of stock
(of whatever amount), stock split or other change in the corporate structure,
appropriate adjustments in the Plan and outstanding options and awards shall be
made by the Committee. In the event of any such changes, adjustments shall
include, where appropriate, changes in the aggregate number of shares subject to
the Plan, the number of shares and the price per share subject to outstanding
options and awards and the amount payable upon exercise of outstanding awards,
in order to prevent dilution or enlargement of option or award rights.

16.  Amendment or Discontinuance of Plan.
----------------------------------------

     The Board of Directors may amend or discontinue the Plan at any time.
Subject to the provisions of Section 15 no amendment of the Plan, however, shall
without shareholder approval: (i) increase the maximum number of shares under
the Plan as provided in Section 2 herein, (ii) decrease the minimum price
provided in Section 5 herein, (iii) extend the maximum term under Section 6, or
(iv) modify the eligibility requirements for participation in the Plan. The
Board of Directors shall not alter or impair any option or award theretofore
granted under the Plan without the consent of the holder of the option.

17.  Time of Granting.
---------------------

     Nothing contained in the Plan or in any resolution adopted or to be adopted
by the Board of Directors or by the shareholders of the Company, and no action
taken by the Committee or the Board of Directors (other than the execution and
delivery of an option or award agreement), shall constitute the granting of an
option or award hereunder.

18.  Effective Date and Termination of Plan.
-------------------------------------------

     (a)  The Plan was approved by the Board of Directors on June 29, 1990 and
shall be approved by the shareholders of the Company within twelve (12) months
thereof.

     (b)  Unless the Plan shall have been discontinued as provided in Section 16
hereof, the Plan shall terminate June 29, 2005. No option or award may be
granted after such termination, but termination of the Plan shall not, without
the consent of the optionee or grantee, alter or impair any rights or
obligations under any option or award theretofore granted.

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                                                                    Exhibit 10.2

                            DIAMETRICS MEDICAL, INC.
                              AMENDED AND RESTATED
                       1993 DIRECTORS' STOCK OPTION PLAN
                           (as amended May 23, 2001)

     1.   Purpose of the Plan.  The purpose of this Diametrics Medical, Inc.
1993 Directors' Stock Option Plan is to attract and retain the best available
individuals for service as Directors of the Company and provide additional
incentive to the Outside Directors of the Company to serve as Directors.

     None of the options granted hereunder shall be "incentive stock options"
within the meaning of Section 422 of the Code (as hereinafter defined).

     2.   Definitions.  As used herein, the following definitions shall apply:

          (a) "Board" shall mean the Board of Directors of the Company.

          (b) "Code" shall mean the Internal Revenue Code of 1986, as amended.

          (c) "Common Stock" shall mean the Common Stock of the Company.

          (d) "Company" shall mean Diametrics Medical, Inc., a Minnesota
corporation.

          (e) "Continuous Status as a Director" shall mean the absence of any
interruption or termination of service as a Director.

          (f) "Director" shall mean a member of the Board.

          (g) "Employee" shall mean any person, including officers and
Directors, employed by the Company or any parent or Subsidiary of the Company.
The payment of a Director's fee by the Company shall not be sufficient in and of
itself to constitute "employment" by the Company.

          (h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

          (i) "Option" shall mean a stock option granted pursuant to the Plan.

          (j) "Option Value" shall mean, with respect to an option described in
Section 4(b)(iv) of the Plan, the value of such option determined on the date of
grant using the same methodology as was used by the Company's independent public
accountants to value stock options for the purposes of the Company's most recent
annual audited financial statements.

          (k) "Optioned Stock" shall mean the Common Stock subject to an Option.

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          (l) "Optionee" shall mean an Outside Director who receives an Option.

          (m) "Outside Director" shall mean a Director who is not an Employee.

          (n) "Parent" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 425(e) of the Code.

          (o) "Plan" shall mean this 1993 Directors' Stock Option Plan.

          (p) "Shares" shall mean shares of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.

          (q) "Subsidiary" shall mean a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 425(f) of the Code.

     3.   Stock Subject to the Plan.  Subject to the provisions of Section 10 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 467,500 Shares of Common Stock.  The Shares may be authorized,
but unissued, or reacquired Common Stock.

     If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject thereto
shall, unless the Plan shall have been terminated, become available for future
grant under the Plan.  If Shares which were acquired upon exercise of an Option
are subsequently repurchased by the Company, such Shares shall not in any event
be returned to the Plan and shall not become available for future grant under
the Plan.

     4.   Administration of and Grants of Options under the Plan.

          (a) Administrator.  Except as otherwise required herein, the Plan
shall be administered by the Board.

          (b) Procedure for Grants.  The provisions set forth in this Section
4(b) shall not be amended more than once every six months, other than to comport
with changes in the Code, the Employee Retirement Income Security Act of 1974,
as amended, or the rules thereunder.  All grants of Options hereunder shall be
made in accordance with the following provisions:

              (i)  The Board shall have discretion to grant options to Outside
     Directors in addition to the Options described in Sections 4(b)(ii), (iii)
     and (iv) and to determine the number of Shares to be covered by such
     Options.

              (ii) Effective August 14, 1997, each Outside Director shall be
     automatically granted an Option (an "Initial Grant") to purchase 18,000
     Shares on the date on which such person first becomes a Director, whether
     through election by the shareholders of the Company or appointment by the
     Board of Directors to fill a vacancy.

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     Options granted under this section 4(b)(ii) shall become vested and thereby
     exercisable with respect to 50% of such Initial Grant on the twelve month
     anniversary date of such Initial Grant and with respect to 25% at each
     successive anniversary date; provided, however, an unvested portion of an
     Initial Grant shall only vest so long as the Outside Director remains a
     Director on the date such portion vests.

           (iii)    Effective August 14, 1997, each Outside Director shall
     automatically receive, on the date of each Annual Meeting of Shareholders,
     an Option to purchase 8,000 Shares of the Company's Common Stock, such
     Option to become exercisable six months subsequent to the date of grant;
     provided however, that such Option shall only be granted to Outside
     Directors who have served since the date of the last Annual Meeting of
     Shareholders and will continue to serve after the date of grant of such
     Option.

           (iv)     Each Outside Director may elect, not later than the last day
     of the Company's fiscal year, to be granted Options in lieu of the
     compensation and fees otherwise payable to such Outside Director for the
     next fiscal year. Such Options shall be granted quarterly on the last day
     of each fiscal quarter in which such compensation and fees are earned, to
     be exercisable immediately. The number of Shares covered by each such
     Option shall be the number determined by dividing the total amount of
     compensation and fees payable at the end of such quarter by the Option
     Value of one such Share on the date of grant.

           (v)      The terms of an Option granted hereunder shall be as
          follows:

                    (A)  the term of the Option shall be ten (10) years.

                    (B)  the Option shall be exercisable only while the Outside
          Director remains a Director of the Company, except as set forth in
          Section 8 hereof.

                    (C)  the exercise price per Share shall be 100% of the fair
          value per Share on the date of grant of the Option.

                    (D)  to the extent necessary to comply with the applicable
          provisions of Rule 16b-3 promulgated under the Exchange Act ("Rule
          16b-3"), no Option will be exercisable until a date more than six
          months subsequent to the date of the grant of that Option.

          (c) Powers of the Board.  Subject to the provisions and restrictions
of the Plan, the Board shall have the authority, in its discretion: (i) to
determine, upon review of relevant information and in accordance with Section
7(b) of the Plan, the fair market value of the Common Stock; (ii) to determine
the exercise price per share of Options to be granted, which exercise price
shall be determined in accordance with Section 7(a) of the Plan; (iii) to
interpret the Plan; (iv) to prescribe, amend and rescind rules and regulations
relating to the Plan; (v) to authorize any person to execute on behalf of the
Company any instrument required to effectuate

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the grant of an Option previously granted hereunder; and (vi) to make all other
determinations deemed necessary or advisable for the administration of the Plan.

          (d) Effect of Board's Decision.  All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.

     5.   Eligibility.  Options may be granted only to Outside Directors.  All
Options shall be automatically granted in accordance with the terms set forth in
Section 4(b) hereof.

     The Plan shall not confer upon any Optionee any right with respect to
continuation of service as a Director or nomination to serve as a Director, nor
shall it interfere in any way with any rights which the Director or the Company
may have to terminate his directorship at any time.

     6.   Term of Plan.  The Plan shall become effective upon the earlier of (i)
its adoption by the Board or (ii) its approval by the shareholders of the
Company as described in Section 16 of the Plan.  It shall continue in effect for
a term of ten (10) years unless sooner terminated under Section 12 of the Plan.

     7.   Exercise Price and Consideration.

          (a) Exercise Price.  The per Share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be 100% of the fair market value
per Share on the date of grant of the Option.

          (b) Fair Market Value.  The fair market value ("Fair Market Value") of
a Share shall be determined by the Board in its discretion; provided however,
that where there is a public market for the Common Stock, the fair market value
per Share shall be the closing price of the Common Stock in the over-the-counter
market on the date of grant, as reported in The Wall Street Journal (or, if not
so reported, as otherwise reported by the National Association of Securities
Dealers Automated Quotation ("NASDAQ") System) or, in the event the Common Stock
is traded on the NASDAQ National Market System or listed on a stock exchange,
the fair market value per Share shall be the closing price on such system or
exchange on the date of grant of the Option, as reported in The Wall Street
Journal.

          (c) Form of Consideration.  Subject to compliance with applicable
provisions of Section 16(b) of the Exchange Act, (or other applicable law), the
consideration to be paid for the Shares to be issued upon exercise of an Option,
including the method of payment, shall be determined by the Board and may
consist entirely of (i) cash, (ii) check, (iii) other Shares which (X) in the
case of Shares acquired upon exercise of an Option, have been owned by the
Optionee for more than six months on the date of surrender, and (Y) have a Fair
Market Value on the date of exercise equal to the aggregate exercise price of
the Shares as to which said Option shall be exercised, (iv) authorization for
the Company to retain from the total number of Shares as to which the Option is
exercised that number of Shares having a Fair Market Value on the date of
exercise equal to the exercise price for the total number of Shares as to which
the Option is exercised, (v) delivery of a properly executed exercise notice
together with irrevocable

                                      -4-
<PAGE>

instructions to a broker to promptly deliver to the Company the amount of sale
or loan proceeds required to pay the exercise price, (vi) by delivering an
irrevocable subscription agreement for the Shares which irrevocably obligates
the option holder to take and pay for the Shares not more than twelve months
after the date of delivery of the subscription agreement, (vii) any combination
of the foregoing methods of payment or (viii) such other consideration and
method of payment for the issuance of Shares as may be permitted under
applicable laws. In making its determination as to the type of consideration to
accept, the Board shall consider whether acceptance of such consideration may be
reasonably expected to benefit the Company.

     8.   Exercise of Option.

          (a) Procedure for Exercise; Rights as a Shareholder.  Any Option
granted hereunder shall be exercisable at such times as are set forth in Section
4(b) hereof; provided however, that no Options shall be exercisable until
shareholder approval of the Plan in accordance with Section 16 hereof has been
obtained.

     An Option may not be exercised for a fraction of a Share.

     An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company.  Full payment may consist of any consideration and method of payment
allowable under Section 7(c) of the Plan.  Until the issuance (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a shareholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option.  A share certificate for the number of Shares so acquired shall be
issued to the Optionee as soon as practicable after exercise of the Option.  No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 10 of the Plan.

     Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

          (b) Termination of Status as a Director.  If an Outside Director
ceases to serve as a Director, he may, but only within seven (7) months after
the date he ceases to be a Director of the Company, exercise his Option to the
extent that he was entitled to exercise it at the date of such termination.  To
the extent that he was not entitled to exercise an Option at the date of such
termination, or if he does not exercise such Option (which he was entitled to
exercise) within the time specified herein, the Option shall terminate.

          (c) Disability of Optionee.  Notwithstanding the provisions of Section
8(b) above, in the event an Optionee is unable to continue his service as a
Director with the Company as a result of his total and permanent disability (as
defined in Section 22(e)(3) of the Code) he

                                      -5-
<PAGE>

may, but only within seven (7) months from the date of termination, exercise his
Option to the extent he was entitled to exercise it at the date of such
termination. To the extent that he was not entitled to exercise the Option at
the date of termination, or if he does not exercise such Option (which he was
entitled to exercise) within the time specified herein, the Option shall
terminate.

       (d)  Death of Optionee.  Notwithstanding the provisions of Section
4(b), in the event of the death of an Optionee:

            (i)  during the term of the Option who is at the time of his death a
     Director of the Company and who has been in Continuous Status as a Director
     since the date of grant of the Option, the Option may be exercised, at any
     time within seven (7) months following the date of death, by the Optionee's
     estate or by a person who acquired the right to exercise the Option by
     bequest or inheritance, but only to the extent of the right to exercise
     that would have accrued had the Optionee continued living and remained in
     Continuous Status as a Director for six (6) months after the date of death;
     or

            (ii) within thirty (30) days after the termination of Continuous
     Status as a Director, the Option may be exercised, at any time within seven
     (7) months following the date of death, by the Optionee's estate or by a
     person who acquired the right to exercise the Option by bequest or
     inheritance, but only to the extent of the right to exercise that had
     accrued at the date of termination.

     9.   Non-Transferability of Options.  The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than (i)
by will, (ii) by the laws of descent or distribution, (iii) to members of the
Optionee's immediate family or (iv) to one or more trusts for the benefit of the
Optionee or members of his or her immediate family, and the Option may be
exercised, during the lifetime of the Optionee, only by the Optionee or a
permitted transferee.

     10.  Adjustments Upon Changes in Capitalization, Dissolution or Merger.

          (a) In the event that the number of outstanding shares of Common Stock
of the Company is changed by a stock dividend, stock split, reverse stock split,
combination, reclassification or similar change in the capital structure of the
Company without consideration, the number of Shares available under this Plan
and the number of Shares subject to outstanding Options and the exercise price
per share of such Options shall be proportionately adjusted, subject to any
required action by the Board or shareholders of the Company and compliance with
applicable securities laws; provided however, that no certificate or scrip
representing fractional shares shall be issued upon exercise of any Option and
any resulting fractions of a Share shall be ignored.  Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive.

          (b) In the event of a dissolution or liquidation of the Company, a
merger in which the Company is not the surviving corporation, a transaction or
series of related transactions in which 100% of the then outstanding voting
stock is sold or otherwise transferred,

                                      -6-
<PAGE>

or the sale of substantially all of the assets of the Company, any or all
outstanding Options shall, notwithstanding any contrary terms of the written
agreement governing such Option, accelerate and become exercisable in full at
least ten days prior to (and shall expire on) the consummation of such
dissolution, liquidation, merger or sale of stock or sale of assets on such
conditions as the Board shall determine unless the successor corporation assumes
the outstanding Options or substitutes substantially equivalent options.

     11.  Time of Granting Options.  The date of grant of an Option shall, for
all purposes, be the date determined in accordance with Section 4(b) hereof.
Notice of the determination shall be given to each Outside Director to whom an
Option is so granted within a reasonable time after the date of such grant.

     12.  Amendment and Termination of the Plan.

          (a)  Amendment and Termination.  The Board may at any time amend,
alter, suspend, or discontinue the Plan, but no amendment, alteration,
suspension, or discontinuance shall be made which would impair the rights of any
Optionee under any grant theretofore made, without his or her consent.  In
addition, to the extent necessary and desirable to comply with Rule 16b-3 under
the Exchange Act (or any other applicable law or regulation), the Company shall
obtain shareholder approval of any Plan amendment in such a manner and to such a
degree as required.

          (b)  Effect of Amendment or Termination.  Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.

     13.  Conditions Upon Issuance of Shares.  Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws, and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.

     As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares, if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.

     Inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect

                                      -7-
<PAGE>

of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

     14.  Reservation of Shares.  The Company, during the term of this Plan,
will at all times reserve and keep available such number of the Shares available
for issuance pursuant to this Plan as shall be sufficient to satisfy the
requirements of the Plan.

     15.  Option Agreement.  Options shall be evidenced by written option
agreements in such form as the Board shall approve.

     16.  Shareholder Approval.

          (a) The Plan shall be subject to approval by the shareholders of the
Company within twelve (12) months of its adoption by the Board.  If such
shareholder approval is obtained at a duly held shareholders' meeting, it may be
obtained by the affirmative vote of the holders of a majority of the outstanding
shares of the Company present or represented and entitled to vote thereon.  If
such shareholder approval is obtained by written consent, it may be obtained by
the written consent of the holders of a majority of the outstanding shares of
the Company.

          (b) Any required approval of the shareholders of the Company shall be
substantially in accordance with Section 14(a) of the Exchange Act and the rules
and regulations promulgated thereunder.

     17.  Information to Optionees.  The Company shall provide to each Optionee,
during the period for which such Optionee has one or more Options outstanding,
copies of all annual reports to shareholders, proxy statements and other
information provided to all shareholders of the Company.

                                      -8-

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