Edgar Filing: NEOPROBE CORP

SCHEDULE 14A

Information Required in Proxy Statement

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

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NEOPROBE CORPORATION
(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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2005 ANNUAL MEETING OF STOCKHOLDERS

April 29, 2005

Dear Stockholder:

You are cordially invited to attend the 2005 Annual Meeting of
Stockholders of Neoprobe Corporation which will be held at 9:00 a.m., Eastern
Daylight Time, on June 13, 2005, at t the Barclay Intercontinental Hotel, 111
East 48th Street, New York, NY 10017 (phone: 212.755.5900). The matters on the
meeting agenda are described in the Notice of 2005 Annual Meeting of
Stockholders and proxy statement which accompany this letter.

We hope you will be able to attend the meeting, but whatever your
plans, we ask that you please complete, execute, and date the enclosed proxy
card and return it in the envelope provided so that your shares will be
represented at the meeting.

Very truly yours,

/s/ David C. Bupp

David C. Bupp
Chief Executive Officer and President

NEOPROBE CORPORATION
425 Metro Place North, Suite 300
Dublin, Ohio 43017

NOTICE OF 2005 ANNUAL MEETING OF STOCKHOLDERS

To the Stockholders of
NEOPROBE CORPORATION:

The Annual Meeting of the Stockholders of Neoprobe Corporation, a
Delaware corporation (the "Company"), will be held at the Barclay
Intercontinental Hotel, 111 East 48th Street, New York, NY 10017 (phone:
212.755.5900), on June 13, 2005, at 9:00a.m., Eastern Daylight Time, for the
following purposes:

1. To elect two directors, to serve for a term of three years or
until their successors are duly elected and qualified;

2. To increase the authorized number of shares of the Company
from 105,000,000 to 155,000,000, consisting of 150,000,000
shares of common stock, $.001 par value, and 5,000,000 shares
of preferred stock, $.001 par value;

3. To approve the amendment of the Company's 2002 Stock Incentive
Plan to increase the number of shares of common stock issuable
under the plan from 3,000,000 to 5,000,000 shares; and

4. To transact such other business as may properly come before
the meeting or any adjournment thereof.

The Board of Directors has fixed the close of business on April 15,
2005, as the record date for the determination of stockholders entitled to
notice of and to vote at the Annual Meeting and any adjournment thereof. A list
of stockholders will be available for examination by any stockholder at the
Annual Meeting and for a period of 10 days before the Annual Meeting at the
executive offices of the Company.

Whether or not you plan to attend the Annual Meeting, please sign,
date, and return the enclosed proxy card in the envelope provided or take
advantage of voting your proxy online.

By Order of the Board of Directors

/s/ David C. Bupp

David C. Bupp
Chief Executive Officer and President

Dublin, Ohio
April 29, 2005

NEOPROBE CORPORATION

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

2005 ANNUAL MEETING OF STOCKHOLDERS

June 13, 2005

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PROXY STATEMENT

Dated April 29, 2005

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

GENERAL INFORMATION

Solicitation. This proxy statement is furnished to the stockholders of
Neoprobe Corporation, a Delaware corporation, in connection with the
solicitation by the Board of Directors of the Company of proxies to be voted at
the Company's 2005 Annual Meeting of Stockholders to be held on June 13, 2005,
and any adjournment thereof. This proxy statement and the accompanying proxy
card are first being mailed to stockholders on or about April 29, 2005.

Company Address. The mailing address of our principal executive offices
is 425 Metro Place North, Suite 300, Dublin, Ohio 43017.

Voting Rights. Stockholders of record at the close of business on April
15, 2005, are entitled to notice of and to vote at the Annual Meeting. As of
that date, there were 58,585,008 shares of common stock of the Company, par
value $.001 per share, outstanding. Each holder of common stock of record on
April 15, 2005, is entitled to one vote per share held with respect to all
matters which may be brought before the Annual Meeting.

Authorization. The shares represented by the accompanying proxy will be
voted as directed if the proxy is properly completed, signed, and received by
us. If no directions are made to the contrary, your proxy will be voted FOR each
of the proposals set forth in the Notice of Annual Meeting of Stockholders. The
proxy will also be voted at the discretion of the persons acting under the proxy
to transact such other business as may properly come before the Annual Meeting
and any adjournment thereof.

Revocation. Any stockholder returning the accompanying proxy has the
power to revoke it at any time before its exercise by giving notice of
revocation to the Company, by duly executing and delivering to the Company a
proxy card bearing a later date, or by voting in person at the Annual Meeting.

Tabulation. Under Section 216 of the Delaware General Corporation Law
(DGCL) and our by-laws, the presence, in person or by proxy, of holders of a
majority of the outstanding shares of our common stock is necessary to
constitute a quorum for the transaction of business at the Annual Meeting.
Shares represented by signed proxies that are returned to the Company will be
counted toward the quorum in all matters even though they are marked as
"Abstain," "Against" or "Withhold Authority" on one or more or all matters or
they are not marked at all (see General Information-Authorization).
Broker/dealers, who hold their customers' shares in street name, may, under the
applicable rules of the exchanges and other self-regulatory organizations of
which such broker/dealers are members, sign and submit proxies for such shares
and may vote such shares on routine matters, which, under such rules, typically
include the election of directors, but broker/dealers may not vote such shares
on other matters without specific instructions from the customer who owns such
shares. Proxies signed and submitted by broker/dealers that have not been voted
on certain matters as described in the previous sentence are referred to as
broker non-votes. Such proxies count toward the establishment of a quorum.

The proposal to increase the authorized number of shares of common stock of
the Company is considered a routine matter and broker/dealers who hold their
customers' shares in street name may, under the applicable rules of the
exchanges and other self-regulatory organizations of which such broker/dealers
are members, sign and submit proxies for such shares and may vote such shares on
this matter. The proposal to amend the Company's 2002 Stock Incentive Plan to
increase the number of shares of common stock issuable under the plan from
3,000,000 to 5,000,000 shares is not considered a routine matter and
broker/dealers who hold their customers' shares in street name may not vote such
shares on this matter.

Under Section 216 of the DGCL and our by-laws, the election of the
director nominees requires the favorable vote of a plurality of all votes cast
by the holders of our common stock at a meeting at which a quorum is present.
Proxies that are marked "Withhold Authority" and broker non-votes will not be
counted toward a nominee's achievement of a plurality and, thus, will have no
effect. Under Section 242 of the DGCL and our by-laws, the amendment to our
Restated Certificate of Incorporation to increase the number of authorized
shares requires the affirmative vote of the holders of a majority of the shares
of our outstanding common stock. For purposes of determining the number of
shares of our common stock voting on the amendment, abstentions will be counted
and will have the effect of a negative vote; broker non-votes will be counted
and thus will have the effect of a negative vote. Under Section 216 of the DGCL
and our by-laws, the amendment to the 2002 Stock Incentive Plan requires the
affirmative vote of a majority of the shares represented in person or by proxy
at the Annual Meeting. For purposes of determining the number of shares of our
common stock voting on the amendment to the 2002 Stock Incentive Plan,
abstentions and broker non-votes will not be counted, but will have the effect
of a negative vote.

ELECTION OF DIRECTORS

Nominees for Election as Directors

We presently have eight directors on our Board of Directors, comprised
of three directors in two classes and two directors in an additional class, with
terms expiring at the Annual Meeting in 2005, 2006 and 2007, respectively. At
the Annual Meeting, the nominees to the Board of Directors receiving the highest
number of votes will be elected as directors to terms of three years expiring in
2008.

Carl J. Aschinger, Jr. and Fred B. Miller are currently directors of
the Company and are being nominated by our Board of Directors for re-election as
directors, to serve for terms of three years. Nancy E. Katz is currently a
director of the Company, but has decided not to stand for re-election.

It is intended that, unless otherwise directed, the shares represented
by the enclosed proxy will be voted FOR the election of Messrs. Aschinger and
Miller. We have no reason to believe that any nominee will not stand for
election or serve as a director. In the event that a nominee fails to stand for
election, the proxies will be voted for the election of another person
designated by the persons named in the proxy. See General
Information-Tabulation.

The Board of Directors has nominated the following persons to serve as directors
of the Company until the 2008 Annual Meeting:

Carl J. Aschinger, Jr., age 66, has served as a director of our Company since
June 2004. Mr. Aschinger is the Chairman and Chief Executive Officer of Columbus
Show Case Co., a privately-held company that manufactures showcases for the
retail industry. Mr. Aschinger also serves on the Board of Directors and as
Chairman of the Audit Committee of Pinnacle Data Systems, a publicly-traded
company that provides software and hardware solutions to original equipment
manufacturers. Mr. Aschinger also serves on the Board of Directors and as
Chairman of the Audit Committee of Wilson-Bohannon, a privately-held company
that manufactures padlocks. Mr. Aschinger is a former director of Liqui-Box
Corporation and Huntington National Bank as well as other privately-held
ventures and has served on boards or advisory committees of several
not-for-profit organizations.

Fred B. Miller, age 66, has served as a director of our Company since January
2002. Mr. Miller serves as Chairman of the Audit Committee. Mr. Miller is the
President and Chief Operating Officer of Seicon, Limited, a privately held
company that specializes in developing, applying and licensing technology to
reduce seismic and mechanically induced vibration. Mr. Miller also serves on the
board of one other privately-held company. Until his retirement in 1995, Mr.
Miller had been with Price Waterhouse LLP since 1962. Mr. Miller is a Certified
Public Accountant, a member of the American Institute of Certified Public
Accountants (AICPA), a past member of the Council of the AICPA and a member and
past president of the Ohio Society of Certified Public Accountants. He also has
served on the boards or advisory committees of several universities and
not-for-profit organizations. Mr. Miller has a B.S. degree in Accounting from
the Ohio State University.

Director whose term concludes at the 2005 Annual Meeting:

Nancy E. Katz, age 46, has served as a director of our Company since January
2001. Ms. Katz currently is an independent health care business consultant. Ms.
Katz served as President, Chief Executive Officer and director of Calypte
Biomedical Corporation (Calypte) until June 2003. Ms. Katz joined Calypte in
October 1999 as President, Chief Operating Officer and Chief Financial Officer.
Prior to joining Calypte, Ms. Katz served as President of Zila Pharm Inc. From
1997 to 1998, Ms. Katz served as Vice President of Sales & Marketing of LifeScan
(the diabetes testing division of Johnson & Johnson) and Vice President of U.S.
Marketing, directing LifeScan's marketing and customer call center departments
from 1995 to 1997. During her seven-year career at Schering-Plough Healthcare
Products from 1987 to 1994, she held numerous positions including Senior
Director & General Manager, Marketing Director for Footcare New Products, and
Product Director of OTC New Products. Ms. Katz also held various product
management positions at American Home Products from 1981 to 1987. Ms. Katz
received her B.A. in Business Administration from the University of South
Florida.

Directors whose terms continue until the 2006 Annual Meeting:

Kirby I. Bland, M.D., age 63, has served as a director of our Company since May
2004. Dr. Bland currently serves as Professor and Chairman and Fay Fletcher
Kerner Professor and Chairman, Department of Surgery of the University of
Alabama at Birmingham (UAB) School of Medicine since 1999 and 2002,
respectively, Deputy Director of the UAB Comprehensive Cancer Center since 2000
and Senior Scientist, Division of Human Gene Therapy, UAB School of Medicine
since 2001. Prior to his appointments at UAB, Dr. Bland was J. Murry Breadsley
Professor and Chairman, Professor of Medical Science, Department of Surgery and
Director, Brown University Integrated Program in Surgery at Brown University
School of Medicine from 1993 to 1999. Prior to his appointments at Brown
University, Dr. Bland was Professor and Associate Chairman, Department of
Surgery, University of Florida College of Medicine from 1983 to 1993 and
Associate Director of Clinical Research at the University of Florida Cancer
Center from 1991 to 1993. Dr. Bland held a number of medical staff positions at
the University of Louisville, School of Medicine from 1977 to 1983 and at M. D.
Anderson Hospital and Tumor Institute from 1976 to 1977. Dr. Bland is a member
of the Board of Governors of the American College of Surgeons (ACS), a member of
the ACS' Advisory Committee, Oncology Group (ACOSOG), a member of the ACS'
American Joint Committee on Cancer Task Force and serves as Chairman of the ACS'
Breast Disease Site Committee, COC. Dr. Bland is a past President of the Society
of Surgical Oncology. Dr. Bland received his B.S. in Chemistry/Biology from
Auburn University and a M.D. degree from the University of Alabama, Medical
College of Alabama.

J. Frank Whitley, Jr., age 63, has served as a director of our Company since May
1994. Mr. Whitley was Director of Mergers, Acquisitions and Licensing at The Dow
Chemical Company (Dow), a multinational chemical company, from June 1993 until
his retirement in June 1997. After joining Dow in 1965, Mr. Whitley served in a
variety of marketing, financial, and business management functions. Mr. Whitley
has a B.S. degree in Mathematics from Lamar State College of Technology.

Directors whose terms continue until the 2007 Annual Meeting:

Reuven Avital, age 53, has served as a director of our Company since January
2002. Mr. Avital is a partner and general manager of Ma'Aragim Enterprises Ltd.,
an investment company in Israel, and he is a member of the board of Neoprobe as
well as a number of privately-held Israeli companies, three of them in the
medical device field. Mr. Avital was a board member of Cardiosonix, Ltd. from
April 2001 through December 31, 2001, when we acquired the company. Previously,
Mr. Avital served in the Israeli government in a variety of middle and senior
management positions. He is also chairman or board member in several
not-for-profit organizations, mainly involved in education for the
under-privileged and international peace-building. Mr. Avital has B.A. degrees
in The History of the Middle East and International Relations from the Hebrew
University of Jerusalem, and a M.P.A. from the Kennedy School of Government at
Harvard University.

David C. Bupp, age 55, has served as President and a director of our Company
since August 1992 and as Chief Executive Officer since February 1998. From
August 1992 to May 1993, Mr. Bupp served as our Treasurer. In addition to the
foregoing positions, from December 1991 to August 1992, he was Acting President,
Executive Vice President, Chief Operating Officer and Treasurer, and from
December 1989 to December 1991, he was Vice President, Finance and Chief
Financial Officer. From 1982 to December 1989, Mr. Bupp was Senior Vice
President, Regional Manager for AmeriTrust Company National Association, a
nationally chartered bank holding company, where he was in charge of commercial
banking operations throughout Central Ohio. Mr. Bupp has a B.A. degree in
Economics from Ohio Wesleyan University. Mr. Bupp completed a course of study at
Stonier Graduate School of Banking at Rutgers University.

Julius R. Krevans, M.D., age 80, has served as a director of our Company since
May 1994 and as Chairman of the Board of Directors of our Company since February
1999. Dr. Krevans served as Chancellor of the University of California, San
Francisco from July 1982 until May 1993. Prior to his appointment as Chancellor,
Dr. Krevans served as a Professor of Medicine and Dean of the School of Medicine
at the University of California, San Francisco from 1971 to 1982. Dr. Krevans is
a member of the Institute of Medicine, National Academy of Sciences, and led its
committee for the National Research Agenda on Aging until 1991. Dr. Krevans also
serves on the Board of Directors and the compensation committee of the Board of
Directors of Calypte Biomedical Corporation, a publicly held corporation. Dr.
Krevans has a B.S. degree and a M.D. degree, both from New York University.

INFORMATION CONCERNING THE BOARD OF DIRECTORS
AND EXECUTIVE OFFICERS

Board of Directors Meetings

Our Board of Directors held a total of nine meetings in fiscal 2004 and
each of the directors attended at least 75 percent of the aggregate number of
meetings of the Board of Directors and committees (if any) on which he or she
served, except for Dr. Bland who attended 43%. It is our policy that all
directors attend the Annual Meeting of Stockholders. However, conflicts and
unforeseen events may prevent the attendance of a director, or directors. Eight
members of our Board of Directors attended the 2004 Annual Meeting of
Stockholders.

Independence

Our Board has adopted the definition of "independence" as described under
the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley") Section 301, Rule 10A-3 under
the Securities Exchange Act of 1934 (the "Exchange Act") and Nasdaq Rules 4200
and 4350. Our Board of Directors has determined that Messrs. Aschinger, Avital,
Miller and Whitley, Drs. Bland and Krevans, and Ms. Katz meet the independence
requirements.

Compensation of Non-Employee Directors

We paid non-employee directors a quarterly retainer of $1,500 for
participation in board or committee meetings during 2004. We also reimbursed
non-employee directors for travel expenses for meetings attended during 2004. In
addition, each non-employee director received 40,000 options to purchase common
stock as a part of our annual stock incentive grants, and the Chairman of the
Board and the Chairman of the Audit Committee each received an additional 40,000
options for their services in those capacities. Options granted to purchase
common stock vest on the first anniversary of the date of grant and have an
exercise price equal to not less than the closing market price of common stock
at the date of grant.

Directors who are also officers or employees of our Company do not
receive any compensation for their services as directors.

Nominating Committee

The company established a Nominating Committee in July 2004. Prior to that
time, nominations for directors were considered by the entire Board, a majority
of whom are independent. The Nominating Committee is responsible for
identification of nominees to serve on our Board of Directors. The members of
the Nominating Committee are Fred B. Miller, Julius R. Krevans, M.D. and J.
Frank Whitley, Jr., each of whom each of whom is "independent" under the Nasdaq
rules referenced above. The Nominating Committee did not hold its first meeting
until fiscal 2005. The Nominating Committee does not currently have a charter.

Our directors play a critical role in guiding our strategic direction
and oversee the management of our Company. Board candidates are considered based
on various criteria, such as their broad based business and professional skills
and experiences, a global business and social perspective, concern for long term
interests of stockholders, and personal integrity and judgment. In addition,
directors must have available time to devote to Board activities and to enhance
their knowledge of the industry. Accordingly, we seek to attract and retain
highly qualified directors who have sufficient time to attend to their
substantial duties and responsibilities to our Company. Recent developments in
corporate governance and financial reporting have resulted in an increased
demand for such highly qualified and productive public company directors.

Our Board will consider the recommendations of stockholders regarding
potential director candidates. In order for stockholder recommendations
regarding possible director candidates to be considered by our Board:

o such recommendations must be provided to the Board c/o Brent L.
Larson, Neoprobe Corporation, 425 Metro Place North, Suite 300,
Dublin, Ohio 43017, in writing at least 120 days prior to the date
of the next scheduled annual meeting;
o the nominating stockholder must meet the eligibility requirements to
submit a valid stockholder proposal under Rule 14a-8 of the
Securities Exchange Act of 1934, as amended;
o the stockholder must describe the qualifications, attributes, skills
or other qualities of the recommended director candidate; and
o the stockholder must follow the procedures set forth in Article III,
Section 2 of our by-laws.

Audit Committee

The Audit Committee of the Board of Directors selects our independent
public accountants with whom the Audit Committee reviews the scope of audit and
non-audit assignments and related fees, the accounting principles that we use in
financial reporting, internal financial auditing procedures and the adequacy of
our internal control procedures. The members of our Audit Committee are: Fred B.
Miller (Chairman), Carl J. Aschinger, Jr., Reuven Avital, Nancy E. Katz, and J.
Frank Whitley, Jr., each of whom is "independent" under the Nasdaq rules
referenced above. The Board of Directors has determined that Fred B. Miller
meets the requirements of an "audit committee financial expert" as set forth in
Section 401(e) of Regulation S-B promulgated by the SEC. The Audit Committee
held five meetings in fiscal 2004.

Compensation Committee

The Compensation Committee establishes guidelines for the compensation
of all our employees, approves the compensation for all executives, administers
and interprets our 2002 Stock Incentive Plan and our 1996 Stock Incentive Plan,
and takes any action that is permitted to be taken by a committee of the Board
of Directors under the terms of such plans, including the granting of options.
The members of the Compensation Committee are Kirby I. Bland, M.D., Nancy E.
Katz and Julius R. Krevans, M.D., each of whom each of whom is "independent"
under the Nasdaq rules referenced above. The Compensation Committee held three
meetings in fiscal 2004.

Stockholder Communications

Stockholders may send communications to our Board of Directors, or to
individual directors, by mailing communications in writing to c/o Brent L.
Larson, Neoprobe Corporation, 425 Metro Place North, Suite 300, Dublin, Ohio
43017.

Executive Officers

In addition to Mr. Bupp, the following individuals are executive
officers of our Company and serve in the position(s) indicated below:

Name Age Position
---- --- --------
Anthony K. Blair 44 Vice President, Manufacturing Operations
Carl M. Bosch 48 Vice President, Research and Development
Rodger A. Brown 53 Vice President, Regulatory Affairs and
Quality Assurance
Brent L. Larson 42 Vice President, Finance; Chief Financial
Officer; Treasurer and Secretary
Douglas L. Rash 61 Vice President, Marketing

Anthony K. Blair has served as Vice President, Manufacturing Operations of our
Company since July 2004. Mr. Blair has 16 years of experience in the medical
device industry. Prior to joining our Company, he served as Vice President,
Manufacturing Operations of Enpath Medical, Lead Technologies Division, formerly
known as Biomec Cardiovascular, Inc. from 2002 to June 2004. From 1998 through
2001, Mr. Blair led the manufacturing efforts at Astro Instrumentation, a
medical device contract manufacturer. From 1989 to 1998 at Ciba Corning
Diagnostics (now Bayer), Mr. Blair held managerial positions including
Operations Manager, Materials Manager, Purchasing Manager and Production
Supervisor. From 1985 to 1989, Mr. Blair was employed by Bailey Controls and
held various positions in purchasing and industrial engineering. Mr. Blair
started his career at Fisher Body, a division of General Motors, in production
supervision. Mr. Blair has a B.B.A. degree in management and labor relations
from Cleveland State University.

Carl M. Bosch has served as Vice President, Research and Development of our
Company since March 2000. Prior to that, Mr. Bosch served as our Director,
Instrument Development from May 1998 to March 2000. Before joining our Company,
Mr. Bosch was employed by GE Medical Systems from 1994 to 1998 where he served
as Manager, Nuclear Programs. From 1977 to 1994, Mr. Bosch was employed by GE
Aerospace in several engineering and management functions. Mr. Bosch has a B.S.
degree in Electrical Engineering from Lehigh University and a M.S. degree in
Systems Engineering from the University of Pennsylvania.

Rodger A. Brown has served as Vice President, Regulatory Affairs and Quality
Assurance of our Company since November 2000. From July 1998 through November
2000, Mr. Brown served as our Director, Regulatory Affairs and Quality
Assurance. Prior to joining our Company, Mr. Brown served as Director of
Operations for Biocore Medical Technologies, Inc. from April 1997 to April 1998.
From 1981 through 1996, Mr. Brown served as Director, Regulatory Affairs/Quality
Assurance for E for M Corporation, a subsidiary of Marquette Electronics, Inc.

Brent L. Larson has served as Vice President, Finance and Chief Financial
Officer of our Company since February 1999. Prior to that, he served as our Vice
President, Finance from July 1998 to January 1999 and as Controller from July
1996 to June 1998. Before joining our Company, Mr. Larson was employed by Price
Waterhouse LLP. Mr. Larson has a B.B.A. degree in accounting from Iowa State
University of Science and Technology and is a Certified Public Accountant.

Douglas L. Rash has served as Vice President, Marketing of our Company since
January 2005. Prior to that, Mr. Rash was Neoprobe's Director, Marketing and
Product Management from March to December 2004. Before joining our Company, Mr.
Rash served as Vice President and General Manager of MTRE North America, Inc.
from 2000 to 2003. From 1994 to 2000, Mr. Rash served as Vice President and
General Manager (Medical Division) of Cincinnati Sub-Zero, Inc. From 1993 to
1994, Mr. Rash was Executive Vice President of Everest & Jennings International,
Ltd. During his nine-year career at Gaymar Industries, Inc. from 1984 to 1993,
Mr. Rash held positions as Vice President and General Manager (Clinicare
Division) and Vice President, Marketing and Sales (Acute Care Division). From
1976 to 1984, Mr. Rash held management positions at various divisions of British
Oxygen Corp. Mr. Rash has a B.S. degree in Business Administration with a minor
in Chemistry from Wisconsin State University.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

Security Ownership of Principal Stockholders, Directors, Nominees and Executive
Officers and Related Stockholder Matters

The following table sets forth, as of April 15, 2005, certain
information with respect to the beneficial ownership of shares of our common
stock by: (i) each person known to us to be the beneficial owner of more than 5
percent of our outstanding shares of common stock, (ii) each director or nominee
for director of our Company, (iii) each of the Named Executives (see "Executive
Compensation - Summary Compensation Table"), and (iv) our directors and
executive officers as a group.

Number of
Shares Beneficially Percent
Beneficial Owner Owned(*) of Class(**)
-------------------------------- ------------------- ------------
Carl J. Aschinger, Jr. 63,000(a) (q)
Reuven Avital 224,256(b) (q)
Anthony K. Blair 50,000(c) (q)
Kirby I. Bland 60,000(d) (q)
Carl M. Bosch 324,291(e) (q)
Rodger A. Brown 234,501(f) (q)
David C. Bupp 2,294,646(g) 3.8%
Nancy E. Katz 117,400(h) (q)
Julius R. Krevans 302,000(i) (q)
Brent L. Larson 417,305(j) (q)
Fred B. Miller 136,000(k) (q)
Douglas L. Rash 17,520(l) (q)
J. Frank Whitley, Jr. 176,000(m) (q)
All directors and officers
as a group(r) (13 persons) 4,416,919(n) 7.1%

Dan Purjes, et al.
830 Third Avenue, 14th Floor
New York, NY 10022 3,209,444(o) 5.5%

Great Point Partners, L.P.
2 Pickwick Plaza, Suite 450
Greenwich, CT 06830 30,000,000(p) 33.9%

(*) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission which generally attribute beneficial
ownership of securities to persons who possess sole or shared voting power
and/or investment power with respect to those securities. Unless otherwise
indicated, voting and investment power are exercised solely by the person
named above or shared with members of such person's household.

(**) Percent of class is calculated on the basis of the number of shares
outstanding on December 20, 2004, plus the number of shares the person has
the right to acquire within 60 days of December 20, 2004.

(a) This amount includes 40,000 shares issuable upon exercise of options which
are exercisable within 60 days, but does not include 40,000 shares issuable
upon exercise of options which are not exercisable within 60 days.

(b) This amount consists of 139,256 shares of our common stock owned by Mittai
Investments Ltd. (Mittai), an investment fund under the management and
control of Mr. Avital, and 85,000 shares issuable upon exercise of options
which are exercisable within 60 days but does not include 40,000 shares
issuable upon exercise of options which are not exercisable within 60 days.
The shares held by Mittai were obtained through a distribution of 2,785,123
shares previously held by Ma'Aragim Enterprise Ltd. (Ma'Aragim) another
investment fund under the management and control of Mr. Avital. On February
28, 2005, Ma'Aragim distributed its shares to the partners in the fund. Mr.
Avital is not an affiliate of the other fund to which the remaining
2,645,867 shares were distributed. Of the 2,785,123 shares previously held
by Ma'Aragim, 2,286,712 were acquired in exchange for surrendering its
shares in Cardiosonix Ltd. on December 31, 2001, in connection with our
acquisition of Cardiosonix, and 498,411 were acquired by Ma'Aragim based on
the satisfaction of certain developmental milestones on December 30, 2002,
associated with our acquisition of Cardiosonix.

(c) This amount does not include 90,000 shares issuable upon exercise of
options which are not exercisable within 60 days.

(d) This amount includes 60,000 shares issuable upon exercise of options which
are exercisable within 60 days but does not include 50,000 shares issuable
upon exercise of options which are not exercisable within 60 days.

(e) This amount includes 240,001 shares issuable upon exercise of options which
are exercisable within 60 days and 44,290 shares in Mr. Bosch's account in
the 401(k) Plan, but does not include 169,999 shares issuable upon exercise
of options which are not exercisable within 60 days.

(f) This amount includes 234,501 shares issuable upon exercise of options which
are exercisable within 60 days, but does not include 159,999 shares
issuable upon exercise of options which are not exercisable within 60 days.

(g) This amount includes 703,334 shares issuable upon exercise of options which
are exercisable within 60 days, 875,000 warrants which are exercisable
within 60 days, a promissory note convertible into 250,000 shares of our
common stock, 50,875 shares that are held by Mr. Bupp's wife for which he
disclaims beneficial ownership and 64,937 shares in Mr. Bupp's account in
the 401(k) Plan, but it does not include 506,666 shares issuable upon
exercise of options which are not exercisable within 60 days.

(h) This amount includes 115,000 shares issuable upon exercise of options which
are exercisable within 60 days, but does not include 40,000 shares issuable
upon the exercise of options which are not exercisable within 60 days.

(i) This amount includes 300,000 shares issuable upon exercise of options which
are exercisable within 60 days, but does not include 60,000 shares issuable
upon exercise of options which are not exercisable within 60 days.

(j) This amount includes 297,201 shares issuable upon exercise of options which
are exercisable within 60 days and 44,604 shares in Mr. Larson's account in
the 401(k) Plan, but it does not include 169,999 shares issuable upon
exercise of options which are not exercisable within 60 days.

(k) This amount includes 125,000 shares issuable upon exercise of options which
are exercisable within 60 days and 11,000 shares held by Mr. Miller's wife
for which he disclaims beneficial ownership, but does not include 60,000
shares issuable upon the exercise of options which are not exercisable
within 60 days.

(l) This amount includes 16,667 shares issuable upon exercise of options which
are exercisable within 60 days and 853 shares in Mr. Rash's account in the
401(k) Plan, but does not include 73,333 shares issuable upon exercise of
options which are not exercisable within 60 days.

(m) This amount includes 175,000 shares issuable upon exercise of options which
are exercisable within 60 days, but does not include 40,000 shares issuable
upon exercise of options which are not exercisable within 60 days.

(n) This amount includes 2,391,704 shares issuable upon exercise of options
which are exercisable within 60 days and 154,684 shares held in the 401(k)
Plan on behalf of certain officers, but it does not include 1,499,996
shares issuable upon the exercise of options which are not exercisable
within 60 days. The Company itself is the trustees of the Neoprobe 401(k)
Plan and may, as such, share investment power over common stock held in
such plan. The trustee disclaims any beneficial ownership of shares held by
the 401(k) Plan. The 401(k) Plan holds an aggregate total of 310,333 shares
of common stock.

(o) This amount consists of 434,783 shares owned by MFW Associates, 217,391
warrants held by MFW associates which are exercisable within 60 days,
694,465 shares owned collectively by Dan & Edna Purjes, 434,783 warrants
held collectively by Dan & Edna Purjes which are exercisable within 60
days, 217,391 shares owned by Y Securities Management, Ltd., 108,696
warrants held by Y Securities Management, Ltd. which are exercisable within
60 days, 217,391 shares owned by the Purjes Foundation, 108,696 warrants
held by the Purjes Foundation which are exercisable within 60 days, 341,065
shares owned by Dan Purjes IRA and 434,783 warrants held by Dan Purjes IRA
which are exercisable within 60 days (collectively, Dan Purjes, et al.).
This amount is based on information provided to us in connection with the
purchase of these securities in a private placement and subsequent filing
of a registration statement and on information provided to us by our
transfer agent and represents the best information available to us at the
time of this filing.

(p)This amount includes 11,000,000 shares issuable upon conversion of
promissory notes in the original principal amount of $4,400,000 held by
Biomedical Value Fund, L.P. (BVF) that are convertible within 60 days,
9,000,000 shares issuable upon conversion of promissory notes in the
original principal amount of $3,600,000 held by Biomedical Offshore Value
Fund, LTD. (BOVF) that are convertible within 60 days, 5,500,000 warrants
held by BVF that are exercisable within 60 days and 4,500,000 warrants held
by BOVF that are exercisable within 60 days. BVF and BOVF are investment
funds managed by Great Point Partners, LLP.

(q) Less than one percent.

(r) The address for all directors and officers is c/o Neoprobe Corporation, 425
Metro Place North, Suite 300, Dublin, Ohio 43017.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth certain information concerning the
annual and long-term compensation of our Chief Executive Officer and our other
three highest paid executive officers having annual compensation in excess of
$100,000 during the last fiscal year (the Named Executives) for the last three
fiscal years.

Long Term
Compensation Awards
Restricted Securities
Stock Underlying
Annual Compensation Awards Options
Name and Principal Position Year Salary Bonus Other ($) (#)
--------------------------- ---- ------ ----- ----- --- ---

Carl M. Bosch 2004 $ 138,375 $ 6,000 $ 2,887(a) - 170,000
Vice President, 2003 135,125 - 6,573(a) - 70,000
Research and Development 2002 129,375 - 3,093(a) - 50,000

Rodger A. Brown 2004 $ 117,300 $ 2,500 $ - - 160,000
Vice President, Regulatory Affairs/ 2003 125,316 - - - 70,000
Quality Assurance 2002 105,417 - - - 50,000

David C. Bupp 2004 $ 271,250 $15,000 $ 4,100(b) - 500,000
President and 2003 222,167 32,500 31,090(b) - 170,000
Chief Executive Officer 2002 297,083 - 5,738(b) - 180,000

Brent L. Larson 2004 $ 137,700 $ 6,000 $ 2,874(c) - 170,000
Vice President, Finance and 2003 135,125 - 11,733(c) - 70,000
Chief Financial Officer 2002 129,375 - 2,993(c) - 50,000

(a) Amounts represent solely matching contribution under the Neoprobe
Corporation 401(k) Plan (the Plan), except for 2003, which includes $3,870
related to the vesting of restricted stock. Eligible employees may make
voluntary contributions and we may, but are not obligated to, make matching
contributions based on 40 percent of the employee's contribution, up to
five percent of the employee's salary. Employee contributions are invested
in mutual funds administered by an independent plan administrator. Company
contributions, if any, are made in the form of shares of common stock. The
Plan is intended to qualify under section 401 of the Internal Revenue Code,
which provides that employee and company contributions and income earned on
contributions are not taxable to the employee until withdrawn from the
Plan, and that we may deduct our contributions when made.

(b) Amounts represent matching contribution under the Plan, except for 2003,
which includes $27,090 related to the vesting of restricted stock and
social luncheon club dues.

(c) Amounts represent solely matching contribution under the Plan, except for
2003, which includes $9,030 related to the vesting of restricted stock.

Option Grants in Last Fiscal Year

The following table presents certain information concerning stock
options granted to the Named Executives under the 2002 Stock Incentive Plan
during the 2004 fiscal year.

Individual Grants
-------------------------------------------------------------------------------------------
Number of Percent of Total
Securities Options Granted Exercise
Underlying Options to Employees in Price Expiration
Name Granted (shares) Fiscal Year Per Share Date(e)
---- --------------- ----------- --------- ----

Carl M. Bosch 70,000(a) 4% $ 0.30(b) 1/7/14

50,000(a) 3% $ 0.49(c) 7/28/14

50,000(a) 3% $ 0.39(d) 12/10/14

Rodger A. Brown 70,000(a) 4% $ 0.30(b) 1/7/14

50,000(a) 3% $ 0.49(c) 7/28/14

40,000(a) 2% $ 0.39(d) 12/10/14

David C. Bupp 150,000(a) 9% $ 0.30(b) 1/7/14

150,000(a) 9% $ 0.49(c) 7/28/14

200,000(a) 12% $ 0.39(d) 12/10/14

Brent L. Larson 70,000(a) 4% $ 0.30(b) 1/7/14

50,000(a) 3% $ 0.49(c) 7/28/14

50,000(a) 3% $ 0.39(d) 12/10/14

(a) Vests as to one-third of these shares on each of the first three
anniversaries of the date of grant.

(b) The per share weighted average fair value of these stock options during
2004 was $0.29 on the date of grant using the Black-Scholes option pricing
model with the following assumptions: an expected life of 4 years, an
average risk-free interest rate of 2.8%, volatility of 146% and no expected
dividend rate.

(c) The per share weighted average fair value of these stock options during
2004 was $0.49 on the date of grant using the Black-Scholes option pricing
model with the following assumptions: an expected life of 4 years, an
average risk-free interest rate of 3.3%, volatility of 139% and no expected
dividend rate.

(d) The per share weighted average fair value of these stock options during
2004 was $0.32 on the date of grant using the Black-Scholes option pricing
model with the following assumptions: an expected life of 4 years, an
average risk-free interest rate of 3.3%, volatility of 80% and no expected
dividend rate.

(e) The options terminate on the earlier of the expiration date, nine months
after death or disability, 90 days after termination of employment without
cause or by resignation, or immediately upon termination of employment for
cause.

Fiscal Year-End Option Numbers and Values

The following table sets forth certain information concerning the
number and value of unexercised options held by the Named Executives at the end
of the last fiscal year (December 31, 2004). There were no stock options
exercised by the Named Executives during the fiscal year ended December 31,
2004.

Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Fiscal Year-End: at Fiscal Year-End:
Name Exercisable/Unexercisable Exercisable/Unexercisable(1)
---- ------------------------- ----------------------------

Carl M. Bosch 176,668 / 233,332 $86,534 / $137,666

Rodger A. Brown 171,168 / 223,332 $80,634 / $131,766

David C. Bupp 586,668 / 773,332 $316,634 / $397,266

Brent L. Larson 233,868 / 233,332 $104,234 / $137,666

(1) Represents the total gain which would be realized if all in-the-money
options held at year end were exercised, determined by multiplying the
number of shares underlying the options by the difference between the per
share option exercise price and the per share fair market value at year end
of $0.59. An option is in-the-money if the fair market value of the
underlying shares exceeds the exercise price of the option.

Equity Compensation Plan Information

The following table sets forth additional information as of December
31, 2004, concerning shares of our common stock that may be issued upon the
exercise of options and other rights under our existing equity compensation
plans and arrangements, divided between plans approved by our stockholders and
plans or arrangements not submitted to our stockholders for approval. The
information includes the number of shares covered by, and the weighted average
exercise price of, outstanding options and other rights and the number of shares
remaining available for future grants excluding the shares to be issued upon
exercise of outstanding options, warrants, and other rights.

Number of Securities
Remaining Available
for Issuance Under
Number of Securities Weighted-Average Equity Compensation
to be Issued Upon Exercise Price of Plans (Excluding
Exercise of Outstanding Options, Securities Reflected
Outstanding Options, Warrants and Rights in Column (a))
Warrants and Rights (b) (c)
(a)
---------------------- ----------------------- ----------------------

Equity compensation plans
approved by security holders 4,857,641 $ 0.59 359,465

Equity compensation plans
not approved by security
holders - - -
---------------------- ----------------------- ----------------------
Total 4,857,641 $ 0.59 359,465
====================== ======================= ======================

Employment and Other Compensation Agreements

Compensation of Mr. Bupp

Employment Agreement. David C. Bupp is employed under a thirty-six
month employment agreement effective January 1, 2004. The employment agreement
provides for an annual base salary of $271,250. Effective January 1, 2005, Mr.
Bupp's annual base salary was increased to $290,000. The Board of Directors
will, on an annual basis, review the performance of our company and of Mr. Bupp
and will pay a bonus to Mr. Bupp as it deems appropriate, in its discretion.
Such review and bonus will be consistent with any bonus plan adopted by the
Compensation Committee that covers the executive officers of our company
generally. Mr. Bupp was paid a bonus of $15,000 relating to fiscal year 2004.

If a change in control occurs with respect to our company and the
employment of Mr. Bupp is concurrently or subsequently terminated:

o by our company without cause (cause is defined as any willful breach of
a material duty by Mr. Bupp in the course of his employment or willful
and continued neglect of his duty as an employee);

o the term of Mr. Bupp's employment agreement expires; or

o Mr. Bupp resigns because his authority, responsibilities or
compensation have materially diminished, a material change occurs in
his working conditions or we breach the agreement;

then, Mr. Bupp will be paid a severance payment of $650,000 (less amounts paid
as Mr. Bupp's salary and benefits that continue for the remaining term of the
agreement if his employment is terminated without cause). If any such
termination occurs after the substantial completion of the liquidation of our
assets, the severance payment shall be increased by $81,250.

For purposes of Mr. Bupp's employment agreement, a change in control includes:

o the acquisition, directly or indirectly, by a person (other than our
company or an employee benefit plan established by the Board of
Directors) of beneficial ownership of 15 percent or more of our
securities with voting power in the next meeting of holders of voting
securities to elect the directors;

o a majority of the directors elected at any meeting of the holders of
our voting securities are persons who were not nominated by our then
current Board of Directors or an authorized committee thereof;

o our stockholders approve a merger or consolidation of our company with
another person, other than a merger or consolidation in which the
holders of our voting securities outstanding immediately before such
merger or consolidation continue to hold voting securities in the
surviving or resulting corporation (in the same relative proportions to
each other as existed before such event) comprising eighty percent
(80%) or more of the voting power for all purposes of the surviving or
resulting corporation; or

o our stockholders approve a transfer of substantially all of our assets
to another person other than a transfer to a transferee, eighty percent
(80%) or more of the voting power of which is owned or controlled by us
or by the holders of our voting securities outstanding immediately
before such transfer in the same relative proportions to each other as
existed before such event.

Mr. Bupp will be paid a severance amount of $406,250 if his employment
is terminated at the end of his employment agreement or without cause and his
benefits will continue for the longer of twenty-four months or the full term of
the agreement.

Compensation Agreements With Other Named Executives

Carl M. Bosch

Employment Agreement. Carl Bosch is employed under a twenty-four month
employment agreement effective January 1, 2005. The employment agreement
provides for an annual base salary of $149,000.

The Compensation Committee will, on an annual basis, review the
performance of our company and of Mr. Bosch and we will pay a bonus to Mr. Bosch
as we deem appropriate, in our discretion. Such review and bonus will be
consistent with any bonus plan adopted by the Compensation Committee that covers
the executive officers of our company generally. Mr. Bosch was paid a bonus of
$6,000 relating to fiscal year 2004.

If a change in control occurs with respect to our company and the
employment of Mr. Bosch is concurrently or subsequently terminated:

o without cause (cause is defined as any willful breach of a material
duty by Bosch in the course of his employment or willful and continued
neglect of his duty as an employee);

o the term of Mr. Bosch's employment agreement expires; or

o Mr. Bosch resigns because his authority, responsibilities or
compensation have materially diminished, a material change occurs in
his working conditions or we breach the agreement;

then, Mr. Bosch will be paid a severance payment of $298,000 and will continue
his benefits for the longer of twelve months or the remaining term of his
employment agreement.

For purposes of Mr. Bosch's employment agreement, a change in control
includes:

o the acquisition, directly or indirectly, by a person (other than our
company or an employee benefit plan established by the Board of
Directors) of beneficial ownership of 30 percent or more of our
securities with voting power in the next meeting of holders of voting
securities to elect the directors;

o our stockholders approve a transfer of substantially all of the assets
of our company to another person other than a transfer to a transferee,
eighty percent (80%) or more of the voting power of which is owned or
controlled by us or by the holders of our voting securities outstanding
immediately before such transfer in the same relative proportions to
each other as existed before such event.

Mr. Bosch will be paid a severance amount of $149,000 if his employment
is terminated at the end of his employment agreement or without cause, and his
benefits will be continued for up to twelve months.

Rodger A. Brown

Employment Agreement. Rodger Brown is employed under a twenty-four
month employment agreement effective January 1, 2005. The employment agreement
provides for an annual base salary of $124,000.

The terms of Mr. Brown's employment agreement are substantially
identical to Mr. Bosch's employment agreement except that Mr. Brown would be
paid $248,000 if terminated due to a change of control and $124,000 if
terminated at the end of his employment or without cause.

The Compensation Committee will, on an annual basis, review the
performance of our company and of Mr. Brown and we will pay a bonus to Mr. Brown
as we deem appropriate, in our discretion. Such review and bonus will be
consistent with any bonus plan adopted by the Compensation Committee that covers
the executive officers of our company generally. Mr. Brown was paid a bonus of
$2,500 relating to fiscal year 2004.

Brent L. Larson

Employment Agreement. Brent Larson is employed under a twenty-four
month employment agreement effective January 1, 2005. The employment agreement
provides for an annual base salary of $149,000.

The terms of Mr. Larson's employment agreement are substantially
identical to Mr. Bosch's employment agreement.

The Compensation Committee will, on an annual basis, review the
performance of our company and of Mr. Larson and we will pay a bonus to Mr.
Larson as we deem appropriate, in our discretion. Such review and bonus will be
consistent with any bonus plan adopted by the Compensation Committee that covers
the executive officers of our company generally. Mr. Larson was paid a bonus of
$6,000 relating to fiscal year 2004.

AMENDMENT TO CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES

Our Certificate of Incorporation currently authorizes us to issue up to
100,000,000 shares of common stock, $.001 par value, and 5,000,000 shares of our
preferred stock, $.001 par value.

Our Board of Directors has adopted, subject to stockholder approval, an
amendment to our Certificate of Incorporation to increase the authorized number
of shares of our common stock from 100,000,000 shares to 150,000,000 shares.
Under the amendment, Section 4.1 of Article FOUR of the Amended and Restated
Certificate of Incorporation would read:

4.1 AUTHORIZED SHARES. The total number of shares of capital stock
which the Corporation has authority to issue is 155,000,000 shares,
consisting of:

(a) 150,000,000 shares of Common Stock, par value $.001 per share
(the Common Stock); and

(b) 5,000,000 shares of Preferred Stock, par value $.001 per share
(the Preferred Stock).

As of April 15, 2005, of the 100,000,000 shares of common stock
presently authorized, 58,585,008 shares were issued and outstanding, 35,729,376
shares were reserved for issuance related to outstanding warrants and
convertible securities, 5,024,308 shares were reserved for issuance under our
stock option plans, -0- shares were reserved for any other specific use and
661,308 shares were available for future issuances. If our stockholders approve
the amendment to our Certificate of Incorporation to increase our authorized
shares, we will have 50,661,308 shares of common stock that are not reserved for
any specific use and are available for future issuances.

Our Board of Directors believes that the 661,308 shares of common stock
that are not reserved and which are available for issuance do not provide us
with sufficient flexibility to act in a timely manner in meeting future stock
needs. We anticipate that we may in the future need to issue additional shares
in connection with one or more of the following:

o acquisitions;

o strategic investments;

o corporate transactions, such as stock splits or stock dividends;

o financing transactions, such as public offerings of common stock or
convertible securities;

o incentive and employee benefit plans; and

o otherwise for corporate purposes that have not yet been identified.

In order to provide our Board of Directors with certainty and
flexibility to undertake such transactions to support our future business
growth, the Board believes it is in the best interests of our Company at this
time to increase the number of authorized shares of our common stock. No such
transactions are currently under consideration by the Board.

If this proposal is adopted, the additional authorized shares of common
stock may be issued upon the approval of our Board of Directors at such times,
in such amounts, and upon such terms as our Board of Directors may determine,
without further approval of the stockholders, unless such approval is expressly
required by applicable law, regulatory agencies, or any exchange or quotation
service on which our common stock may then be listed. For example, such
stockholder approval may be required pursuant to Section 203 of the DGCL for the
issuance of shares of common stock in connection with a business combination
with an interested stockholder (See the discussion under "Possible Anti-Takeover
Effects of the Proposal" at page 16 of this proxy statement). In addition, in
the future should our common stock be listed on a national securities exchange
or the Nasdaq Stock Market (rather than the Over-The-Counter Bulletin Board
where it currently trades), then the approval of our stockholders would be
required in certain additional situations, including: (i) in connection with the
acquisition of certain stock or assets, including another business, from a
director, officer or substantial shareholder, or from an entity in which one of
such persons is a substantial stockholder, or from an entity in which one of
such persons has a substantial direct or indirect interest, and the stock
issuable in such transaction could result in an increase in the number of shares
or voting power of the outstanding shares of 5% or more, (ii) in a transaction
or a series of transactions (except for a public offering of common stock for
cash) that would result in an increase in the number of shares or voting power
of the outstanding shares by 20% or more, (iii) where the issuance of common
stock would result in a change of control of our Company, or (iv) in connection
with a stock option or purchase plan under which stock may be acquired by
officers or directors. The ability of our Board of Directors to issue shares
from the additional authorized shares will allow the Board, except under the
limited circumstances discussed in this paragraph, to perform the functions for
which they are currently empowered under our Restated Certificate of
Incorporation and by-laws in executing certain transactions, such as
acquisitions, investments, or other transactions, pursuant to which such
additional authorized shares could be issued without further stockholder
approval of the specific transaction.

Our stockholders do not have preemptive rights with respect to future
issuances of additional shares of common stock, which means that current
stockholders do not have a prior right to purchase any new issue of common stock
of our Company in order to maintain their proportionate ownership interest. As a
result, the issuance of a significant amount of additional authorized common
stock (other than as the result of a stock split or other pro rata distribution
to stockholders) would result in a significant dilution of the beneficial
ownership interests and/or voting power of each company stockholder who does not
purchase additional shares to maintain his or her pro rata interest. As
additional shares are issued, the shares owned by our existing stockholders will
represent a smaller percentage ownership interest in our Company. For instance,
a stockholder who currently owns 100,000 shares of our common stock has 0.10% of
the total number of our shares currently outstanding plus those reserved for
issuance under outstanding options, warrants and convertible securities. If,
however, the proposal is approved and all 50,000,000 of the additional shares of
common stock are issued (including in that number the shares currently reserved
for issuance under outstanding options, warrants and convertible securities),
the stockholder's 100,000 shares then would represent approximately 0.07% of our
total outstanding shares of common stock. In addition, the issuance of
additional shares of our common stock could result in a decrease in the trading
price of our common stock, depending on the price at which such shares are
issued.

If this proposal is not adopted, management believes we will be
severely limited in our ability to raise capital. As is discussed more fully in
the Risk Factors included in our Annual Report on Form 10-KSB for the year ended
December 31, 2004, we believe we will need to raise additional capital in order
to fund research and development and to maintain existing and secure new
manufacturing capacity. If we are unsuccessful in gaining approval for this
increase in our authorized shares, and other funding sources are not available
to us, we may have to severely curtail our operations.

Possible Anti-Takeover Effects of the Proposal

Our Board of Directors does not intend or view the proposed increase in
the number of authorized shares of our common stock as an anti-takeover measure,
but rather, as a means of providing greater flexibility to the Board as
indicated above. Nevertheless, the proposed increase in our authorized shares
could enable the Board to issue additional shares to render more difficult or
discourage an attempt by another person or entity to obtain control of our
Company, even if the holders of our common stock deem such acquisition of
control of our Company to be in their best interests. The issuance of additional
shares of common stock in a public or private sale, merger or similar
transaction would increase the number of outstanding shares and thereby could
dilute the proportionate interest of a party attempting to gain control of our
Company. As of the date of this proxy statement, our Board of Directors and our
management are not aware of any attempt or plan to takeover or acquire our
Company or our common stock, and the proposal to increase the authorized shares
of our common stock was not prompted by any specific takeover or acquisition
effort or threat. Other than the amendment to our Certificate of Incorporation
to increase the number of authorized shares of our common stock, our Board of
Directors does not currently contemplate recommending the adoption of any other
proposals or amendments to our Restated Certificate of Incorporation that could
be construed to affect the ability of third parties to take over or change the
control of our Company.

Our Certificate of Incorporation permits our Board of Directors to
issue up to 5,000,000 shares of preferred stock on terms established by our
Board from time to time. The Board, within the limitations and restrictions
contained in the Certificate of Incorporation and without further action by our
stockholders, has the authority to issue the preferred stock from time to time
in one or more series and to fix the number of shares and the relative rights,
conversion rights, voting rights, rights and terms of redemption, liquidation
preferences and any other preferences, special rights and qualifications of any
such series. Any issuance of preferred stock with voting rights could, under
certain circumstances, have the effect of delaying or preventing a change in
control of our Company by increasing the number of outstanding shares entitled
to vote and increasing the number of votes required to approve a change in
control of our Company. As of the date of this proxy statement, our Board of
Directors has created one series of preferred stock. 500,000 shares of preferred
stock have been designated as Series A Junior Participating Preferred Stock and
reserved for issuance under our stockholder rights plan.

In July 1995 our Board of Directors adopted a stockholder rights plan.
The stockholder rights plan provides each stockholder of record one right for
each ordinary share of common stock of our Company. The rights are represented
by the Company's ordinary common stock certificates, and are not traded
separately from ordinary common stock and are not exercisable. The rights will
become exercisable only if, unless approved by the Board of Directors, a person
acquires or announces a tender offer that would result in ownership of 15% or
more of our common stock, at which time, each right would enable the holder to
buy shares of our Company's common stock at a discount to the then market price.
We may redeem the rights at any time before they become exercisable for $0.01
per right. The stockholder rights plan expires on August 28, 2005. The
stockholder rights plan may have the effect of deterring third parties from
making takeover bids for control of our Company, or may be used to hinder or
delay a takeover bid. This would decrease the chance that our stockholders would
realize a premium over market price for their shares of common stock as a result
of the takeover bid.

Our by-laws establish advance notice procedures for the nomination of
candidates for election as directors by stockholders, as well as for other
stockholder proposals to be considered at annual meetings. Generally, we must
receive a notice of intent to nominate a director or raise any other matter at a
stockholder meeting not less than 120 days before the first anniversary of the
mailing of our proxy statement for the previous year's annual meeting. The
notice must contain required information concerning the person to be nominated
or the matters to be brought before the meeting and concerning the stockholder
submitting the proposal.

We are incorporated in Delaware, and as such are subject to Section 203
of the DGCL, which provides that a corporation may not engage in any "business
combination" with an "interested stockholder" during the three years after he or
she becomes an interested stockholder unless:

o the corporation's board of directors approved in advance either the
business combination or the transaction which resulted in the
stockholder becoming an interested stockholder;

o the interested stockholder owned at least 85 percent of the
corporation's voting stock at the time the transaction commenced; or

o the business combination is approved by the corporation's board of
directors and the affirmative vote of at least two-thirds of the voting
stock which is not owned by the interested stockholder.

Generally, a "business combination" includes a merger, asset or stock sale, or
other transaction resulting in a financial benefit to the interested
stockholder. An "interested stockholder" is a person who, together with
affiliates and associates, owns or, within three years prior to the
determination of interested stockholder status, did own 15% or more of a
corporation's outstanding voting securities. Section 203 of the DGCL makes it
more difficult for an interested stockholder to implement various business
combinations with our Company for a three-year period, although our stockholders
may vote to exclude it from the law's restrictions.

Required Vote

The affirmative vote of the holders of a majority of the shares of our
outstanding common stock is required to adopt this proposal. It will become
effective upon the filing of an Amended Certificate of Incorporation with the
Secretary of State of Delaware, which we intend to make on June 14, 2005, the
day after the completion of the Annual Meeting.

The Board of Directors recommends that our stockholders vote "FOR" approval of
the amendment to our Certificate of Incorporation.

AMENDMENT TO THE 2002 STOCK INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES
OF COMMON STOCK ISSUABLE UNDER THE PLAN

The proposed amendment to our 2002 Stock Incentive Plan would increase
the number of shares of our common stock subject to the plan from 3,000,000 to
5,000,000 shares. Our board of directors unanimously approved this amendment on
March 15, 2005. This summary of the principal features of the 2002 Stock
Incentive Plan is qualified in its entirety by the full text of the Amended and
Restated 2002 Stock Incentive Plan (the "2002 Plan"), which we have attached to
this proxy statement as Appendix A and which we incorporate herein by reference.

Purpose

The 2002 Plan is intended to further the growth and profitability of
the Company by providing increased incentives to and encourage share ownership
on the part of (a) certain employees of the Company and its affiliates
("Employees"), (b) consultants who provide significant services to the Company
and its affiliates ("Consultants"), and (c) directors of the Company who are
employees of neither the Company nor any affiliate ("Non-employee Directors").

General

The 2002 Plan permits the granting of stock options, stock appreciation
rights, restricted stock awards, performance units and performance shares
(collectively, "Awards") to eligible participants. If our stockholders approve
the amendment to the 2002 Plan at the annual meeting, the maximum number of
shares of our common stock which will be issued pursuant to the 2002 Plan will
be 5,000,000 shares. The market value of the 5,000,000 shares of our common
stock to be subject to the 2002 Plan was approximately $2,000,000 at April 15,
2005. If an Award expires or is canceled without having been fully exercised or
vested, the unvested or canceled shares will be available again for grants of
Awards.

Administration of the 2002 Plan

The 2002 Plan is administered by the Compensation Committee (the
"Committee"). The members of the Committee must qualify as "non-employee
directors" under Rule 16b-3 under the Securities Exchange Act of 1934 ("Rule
16b-3"), and as "outside directors" under section 162(m) of the Internal Revenue
Code (the "Code"). Subject to the terms of the 2002 Plan, the Committee has the
sole discretion to determine the employees and consultants who shall be granted
Awards, the terms and conditions of such Awards, and to construe and interpret
the 2002 Plan. The Committee also is responsible for making adjustments in
outstanding Awards, the shares available for Awards, and the numerical
limitations for Awards to reflect any transactions such as stock splits or stock
dividends. The Committee may delegate its authority to one or more directors or
officers; provided, however, that the Committee may not delegate its authority
and powers (a) with respect to Section 16 Persons, or (b) in any way which would
jeopardize the Plan's qualification under Section 162(m) of the Code or Rule
16b-3. The Board of Directors may amend or terminate the 2002 Plan at any time
and for any reason, but to the extent required under Rule 16b-3, material
amendments to the 2002 Plan must be approved by stockholders.

Eligibility to Receive Awards

Management, employees and consultants of the Company and its affiliates
(i.e., any corporation or other entity controlling, controlled by, or under
common control with the Company) are eligible to be selected to receive one or
more Awards. The estimated number of eligible participants is approximately 22
persons. The actual number of employees and consultants who will receive Awards
under the 2002 Plan cannot be determined because eligibility for participation
in the Plan is at the discretion of the Committee. No participant may receive
Awards covering more than 500,000 shares under the 2002 Plan in any Performance
Period. The 2002 Plan also permits Non-employee Directors to elect to receive
all or part of their annual retainer in shares of the Company's common stock.
Non-employee Directors are not eligible for any of the other Awards available
under the 2002 Plan.

Awards to Covered Officers

For each performance period, the Committee will designate, prior to the
completion of 25% of the period (or such earlier or later date as is permitted
or required by Section 162(m) of the Code), which executive officers are deemed
to be "Covered Officers," the deductibility of whose compensation may be limited
by Section 162(m) of the Code. All Awards to Covered Officers must be made in a
manner that allows for the full deductibility of the Award by the Company. In
general, options granted at fair market value will qualify. All other Awards
must be contingent on the achievement of one or more "performance goals," based
on the business criteria of the type defined in the 2002 Plan, in amounts
determined by the Committee prior to the completion of 25% of the performance
period (or such earlier or later date as is permitted or required by Section
162(m) of the Code). Extraordinary events, as defined in the 2002 Plan will
either be excluded or included in determining whether performance goals are
achieved, whichever will produce the higher Award. The Committee does, however,
have the discretion to reduce or eliminate the amount of any Award, taking into
consideration extraordinary events or other factors. In no event can an Award
under the 2002 Plan to a Covered Officer be increased. Awards may be paid to
Covered Officers only after the Committee has certified in writing that the
performance goals have been achieved.

Options

The Committee may grant incentive stock options, which entitle the
holder to favorable tax treatment, and/or nonqualified stock options. The number
of shares covered by each option is determined by the Committee. The price of
the shares of the Company's common stock subject to each option is set by the
Committee but cannot be less than 25% of the fair market value of the shares on
the date of grant. In addition, the exercise price of an incentive stock option
must be at least 100% of fair market value on the grant date or 110% of fair
market value if the participant owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company.

The exercise price of each option must be paid in full at the time of
exercise. The Committee also may permit payment through the tender of shares of
the Company's common stock already owned by the participant, or by any other
means which the Committee determines to be consistent with the Plan's purpose.
Any taxes required to be withheld must be paid by the participant at the time of
exercise. If the exercise price of an option is paid in shares, the Committee
may provide that the participant will receive a new option covering a number of
shares equal to the number of shares tendered to exercise the previously granted
option, including shares used for tax withholding. The terms and conditions of
the new option generally will be similar to the terms and conditions applicable
to the exercised option, except that the new option will have an exercise price
determined on the date of its grant.

Options become exercisable and terminate at the times and on the terms
established by the Committee, but options generally may not expire later than 10
years after the date of grant.

2002 Stock Incentive Plan Option Table

Set forth below is a summary of the option awards made under the 2002
Plan since its inception through April 15, 2005, to the following named
executives:

Name and Position Number of Options
----------------- -----------------
Carl M. Bosch 240,000
Vice President,
Research and Development

Rodger A. Brown 230,000
Vice President, Regulatory Affairs/
Quality Assurance

David C. Bupp 470,000
President and
Chief Executive Officer

Brent L. Larson 190,000
Vice President, Finance and
Chief Financial Officer

Since the adoption of the 2002 Plan:

o all current executive officers, as a group, have been granted options
and restricted shares under the 2002 Plan covering 1,310,000 shares of
common stock (net of awards cancelled);

o all current directors who are not executive officers , as a group, have
been granted options and restricted shares under the 2002 Plan covering
810,000 shares of common stock (net of awards cancelled);

o The nominees for election as directors, Messrs. Aschinger and Miller,
have been granted options and restricted shares under the 2002 Plan
covering 80,000 and 160,000 shares of common stock (net of awards
cancelled), respectively; and,

o All current employees, excluding executive officers, as a group, have
been granted options and restricted shares under the 2002 Plan covering
543,000 shares of common stock (net of awards cancelled).

Stock Appreciation Rights

Stock appreciation rights ("SARs") may be granted as a separate Award
or together with an option. Upon exercise of a SAR, the participant will receive
a payment from the Company equal to: (1) the excess of the fair market value of
a share on the date of exercise over the exercise price, times (2) the number of
shares with respect to which the SAR is exercised. SARs may be paid in cash,
shares of the Company's common stock, or a combination of both, as determined by
the Committee. The number of shares covered by each SAR is determined by the
Committee. The Committee also determines the other terms and conditions of each
SAR. SARs expire at the times established by the Committee, but subject to the
same maximum time limits as are applicable to employee options granted under the
2002 Plan.

Restricted Stock Awards

Restricted stock awards are shares of the Company's common stock which
vest in accordance with terms established by the Committee in its discretion.
For example, the Committee may provide that restricted stock will vest only if
one or more performance goals are satisfied and/or only if the participant
remains employed with the Company for a specified period of time. Any
performance measures may be applied on a Company-wide or an individual business
unit basis, as deemed appropriate in light of the participant's specific
responsibilities.

Performance Units and Performance Shares

Performance units and performance shares are amounts credited to a
bookkeeping account established for the participant. A performance unit has an
initial value that is established by the Committee at or before the time of its
grant. A performance share has an initial value equal to the fair market value
of a share of the Company's common stock on the date of grant. Whether a
performance unit or share actually will result in a payment to a participant
will depend upon the extent to which performance goals established by the
Committee are satisfied. The applicable performance goals and all other terms
and conditions of the Award are determined by the Committee. After a performance
unit or share has vested, that is, after the applicable performance goal or
goals have been achieved, the participant will be entitled to a payment of cash
and/or common stock, as determined by the Committee. The Committee also may
waive the achievement of any performance goals for any performance units or
shares, but not for executive officers.

Non-employee Director Options and Stock

The 2002 Plan also provides for the grant of stock options to
Non-employee Directors. The exercise price of each Non-employee Director option
will be no less than twenty five percent (25%) of the fair market value of the
shares on the date of grant. Each such option becomes exercisable one year after
the date of grant, assuming continuous service as a Non-employee Director.

All options granted to Non-employee Directors will expire ten years
after the date of grant. If a director terminates service on the Board prior to
an option's normal expiration date, the option will terminate three months after
termination of service for any reason other than death, disability or
retirement, but not later than the original maximum term of the option. Options
will expire one year after termination on account of retirement, disability or
death. The Non-employee Director provisions of the 2002 Plan are administered by
the Board of Directors rather than the Committee.

The 2002 Plan also permits each Non-employee Director to elect to
forego receipt of all or a portion of the director's meeting fees in exchange
for shares of the Company's common stock having a fair market value equal to the
amount of foregone compensation. The number of shares received is determined by
dividing the amount of foregone compensation by the fair market value of a share
on the date that the compensation otherwise would have been paid.

Forfeiture

If a participant or former participant engages in a breach of conduct,
including conduct prejudicial to or in conflict with the Company or an affiliate
or competes with the Company, all outstanding and unexercised Awards may be
cancelled and terminated. In addition, participants may have to reimburse the
Company for any gain realized or payment received upon the exercise or payment
of an Award within one year of the harmful behavior.

Awards to be Granted to Certain Individuals and Groups

As described above, the Committee has discretion to determine the
number and type of Awards to be granted to any employee or consultant.
Accordingly, the actual number and type of Awards to be granted in the future is
not determinable.

Nontransferability of Options

Except for nonqualified stock options, Awards granted under the 2002
Plan may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the applicable laws of descent and
distribution. Nonqualified stock options may be transferred for no consideration
to family members or to trusts or other entities for their benefit, or to other
persons, if approved by the Compensation Committee.

Tax Aspects

Based on management's understanding of current federal income tax laws,
the tax consequences of the grant of Awards under the 2002 Plan are, generally,
as follows:

A recipient of an option or SAR granted under the 2002 Plan will not
have regular taxable income at the time of grant.

Upon exercise of a nonqualified stock option or SAR, the optionee
generally must recognize taxable income in an amount equal to the fair market
value on the date of exercise of the shares exercised, minus the exercise price.
Any gain or loss recognized upon any later sale or other disposition of the
acquired shares generally will be capital gain or loss.

Upon exercise of an incentive stock option, the optionee generally will
not be required to recognize any regular taxable income on account of such
exercise. The optionee will have alternative minimum taxable income. Upon a
later sale or other disposition of the shares, the optionee must recognize
long-term capital gain or ordinary taxable income, depending upon whether the
optionee holds the shares for specified holding periods.

A participant who receives restricted stock or performance units or
shares will not recognize taxable income upon receipt, but instead will
recognize ordinary income when the shares or units vest. Alternatively, with
respect to restricted stock, a participant may elect under section 83(b) of the
Code to be taxed at the time of receipt. In all cases, the amount of ordinary
income recognized by the participant will be equal to the fair market value of
the shares at the time income is recognized, less the amount of any price paid
for the shares. In general, any gain recognized thereafter will be capital gain.

At the discretion of the Committee, a participant may satisfy tax
withholding requirements under federal and state tax laws in connection with the
exercise or receipt of an Award by electing to have shares withheld, or by
delivering to the Company already-owned shares, having a value equal to the
amount required to be withheld.

The Company generally will be entitled to a tax deduction in connection
with an Award made under the 2002 Plan only to the extent that the participant
recognizes ordinary income from the Award. Section 162(m) of the Code contains
special rules regarding the federal income tax deductibility of compensation
paid to the Company's Chief Executive Officer and to each of the other four most
highly compensated executive officers. The general rule is that annual
compensation paid to any of these specified executives will be deductible only
to the extent that it does not exceed $1,000,000 or qualifies as
"performance-based" compensation under section 162(m) of the Code. The 2002 Plan
has been designed so that Awards to Covered Officers should qualify as
performance-based compensation under section 162(m) of the Code.

The discussion above does not address the current federal income tax
consequences of Awards subject to Section 409A of the Code. Section 409A of the
Code was added to the Internal Revenue Code by the American Jobs Creation Act of
2004 and generally affects amounts deferred under a covered nonqualified
deferred compensation plan after December 31, 2004, and such prior deferrals
under a plan that has been materially modified after October 3, 2004.
Preliminary guidance issued under Code Section 409A suggests that certain types
of awards under the 2002 Plan (other than incentive stock options) may be
subject to the additional limitations. The Board of Directors intends to further
review the terms of the 2002 Plan and awards made under the 2002 Plan, and may
adopt such additional amendments as it determines appropriate in light of the
current and any additional guidance issued under Code Section 409A.

Required Vote

Approval of the amendment to the 2002 Plan requires the affirmative
vote of a majority of the shares represented and voting, in person or by proxy,
at the Annual Meeting.

The Board of Directors recommends that our stockholders vote "FOR" the approval
of the amendment to the 2002 Stock Incentive Plan.

CODE OF CONDUCT AND ETHICS

We have adopted a code of conduct and ethics that applies to our
directors, officers and all employees. The code of conduct and ethics is posted
on our website at www.neoprobe.com. The code of business conduct and ethics may
be also obtained free of charge by writing to Neoprobe Corporation, Attn: Chief
Financial Officer, 425 Metro Place North, Suite 300, Dublin, Ohio 43017.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

During April 2003, we completed a bridge loan agreement with our
President and CEO, David Bupp. Under the terms of the agreement, Mr. Bupp
advanced us $250,000. In consideration for the loan, we issued a note to Mr.
Bupp in the principal amount of $250,000. The note was secured by general assets
of the company, excluding accounts receivable. In addition, we issued Mr. Bupp
375,000 warrants to purchase our common stock at an exercise price of $0.13 per
share, expiring in April 2008. The note bore interest at 8.5% per annum, payable
monthly, and the note was originally due on June 30, 2004. On March 8, 2004, at
the request of the Board of Directors, Mr. Bupp agreed to extend the due date of
the note from June 30, 2004 to June 30, 2005. In exchange for extending the due
date of the note, we issued Mr. Bupp an additional 375,000 warrants to purchase
our common stock at an exercise price of $0.50 per share, expiring in March
2009. On December 13, 2004, we paid the balance of the note to Mr. Bupp. Mr.
Bupp's 750,000 warrants related to this transaction remain outstanding. The
issuances of the note and warrants to Mr. Bupp were exempt from registration
under Sections 4(2) and 4(6) of the Securities Act and Regulation D.

REPORT OF AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

The Audit Committee consults with our Chief Financial Officer and other
key members of our management and with our independent auditors with regard to
the plan of audit; reviews, in consultation with the independent auditors, their
report of audit, or proposed report of audit and the accompanying management
letter, if any; and consults with our Chief Financial Officer and other key
members of our management and with our independent auditors with regard to the
adequacy of the internal accounting controls. The Board of Directors adopted a
written Amended and Restated Audit Committee Charter on April 30, 2004.

In fulfilling its responsibilities, the Audit Committee selected KPMG
LLP as our independent accountants for purposes of auditing our financial
statements for 2004. The Audit Committee has reviewed and discussed with
management and the independent auditors our audited financial statements;
discussed with the independent auditors the matters required to be discussed by
Codification of Statements on Auditing Standards No. 61; received the written
disclosures and the letter from the independent auditors required by
Independence Standards Board Standard No. 1; and discussed with the independent
accountants their independence from our Company.

Based on the reviews and discussions with management and KPMG LLP, the
Audit Committee recommended to the Board that our audited consolidated financial
statements be included in our Annual Report on Form 10-KSB for the fiscal year
ended December 31, 2004, filed with the Securities and Exchange Commission.

The Board of Directors evaluated the independence of each member of the
Audit Committee. As part of its evaluation, the Board of Directors determined,
in the exercise of its business judgment, that Messrs. Aschinger, Avital, Miller
and Whitley and Ms. Katz are independent under Rule 4350(d) of the Nasdaq Stock
Market and are financially literate each in his/her own capacity.

Based upon its work and the information received in the inquiries
outlined above, the Audit Committee is satisfied that its responsibilities under
the charter for the period ended December 31, 2004, were met and that our
financial reporting and audit processes are functioning effectively.

Submitted by the Audit Committee
of the Board of Directors:

Carl J. Aschinger, Jr.
Reuven Avital
Nancy E. Katz
Fred B. Miller
J. Frank Whitley, Jr.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Act of 1934 requires our officers and
directors, and greater than 10% stockholders, to file reports of ownership and
changes in ownership of our securities with the Securities and Exchange
Commission. Copies of the reports are required by SEC regulation to be furnished
to us. Based on our review of these reports and written representations from
reporting persons, we believe that all reporting persons complied with all
filing requirements during the fiscal year ended December 31, 2004, except for
Carl Aschinger, who had two late Form 4 filings, and Anthony Blair, who had one
late Form 3 and one late Form 4 filing.

INDEPENDENT ACCOUNTANTS

KPMG LLP was engaged as the Company's principal accountant on December
7, 1998, and has audited the Company's financial statements for each of the
seven fiscal years in the period ended December 31, 2004. A representative of
KPMG LLP is expected to be present at the Annual Meeting. The representative
will have an opportunity to make a statement if he so desires and is expected to
be available to respond to appropriate questions of stockholders.

FEES OF THE INDEPENDENT PUBLIC ACCOUNTANTS FOR FISCAL 2004

Audit Fees. The aggregate fees billed for professional services rendered by KPMG
LLP, for the audits of the company's annual consolidated financial statements
for the 2004 fiscal year and the reviews of the financial statements included in
the company's Quarterly Reports on Form 10-QSB for the fiscal year were $149,500
(including direct engagement expenses). The aggregate fees billed for
professional services rendered by KPMG LLP for the audits of the company's
annual consolidated financial statements for the 2003 fiscal year and the
reviews of the financial statements included in the company's Quarterly Reports
on Form 10-QSB for the fiscal year were $128,900 (including direct engagement
expenses).

Audit-Related Fees. The aggregate fees billed by KPMG LLP for audit-related
services rendered for the company for the 2004 fiscal year were $22,840. The
aggregate fees billed KPMG LLP for audit-related services rendered for the
company and its subsidiaries for the 2003 fiscal year were $11,500.
Audit-related fees generally include fees in support of the company's filing of
registration statements with the SEC and similar matters.

Tax Fees. The aggregate fees billed by KPMG LLP for tax-related services
rendered for the company for the 2004 fiscal year were $6,500. The aggregate
fees billed by KPMG LLP for tax-related services rendered for the company and
its subsidiaries for the 2003 fiscal year were $6,525. The tax-related services
were all in the nature of tax compliance and tax planning.

All Other Fees. The aggregate fees billed for services rendered to the company
by KPMG LLP, other than the audit services, audit-related services, and tax
services, were $0 for the 2004 fiscal year and $0 for the 2003 fiscal year.

Pre-Approval Policy. The Audit Committee is required to pre-approve all auditing
services and permitted non-audit services (including the fees and terms thereof)
to be performed for the company by its independent auditor or other registered
public accounting firm, subject to the de minimis exceptions for non-audit
services described in Section 10A(i)(1)(B) of the Securities Exchange Act of
1934 that are approved by the Audit Committee prior to completion of the audit.

COST OF SOLICITATION OF PROXIES

We will pay the cost of this solicitation. We may request persons
holding shares in their names for others to forward soliciting materials to
their principals to obtain authorization for the execution of proxies, and we
will reimburse such persons for their expenses in so doing.

STOCKHOLDER PROPOSALS

A stockholder proposal intended for inclusion in the proxy statement
and form of proxy for the Annual Meeting of Stockholders of the Company to be
held in 2006 must be received by the Company before December 30, 2005, at its
executive offices, Attention: Brent Larson. Any stockholder proposal submitted
outside the processes of Rule 14a-8 under the Securities Exchange Act of 1934
for presentation at our 2006 Annual Meeting will be considered untimely for
purposes of Rule 14a-4 and 14a-5 if notice thereof is received by us after March
15, 2006.

A stockholder who wishes to nominate a candidate for election to the
Board of Directors must follow the procedures set forth in Article III, Section
2 of our By-Laws. A copy of these procedures is available upon request from the
Company at 425 Metro Place North, Suite 300, Dublin, Ohio 43017-1367, Attention:
Brent Larson. In order for a stockholder to nominate a candidate for the Board
of Directors election at the 2006 Annual Meeting, notice of the nomination must
be delivered to the Company's executive offices, Attention: Brent Larson, before
December 30, 2005.

OTHER BUSINESS

The Board of Directors does not intend to present, and has no knowledge
that others will present, any other business at the Annual Meeting. If, however,
any other matters are properly brought before the Annual Meeting, it is intended
that the persons named in the enclosed proxy will vote the shares represented
thereby in accordance with their best judgment.

Appendix A

NEOPROBE CORPORATION

AMENDED AND RESTATED 2002 STOCK INCENTIVE PLAN

1. Background, Purpose and Duration

1.1 Effective Date. The Plan is effective as of March 7, 2002,
subject to ratification by an affirmative vote of the holders of a majority of
the Shares which are present in person or by proxy and entitled to vote at the
2002 Annual Meeting of Stockholders. Section 4.1 of the Plan was amended
effective March 15, 2005, and the amendment is subject to ratification by an
affirmative vote of the holders of a majority of the Shares which are present in
person or by proxy and entitled to vote at the 2005 Annual Meeting of
Stockholders.

1.2 Purpose of the Plan. The Plan is intended to further the
growth and profitability of the Company by providing increased incentive to and
encourage Share ownership on the part of (a) employees of the Company and its
Affiliates, (b) consultants who provide significant services to the Company and
its Affiliates, and (c) directors of the Company who are not employees of the
Company. All management and key Employees, Consultants and Directors of the
Company are eligible to receive Awards under the Plan.

2. Definitions

The following words and phrases shall have the following meanings
unless a different meaning is plainly required by the context:

2.1 "1934 Act" means the Securities Exchange Act of 1934, as
amended. Reference to a specific section of the 1934 Act or regulation
thereunder shall include such section or regulation, any valid regulation
promulgated under such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding such section or
regulation.

2.2 "Affiliate" means any corporation or any other entity
(including, but not limited to, partnerships, limited liability corporations and
joint ventures) controlling, controlled by, or under common control with the
Company.

2.3 "Affiliated SAR" means a SAR that is granted in connection
with a related Option, and which automatically will be deemed to be exercised at
the same time that the related Option is exercised. The deemed exercise of an
Affiliated SAR shall not necessitate a reduction in the number of Shares subject
to the related Option, except to the extent of the exercise of the related
Option.

2.4 "Award" means, individually or collectively, a grant under the
Plan of Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted
Stock, Performance Units, or Performance Shares.

2.5 "Award Agreement" means the written agreement setting forth the
terms and provisions applicable to each Award granted under the Plan.

2.6 "Board" means the Board of Directors of the Company.

2.7 "Change of Control" will be deemed to have occurred if and
when (a) an individual, partnership, corporation, trust or other entity
("Person") acquires or combines with the Company, or 50 percent or more of the
Company's assets or earning power, in one or more transactions, and after such
acquisition or combination, less than a majority of the outstanding voting
shares of the Person surviving such transaction (or the ultimate parent of the
surviving Person) are owned by the owners of the voting shares of the Company
outstanding immediately prior to such acquisition or combination; or (b) during
any period of two consecutive years during the term of this Plan, individuals
who at the beginning of such period are members of the Board ("Original Board
Members") cease for any reason to constitute at least a majority of the Board,
unless the election of each Board member who was not an Original Board Member
has been approved in advance by Board members representing at least two-thirds
of the Board members then in office who were Original Board Members or elected
by them.

A-1

2.8 "Code" means the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code or regulation thereunder shall
include such section or regulation, any valid regulation promulgated under such
section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation.

2.9 "Committee" means the committee appointed by the Board
(pursuant to Section 3.1) to administer the Plan.

2.10 "Company" means Neoprobe Corporation, a Delaware corporation,
its Subsidiaries and any successors.

2.11 "Consultant" means any person who provides services to the
Company or any Subsidiary (other than in connection with the offer or sale of
securities of the Company or any Subsidiary in a capital raising transaction),
who is neither an Employee nor a Director and who is a consultant or an adviser
to the Company or any Subsidiary within the meaning of General Instruction A.1.
to Form S-8 promulgated by the SEC under the Securities Act of 1933.

2.12 "Covered Officers" means those Participants who the Committee
designates, for each Performance Period, in order to maintain qualified
performance-based compensation within the meaning of Code Section 162(m).

2.13 "Director" means any individual who is a member of the Board.

2.14 "Disability" means a permanent and total disability within the
meaning of Code section 22(e)(3), provided that in the case of Awards other than
Incentive Stock Options, the Committee in its discretion may determine whether a
permanent and total disability exists in accordance with uniform and
non-discriminatory standards adopted by the Committee from time to time.

2.15 "Employee" means any management or key employee of the Company
or of an Affiliate, whether such employee is so employed at the time the Plan is
adopted or becomes so employed subsequent to the adoption of the Plan.

2.16 "Exercise Price" means the price at which a Share may be
purchased by a Participant pursuant to the exercise of an Option.

2.17 "Extraordinary Events" shall mean (a) asset write-downs, (b)
litigation or claim judgments or settlements, (c) the effect of changes in tax
law, accounting principles or other such laws or provisions affecting reported
results, (d) accruals for reorganization and restructuring programs, (e) capital
gains and losses, (f) special charges in connection with mergers and
acquisitions, and (g) any extraordinary non-recurring items as described in
Accounting Principles Board Opinion No. 30 and/or in management's discussion and
analysis of financial condition and results of operation appearing or
incorporated by reference in the Company's Annual Report on Form 10-K filed with
the Securities and Exchange Commission for the applicable year.

2.18 "Fair Market Value" means (a) if the Shares are listed or
admitted to trading on a national securities exchange or the Nasdaq National
Market, the per Share closing price regular way on the principal national
securities exchange or the Nasdaq National Market on which the Shares are listed
or admitted to trading on the day prior to the Grant Date or, if no closing
price can be determined for the such day, the most recent date for which such
price can reasonably be ascertained, or (b) if the Shares are not listed or
admitted to trading on a national securities exchange or the Nasdaq National
Market, but are quoted on the over-the-counter Bulletin Board, the average of
the high and low sales price per share reported on the over-the-counter Bulletin
Board on the day prior to the Grant Date or, if no high and low price can be
determined for such day, the most recent date for which such price can
reasonably be ascertained, or (c) if the Shares are not listed or admitted to
trading on a national securities exchange or the Nasdaq National Market, nor are
quoted on the over-the-counter Bulletin Board, the mean between the
representative bid and asked per Share prices in the over-the-counter market at
the closing of the day prior to the Grant Date, or the most recent such bid and
asked prices then available, as reported by NASDAQ or if the Shares are not then
quoted by NASDAQ as furnished by any market maker selected from time to time by
the Committee for that purpose. In all other cases, the fair market value will
be determined in accordance with procedures established in good faith by the
Committee and with respect to Incentive Stock Options, shall conform to
regulations issued by the Internal Revenue Service.

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2.19 "Fiscal Year" means the fiscal year of the Company.

2.20 "Freestanding SAR" means a SAR that is granted independently
of any Option.

2.21 "Grant Date" means, with respect to an Award, the date that
the Award was granted.

2.22 "Incentive Stock Option" means an Option to purchase Shares
which is designated as an Incentive Stock Option and is intended to meet the
requirements of section 422 of the Code.

2.23 "Nonqualified Stock Option" means an option to purchase Shares
which is not intended to be an Incentive Stock Option.

2.24 "Option" means an Incentive Stock Option or a Nonqualified
Stock Option.

2.25 "Participant" means an Employee, Consultant, or Non-employee
Director who has an outstanding Award.

2.26 "Performance Goal" shall mean any one or more of the following
performance criteria:

(a) Income (loss) per common share from continuing operations as
disclosed in the Company's annual report to shareholders for a particular Fiscal
Year;

(b) Income (loss) per common share disclosed in the Company's
annual report to stockholders for a particular Fiscal Year;

(c) Income (loss) per common share or income (loss) per common
share from continuing operations excluding (i) extraordinary charge(s); and/or
(ii) any accruals for restructuring programs, merger integration costs, or
merger transaction costs; and/or (iii) other unusual or infrequent items
(whether gains or losses) as defined by generally accepted accounting principles
(GAAP) which are disclosed as a separate component of income or loss on the face
of the income statement or as may be disclosed in the notes to the financial
statements (hereinafter "EPS");

(d) Ratio of (i) operating profit, or other objective and specific
income (loss) category results to (ii) average common shares outstanding
(adjustments to (i) in this paragraph may be made at the time of the goal/target
establishment by the Committee in its discretion);

(e) Any of items (a), (b), (c) or (d) on a diluted basis as
described in Statement of Financial Accounting Standards No. 128 including
official interpretations or amendments thereof which may be issued from time to
time as long as such interpretations or amendments are utilized on the face of
the income statement or in the notes to the financial statements disclosed in
the Company's annual report to shareholders;

(f) Share price;

(g) Total stockholder return expressed on a dollar or percentage
basis as is customarily disclosed in the proxy statement accompanying the notice
of annual meetings of stockholders;

(h) Income (loss) (i) from continuing operations before
extraordinary charge(s), or (ii) before extraordinary charge(s), or (iii) net,
as the case may be, adjusted to remove the effect of any accruals for
restructuring programs or other unusual or infrequent items as defined by
generally accepted accounting principles (GAAP) disclosed as a separate
component of income on the face of the income statement or in the notes to the
financial statements;

(i) Net income;

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(j) Income (loss) before income taxes;

(k) Any of items (a) through (j) above with respect to any
Subsidiary, Affiliate, division, business unit or business group of the Company
whether or not such information is included in the Company's annual report to
stockholders, proxy statement or notice of annual meeting of stockholders;

(l) Any of items (a) though (j) above with respect to a
Performance Period whether or not such information is included in the Company's
annual report to stockholders, proxy statement or notice of annual meetings of
stockholders;

(m) Total Stockholder Return Ranking Position meaning the relative
placement of the Company's Total Stockholder Return compared to those publicly
held companies in the Company's peer group as established by the Committee prior
to the beginning of a vesting period or such later date as permitted under the
Code. The peer group shall be comprised of not less than six (6) companies,
including the Company; or

(n) Any other objective criteria established by the Committee and
approved by the shareholders of the Company prior to payment of any Award based
on the criteria.

With respect to items (a), (b), (c) and (d) above, other terminology may be used
for "income (loss) per common share" (such as "Basic EPS", "earnings per common
share", "diluted EPS", or "earnings per common share-assuming dilution") as
contemplated by Statement of Financial Accounting Standards No. 128.

2.27 "Performance Period" means the Fiscal Year except in the
following cases: (a) the Employee's service period within a Fiscal Year in the
case of a new hire or promoted Employee; or (b) a period of service determined
at the discretion of the Committee prior to the expiration of more than 25% of
the period. Notwithstanding any provision contained herein, Performance Periods
of Awards granted to Section 16 Persons shall exceed six (6) months in length
(or such shorter period as may be permissible while maintaining compliance with
Rule 16b-3).

2.28 "Performance Share" means a Performance Share granted to a
Participant pursuant to Section 8.

2.29 "Performance Unit" means a Performance Unit granted to a
Participant pursuant to Section 8.

2.30 "Period of Restriction" means the period during which shares
of Restricted Stock are subject to forfeiture and/or restrictions on
transferability; provided, however, that the Period of Restriction on Shares
granted to a Section 16 Person may not lapse until at least six (6) months after
the Grant Date.

2.31 "Plan" means the Neoprobe Corporation 2002 Stock Incentive
Plan, as set forth in this instrument and as hereafter amended from time to
time.

2.32 "Restricted Stock" means an Award granted to a Participant
pursuant to Section 7.

2.33 "Retirement" means, in the case of an Employee, a Termination
of Service by reason of the Employee's retirement at or after his or her having
satisfied the requirements for retirement under the applicable Company or
Affiliate qualified retirement plan. With respect to a Consultant, no
Termination of Service shall be deemed to be on account of "Retirement." With
respect to a Non-employee Director, "Retirement" means termination of service on
the Board with the consent of the remaining Directors.

2.34 "Rule 16b-3" means Rule 16b-3 promulgated under the 1934 Act,
as amended, and any future regulation amending, supplementing or superseding
such regulation.

2.35 "Section 16 Person" means a person who, with respect to the
Shares, is subject to section 16 of the 1934 Act.

2.36 "Shares" means the shares of the Company's common stock,
$0.001 par value.

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2.37 "Stock Appreciation Right" or "SAR" means an Award, granted
alone or in connection with a related Option, that pursuant to Section 6 is
designated as a SAR.

2.38 "Subsidiary" means any entity in an unbroken chain of entities
beginning with the Company if each of the entities other than the last entity in
the chain then owns fifty percent (50%) or more of the total combined voting
power in one of the other entities in the chain.

2.39 "Tandem SAR" means a SAR that is granted in connection with a
related Option, the exercise of which shall require forfeiture of the right to
purchase an equal number of Shares under the related Option (and when a Share is
purchased under the Option, the SAR shall be canceled to the same extent).

2.40 "Termination of Service" means (a) in the case of an Employee,
a cessation of the employee-employer relationship between an Employee and the
Company or an Affiliate for any reason, including, but not by way of limitation,
a termination by resignation, discharge, death, Disability, Retirement, or the
disaffiliation of an Affiliate, but excluding any such termination where there
is a simultaneous reemployment by the Company or an Affiliate; (b) in the case
of a Consultant, a cessation of the service relationship between a Consultant
and the Company or an Affiliate for any reason, including, but not by way of
limitation, a termination by resignation, discharge, death, Disability, or the
disaffiliation of an Affiliate, but excluding any such termination where there
is a simultaneous re-engagement of the consultant by the Company or an
Affiliate; and (c) in the case of a Non-employee Director, a cessation of the
Non-employee Director's service on the Board for any reason.

3. Administration

3.1 The Committee. The Plan shall be administered by the
Committee. The Committee shall consist of not less than two (2) Directors. The
members of the Committee shall be appointed from time to time by, and shall
serve at the pleasure of, the Board. The Committee shall be comprised solely of
Directors who both are (a) "non-employee directors" under Rule 16b-3, and (b)
"outside directors" under section 162(m) of the Code.

3.2 Authority of the Committee. It shall be the duty of the
Committee to administer the Plan in accordance with the Plan's provisions. The
Committee shall have all powers and discretion necessary or appropriate to
administer the Plan and to control its operation, including, but not limited to,
the power to (a) determine which Employees and Consultants shall be granted
Awards, (b) prescribe the terms and conditions of the Awards (other than the
Options granted to Non-employee Directors pursuant to Section 9), (c) interpret
the Plan and the Awards, (d) adopt such procedures and subplans as are necessary
or appropriate to permit participation in the Plan by Employees, Consultants and
Directors who are foreign nationals or employed outside of the United States,
(e) adopt rules for the administration, interpretation and application of the
Plan as are consistent therewith, and (f) interpret, amend or revoke any such
rules.

3.3 Delegation by the Committee. The Committee, in its sole
discretion and on such terms and conditions as it may provide, may delegate all
or any part of its authority and powers under the Plan to one or more directors
or officers of the Company; provided, however, that the Committee may not
delegate its authority and powers (a) with respect to Section 16 Persons, or (b)
in any way which would jeopardize the Plan's qualification under Section 162(m)
of the Code or Rule 16b-3.

3.4 Non-employee Directors. Notwithstanding any contrary provision
of this Section 3, the Board shall administer Section 9 of the Plan, and the
Committee shall exercise no discretion with respect to Section 9. In the Board's
administration of Section 9 and the Options and any Shares granted to
Non-employee Directors, the Board shall have all of the authority and discretion
otherwise granted to the Committee with respect to the administration of the
Plan.

3.5 Decisions Binding. All determinations and decisions made by
the Committee, the Board, and any delegate of the Committee pursuant to the
provisions of the Plan shall be final, conclusive, and binding on all Persons,
and shall be given the maximum deference permitted by law.

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4. Shares Subject to the Plan

4.1 Number of Shares. Subject to adjustment as provided in Section
4.3, the total number of Shares available for grant under the Plan shall not
exceed Five Million (5,000,000) Shares. The maximum number of Shares that are
available for grant to any individual Participant in any calendar year shall not
exceed 500,000 Shares. Shares granted under the Plan may be either authorized
but unissued Shares or treasury Shares.

4.2 Lapsed Awards. If an Award terminates, expires, or lapses for
any reason, any Shares subject to such Award again shall be available to be the
subject of an Award.

4.3 Adjustments in Awards and Authorized Shares. In the event of
any merger, reorganization, consolidation, recapitalization, separation,
liquidation, stock dividend, split-up, Share combination, or other change in the
corporate structure of the Company affecting the Shares, the Committee shall
adjust the number and class of Shares which may be delivered under the Plan, the
number, class, and price of Shares subject to outstanding Awards, and the
numerical limit of Section 10.5 in such manner as the Committee (in its sole
discretion) shall determine to be appropriate to prevent the dilution or
diminution of such Awards. Notwithstanding the preceding, the number of Shares
subject to any Award always shall be a whole number.

5. Stock Options

5.1 Grant of Options. Subject to the terms and provisions of the
Plan, Options may be granted to Employees and Consultants at any time and from
time to time as determined by the Committee in its sole discretion. The
Committee, in its sole discretion, shall determine the number of Shares subject
to each Option. The Committee may grant Incentive Stock Options, Nonqualified
Stock Options, or a combination thereof.

5.2 Award Agreement. Each Option shall be evidenced by an Award
Agreement that shall specify the Exercise Price, the expiration date of the
Option, the number of Shares to which the Option pertains, any conditions to
exercise of the Option, and such other terms and conditions as the Committee, in
its discretion, shall determine. The Award Agreement shall specify whether the
Option is intended to be an Incentive Stock Option or a Nonqualified Stock
Option.

5.3 Exercise Price. Subject to the provisions of this Section 5.3,
the Exercise Price for each Option shall be determined by the Committee in its
sole discretion.

5.3.1 Nonqualified Stock Options. In the case of a Nonqualified
Stock Option, the Exercise Price shall be not less than twenty five percent
(25%) of the Fair Market Value of a Share on the Grant Date.

5.3.2 Incentive Stock Options. In the case of an Incentive Stock
Option, the Exercise Price shall be not less than one hundred percent (100%) of
the Fair Market Value of a Share on the Grant Date; provided, however, that if
on the Grant Date, the Employee (together with persons whose stock ownership is
attributed to the Employee pursuant to section 424(d) of the Code) owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or any of its Subsidiaries, the Exercise Price shall be not
less than one hundred and ten percent (110%) of the Fair Market Value of a Share
on the Grant Date.

5.3.3 Substitute Options. Notwithstanding the provisions of Sections
5.3.1 and 5.3.2, in the event that the Company or an Affiliate consummates a
transaction described in section 424(a) of the Code (e.g., the acquisition of
property or stock from an unrelated corporation), persons who become Employees
or Consultants on account of such transaction may be granted Options in
substitution for options granted by their former employer. If such substitute
Options are granted, the Committee, in its sole discretion and consistent with
section 424(a) of the Code, shall determine the exercise price of such
substitute Options.

5.4 Expiration of Options.

5.4.1 Expiration Dates. Each Option shall terminate no later than
the first to occur of the following events:

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(a) The date for termination of the Option set forth in the
written Award Agreement; or

(b) The expiration of ten (10) years from the Grant Date (except
as provided in Section 5.8.4 regarding Incentive Stock Options); or

(c) Immediately upon the date and time of the Participant's
Termination of Service for a reason other than the Participant's death,
Disability or Retirement, unless the Committee in its sole discretion elects to
extend the exercisability of an Option to not more than three (3) months from
Termination of Service; or

(d) The expiration of one (1) year from the date of the
Participant's Termination of Service by reason of death, Disability or
Retirement (except as provided in Section 5.8.2 regarding Incentive Stock
Options).

5.4.2 Committee Discretion. Subject to the limits of Sections 5.4.1,
the Committee, in its sole discretion, (a) shall provide in each Award Agreement
when each Option expires and becomes unexercisable, and (b) may, after an Option
is granted, extend the maximum term of the Option (subject to Section 5.8.4
regarding Incentive Stock Options).

5.5 Exercisability of Options. Options granted under the Plan
shall be exercisable at such times and be subject to such restrictions and
conditions as the Committee shall determine in its sole discretion. After an
Option is granted, the Committee, in its sole discretion, may accelerate the
exercisability of the Option. However, in no event may any Option granted to a
Section 16 Person be exercisable until at least six (6) months following the
Grant Date.

5.6 Payment. Options shall be exercised by the Participant's
delivery of a written notice of exercise to the Secretary of the Company (or the
Company's designee), setting forth the number of Shares with respect to which
the Option is to be exercised, accompanied by full payment for the Shares.

Upon the exercise of any Option, the Exercise Price shall be payable to
the Company in full in cash or its equivalent. The Committee, in its sole
discretion, also may permit exercise (a) by tendering previously acquired Shares
having an aggregate Fair Market Value at the time of exercise equal to the total
Exercise Price, or (b) by any other means which the Committee, in its sole
discretion, determines to both provide legal consideration for the Shares, and
to be consistent with the purposes of the Plan.

As soon as practicable after receipt of a written notification of
exercise and full payment for the Shares purchased, the Company shall deliver to
the Participant (or the Participant's designated broker), Share certificates
(which may be in book entry form) representing such Shares.

5.7 Restrictions on Share Transferability. The Committee may
impose such restrictions on any Shares acquired pursuant to the exercise of an
Option as it may deem advisable, including, but not limited to, restrictions
related to applicable Federal securities laws, the requirements of any national
securities exchange or system upon which Shares are then listed or traded, or
any blue sky or state securities laws.

5.8 Certain Additional Provisions for Incentive Stock Options.
Notwithstanding anything to the contrary contained in this Section 5, the
following provisions shall apply to any Incentive Stock Option granted pursuant
to the Plan.

5.8.1 Exercisability. The aggregate Fair Market Value (determined on
the Grant Date(s)) of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by any Employee during any calendar year
(under all plans of the Company and its Subsidiaries) shall not exceed $100,000.

5.8.2 Termination of Service. No Incentive Stock Option may be
exercised more than three (3) months after the Participant's Termination of
Service for any reason other than Disability or death, unless (a) the
Participant dies during such three-month period, and (b) the Award Agreement or
the Committee permits later exercise.

5.8.3 Company and Subsidiaries Only. Incentive Stock Options may be
granted only to persons who are Employees of the Company or a Subsidiary on the
Grant Date.

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5.8.4 Expiration. No Incentive Stock Option may be exercised after
the expiration of ten (10) years from the Grant Date; provided, however, that if
the Option is granted to an Employee who, together with persons whose stock
ownership is attributed to the Employee pursuant to section 424(d) of the Code,
owns stock possessing more than 10% of the total combined voting power of all
classes of the stock of the Company or any of its Subsidiaries, the Option may
not be exercised after the expiration of five (5) years from the Grant Date.

5.9 Grant of Reload Options. The Committee may provide in an Award
Agreement that a Participant who exercises all or part of an Option by payment
of the Exercise Price with already owned Shares, shall be granted an additional
option (a "Reload Option") for a number of shares equal to the number of Shares
tendered to exercise the previously granted Option plus, if the Committee so
determines, any Shares withheld or delivered in satisfaction of any tax
withholding requirements. As determined by the Committee, each Reload Option
shall: (a) have a Grant Date which is the date as of which the previously
granted Option is exercised, and (b) be exercisable on the same terms and
conditions as the previously granted Option, except that the Exercise Price
shall be determined as of the Grant Date.

5.10 Acceleration on Change of Control. Unless provided otherwise
in the Award Agreement, if a Change of Control occurs, all outstanding Options
granted under the Plan will become immediately exercisable to the extent of 100%
of the Shares subject thereto notwithstanding any contrary exercise or vesting
periods specified in this Plan.

6. Stock Appreciation Rights.

6.1 Grant of SARs. Subject to the terms and conditions of the
Plan, a SAR may be granted to Employees and Consultants at any time and from
time to time as shall be determined by the Committee, in its sole discretion.
The Committee may grant Affiliated SARs, Freestanding SARs, Tandem SARs, or any
combination thereof. The Committee shall have complete discretion to determine
the number of SARs granted to any Participant.

6.1.1 Exercise Price and Other Terms. The Committee, subject to the
provisions of the Plan, shall have complete discretion to determine the terms
and conditions of SARs granted under the Plan. However, the exercise price of a
Freestanding SAR shall be not less than twenty five percent (25%) of the Fair
Market Value of a Share on the Grant Date. The exercise price of Tandem or
Affiliated SARs shall equal the Exercise Price of the related Option. In no
event shall a SAR granted to a Section 16 Person become exercisable until at
least six (6) months after the Grant Date (or such shorter period as may be
permissible while maintaining compliance with Rule 16b-3).

6.2 Exercise of Tandem SARs. Tandem SARs may be exercised for all
or part of the Shares subject to the related Option upon the surrender of the
right to exercise the equivalent portion of the related Option. A Tandem SAR may
be exercised only with respect to the Shares for which its related Option is
then exercisable. With respect to a Tandem SAR granted in connection with an
Incentive Stock Option: (a) the Tandem SAR shall expire no later than the
expiration of the underlying Incentive Stock Option; (b) the value of the payout
with respect to the Tandem SAR shall be for no more than one hundred percent
(100%) of the difference between the Exercise Price of the underlying Incentive
Stock Option and the Fair Market Value of the Shares subject to the underlying
Incentive Stock Option at the time the Tandem SAR is exercised; and (c) the
Tandem SAR shall be exercisable only when the Fair Market Value of the Shares
subject to the Incentive Stock Option exceeds the Exercise Price of the
Incentive Stock Option.

6.3 Exercise of Freestanding SARs. Freestanding SARs shall be
exercisable on such terms and conditions as the Committee, in its sole
discretion, shall determine. However, no SAR granted to a Section 16 Person
shall be exercisable until at least six (6) months after the Grant Date (or such
shorter period as may be permissible while maintaining compliance with Rule
16b-3).

6.4 SAR Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the exercise price, the term of the SAR, the
conditions of exercise, and such other terms and conditions as the Committee, in
its sole discretion, shall determine.

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6.5 Expiration of SARs. A SAR granted under the Plan shall expire
upon the date determined by the Committee, in its sole discretion, and set forth
in the Award Agreement. Notwithstanding the foregoing, the rules of Section 5.4
also shall apply to SARs.

6.6 Payment of SAR Amount. Upon exercise of a SAR, a Participant
shall be entitled to receive payment from the Company in an amount determined by
multiplying:

(a) The difference between the Fair Market Value of a Share on the
date of exercise over the exercise price; times

(b) The number of Shares with respect to which the SAR is
exercised. At the discretion of the Committee, payment for a SAR may be in cash,
Shares or a combination thereof.

7. Restricted Stock

7.1 Grant of Restricted Stock. Subject to the terms and provisions
of the Plan, the Committee, at any time and from time to time, may grant Shares
of Restricted Stock to Employees and Consultants in such amounts as the
Committee, in its sole discretion, shall determine. The Committee, in its sole
discretion, shall determine the number of Shares to be granted to each
Participant.

7.2 Restricted Stock Agreement. Each Award of Restricted Stock
shall be evidenced by an Award Agreement that shall specify the Period of
Restriction, the number of Shares granted, any price to be paid for the Shares,
and such other terms and conditions as the Committee, in its sole discretion,
shall determine. Unless the Committee determines otherwise, Shares of Restricted
Stock shall be held by the Company as escrow agent until the restrictions on
such Shares have lapsed.

7.3 Transferability. Shares of Restricted Stock may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction. In no event may the restrictions on
Restricted Stock granted to a Section 16 Person lapse prior to six (6) months
following the Grant Date.

7.4 Other Restrictions. The Committee, in its sole discretion, may
impose such other restrictions on Shares of Restricted Stock as it may deem
advisable or appropriate, in accordance with this Section 7.4. For example, the
Committee may set restrictions based upon the achievement of specific
performance objectives (Company-wide, divisional, or individual), applicable
Federal or state securities laws, or any other basis determined by the Committee
in its discretion. The Committee, in its discretion, may legend the certificates
representing Restricted Stock to give appropriate notice of the restrictions
applicable to such Shares.

7.5 Removal of Restrictions. Shares of Restricted Stock covered by
each Restricted Stock grant made under the Plan shall be released from escrow as
soon as practicable after the last day of the Period of Restriction. The
Committee, in its discretion, may accelerate the time at which any restrictions
shall lapse, and remove any restrictions; provided, however, that the Period of
Restriction on Shares granted to a Section 16 Person may not lapse until at
least six (6) months after the Grant Date. After the restrictions have lapsed,
the Participant shall be entitled to have any legend or legends under Section
7.4 removed from his or her Share certificate, and the Shares shall be freely
transferable by the Participant.

7.6 Voting Rights. During the Period of Restriction, Participants
holding Shares of Restricted Stock granted hereunder may exercise full voting
rights with respect to those Shares, unless otherwise provided in the Award
Agreement.

7.7 Dividends and Other Distributions. During the Period of
Restriction, Participants holding Shares of Restricted Stock shall be entitled
to receive all dividends and other distributions paid with respect to such
Shares unless otherwise provided in the Award Agreement. If any such dividends
or distributions are paid in Shares, the Shares shall be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid. With respect to Restricted Stock
granted to a Section 16 Person, any dividend or distribution that constitutes a
"derivative security" or an "equity security" under Section 16 of the 1934 Act
shall be subject to a Period of Restriction equal to the longer of: (a) the
remaining Period of Restriction on the Shares of Restricted Stock with respect
to which the dividend or distribution is paid; or (b) six (6) months.

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7.8 Return of Restricted Stock to Company. On the date set forth
in the Award Agreement, the Restricted Stock for which restrictions have not
lapsed shall revert to the Company and again shall become available for grant
under the Plan.

8. Performance Units and Performance Shares

8.1 Grant of Performance Units/Shares. Performance Units and
Performance Shares may be granted to Employees and Consultants at any time and
from time to time, as shall be determined by the Committee, in its sole
discretion. The Committee shall have complete discretion in determining the
number of Performance Units and Performance Shares granted to any Participant.

8.2 Initial Value. Each Performance Unit shall have an initial
value that is established by the Committee on or before the Grant Date. Each
Performance Share shall have an initial value equal to the Fair Market Value of
a Share on the Grant Date.

8.3 Performance Objectives and Other Terms. The Committee shall
set performance objectives in its discretion which, depending on the extent to
which they are met, will determine the number or value of Performance Units or
Shares that will be paid out to the Participants. The Committee may set
performance objectives based upon the achievement of Company-wide, divisional,
or individual goals, or any other basis determined by the Committee in its
discretion. The time period during which the performance objectives must be met
shall be called the "Performance Period". Performance Periods of Awards granted
to Section 16 Persons shall exceed six (6) months in length (or such shorter
period as may be permissible while maintaining compliance with Rule 16b-3). Each
Award of Performance Units/Shares shall be evidenced by an Award Agreement that
shall specify the Performance Period, and such other terms and conditions as the
Committee, in its sole discretion, shall determine.

8.4 Earning of Performance Units and Performance Shares. After the
applicable Performance Period has ended, the Participant shall be entitled to
receive a payout of the number of Performance Units or Shares earned during the
Performance Period, depending upon the extent to which the applicable
performance objectives have been achieved. After the grant of a Performance Unit
or Share, the Committee, in its sole discretion, may reduce or waive any
performance objectives for Award; provided that Performance Periods of Awards
granted to Section 16 Persons shall not be less than six (6) months (or such
shorter period as may be permissible while maintaining compliance with Rule
16b-3).

8.5 Form and Timing of Payment. Payment of earned Performance
Units or Performance Shares shall be made as soon as practicable after the
expiration of the applicable Performance Period. The Committee, in its sole
discretion, may pay earned Performance Units or Performance Shares in cash,
Shares or a combination thereof

8.6 Cancellation. On the date set forth in the Award Agreement,
all unearned or unvested Performance Units or Performance Shares shall be
forfeited to the Company, and again shall be available for grant under the Plan.

9. Non-employee Directors

9.1 Granting of Options. Subject to the terms & provisions of the
Plan, the Board may grant Nonqualified Stock Options to purchase shares to
Non-employee Directors of the Company.

9.2 Terms of Options. The Board, in its sole discretion, shall
determine the number of shares subject to each Option.

9.2.1 Option Agreement. Each Option granted pursuant to this Section
9 shall be evidenced by a written stock option agreement which shall be executed
by the Participant and the Company.

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9.2.2 Exercise Price. The Exercise Price for the Shares subject to
each Option granted pursuant to this Section 9 shall be not less than twenty
five percent (25%) of the Fair Market Value of a Share on the Grant Date.

9.2.3 Exercisability. Each Option granted pursuant to this Section 9
shall become exercisable in full one year after the date the Option is granted.
If a Non-employee Director incurs a Termination of Service for a reason other
than Retirement, death or Disability, his or her Options which are not
exercisable on the date of such Termination shall never become exercisable. If
the Termination of Service is on account of Retirement, death or Disability, the
Option shall become exercisable in full on the date of the Termination of
Service.

9.2.4 Expiration of Options. Each Option shall terminate upon the
first to occur of the following events:

(a) The expiration of ten (10) years from the Grant Date; or

(b) The expiration of three (3) months from the date of the
Participant's Termination of Service for a reason other than death, Disability
or Retirement; or

(c) The expiration of one (1) year from the date of the
Participant's Termination of Service by reason of Disability or Retirement.

9.2.5 Death of Director. Notwithstanding Section 9.2.4, if a
Director dies prior to the expiration of his or her options in accordance with
Section 9.2.4, his or her options shall terminate one (1) year after the date of
his or her death.

9.2.6 Special Rule for Retirement. Notwithstanding the provisions of
Section 9.2.4, if the exercisability of an Option is accelerated under Section
9.2.3 on account of the Participant's Retirement, such Option shall terminate
upon the first to occur of: (a) the expiration of ten (10) years from the date
the Option was granted; or (b) the expiration of one year from the date of the
Participant's death.

9.2.7 Not Incentive Stock Options. Options granted pursuant to this
Section 9 shall not be designated as Incentive Stock Options.

9.2.8 Other Terms. All provisions of the Plan not inconsistent with
this Section 9, including, but not limited to, Section 5.10, shall apply to
Options granted to Non-employee Directors.

9.3 Elections by Non-employee Directors. Pursuant to such
procedures as the Board (in its discretion) may adopt from time to time, each
Non-employee Director may elect to forego receipt of all or a portion of
committee fees and meeting fees otherwise due to the Non-employee Director in
exchange for Shares. The number of Shares received by any Non-employee Director
shall equal the amount of foregone compensation divided by the Fair Market Value
of a Share on the date that the compensation otherwise would have been paid to
the Non-employee Director, rounded up to the nearest whole number of Shares. The
procedures adopted by the Board for elections under this Section 9.3 shall be
designed to ensure that any such election by a Non-employee Director will not
disqualify him or her as a "non-employee director" under Rule 16b-3.

10. Section 162(m) Deduction Qualification. Except as otherwise provided in
Section 10.5, the provisions of this Section 10 shall apply only to Awards of
Covered Officers.

10.1 Awards for Covered Officers. Any other provision of the Plan
notwithstanding, all Awards to Covered Officers shall be made in a manner that
allows for the full deductibility of the Award by the Company or its
Subsidiaries under Section 162(m) of the Code. All Awards for Covered Officers
shall comply with the provisions of this Section 10.

10.2 Designation of Covered Officers. For each Performance Period,
the Committee will designate which Participants are Covered Officers prior to
the completion of 25% of the Performance Period (or such earlier or later date
as is permitted or required by Section 162(m) of the Code).

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10.3 Establishment of Performance Goals and Awards for Covered
Officers. Prior to the completion of 25% of a Performance Period (or such
earlier or later date as is permitted or required by Section 162(m) of the
Code), the Committee shall in its sole discretion, for each such Performance
Period: (a) determine and establish in writing one or more Performance Goals
applicable to the Performance Period for each Covered Officer; and (b) either
(i) assign each Covered Officer a target Award expressed as a fixed number of
Shares or a whole dollar amount or (ii) establish a payout table or formula for
purposes of determining the Award payable to each Covered Officer. Each payout
table or formula: (a) shall be in writing; (b) shall be based on a comparison of
actual performance to the Performance Goals; (c) may include a "floor" which is
the level of achievement of the Performance Goal in which payout begins; and (d)
shall provide for an actual Award equal to or less than the Covered Officer's
target Award, depending on the extent to which actual performance approached or
reached the Performance Goal. Such pre-established Performance Goals and Awards
must state, in terms of an objective formula or standard, the method for
computing the amount of the Award payable to each Covered Officer if the
Performance Goal is met. A formula or standard is objective if a third party
having knowledge of the relevant performance results could calculate the amount
to be paid to the Covered Officer. The Committee may establish any number of
Performance Periods, Performance Goals and Awards for any Covered Officer
running concurrently, in whole or in part, provided, that in so doing the
Committee does not jeopardize the Company's deduction for such Awards under
Section 162(m) of the Code. The Committee may select different Performance Goals
and Awards for different Covered Officers.

10.4 Certification of Achievement of Performance Goals and Amount
of Awards. After the end of each Performance Period, or such earlier date if the
Performance Goals are achieved, the Committee shall certify in writing, prior to
the unconditional payment of any Award, that the Performance Goals for the
Performance Period and all other material terms of the Plan were satisfied and
to what extent they were satisfied. The Committee shall determine the actual
Award for each Covered Officer based on the payout table/formula established in
Section 10.3, as the case may be. Extraordinary Events shall either be excluded
or included in determining the extent to which the corresponding Performance
Goal has been achieved, whichever will produce the higher Award, provided,
however, notwithstanding the attainment of specified Performance Goals, the
Committee has the discretion to reduce or eliminate an Award that would
otherwise be paid to any Participant, including any Covered Officer, based on
the Committee's evaluation of Extraordinary Events or other factors. Without
limiting the manner of computing Awards set forth in the preceding sentence,
with respect to Covered Officers, the Committee may not under any circumstances
increase the amount of an Award.

10.5 Maximum Award. Any other provision of the Plan
notwithstanding, the maximum aggregate Awards payable to any Participant under
the Plan for any Performance Period shall not exceed Five Hundred Thousand
(500,000) Shares, which maximum number of Shares shall be adjusted pursuant to
Section 4.3.

11. Miscellaneous

11.1 Forfeiture. Notwithstanding anything in the Plan or in any
Award Agreement to the contrary, in the event of a breach of conduct by a
Participant or former Participant (including, without limitation, any conduct
prejudicial to or in conflict with the Company or an Affiliate), or any activity
of a Participant or former Participant in competition with any of the businesses
of the Company or an Affiliate, the Committee may (a) cancel any outstanding
Award granted to the Participant, in whole or in part, whether or not vested,
and/or (b) if such conduct or activity occurs within one year following the
exercise or payment of an Award, require the former Participant to repay to the
Company any gain realized or payment received upon the exercise or payment of
such Award (with such gain or repayment valued as of the date of exercise or
payment). Such cancellation or repayment obligation shall be effective as of the
date specified by the Committee. Any repayment obligation may be satisfied in
Shares or cash or a combination thereof (based upon the Fair Market Value of the
Shares on the day prior to the date of payment), and the Committee may provide
for an offset to any future payments owed by the Company or Affiliate to such
individual if necessary to satisfy the repayment obligation. The determination
of whether any Participant or former Participant has engaged in a breach of
conduct or any activity in competition with any of the businesses of the Company
or an Affiliate shall be determined by the Committee in good faith and in its
sole discretion.

11.2 No Effect on Employment or Service. Nothing in the Plan shall
interfere with or limit in any way the right of the Company to terminate any
Participant's employment or service at any time, with or without cause. For
purposes of the Plan, transfer of employment of a Participant between the
Company and any one of its Affiliates (or between Affiliates) shall not be
deemed a Termination of Service. Unless there is a written agreement between the
Employee and the Company or an Affiliate to the contrary, employment of an
Employee with the Company and its Affiliates is on an at-will basis only.

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11.3 Participation. No Employee or Consultant shall have the right
to be selected to receive an Award under this Plan, or, having been so selected,
to be selected to receive a future Award.

11.4 Indemnification. Each person who is or shall have been a
member of the Committee, or of the Board, shall be indemnified and held harmless
by the Company against and from (a) any loss, cost, liability, or expense that
may be imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan or any Award Agreement, and (b) from any and all
amounts paid by him or her in settlement thereof, with the Company's approval,
or paid by him or her in satisfaction of any judgment in any such claim, action,
suit, or proceeding against him or her, provided he or she shall give the
Company an opportunity, at its own expense, to handle and defend the same before
he or she undertakes to handle and defend it on his or her own behalf. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such individuals may be entitled under the Company's
Articles of Incorporation or Code of Regulations, by contract, as a matter of
law, or otherwise, or under any power that the Company may have to indemnify
them or hold them harmless.

11.5 Successors. All obligations of the Company under the Plan,
with respect to Awards granted hereunder, shall be binding on any successor to
the Company, whether the existence of such successor is the result of a direct
or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business or assets of the Company.

11.6 Beneficiary Designations. If permitted by the Committee, a
Participant under the Plan may name a beneficiary or beneficiaries to whom any
vested but unpaid Award shall be paid in the event of the Participant's death.
Each such designation shall revoke all prior designations by the Participant and
shall be effective only if given in a form and manner acceptable to the
Committee. In the absence of any such designation, any vested benefits remaining
unpaid at the Participant's death shall be paid to the Participant's estate and,
subject to the terms of the Plan and of the applicable Award Agreement, any
unexercised vested Award may be exercised by the administrator or executor of
the Participant's estate.

11.7 Nontransferability of Awards; Unfunded Plan. No Award granted
under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will, by the laws of descent and
distribution, or to the limited extent provided in Section 11.5. All rights with
respect to an Award granted to a Participant shall be available during his or
her lifetime only to the Participant. Notwithstanding the foregoing, to the
extent provided in the applicable Award Agreement, a Participant may transfer a
Nonqualified Stock Option either (a) to members of his or her immediate family
(as defined in Rule 16a-1 promulgated under the 1934 Act), to one or more trusts
for the benefit of such family members, or to partnerships or other entities in
which such family members are the only partners or owners, provided that the
Participant does not receive any consideration for the transfer, or (b) if such
transfer is approved by the Committee. If such transfer is permitted under the
Award Agreement, any Nonqualified Stock Option held by such transferees are
subject to the same terms and conditions that applied to such Nonqualified Stock
Options immediately prior to transfer based on the transferor Participant's
continuing relationship with the Company. It is intended that the Plan be an
"unfunded" plan for incentive compensation. The Plan does not give a Participant
any interest, lien or claim against any specific asset of the Company. No
Participant or beneficiary shall have any rights under this Plan other than as a
general unsecured creditor of the Company.

11.8 No Rights as Stockholder. Except to the limited extent
provided in Sections 7.6 and 7.7, no Participant (nor any beneficiary) shall
have any of the rights or privileges of a shareholder of the Company with
respect to any Shares issuable pursuant to an Award (or exercise thereof),
unless and until certificates representing such Shares shall have been issued,
recorded on the records of the Company or its transfer agents or registrars, and
delivered to the Participant (or beneficiary).

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11.9 Withholding Requirements. Prior to the delivery of any Shares
or cash pursuant to an Award (or exercise thereof), the Company shall have the
power and the right to deduct or withhold, or require a Participant to remit to
the Company, an amount sufficient to satisfy Federal, state, and local taxes
(including the Participant's FICA obligation) required to be withheld with
respect to such Award (or exercise thereof).

11.10 Withholding Arrangements. The Committee, in its sole
discretion and pursuant to such procedures as it may specify from time to time,
may permit or require a Participant to satisfy all or part of the tax
withholding obligations in connection with an Award by (a) having the Company
withhold otherwise deliverable Shares, or (b) delivering to the Company
already-owned Shares having a Fair Market Value equal to the amount required to
be withheld. The amount of the withholding requirement shall be deemed to
include any amount which the Committee determines, not to exceed the amount
determined by using the minimum federal, state or local marginal income tax
rates applicable to the Participant with respect to the Award on the date that
the amount of tax to be withheld is to be determined. The Fair Market Value of
the Shares to be withheld or delivered shall be determined as of the date that
the taxes are required to be withheld.

11.11 Deferrals. The Committee, in its sole discretion, may permit a
Participant to defer receipt of the payment of cash or the delivery of Shares
that would otherwise be delivered to a Participant under the Plan. Any such
deferral elections shall be subject to such rules and procedures as shall be
determined by the Committee in its sole discretion.

12. Amendment, Termination and Duration

12.1 Amendment, Suspension, or Termination. The Board, in its sole
discretion, may amend or terminate the Plan, or any part thereof, at any time
and for any reason. However, if and to the extent required to maintain the
Plan's qualification under applicable law or stock exchange regulation, any such
amendment shall be subject to shareholder approval. The amendment, suspension,
or termination of the Plan shall not, without the consent of the Participant,
alter or impair any rights or obligations under any Award previously granted to
such Participant. No Award may be granted during any period of suspension or
after termination of the Plan.

12.2 Duration of the Plan. The Plan shall commence on the date
specified herein, and subject to Section 12.1 (regarding the Board's right to
amend or terminate the Plan), shall remain in effect thereafter. However,
without further stockholder approval, no Incentive Stock Option may be granted
under the Plan after March 7, 2012.

13. Legal Construction

13.1 Gender and Number; Accounting Terms. Except where otherwise
indicated by the context, any masculine term used herein also shall include the
feminine; the plural shall include the singular and the singular shall include
the plural. Accounting terms not specifically defined herein shall be construed
in accordance with generally accepted accounting principles.

13.2 Severability. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.

13.3 Requirements of Law. The granting of Awards and the issuance
of Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

13.4 Compliance with Rule 16b-3. Transactions under this Plan with
respect to Section 16 Persons are intended to comply with all applicable
conditions of Rule 16b-3. To the extent any provision of the Plan, Award
Agreement or action by the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Committee.
Notwithstanding any contrary provision of the Plan, if the Committee
specifically determines that compliance with Rule 16b-3 no longer is required,
all references in the Plan to Rule 16b-3 shall be null and void.

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13.5 Governing Law. The Plan and all Award Agreements shall be
construed in accordance with and governed by the laws of the State of Delaware.

13.6 Captions. Captions are provided herein for convenience only,
and shall not serve as a basis for interpretation or construction of the Plan.

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