================================================================================

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (s)240.14a-11(c) or (s)240.14a-12

BIOJECT MEDICAL TECHNOLOGIES INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

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

(2) Aggregate number of securities to which transaction applies:

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

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

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

(4) Proposed maximum aggregate value of transaction:

---------------------------------------------------------------------
(5) Total fee paid:

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

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

---------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:

---------------------------------------------------------------------
(3) Filing Party:

---------------------------------------------------------------------
(4) Date Filed:

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

================================================================================

BIOJECT MEDICAL TECHNOLOGIES INC.
211 SOMERVILLE ROAD, ROUTE 202 NORTH
BEDMINSTER, NJ 07921

August 8, 2002

Dear Shareholders:

You are cordially invited to attend the 2002 annual meeting of the shareholders
of BIOJECT MEDICAL TECHNOLOGIES INC., to be held at The Westin Portland, 750
S.W. Alder Street, Portland, Oregon 97205, on Thursday, September 19, 2002 at
9:00 a.m., Pacific Daylight Time.

The matters to be acted upon at the meeting are as follows:

(i) to elect two members of the Board of Directors;

(ii) to approve the Company's 2002 Restated Articles of Incorporation;
and

(iii) to transact such other business as may properly come before the
meeting.

These matters are more fully described in the accompanying proxy statement.

We believe the annual meeting provides an excellent opportunity for shareholders
to become better acquainted with Bioject and its board members and officers.
Although we would like very much to have each shareholder attend the 2002
meeting, we realize this is not possible. Whether or not you plan to be present
at the meeting, it is important that your shares be represented. Therefore, we
urge you to complete, sign and return the enclosed proxy as soon as possible.

If you return your proxy promptly, you can help us avoid the expense of
follow-up mailings to ensure a quorum so that the meeting can be held. If you
decide between now and September that you can attend the meeting in person, you
may revoke your proxy at that time and vote your shares at the meeting.

We appreciate your continued support of Bioject and look forward to either
greeting you personally at the meeting or receiving your proxy.

Sincerely,

------------------------------------
James C. O'Shea
Chairman of the Board, President
and Chief Executive Officer

BIOJECT MEDICAL TECHNOLOGIES INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that the annual meeting (the "Meeting") of the
shareholders of BIOJECT MEDICAL TECHNOLOGIES INC. (the "Company") will be held
on Thursday, September 19, 2002, at 9:00 a.m., Pacific Daylight Time, at The
Westin Portland, 750 S.W. Alder Street, Portland, Oregon 97205 for the following
purposes:

(i) to elect two members of the Board of Directors;

(ii) to approve the Company's 2002 Restated Articles of Incorporation;
and

(iii) to transact such other business as may properly come before the
meeting.

These matters are more fully described in the proxy statement accompanying this
Notice.

Accompanying this Notice of Meeting is a proxy statement and a form of proxy,
together with the annual report of the Company, containing the management
discussion and analysis, the consolidated financial statements for the year
ended March 31, 2002, and the auditors' report on the financial statements. Only
holders of common stock of record at the close of business on July 19, 2002,
will be entitled to vote at the Annual Meeting of Shareholders and any
adjournments thereof.

Shareholders who are unable to attend the Meeting in person are requested to
complete, sign, date and return the enclosed form of proxy directly to American
Stock Transfer and Trust Co., postage prepaid. A proxy will not be valid unless
it is received at the office of American Stock Transfer and Trust Co., 59 Maiden
Lane, New York, New York 10038 before the time fixed for the Meeting.

DATED at Portland,Oregon, this 8th day of August 2002.

BY ORDER OF THE BOARD

----------------------------------------------------------
James C. O'Shea
Chairman of the Board, President
and Chief Executive Officer

BIOJECT MEDICAL TECHNOLOGIES INC.

TABLE OF CONTENTS

MANAGEMENT SOLICITATION............................................................ 1

APPOINTMENT AND REVOCABILITY OF PROXIES............................................ 1

VOTING OF PROXIES.................................................................. 1

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF.................................... 2

EQUITY COMPENSATION PLAN INFORMATION............................................... 3

PROPOSAL #1: ELECTION OF DIRECTORS................................................ 4
Directors Compensation........................................................ 6
Meetings and Committees of the Board of Directors............................. 7
Audit Committee Report........................................................ 7

EXECUTIVE COMPENSATION AND OTHER TRANSACTIONS...................................... 8
Biographical Information...................................................... 8
Executive Compensation........................................................ 10
Grant of Stock Options........................................................ 11
Option Exercises and Fiscal Year End Values................................... 12
Employment Contracts.......................................................... 12
Section 16(a) Beneficial Ownership Reporting Compliance....................... 13

REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION......................... 14

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION........................ 15

STOCK PERFORMANCE CHART............................................................ 16

PROPOSAL #2: TO APPROVE THE COMPANY'S 2002 RESTATED ARTICLES OF INCORPORATION..... 17

OTHER MATTERS TO BE ACTED UPON..................................................... 20

SHAREHOLDER PROPOSAL AND NOMINATION PROCEDURES FOR THE MEETING..................... 20

ANNUAL REPORT AND INCORPORATION BY REFERENCE....................................... 21

INDEPENDENT ACCOUNTANTS............................................................ 21

PROPOSALS OF SHAREHOLDERS FOR THE 2003 ANNUAL MEETING OF SHAREHOLDERS.............. 22

BIOJECT MEDICAL TECHNOLOGIES INC.
PROXY STATEMENT
AUGUST 8, 2002

MANAGEMENT SOLICITATION

This proxy statement and accompanying form of proxy are furnished in connection
with the solicitation of proxies by the Board of Directors of BIOJECT MEDICAL
TECHNOLOGIES INC. (the "Company"), for use at the annual meeting (the "Meeting")
of shareholders of the Company to be held on September 19, 2002, at the time and
place and for the purposes set forth in the Notice of Meeting.

The form of proxy accompanying this proxy statement is solicited by the Board of
Directors of the Company. Proxies may be solicited by officers, directors and
regular supervisory and executive employees of the Company, none of whom will
receive any additional compensation for their services. In addition, the Company
has retained the services of Allen Nelson & Co. to assist in the solicitation of
proxies. Proxies may be solicited personally or by mail, telephone, telex,
facsimile, telegraph or messenger. The Company estimates it will pay Allen
Nelson & Co. its customary and reasonable fees not expected to exceed $10,000,
plus reimbursement of certain out-of-pocket expenses, for its services in
soliciting proxies. The Company will also pay persons holding shares of the
common stock in their names or in the names of nominees, but not owning such
shares beneficially, such as brokerage houses, banks and other fiduciaries, for
the expense of forwarding soliciting materials to their principals. The cost of
this solicitation will be borne directly by the Company.

The approximate mailing date of the Notice of Meeting, proxy statement and form
of proxy is August 8, 2002.

APPOINTMENT AND REVOCABILITY OF PROXIES

The persons named in the accompanying form of proxy are officers of the Company.

In addition to revocation in any other manner permitted by law, a proxy may be
revoked by:

(i) signing another proxy bearing a later date and depositing it in the
manner set forth in the Notice of Meeting;

(ii) signing and dating a written notice of revocation (in the same
manner as a proxy is required to be executed) and either depositing
it in the manner set forth in the Notice of Meeting at any time
before the time fixed for the Meeting or an adjournment thereof or
with the chairman of the Meeting on the day of the Meeting or an
adjournment thereof; or

(iii) attending the Meeting or an adjournment thereof, and casting a
ballot in person.

Such revocation will have effect only in respect of those matters that have not
already been acted upon. Additional proxy forms may be obtained by calling or
writing to American Stock Transfer & Trust Co., Shareholder Services, 59 Maiden
Lane, Plaza Level, New York, NY 10038. Telephone: (800) 937-5449.

VOTING OF PROXIES

The securities represented by the proxy will be voted or withheld from voting in
accordance with the instructions of the shareholder on any ballot that may be
called for, and if the shareholder specifies a choice with respect to any matter
to be acted upon, the securities shall be voted accordingly. The form of proxy
confers authority upon the named proxy holder with respect to matters identified
in the accompanying Notice of Meeting. If a choice with respect to such matters
is not specified, it is intended that James C. O'Shea and John Gandolfo, the
persons designated by management in the form of proxy, will vote the securities
represented by the proxy in favor of each matter identified in the proxy
statement and for election of the nominees named in this proxy statement to the
Board of Directors. The proxy confers discretionary authority upon the named
proxy holder with respect to amendments to or variations

in matters identified in the accompanying Notice of Meeting and other matters,
which may properly come before the Meeting.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The voting securities of the Company consist of common stock, without par value
(the "common stock"). The Record Date has been fixed in advance by the directors
as July 19, 2002, for the purpose of determining shareholders entitled to notice
of and to vote at the Meeting. Each share issued at the time of the Record Date
carries the right to one vote at the Meeting. As of July 19, 2002, a total of
10,598,826 shares of the Company's common stock were issued and outstanding.

The following tables set forth certain information concerning the beneficial
ownership of the Company's common stock at July 19, 2002, by: (i) each person
known by the Company to own beneficially more than 5 percent of the outstanding
capital stock of the Company; (ii) each of the directors and named executive
officers; and (iii) all directors and executive officers as a group.

NUMBER OF
SHARES PERCENTAGE
BENEFICIALLY BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED (1)(2) OWNED
------------------------------------------------ --------- ---------

Elan Pharmaceutical Investments, Ltd. (3) 3,194,470 23.2%
Flatt Smiths SL04
Bermuda
Mazama Capital Management, Inc. (4) 1,621,600 15.3%
One S.W. Columbia, Suite 1860
Portland, Oregon 97258
Edward L. Flynn 430,012 4.0%
James C. O'Shea 234,200 2.2%
Richard J. Plestina 76,570 *
J. Michael Redmond 62,230 *
John Gandolfo 52,000 *
John Ruedy, M.D 47,760 *
Michael A. Temple 47,155 *
Richard R. Stout 46,515 *
Eric T. Herfindal 33,000 *
Grace Keeney Fey 27,450 *
William A. Gouveia 14,000 *
Sandra Panem, Ph.D 13,000 *
All Directors and Executive Officers as a Group
(15 persons) 1,121,669 10.04%

- -----------------------
* Less than one percent.

(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes shares over which the
indicated beneficial owner exercises voting and/or investment power.
Shares of common stock subject to options currently exercisable or
exercisable within 60 days of July 19, 2002 are deemed outstanding for
computing the percentage ownership of the person holding the options but
not deemed outstanding for computing the percentage of ownership of any
other person. Except as indicated, and subject to community property
laws where applicable, the persons named in the table above have sole
voting and investment power with respect to all shares of common stock
shown as beneficially owned by them.

(2) Includes options currently exercisable or exercisable within 60 days
after July 19, 2002 for shares of the Company's common stock as follows:

NAME SHARES SUBJECT TO OPTIONS
-------------------------------------- -------------------------

Edward L. Flynn 12,500
James C. O'Shea 214,544
Richard J. Plestina 25,000
J. Michael Redmond 52,127
John Gandolfo 50,000
John Ruedy, M.D. 30,250
Michael A. Temple 41,666
Richard R. Stout 41,515
Eric T. Herfindal 25,000
Grace Keeney Fey 23,750
William A. Gouveia 14,000
Sandra Panem, Ph.D. 8,500
All Directors and Executive Officers
as a Group 574,321

(3) Includes warrants to purchase 505,334 shares of common stock, which are
presently exercisable. Also includes 952,738 shares of Series A
Convertible Preferred Stock, convertible into 1,905,476 shares of common
stock, and 391,830 shares of Series C Convertible Preferred Stock,
convertible into 783,660 shares of common stock, both of which are
presently convertible.

(4) Information provided as of June 13, 2002 in a Schedule 13G filed by the
shareholder.

EQUITY COMPENSATION PLAN INFORMATION

The following table summarizes equity securities authorized for issuance as of
March 31, 2002.

NUMBER OF NUMBER OF SECURITIES
SECURITIES TO BE REMAINING AVAILABLE FOR
ISSUED UPON WEIGHTED AVERAGE FUTURE ISSUANCE UNDER
EXERCISE OF EXERCISE PRICE OF EQUITY COMPENSATION
OUTSTANDING OUTSTANDING PLANS (EXCLUDING
OPTIONS, WARRANTS OPTIONS, WARRANTS SECURITIES REFLECTED IN
PLAN CATEGORY AND RIGHTS (a) AND RIGHTS (b) COLUMN (a)(c))
- ---------------------- ------------------ ----------------- -----------------------

Equity compensation
plans approved
by shareholders (1) 1,813,550 $7.66 689,419

Equity compensation
plans not approved by
shareholders (2) 175,049 5.40 --
--------- --------- ---------
Total 1,988,599 $7.46 689,419
========= ========= =========

(1) Represents 560,069 shares of common stock available for issuance
under the Company's 1992 Stock Incentive Plan and 129,350 shares
of common stock available for purchase under the Company's 2000
Employee Stock Purchase Plan. Under the terms of 1992 Stock
Incentive Plan, a committee of the Board of Directors may
authorize the sales of common stock, grant incentive stock
options or nonstatutory stock options, and award stock bonuses
and stock appreciation rights to eligible employees, officers
and directors and eligible non-employee agents, consultants,
advisers and independent contractors of the Company or any
parent or subsidiary.

(2) The Company has issued warrants to purchase an aggregate of
175,049 shares of common stock to various non-employee
consultants. The warrants are fully exercisable and have grant
dates ranging from October 1997 to August 2002, terms ranging
from three years to five years and exercise prices ranging from
$2.80 to $13.50.

PROPOSAL #1: ELECTION OF DIRECTORS

The Amended and Restated Articles of Incorporation of the Company provide for
the holders of common stock to elect the Class One members of the Board of
Directors at the 2002 Meeting. Directors hold office for three years or until
their successors have been elected and qualified. The Board is divided into
three classes. There are no family relationships between any of the directors or
executive officers of the Company.

At this Meeting, two persons will be nominated to serve as Class One directors
until the Annual Meeting in 2005 and until their successors are elected and duly
qualified. The Class One nominees are Messrs. Edward L. Flynn and William A.
Gouveia.

The presence in person or by proxy of holders of record of a majority of the
outstanding common stock is required to constitute a quorum for the transaction
of business at the Meeting. If a quorum is present, the two nominees for
election to the Board of Directors who receive the greatest number of votes cast
at the Meeting shall be elected directors. Votes may be cast for or withheld
from each nominee. Abstentions from voting or non-voting by brokers will have no
effect on the outcome of the vote.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE CLASS
ONE NOMINEES LISTED BELOW.

The Board of Directors is currently composed of eight members, one of whom is an
employee of the Company. The following table sets forth the names, ages and
certain other information concerning the Company's current directors.

YEAR CURRENT
ELECTED TERM
NAME CLASS AGE POSITION DIRECTOR EXPIRES
- ---- ----- --- -------- -------- --------

Grace Keeney Fey 2 56 Director (c)(d) 1995 2003
Eric T. Herfindal 2 61 Director (a)(c) 1996 2003
Richard J. Plestina 2 56 Director (a)(b)(d) 1997 2003

James C. O'Shea 3 57 Chairman, Chief Executive 1995 2004
Officer and President
Sandra Panem, Ph.D. 3 56 Director (c)(d) 2001 2004
John Ruedy, M.D. 3 70 Director (a)(b) 1987 2004

- ----------

(a) Member of Compensation Committee
(b) Member of Nominating Committee
(c) Member of Audit Committee
(d) Member of Ad Hoc-Financing Committee

NOMINEES FOR DIRECTOR TO BE ELECTED BY SHAREHOLDERS FOR A THREE-YEAR TERM
EXPIRING IN 2005

EDWARD L. FLYNN was elected a director of the Company in September 1999. Since
1972, Mr. Flynn has been owner and Chief Executive Officer of Flynn Meyer
Company, a restaurant industry management company. From 1958 to 1972, Mr. Flynn
was a securities broker with Merrill Lynch Pierce Fenner and Smith. He serves as
a member of the board of directors of Citri-Lite Co. Inc., a soft drink company,
and of TGCI Industries, a geophysical service company primarily conducting three
dimensional seismic surveys for companies engaged in oil and gas exploration.

WILLIAM A. GOUVEIA was elected a director of the Company in January 1994. Mr.
Gouveia has served as Director of Pharmacy at Boston's Tufts-New England Medical
Center since 1972. He holds a faculty appointment as Associate Professor of
Medicine at Tufts University School of Medicine (1977), and serves on the
faculty of the Massachusetts College of Pharmacy and Health Sciences, and at
Northeastern University's Bouve College of Health Sciences. He holds an M.S. in
Hospital Pharmacy from Northeastern University (1966). He has published over 100
articles in leading healthcare journals, as well as numerous book chapters, and
has delivered presentations at U.S. and international health care organizations
and colleges. He is a Fellow of the American Society of Health-System
Pharmacists (ASHP) and has served as Board member of the ASHP.

DIRECTORS WHOSE TERMS EXPIRE IN 2003

GRACE K. FEY, CFA, was elected a director of the Company in October 1995. Ms.
Fey is currently an Executive Vice President and Director of Frontier Capital
Management Company ("Frontier Capital"), a $4.8 billion investment management
firm located in Boston, Massachusetts. Ms. Fey joined Frontier Capital in 1988
to spearhead the firm's efforts in the wealthy individual and smaller
institutional areas. She currently manages this division for Frontier Capital,
which has over $600 million in assets, as well as manages the Large
Capitalization Institutional portfolios. Ms. Fey is a Chartered Financial
Analyst and is a member of the Association for Investment Management and
Research and the Boston Security Analysts Society. Ms. Fey is Chairman of the
Board of Directors of Zoo New England, Chairman of the Board of Trustees of the
University of Massachusetts, a member of the Board of Trustees of the Huntington
Theatre, a Director of the Commonwealth Institute and an Overseer of the Boston
Center for Adult Education.

ERIC T. HERFINDAL has served as a director of the Company since September 1996.
He is currently President and CEO of National Oncology Alliance, Inc., a company
that provides business, clinical, technology and management services to
community based oncology practices. Previously, he was Executive Vice President
of OnCare Inc., an oncology physician practice management company. Prior to
joining OnCare, he was Sr. Vice President of Axion, an oncology focused
healthcare company. He served for over 20 years as a Professor of Clinical
Pharmacy, School of Pharmacy, at the University of California Medical Center in
San Francisco, where he is currently a Professor Emeritus. He holds a Doctorate
in Pharmacy from the University of California, San Francisco, and a Masters in
Public Health from the University of California, Berkeley. He is the author of
numerous articles in professional journals and is the editor of a number of
books in the field of pharmacy and therapeutics, including the TEXTBOOK OF
THERAPEUTICS: DRUG AND DISEASE MANAGEMENT, currently in its seventh edition. Dr.
Herfindal has been active in various professional organizations, serves on a
number of editorial and advisory boards, and is a frequent lecturer at national
and international healthcare meetings.

RICHARD J. PLESTINA was elected a director of the Company in April 1997. Since
1986, Mr. Plestina has served as President of Quelah Corporation, NW, a family
owned investment firm. In 1988, he was a consultant for Cologon, Inc. DBA Alpine
Glass Company, a large commercial and residential glass company. From 1979 to
1986, he was an Executive Vice President of Orion Capital Corporation, a
multi-line insurance company, and President of EBI Companies, which was acquired
by Orion Corporation in 1979. From 1974 to 1979 he served as the Vice President
and Marketing Manager of EBIC. Mr. Plestina has served previous directorships
for Orion Capital Corporation, EBI Companies, Associated Oregon Industries and
Northwest Employer's Council.

DIRECTORS WHOSE TERMS EXPIRE IN 2004

JAMES C. O'SHEA has served as Chairman, President and Chief Executive Officer of
the Company since March 1995. Prior to joining Bioject, he was President and
Chief Operating Officer of Biopure Corporation, a developer of red blood cell
substitutes. Prior to 1989, Mr. O'Shea was Executive Vice President of Marketing
and Scientific Affairs at Delmed Inc., a manufacturer of peritoneal dialysis
solutions and parenteral products. He is a member of the Board of Directors of
PSC, Inc., serving as Chairman of the Compensation Committee and previously
serving as Chairman of the Executive Committee.

SANDRA PANEM, PH.D. became a director in 2001. She is a partner in Cross
Atlantic Partners, Inc., an investment company specializing in biotechnology and
healthcare. Prior to 1999, Dr. Panem was President of Vector Fund Management,
L.P., which focused on later-stage companies. Prior to this, Dr. Panem served as
Vice President and Portfolio Manager for the Oppenheimer Global BioTech Fund, a
mutual fund that invested in public and private biotechnology companies. Prior
to joining Oppenheimer, Dr. Panem was a Vice President at Salomon Brothers
Venture Capital, a fund focused on early and later-stage life sciences and
technology investments. Dr. Panem serves on the boards of directors of Martek
Biosciences, Inc. (MATK) and several private companies.

JOHN RUEDY, MDCM. FRCPC, LLD (hon) has served as a director of the Company since
1987. Dr. Ruedy, a physician specialist in internal medicine and clinical
pharmacology, has served in a number of key academic positions including Chair
of the Department of Pharmacology and Therapeutics, McGill University, Head of
the Department of Medicine at St. Paul's Hospital, Vancouver, a teaching
hospital of the University of British Columbia, and from 1992-1999 as Dean of
the Faculty of Medicine, Dalhousie University. He currently serves as Vice
President, Academic Affairs, Capital District Health Authority, Halifax, Nova
Scotia, the major clinical teaching facility of the Faculty of Medicine,
Dalhousie University. He has extensive experience in clinical trials of drugs
and has served on a number of Canadian and international committees dealing with
regulatory issues concerning new drugs and devices. He currently is Chairman of
the Board of Person to Person Health Care, a tele technology company based in
Nova Scotia, Canada.

DIRECTOR COMPENSATION

The Company pays its directors no annual cash or per meeting compensation for
services. Under the terms of the 1992 Stock Incentive Plan, each non-employee
director is automatically awarded an option to purchase 3,500 shares of the
Company's common stock as a retainer immediately following the close of each
annual shareholders' meeting, 1,000 shares for each board meeting attended
(4,000 share maximum per calendar year) and 2,000 shares for service as a
committee chair, at an exercise price equal to the fair market value on the date
of the grant. Such options are vested and exercisable with respect to one-half
of the shares at six months from the date of grant with the remaining shares
vested and exercisable six months thereafter. The options expire eight years
after grant unless previously exercised or terminated due to termination of
service. The following table summarizes the options granted to each of the
non-employee directors during fiscal 2002.

SHARES COVERED BY WEIGHTED AVERAGE
NAME OPTIONS GRANTED EXERCISE PRICE
- ------------------------- ------------------ -----------------

Grace Keeney Fey 4,500 $11.99
Edward L. Flynn 7,500 9.80
William A. Gouveia 8,500 10.12
Eric T. Herfindal 9,500 10.26
Sandra Panem, Ph.D 5,500 11.91
Richard J. Plestina 8,500 11.07
John Ruedy, M.D 8,500 11.07

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

There were eight meetings of the Board of Directors and five actions by written
consent during fiscal 2002. Each of the directors, except Mss. Fey and Panem,
attended at least 75% of all of the meetings of the Board of Directors and
committees on which they served.

There are four standing committees of the Board of Directors: the Audit
Committee, the Compensation Committee, the Nominating Committee and the Ad
Hoc-Financing Committee.

The Audit Committee meets with the Company's independent accountants to review
the scope and findings of the annual audit and accounting policies and
procedures of the Company, which are then reported by the committee to the
directors of the Company. The Audit Committee met three times during fiscal
2002. The members of the Audit Committee are Mss. Fey and Panem and Messrs.
Flynn, Gouveia and Herfindal (committee chair).

The Compensation Committee administers the 1992 Stock Incentive Plan and cash
compensation for the executive officers. The Compensation Committee met three
times and took action pursuant to six written consents during fiscal 2002. The
members of the Compensation Committee are Messrs. Flynn, Herfindal, Plestina and
Ruedy (committee chair).

The Nominating Committee reviews and recommends to the full Board nominees for
directors of the Company to be submitted for election at the next annual
shareholders' meeting. The Nominating Committee has not put in place a procedure
for considering nominees recommended by shareholders. The Nominating Committee
did not meet during fiscal 2002. The members of the Nominating Committee are
Messrs. Gouveia (committee chair), Plestina and Ruedy.

The Ad Hoc Financing Committee monitors the Company's cash reserves and develops
strategies for procuring additional capital. The Ad Hoc Financing Committee did
not meet during fiscal 2002. The members of the Ad Hoc Financing Committee are
Mss. Fey and Panem and Mr. Plestina (committee chair).

AUDIT COMMITTEE REPORT

The Audit Committee of the Board of Directors reports to the Board and is
comprised of five directors, all of whom meet independence requirements under
current Nasdaq Stock Market corporate governance standards. The Audit
Committee's activities are governed by a written charter, which was adopted by
the Board in May 2000.

Management is responsible for the Company's internal controls and the financial
reporting process. The independent accountants are responsible for performing an
independent audit of the Company's consolidated financial statements in
accordance with generally accepted auditing standards and for issuing a report
thereon. The Audit Committee's responsibility is to monitor and oversee these
processes.

In discharging its responsibilities, the Audit Committee and its individual
members have met with management and Bioject's independent auditors, KPMG LLP,
to review the Company's accounting functions, the audited financial statements
for the fiscal year ended March 31, 2002, and the audit process. The Audit
Committee discussed and reviewed with its independent auditors all matters that
the independent auditors were required to communicate and discuss with the Audit
Committee under applicable auditing standards, including those described in
Statement on Auditing Standards No. 61, as amended, regarding communications
with audit committees. Audit Committee members also discussed and reviewed the
results of the independent auditors' examination of the financial statements,
the quality and adequacy of the Company's internal controls, and issues relating
to auditor independence. The Audit Committee has obtained a formal written
statement relating to independence consistent with Independence Standards Board
Standard No. 1, "Independence Discussions with Audit Committee," and discussed
with the auditors any relationships that may impact their objectivity and
independence.

Based on its review and discussions with management and the Company's
independent auditors, the Audit Committee recommended to the Board that the
audited Financial Statements be included in Bioject's Annual Report on Form 10-K
for the fiscal year ended March 31, 2002, for filing with the United States
Securities and Exchange Commission.

Submitted by the Audit Committee of the Board of Directors:
Grace Keeney Fey
Edward L. Flynn
William A. Gouveia
Eric T. Herfindal
Sandra Panem, Ph.D.

EXECUTIVE COMPENSATION AND OTHER TRANSACTIONS

The following individuals comprise the executive officers of the Company:

NAME AGE POSITION OFFICER SINCE
- ---- --- -------- -------------

James C. O'Shea 57 Chairman, Chief Executive Officer and President 1995
John Gandolfo 41 Chief Financial Officer and Vice President, Finance 2001
Michael A. Temple 52 Executive Vice President and General Manager 2001
Eric Mishkin, Ph.D. 51 Senior Vice President and Chief Scientific Officer 2002
Christopher Pugh 35 Vice President, Business Development 2002
J. Michael Redmond 42 Vice President, Business Development 1996
Ricky Richardson 40 Vice President, Product Development 2002
Richard R. Stout, M. D. 49 Vice President, Clinical Affairs 1994

BIOGRAPHICAL INFORMATION

JAMES C. O'SHEA. Please see biography information in section "ELECTION OF
DIRECTORS."

JOHN GANDOLFO joined Bioject in October 2001 as Chief Financial Officer and Vice
President, Finance. Mr. Gandolfo has more than 15 years of experience as a chief
financial officer of publicly held and private businesses with a primary focus
in the medical sector. Prior to joining Bioject, Mr. Gandolfo was the Chief
Financial Officer of Xceed, Inc. from November 1999 through September 2000 and
of Capital Access Network, Inc. from September 2000 through September 2001. From
April 1994 through November 1999, Mr. Gandolfo was Chief Financial Officer and
Chief Operating Officer of Impath, Inc., a publicly-held, cancer-focused
healthcare information company. Mr. Gandolfo's additional experience includes
chief financial officer of Medical Resources, Inc., Xceed Inc., and Capital
Access Network. A graduate of Rutgers University, Mr. Gandolfo is a certified
public accountant who began his professional career at Price Waterhouse.

MICHAEL A. TEMPLE joined Bioject as Executive Vice President and General Manager
in August 2001. From August 1999 to August 2001, Mr. Temple was founder and CFO
of Upright Systems Inc., an internet infrastructure company. From April 1998 to
August 1999, he was Bioject's Chief Financial Officer. From December 1996 until
January 1998, Mr. Temple was Chief Financial Officer for Graziano Produce Co., a
northwest regional fresh produce processor. From October 1993 until November
1996 he was Vice President of Finance and Chief Financial Officer for
Instromedix Inc., an Oregon-based medical technology company that designed and
manufactured transtelephonic cardiac event monitors. From April 1989 until
September 1993 he was Vice President of Finance and Chief Financial Officer for
the Yoshida Group, an Oregon-based group of companies with business activities
in manufacturing, logistics and real estate development. Prior to joining the
Yoshida Group, Mr. Temple was a principal in the accounting and business
advisory services practice of Laventhol & Horvath, a national public accounting
firm.

ERIC MISHKIN, PH.D. joined Bioject as Senior Vice President and Chief Scientific
Officer in June 2002. Dr. Mishkin has more than 15 years of experience in
Biomedical Research and Development in academic and industrial settings with a
primary focus in vaccine R&D. From August 1999 through May 2002, Dr. Mishkin was
Director of Immunology Research of Wyeth-Ayerst Research, the biopharmaceutical
division of American Home Products Company where he led viral vaccine Discovery
Research efforts. Dr. Mishkin's additional healthcare experience includes
Associate Director and Department Head of Viral Vaccine Immunology for
Wyeth-Lederle Vaccines and Pediatrics from May 1995 through August 1999, Group
Leader of Viral Vaccine Immunology Research for Lederle-Praxis Biologics from
January 1992 through May 1995 and various research positions in the Department
of Viral Vaccine Research and Development for Lederle-Praxis Biologicals from
July 1987 through January 1992. Dr. Mishkin received his B.A. from Hofstra
University and his M.S. and Ph.D. (1982, Parasitology) from the University of
Connecticut. Dr Mishkin served as a Post-Doctoral Fellow and Research Faculty
member in the Departments of Pharmacology/Toxicology and Microbiology/Immunology
at The Medical College of Virginia, Virginia Commonwealth University, January 1,
1983 through June 1987.

CHRISTOPHER PUGH joined Bioject as Vice President of Business Development in May
2002. Mr. Pugh has over ten years experience in pharmaceuticals. From November
1998 to May 2002 he was Director of Business Development at Guilford
Pharmaceuticals. From July 1996 to September 1998 Mr. Pugh was Project Manager
at Merck & Co. Mr. Pugh was a Group Product Manager at SmithKline Beecham from
June 1991 to July 1996. Mr. Pugh started his career in sales for Proctor &
Gamble Pharmaceuticals. He holds a Council of National Academics Awards MSc from
University of West England (Bristol) with research at University of Cambridge.
He holds an undergraduate degree in Zoology and Psychology from Swansea
University, UK.

J. MICHAEL REDMOND joined Bioject in February 1996 as Vice President of Sales
and Marketing. He was appointed Vice President of Business Development in
February 1998. Mr. Redmond has over fifteen years experience in medical
marketing and product sales. Prior to joining Bioject he was Director of
Business Development and Director of Sales and Marketing for Kollsman
Manufacturing Company. Kollsman is a private label developer and manufacturer of
medical instrumentation. He also held various sales and marketing positions with
Abbott Laboratories Diagnostic division.

RICKY RICHARDSON was promoted to Vice President of Product Development in June
2002. Mr. Richardson joined Bioject as a Senior Manufacturing Engineer in
October 1994. From August 1996 to September 1999 he served as Manufacturing
Manager. In September 1999 he was promoted to Vice President of Manufacturing.
In October 2000, he was promoted to Vice President of Operations. From May 1991
to October 1994 he was employed as a Quality Engineer and Production Supervisor
with Baxter Healthcare. From 1987 to April 1991, Mr. Richardson was a
Manufacturing Supervisor at Texas Instruments. From 1984 to 1987 he was a
Lieutenant, Field Artillery, with the U.S. Army. He holds a Bachelor's degree in
engineering from the U.S. Military Academy, West Point, NY.

RICHARD R. STOUT, M.D. joined Bioject in April 1994 as Director of Clinical and
Regulatory Affairs. He was promoted to Vice President of Clinical Affairs in
December 1994. From 1992 to 1993 he was the Director of Clinical and Regulatory
Affairs at EndoVascular Instruments, Inc., a developer of surgical devices and
methods for endarterectomy and intraluminal graft placement. Dr. Stout acted as
the Manager of Tachycardia Clinical Studies at Telectronics Pacing Systems from
1990 to 1992, an international medical device company involved in manufacturing
and distributing cardiac pacemakers and implantable defibrillators. From 1987 to
1989, Dr. Stout was Director of Medical Programs at Biotronic Inc., also a
manufacturer and distributor of implantable cardiac pacemakers.

EXECUTIVE COMPENSATION

The following table sets forth the cash compensation paid by the Company to its
Chief Executive Officer and to the other executive officers having salary and
bonus compensation greater than $100,000 in fiscal 2002 (collectively the "named
executive officers"), for services rendered to the Company during the fiscal
years ended March 31, 2002, 2001 and 2000.

SUMMARY COMPENSATION TABLE

Long Term
Compensation
Annual Compensation Awards
------------------------------------------- ------------
Other Annual All Other
Name and Principal Salary Bonus Compensation Option Compensation
Position Year ($) ($) ($) Shares ($)(1)
- -------------------------- --------- -------- -------- ----------- ------- ------------

James C. O'Shea 2002 $294,945 $ -- $8,747(2) 200,000 $ 6,005
Chairman, Chief 2001 242,000 -- 8,043 70,000 5,874
Executive Officer 2000 220,000 -- 7,339 95,500 3,939
and President

John Gandolfo 2002 135,264 100,000 -- 190,000 1,257
Chief Financial Officer 2001 -- -- -- -- --
and Vice President of 2000 -- -- -- -- --
Finance

Michael A. Temple 2002 114,699 -- -- 165,000 1,461
Executive Vice President 2001 -- -- -- -- --
and General Manager 2000 -- -- -- -- --

J. Michael Redmond 2002 149,274 72,262 6,000 24,500 5,093
Vice President of 2001 124,000 59,744 6,000 22,000 4,860
Business Development 2000 111,834 -- 6,000 23,700 2,692

Richard R. Stout, M.D 2002 132,724 -- -- 24,500 --
Vice President of 2001 121,500 -- -- 24,000 --
Clinical Affairs 2000 112,000 -- -- 25,076 --

(1) Represents the value of the Company's common stock contributed
to the officer's 401(k) account by the Company.

(2) Represents supplemental life and disability insurance premiums
paid pursuant to an employment agreement with Mr. O'Shea. No
other executive officers are entitled to this benefit.

(3) Represents a signing bonus upon accepting employment with the
Company.

(4) Represents commission and bonuses received in conjunction with
results achieved through Mr. Redmond's business development
efforts.

(5) Represents an automobile allowance of $500 per month.

GRANT OF STOCK OPTIONS

Shown below is information regarding grants of stock options pursuant to the
Company's 1992 Stock Incentive Plan during the fiscal year ended March 31, 2002
to the named executive officers.

OPTION GRANTS IN LAST FISCAL YEAR

Potential
Realizable Value
At Assumed Annual
Rates of Stock Price
Appreciation for
Individual Grants Option Term (1)
- -------------------------------------------------------------------------------- ---------------------------
Number of % of Total
Securities Options Exercise
Underlying Granted to Or Base
Options Employees in Price Expiration
Name Granted (2) Fiscal 2002 ($/Sh.) Date 5% ($) 10% ($)
- ---------------------- ----------- ----------- ----------- ----------- ----------- -----------

James C. O'Shea 100,000 11.4% $ 10.48 10/08/08 $ 426,637 $ 994,246
100,000 11.4 4.60 03/06/09 187,266 436,410

John Gandolfo 150,000 17.1 11.99 03/06/09 732,170 1,706,268
40,000 4.6 4.60 03/06/09 74,906 174,564

Michael A. Temple 75,000 8.6 11.38 03/07/08 347,460 809,730
50,000 5.7 11.99 03/06/09 244,057 568,756
40,000 4.6 4.60 03/06/09 74,906 174,564

J. Michael Redmond 24,500 2.8 4.60 03/06/09 45,880 106,920

Richard R. Stout M.D 24,500 2.8 4.60 03/06/09 45,880 106,920

(1) Potential realizable value is based on the assumption that the stock price
of the common stock appreciates at the annual rate shown (compounded
annually) from the date of grant until the end of the applicable option
term. These numbers are calculated based on the requirements promulgated by
the Securities and Exchange Commission and do not reflect the Company's
estimate of future stock price performance. The actual value, if any, which
may be realized by any officer will vary based on exercise date and the
market price of the related common stock when sold.

(2) All of the options granted vest as to one-third of the total granted on
each of the first through third anniversaries of the grant date.

OPTION EXERCISES AND FISCAL YEAR END VALUES

Shown below is information with respect to options exercised during fiscal 2002
and unexercised options to purchase the Company's common stock held by the named
executive officers at March 31, 2002.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES

Number of
Securities Value of
Underlying Unexercised
Shares Unexercised In-The-Money
Acquired Options Options
On Value At FY-END (#) At FY-End ($)(1)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
- ----------------------- ------------ ------------ ------------------ ------------------

James C. O'Shea -- -- 210,270/278,502 $58,106/$11,625

John Gandolfo -- -- --/190,000 --/--

Michael A. Temple 11,677 $ 8,444 --/165,000 --/--

J. Michael Redmond 3,000 25,140 50,417/47,068 9,355/1,891

Richard R. Stout, MD -- -- 39,378/48,858 5,692/1,470

(1) Based on the difference between the exercise price and the closing price of
the Company's common stock as quoted by the Nasdaq National Market System
on March 29, 2002 ($3.85). The actual value, if any, which may be realized
by any officer will vary based on exercise date and the market price of the
related common stock when sold.

EMPLOYMENT CONTRACTS

In March 1995, the Company entered into an employment agreement with Mr. O'Shea
to serve as Chairman, President and Chief Executive Officer. His salary, which
was $345,000 per annum at March 31, 2002, is subject to annual adjustment by the
Board of Directors. He also receives annual payment of certain disability and
life insurance policy premiums. His agreement continues until terminated. In the
event he is terminated, he will receive his base salary for up to two years. If
he becomes disabled, he will continue at 75% of his then current salary for not
less than six months and at 50% of such salary for the successive six months. In
the event of his death, his salary will continue for 60 days following the end
of the month of his death. Under the agreement, he is permitted to participate
in any profit sharing, deferred compensation or other programs. In addition, he
is prohibited from competing with the Company for three years following
termination of his employment. Under the terms of this agreement, Mr. O'Shea is
also entitled to receive 20,000 shares of the Company's common stock when the
Company first achieves two consecutive quarters of positive earnings per share.

In February 1996, the Company entered into an employment agreement with Mr.
Redmond to serve as Vice President of Sales and Marketing. In February 1998, he
was appointed Vice President of Business Development. His salary, $140,000 per
annum for fiscal 2002, plus $500 per month car allowance, is subject to annual
adjustment by the Board of Directors. Effective April 1, 2002 his salary
increased to $147,700 per annum. Mr. Redmond's agreement continues until
terminated. In the event he is terminated, he will receive his base salary for
up to four months. In the event he is disabled, he will continue at 75% of his
then current salary for not less than six months and then at 50% of such salary
through the end of the current term. In the event of his death, his salary will
continue for 60 days following the end of the month of his death. Under the
agreement, he is permitted to participate in any profit sharing, deferred
compensation or other programs. In addition, he is prohibited from competing
with the Company for three years following termination of his employment.

In March 2002, the Company entered into an amended and restated employment
agreement with Mr. Gandolfo to serve as the Company's Chief Financial Officer
and Vice President of Finance. Mr. Gandolfo's salary is currently $305,000 per
annum. Mr. Gandolfo was awarded an option to purchase 150,000 shares of the
Company's common stock upon commencement of employment and will receive an
option to purchase an additional 50,000 shares of the Company's common stock on
the first anniversary of his employment. Mr. Gandolfo's agreement has an initial
term of two years, beginning October 15, 2001. Upon expiration of the initial
term, the agreement will be automatically renewed for successive one-year terms
unless either Mr. Gandolfo or the Company shall, upon three months written
notice to the other, elect not to renew this agreement for any year. In the
event Mr. Gandolfo is terminated, he will receive his salary and benefits for up
to twelve months following the date of termination. In the event he is disabled,
he will continue at 75% of his then current salary for not greater than six
months and then at 50% of such salary for up to an additional six months. Health
and dental insurance and other benefit coverage will continue for the duration
of these payments, for a maximum time period not to exceed twelve (12) months.
In the event of his death, his salary will continue for 60 days following the
end of the month of his death. Under the agreement, Mr. Gandolfo is permitted to
participate in any profit sharing, deferred compensation or other programs. In
the event of a change in control, as defined by the agreement, and under certain
other circumstances, Mr. Gandolfo's unvested options, if any, will immediately
vest. Mr. Gandolfo is prohibited from competing with the Company for two years
following termination of his employment.

In March 2002, the Company entered into an amended and restated employment
agreement with Mr. Temple to serve as the Company's Executive Vice President and
General Manager. Mr. Temple's salary is currently $180,000 per annum. Mr. Temple
was awarded an option to purchase 75,000 shares of the Company's common stock
upon commencement of employment. Mr. Temple's agreement has an initial term of
two years, beginning August 6, 2001. Upon expiration of the initial term, the
agreement will be automatically renewed for successive one-year terms unless
either Mr. Temple or the Company shall, upon three months written notice to the
other, elect not to renew this agreement for any year. In the event Mr. Temple
is terminated, he will receive his salary and benefits for up to twelve months
following the date of termination. In the event he is disabled, he will continue
at 75% of his then current salary for not greater than six months and then at
50% of such salary for up to an additional six months. Health and dental
insurance and other benefit coverage will continue for the duration of these
payments, for a maximum time period not to exceed twelve (12) months. In the
event of his death, his salary will continue for 60 days following the end of
the month of his death. Under the agreement, Mr. Temple is permitted to
participate in any profit sharing, deferred compensation or other programs. In
the event of a change in control, as defined by the agreement, and under certain
other circumstances, Mr. Temple's unvested options, if any, will immediately
vest. Mr. Temple is prohibited from competing with the Company for two years
following termination of his employment.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers, directors and 10 percent shareholders to file reports of ownership and
changes in ownership with the Securities and Exchange Commission (the
"Commission"). Officers, directors and 10 percent shareholders are required by
Commission regulations to furnish the Company with all Section 16(a) reports
they file. Based solely on the Company's review of the copies of such reports
the Company received and written representations from the Company's officers and
directors, the Company believes that all required reports were timely filed in
fiscal 2002.

REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

The Company has maintained a philosophy of seeking to attract and retain a key
group of experienced executives capable of successfully managing product
development, manufacturing, marketing and sales, while providing strong
financial management. The Company provides a combination of annual cash
compensation and stock option grants as incentive to increase long-term
shareholder value.

To achieve the Company's executive compensation objectives, the Compensation
Committee adheres to several principles in structuring the compensation packages
for the Chief Executive Officer and the other executive officers of the Company.
Such principles include:

- Compensation that is based on both Company and individual
performance;

- Competitive compensation as determined by reviewing executive
compensation levels at comparable companies;

- Encouraging executive ownership through equity compensation
components; and

- Structuring compensation packages to attract and retain
qualified executives with leadership skills and other key
abilities required to meet the Company's objectives and enhance
shareholder value.

The Company's executive compensation is composed of the following key elements:

BASE SALARY

This is an amount of annual cash compensation, which the Company believes is
necessary to attract and retain qualified executives and is administered on
behalf of the Board of Directors by the Chief Executive Officer for all
executive officers other than the CEO. In fiscal 2002, the Company's Chief
Executive Officer, Mr. O'Shea, was paid an annual salary of $266,000 through
September 30, 2001, $300,000 from October 1, 2001 through December 31, 2001 and
$345,000 from January 1, 2002 through March 31, 2002. Mr. O'Shea's current base
salary is $345,000. As part of Mr. O'Shea's compensation package, the Board
agreed to pay premiums on certain life and disability policies owned by Mr.
O'Shea.

LONG-TERM INCENTIVES

At present, the Company's primary long-term incentive program is its 1992 Stock
Incentive Plan, which is available to all employees, executive officers and
non-employee consultants of the Company. The Compensation Committee of the Board
of Directors grants all options to officers pursuant to the 1992 Stock Incentive
Plan. Generally, upon joining the Company, executive officers are granted
options vesting over a three year period at current fair market value in
amounts, which in the Compensation Committee's opinion, are consistent with
their positions and responsibilities with the Company. In addition, based on
individual annual performance and contribution to the long-term goals of the
Company, executive officers may receive additional stock option grants. The
amount and terms of such options are discretionary and are determined by the
Compensation Committee taking into account Company and individual performance.
These options vest over varying periods and are intended to focus all employees
on achieving the long-term goals of the Company and to directly reward them for
corresponding increases in shareholder value.

The Company also has the 2000 Employee Stock Purchase Plan (the "ESPP"), which
is available to all full-time employees and executive officers of the Company.
The ESPP allows for the purchase of shares of the Company's common stock at a
discount utilizing payroll deductions.

The Company also has a 401(k) Retirement Benefit Plan for its employees,
including its executive officers, which provides for voluntary employer matches
of employee contributions up to 6% of salary and for discretionary profit
sharing contributions to all employees. In fiscal 2002, the named executive
officers received the following contributions under this plan:

NAME NUMBER OF SHARES VALUE OF SHARES
- ---- ---------------- ---------------

James C. O'Shea 1,081 $6,005
John Gandolfo 328 1,257
Michael A. Temple 381 1,461
J. Michael Redmond 919 5,093
Richard R. Stout, MD -- --

OTHER

Due to the availability of operating loss carryforwards, the Compensation
Committee determined Mr. O'Shea's and the other executive officers' compensation
packages without regard to the limitations of deductibility imposed by Internal
Revenue Code Section 162(m).

The Company is engaged in a highly competitive industry. In order to succeed,
the Company believes that it must be able to attract and retain qualified
executives. The Board of Directors believes that the above described
compensation structure will help the Company to achieve these objectives.

Compensation Committee:

Edward Flynn
Eric T. Herfindal
Richard J. Plestina
John Ruedy, M.D.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Executive compensation is administered by the Compensation Committee. The
Compensation Committee is composed of Messrs. Flynn, Herfindal, Plestina and
Ruedy. All members of the Compensation Committee are non-employee, outside
directors. James O'Shea, the Company's Chairman, President and Chief Executive
Officer, while not a member of the Compensation Committee, participated in
deliberations concerning executive officer compensation, but abstained from
deliberations concerning his own compensation.

STOCK PERFORMANCE CHART

The following chart compares the yearly stock market (U.S.) percentage change in
the cumulative total stockholder return on the Company's common stock during the
five fiscal years ended March 31, 2002 with the cumulative total return on the
Nasdaq Stock Market (U.S.) Index and the S&P 500 Pharmaceutical and Biotech
Index. The Hambrecht and Quist Healthcare Index (exclusive of biotechnology
companies), which was used as the Company's industry index in previous years, is
no longer available. The comparison assumes $100 was invested on March 31, 1997,
in the Company's common stock and in each of the foregoing indices and assumes
reinvestment of dividends.

[PERFORMANCE GRAPH]

Indexed Returns
Base Year Ending
Period ----------------------------------------------------------------------
Company/Index 3/31/97 3/31/98 3/31/99 3/31/00 3/31/01 3/31/02
- ------------- ---------- ---------- ---------- ---------- ---------- ----------

Bioject $ 100.00 $ 192.06 $ 80.03 $ 289.69 $ 280.09 $ 98.59
S&P 500 Pharmaceutical &
Biotech Index 100.00 166.83 224.14 192.61 220.47 221.23
Nasdaq Stock Market -- U.S. 100.00 151.57 204.79 380.91 152.34 153.41

PROPOSAL #2: TO APPROVE THE COMPANY'S
2002 RESTATED ARTICLES OF INCORPORATION

The Board of Directors unanimously proposes and recommends the approval of the
2002 Restated Articles of Incorporation (the "2002 Restated Articles") to
replace the Company's current Amended and Restated Articles of Incorporation
(the "Current Articles"). As described in detail below, the principal amendments
to the Current Articles included in the 2002 Restated Articles are changes to
the rights of the Company's Series A Convertible Preferred Stock ("Series A
Stock") and Series C Convertible Preferred Stock ("Series C Stock"). All
outstanding shares of Series A Stock and Series C Stock are held by Elan
Pharmaceutical Investments, Ltd. ("Elan"), and the amendments to the rights of
those shares are being proposed pursuant to an agreement between the Company and
Elan.

The complete text of the 2002 Restated Articles, marked to show the proposed
amendments to the Current Articles, is attached to this proxy statement as
Appendix A.

BACKGROUND

A total of 952,738 shares of Series A Stock and a total of 391,830 shares of
Series C Stock are currently outstanding, all of which are held by Elan. No
shares of Series B Convertible Preferred Stock or Series R Participating
Preferred Stock are outstanding.

In October 2001, the Company announced its intention to redeem 24% of the
outstanding shares of Series A Stock pursuant to Article IV, Section 2.7(a)(i)
of the Current Articles. Elan disputed the Company's right to redeem the shares
at that time. To enforce its redemption rights, the Company filed a lawsuit in
U.S. District Court in Oregon seeking an injunction and declaratory judgment to
compel Elan to abide by the redemption provisions in the Current Articles.
Subsequently, the Company received notice from Elan of its intention to convert
all of its shares of Series A Stock into shares of the Company's common stock.
As a result of Elan's notice of intent to convert the Series A Stock, the
Company had the right under Article IV, Section 2.6(a)(3) of the Current
Articles to redeem all of the Series A Stock for an aggregate redemption price
of $14.5 million. The Company had until January 8, 2002 to exercise this right,
although Elan indicated that it might dispute this redemption right as well.

In order to fund the potential redemption of the Series A Stock, the Board of
Directors authorized the issuance of up to 2.0 million shares of the Company's
common stock, and the issuance of common stock for that purpose was approved by
the shareholders at a special meeting held on November 20, 2001.

However, on December 12, 2001, the Company and Elan came to an agreement wherein
Elan agreed to the following:

- to eliminate, on a prospective basis from October 15, 2001, the
9% cumulative annual dividend payable on the Series A Stock;

- to terminate Elan's Series K warrants which gave Elan the right
to purchase 350,000 shares of Company common stock at $12.50 per
share;

- to partially exercise Elan's Series P warrant to purchase
252,666 shares of Company common stock for $7.50 per share or a
total of $1.9 million; and

- to exercise the remaining Series P warrants to purchase 252,666
shares of common stock within 30 days after December 12, 2002 if
the average closing market price over the ten trading days prior
to that date is at least $12.50 per share, and to purchase
252,667 shares of common stock within 30 days after December 12,
2003 if the average closing market price over the ten trading
days prior to that date is at least $15.00 per share.

In exchange, the Company agreed to the following:

- to issue to Elan an additional 260,044 shares of Series A Stock
in full satisfaction of the Company's obligations with respect
to dividends accrued on the Series A Stock through October 15,
2001;

- to eliminate all rights of the Company to redeem Series A Stock,
Series C Stock or Series P warrants, particularly including the
right that the Company had proposed to exercise to override
Elan's Series A conversion rights by redeeming shares of Series
A Stock as to which Elan had given notice of intent to convert;

- to eliminate provisions that required the mandatory conversion
of all outstanding shares of Series A Stock and Series C Stock
on October 15, 2004; and

- to dismiss the lawsuit the Company had filed to enforce its
Series A redemption rights.

In connection with the termination of the Series K warrant and the changes to
the Series A Stock, the Company recorded an additional preferred dividend charge
of $1.7 million in the third quarter of fiscal 2002, which resulted in total
preferred dividends in the quarter of $1.9 million. The preferred dividend
charge reflected a non-cash accounting adjustment required under generally
accepted accounting principles to record the fair market value of the Series A
Stock after giving effect to the modifications of its terms under the Elan
agreement.

Although both the Company and Elan believed and intended, and continue to
believe and intend, that the foregoing agreements changing the rights of the
Series A Stock and the Series C Stock were effective immediately, the Company
agreed to submit to its shareholders for approval at the 2002 annual meeting
amendments to the Current Articles to reflect all of the agreed upon changes.
This proposal is being submitted to shareholders in accordance with that
agreement. The Company further agreed that if the shareholders do not approve
the proposed amendments before December 14, 2002, the Company will issue a
warrant to Elan exercisable at a nominal price for shares of the Company's
common stock. The number of shares of common stock covered by that warrant would
be calculated pursuant to a specified formula intended to compensate Elan for
the difference in the value of its shares without the adoption of the proposed
amendments.

SUMMARY OF PROPOSED AMENDMENTS TO THE CURRENT ARTICLES

The following summarizes selected provisions of the Current Articles applicable
to the Series A Stock and the Series C Stock, the amendments thereto included in
the 2002 Restated Articles and the effect of such amendments. This summary is
qualified in its entirety by reference to the full text of the 2002 Restated
Articles attached to this proxy statement as Appendix A.

Dividends. Under the terms of the Current Articles, dividends accrue on the
Series A Stock at the rate of 9% per year, compounded semiannually. In the
Company's fiscal year ended March 31, 2001, for example, the Company accrued
$1,148,060 of Series A dividends which resulted in a corresponding reduction in
net income and earnings per common share. The 2002 Restated Articles amend
Article IV, Section 2.3(a)(1) of the Current Articles to eliminate as of October
15, 2001, the 9% cumulative annual dividend payable on the Series A Stock. Based
on the agreement with Elan, the Company has already ceased accruing Series A
dividends effective as of October 15, 2001. Under the Current Articles, holders
of Series C Stock are entitled to receive dividends when and as declared by the
Board of Directors on a pro rata basis along with the holders of common stock.
No changes are proposed to the dividend rights of the Series C Stock.

Conversion. Each share of Series A Stock and each share of Series C Stock is
convertible at any time at the election of holder into two shares of common
stock. Under the terms of the Current Articles, if any shares of Series A Stock
or Series C Stock remain outstanding on October 15, 2004, each such share would
automatically be converted into common stock. The 2002 Restated Articles amend
Article IV, Sections 2.6(a) and 2.6(c) of the Current Articles to eliminate this
mandatory conversion requirement for Series A Stock and Series C Stock, while
retaining Elan's voluntary right to convert each share of Series A Stock and
Series C Stock into two shares of common stock at any time. Accordingly, Elan's
952,738

shares of Series A Stock and 391,830 shares of Series C Stock are convertible
into a total of 2,689,136 shares of common stock.

Redemption. Under the Current Articles, the Series A Stock and Series C Stock
are redeemable by the Company if certain conditions are satisfied. The
redemption price per share is $15.00 plus accrued and unpaid dividends for
Series A Stock (or $7.50 per common equivalent share) and $6.125 plus accrued
and unpaid dividends for Series C Stock (or $3.0625 per common equivalent
share). Under the Current Articles, redemption is permitted in the following
circumstances:

- Under Article IV, Section 2.6(a)(3) of the Current Articles, if
the holder of Series A Stock provides notice of its intention to
convert any shares of Series A Stock into common stock, the
Company has the right, within 90 days and upon five business
days' notice, to redeem the shares subject to the notice.

- In addition, under Article IV, Section 2.7 of the Current
Articles, the Series A Stock and Series C Stock may be redeemed
based on satisfaction of the "Redemption Price Condition" which
is satisfied on any date if the closing price of the common
stock was at least $11.25 on at least 20 days in the 30
trading-day period ending with such date. If the Redemption
Price Condition is met after October 15, 2000, the Company may
redeem one-third of the Series A Preferred Stock and one-third
of the Series C Preferred Stock. If the Redemption Price
Condition is met after October 15, 2001, the Company's
redemption right applies to an additional third of the Series A
Preferred Stock and an additional third of the Series C
Preferred Stock. If the Redemption Price Condition is met after
October 15, 2002, the Company's redemption right is further
expanded to apply to the final third of the Series A Preferred
Stock and the final third of the Series C Preferred Stock. To
redeem shares, the Company must give notice of redemption within
60 days after a date on which the Redemption Price Condition is
satisfied, and must specify a redemption date not less than 45
days and not more than 90 days after the redemption notice.
Until the redemption date, Elan could elect to convert the
shares subject to the redemption notice into common stock as
described above, except that with respect to Series A Stock, the
Company would have the right pursuant to Article IV, Section
2.6(a)(3) to override Elan's conversion election and redeem the
shares.

The 2002 Restated Articles delete Article IV, Sections 2.6(a)(3) and 2.7 of the
Current Articles, thereby eliminating all rights of the Company to redeem Series
A Stock and Series C Stock.

Liquidation. On liquidation or dissolution of the Company, holders of Series A
Stock are entitled to receive an amount equal to $15.00 plus accrued and unpaid
dividends for each outstanding share of Series A Stock, and holders of Series C
Stock are entitled to receive an amount equal to $6.125 plus accrued and unpaid
dividends for each outstanding share of Series C Stock, in each case prior and
in preference to any distribution to holders of common stock. The liquidation
preferences of the Series A Stock and the Series C Stock remain unchanged under
the 2002 Restated Articles.

Voting. The Series A Stock and the Series C Stock do not carry any right to vote
with the common stock on the election of directors or on any other corporate
matters. The Series A Stock and the Series C Stock have class voting rights
under the Current Articles and Oregon corporate law on certain amendments to the
Current Articles affecting the Series A Stock or Series C Stock as well as on
any merger, consolidation or similar transaction. The voting rights of the
Series A Stock and the Series C Stock remain unchanged under the 2002 Restated
Articles.

Additional Amendments. The 2002 Restated Articles include additional amendments
to the Current Articles to either conform other portions of the document to the
principal amendments discussed above, correct previous typographical errors, or
eliminate outdated or unnecessary provisions.

FINANCIAL INFORMATION

RECOMMENDATION OF THE BOARD

The Board of Directors recommends that shareholders vote FOR the proposal to
approve the 2002 Restated Articles as described above. This proposal will be
approved if each of the following takes place: (1) provided a quorum of the
holders of common stock is present, the votes cast by holders of common stock in
favor of the proposal exceed the votes cast against the proposal, (2) provided a
quorum of the holders of Series C Stock is present, the votes cast by holders of
Series C Stock in favor of the proposal exceed the votes cast against the
proposal, and (3) holders of a majority of the outstanding shares of Series A
Stock vote in favor of the proposal. With respect to holders of common stock and
Series C Stock, abstentions and broker non-votes are counted for purposes of
determining whether a quorum exists at the Meeting but are not counted and have
no effect on the results of the vote on the proposal. With respect to holders of
Series A Stock, abstentions and broker non-votes have the same effect as "no"
votes in determining whether the proposal is approved. Elan has agreed to vote
in favor of this proposal, so the approval of holders of Series A Stock and
Series C Stock is assured. The proxies will be voted for or against the proposal
or as an abstention, in accordance with the instructions specified on the proxy
form. If no instructions are given, proxies will be voted FOR the proposal.

OTHER MATTERS TO BE ACTED UPON

It is not known whether any other matters will come before the Meeting other
than as set out above and in the Notice of Meeting. However, if such should
occur, the two persons named in the accompanying form of proxy, James C. O'Shea
and John Gandolfo, intend to vote on the matters in accordance with their best
judgment, exercising discretionary authority with respect to amendments or
variations or matters identified in the Notice of Meeting and other matters
which may properly come before the Meeting or an adjournment thereof.

SHAREHOLDER PROPOSAL AND NOMINATION PROCEDURES FOR THE MEETING

Section 1.12 of the Company's Bylaws provides that advance notice of nominations
for the election of directors or proposals for an amendment to the Company's
Bylaws must be received by the Company thirty (30) days prior to the date of the
shareholder meeting at which the shareholder wishes to present such nomination
or proposal or, if less than 40 days' notice of the date of the meeting is given
to shareholders, by the close of business on the 10th day following the date on
which notice of the meeting was mailed to shareholders.

Each notice of a nomination or proposal of a Bylaw amendment must contain, among
other things, (i) the name and address of the shareholder who intends to make
the nomination or proposal; (ii) a representation that the shareholder is a
holder of record of common stock of the Company entitled to vote at such meeting
and intends to appear in person or by proxy at the meeting to present the
nomination or proposal; (iii) certain biographical information concerning each
person to be nominated for election as a director, the number of shares of
common stock beneficially owned by such nominee, and the consent of such person
to serve as a director if so elected; (iv) a description of all arrangements or
understandings between the shareholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the shareholder; (v) the provisions of any
proposed Bylaw amendment and any financial interest of the shareholder in the
proposal; and (vi) such other information regarding each nominee or proposal as
would be required to be

included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission.

ANNUAL REPORT AND INCORPORATION BY REFERENCE

The Company's Annual Report to Shareholders for the fiscal year ended March 31,
2002 accompanies this proxy statement. The Company hereby incorporates by
reference into this proxy statement the information included in the following
portions of the Annual Report to Shareholders: Consolidated Financial Statements
and Notes thereto, Management's Discussion and Analysis of Financial Condition
and Results of Operations, Quantitative and Qualitative Disclosures About Market
Risk, and Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure. On written request, the Company will provide, without
charge, a copy of its Form 10-K filed with the Securities and Exchange
Commission (including a list briefly describing the exhibits thereto) to any
record holder or beneficial owner of the Company's common stock. Requests should
be directed to the attention of the Secretary of the Company at 211 Somerville
Road (Route 202 North), Bedminster, NJ 07921.

INDEPENDENT ACCOUNTANTS

Arthur Andersen LLP began the audit of the Company's financial statements for
fiscal 2002 and KPMG LLP, independent public accountants, completed the audit of
the financial statements of the Company for fiscal 2002. No change in
independent public accountants is contemplated for fiscal 2003. The Company
expects representatives of KPMG LLP to be present at the 2002 Meeting and to be
available to respond to appropriate questions from shareholders. The accountants
will have the opportunity to make a statement at the meeting if they desire to
do so. The fees billed by KPMG LLP for the audit of the Company's fiscal 2002
annual financial statements and for other professional services rendered in
fiscal 2002 were:

Audit Fees $26,000
Financial Information Systems Design and
Implementation Fees --
All Other Fees --
-------
Total $26,000
=======

On May 10, 2002, the Audit Committee of our Board of Directors approved the
dismissal of our previous independent public accountants, Arthur Andersen LLP.
Arthur Andersen LLP's reports on our financial statements for each of the last
two fiscal years did not contain an adverse opinion or disclaimer of opinion and
were not qualified or modified as to uncertainty, audit scope or accounting
principles. During our two most recent fiscal years and during the subsequent
interim period through the date of dismissal, May 10, 2002, there have not been
any disagreements between us and Arthur Andersen LLP on any matters of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure, or any reportable events as defined under Item 304(a)(1)(v)
of Regulation S-K promulgated by the Securities and Exchange Commission.

Also on May 10, 2002, based on the recommendation of the Audit Committee of our
Board of Directors, we engaged the firm of KPMG LLP to be our independent public
accountants. We did not consult KPMG LLP at any time since March 31, 2000 with
respect to the application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that might be
rendered on our financial statements, or concerning any disagreement or
reportable event with Arthur Andersen LLP.

PROPOSALS OF SHAREHOLDERS FOR THE 2003 ANNUAL MEETING OF SHAREHOLDERS

Proposals of shareholders to be presented at the Meeting to be held in September
2003 must be received at the Company's executive offices by April 10, 2003, in
order to be included in the Company's proxy statement and form of proxy
concerning that meeting.

In accordance with Rule 14a-4(c) promulgated by the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended, the
holders of the proxies solicited by the Board of Directors in connection with
the 2003 Annual Meeting of Shareholders may vote such proxies in their
discretion on certain matters as more fully described in such rule, including,
without limitation, on any matter coming before the meeting as to which the
Corporation does not have notice on or before June 29, 2003. This notice period
does not apply to director nominations or amendments to the Bylaws, which are
governed by the Company's Bylaws and explained under the heading "Shareholder
Proposal and Nomination Procedures for the Meeting."

DATED at Portland, Oregon, this 8th day of
August 2002.

BY ORDER OF THE BOARD

-------------------------------------------
James O'Shea
Chairman of the Board, President
and Chief Executive Officer

APPENDIX A

2002 RESTATED ARTICLES OF INCORPORATION
OF
BIOJECT MEDICAL TECHNOLOGIES INC.

ARTICLE I

Name

The name of the corporation (the "Corporation") shall be Bioject Medical
Technologies Inc.

ARTICLE II

Duration

The Corporation's duration shall be perpetual.

ARTICLE III

Purposes

The purposes for which the Corporation is organized are:

Section 1. In general, to carry on any lawful business whatsoever which is
calculated, directly or indirectly, to promote the interests of the Corporation
or to enhance the value of its properties.

Section 2. To engage in and carry on any lawful business or trade and exercise
all powers granted to a corporation formed under the Oregon Business Corporation
Act, including any amendments thereto or successor statute that may hereinafter
be enacted.

ARTICLE IV

Authorized Capital Stock

Section 1. Classes. After giving effect to the reverse stock split set forth in
Section 1.1, the Corporation shall be authorized to issue two classes of stock
to be designated, respectively, "Common Stock" and "Preferred Stock"; the total
number of shares which the Corporation shall have authority to issue is One
Hundred Ten Million (110,000,000) ; the authorized number of shares of Common
Stock shall be One Hundred Million (100,000,000), without par value; the
authorized number of shares of Preferred Stock shall be Ten Million
(10,000,000), without par value.

Section 1.1. Each five shares of issued and outstanding Common Stock of this
Corporation were, on October 13, 1999 (which was the effective date of the
Corporation's previous Amended and Restated Articles of Incorporation),
automatically reclassified into one share of Common Stock of this Corporation,
thereby giving effect to a one-for-five reverse stock split (the "Reverse Stock
Split"). All outstanding rights and obligations (including option plans, stock
options and the exercise price thereof, stock purchase warrants and the exercise
prices thereof and the conversion terms of the Corporation's shares of Series A
Convertible Preferred Stock, Series B Convertible Preferred Stock and Series C
Convertible Preferred Stock) relating to this Corporation's Common Stock were on
that date mathematically adjusted to reflect the Reverse Stock Split so that the
proportionate ratio of such rights and obligations to the reclassified shares
was equal to the proportionate ratio of such rights and

A-1

obligations to the shares outstanding immediately prior to such
reclassification. In lieu of the issuance of any fractional shares that
otherwise resulted from the Reverse Stock Split, the Corporation issued to any
shareholder that would have otherwise received fractional shares one whole
share, the additional shares thereby issued being taken from authorized but
theretofore unissued shares of Common Stock.

Section 2. Preferred Stock. Shares of Preferred Stock may be issued from time to
time in one or more series. Shares of Preferred Stock which may be redeemed,
purchased or acquired by the Corporation may be reissued except as otherwise
provided by law. The board of directors of the Corporation is hereby authorized
to fix the designations and powers, preferences and relative participating,
optional or other rights, if any, and qualifications, limitations or other
restrictions thereof, including, without limitation, the dividend rate (and
whether or not dividends are cumulative), conversion rights, if any, voting
rights, rights and terms of redemption (including sinking fund provisions, if
any), redemption price and liquidation preferences of any wholly unissued series
of Preferred Stock and the number of shares constituting any such series and the
designation thereof, or any of them; and to increase or decrease the number of
shares of any series subsequent to the issue of shares of that series, but not
below the number of shares of such series then outstanding.

Designation of Rights and Preferences of Series A Convertible
Preferred Stock, Series B Convertible Preferred Stock and
Series C Convertible Preferred Stock

Section 2.1. Definitions. The following terms shall have the respective meanings
ascribed to them below.

"Board" shall mean the Board of Directors of the Corporation.

"Business Day" shall mean any day other than Saturday, Sunday or a day on which
federally-chartered banks located in New York, New York or Portland, Oregon are
permitted by law to be closed.

"Closing Date" shall mean October 15, 1997.

"Closing Price" at any date shall mean the last reported sale price of the
Common Stock on the NASDAQ Stock Market or other principal market of the Common
Stock on such date.

"Common Stock" shall mean, collectively, the Corporation's Common Stock and any
capital stock of any class of the Corporation (other than any Preferred Stock)
hereafter authorized that is not limited to a fixed amount of percentage of par
or stated value in respect of the rights of the holders thereof to participate
in dividends or in the distribution of assets upon any liquidation, dissolution
or winding up of the Corporation.

"Conversion Stock" shall mean shares of the Corporation's Common Stock issuable
upon the conversion of any shares of Preferred Stock.

"Excluded Stock" shall mean (i) shares of Common Stock issued or reserved for
issuance by the Corporation as a stock dividend payable in shares of Common
Stock, or upon any subdivision or split-up of the outstanding shares of Common
Stock, or upon conversion of shares of the Preferred Stock, (ii) up to 3,650,000
shares of Common Stock (or Rights (as defined below)) therefor issued to
directors, officers or employees of the Corporation or its affiliates (or in the
case of options, granted at an exercise price) at less than Fair Value under a
duly-enacted stock option or compensation plan, or (iii) any shares of Common
Stock issuable upon exercise of any warrants currently outstanding or warrants
which the Corporation has committed, as of October 15, 1997, to issue in the
future.

"Fair Value" shall mean the fair market value of any securities or assets as
reasonably and in good faith determined by the Board.

A-2

"Junior Securities" shall mean any of the Corporation's equity securities
(whether or not currently authorized) that are junior in liquidation preference
to the Preferred Stock.

"Liquidation Value" of any share of Series A Preferred Stock or Series B
Preferred Stock as of any particular date shall be equal to $15.00 per share.
Liquidation Value of Series C Preferred Stock is the Series C Issuance Price.

"Market Price" of any security shall mean the average of the closing prices of
such security's sales on all securities exchanges on which such security may at
the time be listed, or, if there have been no sales on any such exchange on any
day, the average of the highest bid and lowest asked prices on all such
exchanges at the end of such day, or, if on any day such security is not so
listed, the average of the representative bid and asked prices quoted in the
NASDAQ Stock Market as of 4:00 p.m., New York time, or, if on any day such
security is not quoted in the NASDAQ Stock Market, the average of the highest
bid and lowest asked prices on such day in the domestic over-the-counter market
as reported by the National Quotation Bureau, Incorporated, or any similar
successor organization, in each such case averaged over a period of the 10
trading days preceding the determination date. If at any time such security is
not listed on any securities exchange or quoted in the NASDAQ Stock Market or
the over-the-counter market, the "Market Price" shall be the Fair Value thereof.

"Person" shall mean an individual, a partnership, a corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization
and a governmental entity or any department, agency or political subdivision
thereof.

"Preferred Stock" shall mean the Series A Preferred Stock, the Series B
Preferred Stock and the Series C Preferred Stock, or, as the context requires,
all such series of preferred stock of the Corporation.

"Preferred Issuance Price" shall mean the purchase price per share for the
Series A Preferred Stock, which is $15.00, and the purchase price per share for
the Series B Preferred Stock, which is $15.00.

"Series C Issuance Price" means the original price per share at which Series C
Preferred Stock is issued.

"Subsidiary" shall mean any Person of which the shares of outstanding capital
stock or other equity interests, as the case may be, possessing the voting power
under ordinary circumstances in electing the board of directors are, at the time
as of which any determination is being made, owned by the Corporation either
directly or indirectly through subsidiaries.

Section 2.2. Preferred Stock. (a) Series A Preferred Stock. 1,235,000 shares of
the preferred stock, without par value, of the Corporation are hereby
constituted as a series of preferred stock of the Corporation designated as
Series A Convertible Preferred Stock (the "Series A Preferred Stock"). Such
amount shall be adjusted by the Corporation in the event that any adjustments to
the Series A Preferred Stock are required as set forth herein, and, in
connection therewith, the Corporation shall promptly take all necessary or
appropriate actions and make all necessary or appropriate filings in connection
therewith.

(b) Series B Preferred Stock. 200,000 shares of the preferred stock, without par
value, of the Corporation are hereby constituted as a series of preferred stock
of the Corporation designated as Series B Convertible Preferred Stock (the
"Series B Preferred Stock"). Such amount shall be adjusted by the Corporation in
the event that any adjustments to the Series B Preferred Stock are required as
set forth herein, and, in connection therewith, the Corporation shall promptly
take all necessary or appropriate action and make all necessary or appropriate
filings in connection therewith.

A-3

(c) Series C Preferred Stock. 500,000 shares of the preferred stock, without par
value, of the Corporation are hereby constituted as a series of preferred stock
of the Corporation designated as Series C Convertible Preferred Stock (the
"Series C Preferred Stock"). Such amount shall be adjusted by the Corporation in
the event that any adjustments to the Series C Preferred Stock are required as
set forth herein, and, in connection therewith, the Corporation shall promptly
take all necessary or appropriate action and make all necessary or appropriate
filings in connection therewith.

Section 2.3. Dividends. (a) General. (1) Series A Preferred Stock. Each
outstanding share of Series A Preferred Stock shall accrue from the date of
issuance through October 15, 2001 a dividend equal to 9% per annum of the
Preferred Issuance Price of Series A Preferred Stock, compounded semiannually
beginning on September 2, 1998; such dividend shall be paid by the issuance of
additional shares of Series A Preferred Stock, based upon a value equal to the
Preferred Issuance Price.

(2) Series B Preferred Stock. The holder of each share of Series B Preferred
Stock shall be entitled to receive, pro rata among such holders and on a pari
passu basis with the holders of the Series C Preferred Stock and the holders of
Common Stock, as if the Series B Preferred Stock had been converted into Common
Stock immediately prior to the record date in respect thereof, when and as
declared by the Board out of funds legally available for the declaration and
payment of dividends, cash dividends at the same rate and in the same amount per
share as any and all dividends declared and paid in respect of the Common Stock.
Except as set forth above, such holders shall not be entitled to receive any
dividends.

(3) Series C Preferred Stock. The holder of each share of Series C Preferred
Stock shall be entitled to receive, pro rata among such holders and on a pari
passu basis with the holders of the Series B Preferred Stock and the holders of
Common Stock, as if the Series C Preferred Stock had been converted into Common
Stock immediately prior to the record date in respect thereof, when and as
declared by the Board out of funds legally available for the declaration and
payment of dividends, cash dividends at the same rate and in the same amount per
share as any and all dividends declared and paid in respect of the Common Stock.
Except as set forth above, such holders shall not be entitled to receive any
dividends.

(b) Payment of Dividends. (1) Series A Preferred Stock. Dividends accrued and
unpaid on shares of Series A Preferred Stock shall be payable in accordance with
Section 2.3(a)(1) above.

(2) Series B Preferred Stock. Dividends payable in respect of the Series B
Preferred Stock shall be paid as and when dividends are paid in respect of the
Common Stock.

(3) Series C Preferred Stock. Dividends payable in respect of the Series C
Preferred Stock shall be paid as and when dividends are paid in respect of the
Common Stock.

(4) Change in Dividend Rate. If the Corporation shall fail to declare or pay a
dividend on a date on which dividends are to be compounded pursuant to Section
2.3(a)(1) hereof, dividends on each share of Series A Preferred Stock shall
thereupon begin to accrue at the rate of 9% of the sum of (a) the Preferred
Issuance Price and (b) accrued and unpaid dividends on such date. If a dividend
that was accrued and unpaid on a date dividends are to be compounded is
subsequently paid, the rate at which dividends accrue shall thereupon be lowered
to reflect such payment.

Section 2.4. Liquidation. Upon any liquidation, dissolution or winding up of the
Corporation, each holder of Preferred Stock shall be entitled to receive from
amounts remaining after satisfaction of creditors and holders of securities (if
any) with liquidation preferences senior to the Preferred Stock, and pro rata
based on the respective outstanding liquidation preferences with holders of
securities with a liquidation preference pari passu to the Preferred Stock, an
amount equal to the Liquidation Value, plus accrued and

A-4

unpaid dividends thereon, per share multiplied by the number of shares of
Preferred Stock, held by such holder, until paid in full, in preference and
priority to any distribution to any holder of Junior Securities.

The Corporation shall provide written notice of such liquidation, dissolution or
winding up, not less than 30 days prior to the payment date stated therein, to
each record holder of any shares of Preferred Stock.

Section 2.5. Voting Rights. (a) No Voting. Except as provided in Section 2.5(b)
below or as required by the Oregon Business Corporation Act, the outstanding
shares of Preferred Stock shall not be entitled to vote on any matter as to
which stockholders of the Corporation shall be entitled to vote.

(b) Special Voting Rights. The Corporation shall not, without first obtaining
the affirmative vote or written consent of a majority in interest of the Series
A Preferred Stock, voting as a class:

(1) amend or repeal any provision of, or add any provision to, the Corporation's
Articles of Incorporation or By-laws if such action would adversely alter
preferences, rights, privileges or powers of, or the restrictions provided
herein for the benefit of, the Series A Preferred Stock;

(2) create a series of Preferred Stock with a liquidation preference senior to
the Series A Preferred Stock;

(3) effect any merger, consolidation or similar transaction; or

(4) increase or decrease the number of authorized shares of Series A Preferred
Stock, except as required by Section 2.2 hereof.

Section 2.6 Conversion. (a) Series A Preferred Stock. All holders of Series A
Preferred Stock issued as of December 12, 2001, shall have the right to convert
at any time each share of Series A Preferred Stock into two shares of Common
Stock as of such date (which amount gives effect to the Reverse Stock Split
described in Section 1.1), subject to Section 2.6(e) below (the "Antidilution
Adjustments").

(b) Series B Preferred Stock. Series B Preferred Stock is convertible in the
same manner and subject to the same terms and conditions as provided for in
Section 2.6(a) above with respect to the holders of Series A Preferred Stock.

A-5

(c) Series C Preferred Stock. All holders of Series C Preferred Stock issued as
of December 12, 2001 shall have the right to convert at any time each share of
Series C Preferred Stock into two shares of Common Stock as of such date (which
amount gives effect to the Reverse Stock Split described in Section 1.1),
subject to the Antidilution Adjustments.

(d) Conversion Procedure. (1) Before any holder of shares of Preferred Stock
shall be entitled to convert any of such shares into shares of Common Stock,
such holder shall surrender the certificate or certificates, duly endorsed, at
the office of the Corporation or of any transfer agent for the Preferred Stock,
and shall give written notice to the Corporation at its principal corporate
office of the election to convert such shares and shall state therein the name
or names in which the certificate or certificates for shares of Common Stock are
to be issued.

(2) Each conversion of any shares of Preferred Stock shall be deemed to have
been effected on the close of business on the date on which the certificate or
certificates representing such Preferred Stock to be converted have been
surrendered at the principal corporate office of the Corporation or the office
of any transfer agent for the Preferred Stock. At such time as such conversion
has been effected, the rights of the holder of such Preferred Stock as a holder
shall cease, the Person or Persons in whose name or names any certificate or
certificates for shares of Conversion Stock are to be issued upon such
conversion shall be deemed to have become the holder or holders of record of the
shares of Conversion Stock represented thereby.

(3) As soon as possible after a conversion has been effected (but in any event
within five business days in the case of clause (6) below), the Corporation or
its transfer agent shall deliver to the converting holder:

(i) a certificate or certificates representing the number of shares of
Conversion Stock issuable by reason of such conversion in such name or names and
such denomination or denominations as the converting holder has specified; and

(ii) payment in an amount equal to the amount payable under clause (6) below
with respect to such conversion.

(4) The issuance of certificates for shares of Conversion Stock upon conversion
of the Preferred Stock shall be made without charge to the holders of such
Preferred Stock for any cost incurred by the Corporation in connection with such
conversion and the related issuance of shares of Conversion Stock. Upon
conversion of each share of Preferred Stock, the Corporation shall take all such
actions as are necessary in order to ensure that the Conversion Stock issuable
with respect to such conversion shall be validly issued, fully paid and
nonassessable.

(5) The Corporation shall not close its books against the transfer of the
Preferred Stock or of Conversion Stock issued or issuable upon conversion of the
Preferred Stock in any manner which interferes with the timely conversion of the
Preferred Stock. The Corporation shall assist and cooperate with any holder of
the Preferred Stock or Conversion Stock required to make any governmental
filings or obtain any governmental approval prior to or in connection with any
conversion of shares hereunder (including, without limitations, making any
filings required to be made by the Corporation).

A-6

(6) If any fractional interest in a share of Conversion Stock would, except for
the provisions of this clause (6), be deliverable upon any conversion of the
Preferred Stock, the Corporation, in lieu of delivering the fractional share
therefor, shall pay an amount to the holder thereof equal to the Market Price of
such fractional interest as of the date of conversion.

(7) The Corporation shall at all times reserve and keep available out of its
authorized but unissued shares of Conversion Stock, solely for the purpose of
issuance upon the conversion of the Preferred Stock, such number of shares of
Conversion Stock issuable upon the conversion of all outstanding shares of
Preferred Stock. All shares of Conversion Stock which are so issuable shall,
when issued, be duly and validly issued, fully paid and nonassessable and free
from all taxes, liens and charges. The Corporation shall take all such actions
as may be necessary to ensure that all such shares of Conversion Stock may be so
issued without violation of any applicable law or governmental regulation or any
requirements of any domestic securities exchange or market upon which shares of
Conversion Stock may be listed (except for official notice of issuance which
shall be immediately delivered by the Corporation upon each such issuance and
except for filings, notices of applicability and permissions solely within the
control of, or laws and regulations solely applicable to, the holders of the
Preferred Stock).

(e) Anti-dilution Adjustments. (1) Changes in Common Stock. In case the
Corporation shall at any time or from time to time after October 13, 1999 (i)
pay a dividend or make any other distribution with respect to its Common Stock
in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock
into a greater number of shares of Common Stock, (iii) combine its outstanding
shares of Common Stock or (iv) issue any shares of its capital stock or other
assets in a reclassification or reorganization of the Common Stock (including
any such reclassification in connection with a consolidation or merger in which
the Corporation is the continuing entity), then the number and kind of shares of
capital stock of the Corporation or other assets that may be received upon the
conversion of the Preferred Stock shall be adjusted to the number of shares of
Conversion Stock and amount of any such securities, cash or other property of
the Corporation which the holders would have owned or have been entitled to
receive after the happening of any of the events described above had the
Preferred Stock been converted immediately prior to the record date (or, if
there is no record date, the effective date) for such event. An adjustment made
pursuant to this clause (1) shall become effective upon the effective date of
such payment, sub-division, combination or issuance as described above. Any
Conversion Stock or other assets to be acquired as a result of such adjustment
shall not be issued prior to the effective date of such event. For the purposes
of this clause (1), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Corporation.

(2) Issuance of Rights. In case the Corporation shall issue to all holders of
its Common Stock rights, options or warrants to subscribe for or purchase, or
other securities exchangeable for or convertible into, shares of Common Stock
that are not distributed to holders of Preferred Stock (any such rights,
options, warrants or other securities, collectively, "Rights") (excluding rights
to purchase Common Stock pursuant to a Corporation plan for reinvestment of
dividends or interest and excluding any Excluded Stock) at a subscription
offering, exercise or conversion price per share (as defined below, the
"offering price per share") which, before deduction of customary discounts and
commissions, is lower than the current Market Price per share of Common Stock on
the record date of such issuance or grant, whether or not, in the case of
Rights, such Rights are immediately exercisable or convertible, then the number
of shares of Conversion Stock issuable upon conversion of the Preferred Stock
shall be adjusted by multiplying the number of shares of Conversion Stock
issuable upon conversion of the Preferred Stock immediately prior to any
adjustment in connection with such issuance or grant by a fraction, the
denominator of which shall be the number of shares of Common Stock outstanding
(exclusive of any treasury shares) on the record date of issuance or grant of
such Rights plus the number of shares which the aggregate offering price (as
defined below) of the total number of shares of Common Stock so offered would
purchase at the current Market Price per share of Common Stock on the record
date, and the numerator of which is the number

A-7

of shares of Common Stock outstanding plus the aggregate number of shares of
Common Stock issuable upon exercise of the rights. Such adjustment shall be made
immediately after the record date for the issuance or granting of such Rights.
For purposes of this clause, the "offering price per share" of Common Stock
shall, in the case of Rights, be determined by dividing (x) the total amount
received or receivable by the Corporation in consideration of the issuance of
such Rights plus the total consideration payable to the Corporation upon
exercise thereof (the "aggregate offering price"), by (y) the total number of
shares of Common Stock covered by such Rights.

(3) Dividends and Distributions. In case the Corporation shall distribute to all
holders of Common Stock any dividend or other distribution of evidences of its
indebtedness or other assets (in each case other than cash dividends and other
than as provided in clause (1) above in which the holders of the Preferred Stock
are otherwise entitled to share, as provided herein) or Rights, then, in each
case, all holders of the Preferred Stock shall be entitled to receive all of the
same dividends, distributions or Rights, as the case may be, as the holders of
Common Stock, on an as-converted basis, as and when distributed to the holders
of Common Stock, at such time, if any, that the holders of the Preferred Stock
shall have elected to convert such stock to Common Stock, as provided herein.

(4) Computations. For the purpose of any computation under clauses (1) and (2)
above, the current Market Price per share of Common Stock at any date shall be
as set forth in (i) the definition of Market Price for the 10 consecutive
trading days commencing 20 trading days prior to the earlier to occur of (A) the
date as of which the Market Price is to be computed or (B) the last full trading
day before the commencement of "ex-dividend" trading in the Common Stock
relating to the event giving rise to the adjustment required by clause (1) or
(2) or (ii) any other arm's-length adjustment formula that the Board may use in
good faith. In the event the Common Stock is not then publicly traded or if for
any other reason the current market price per share cannot be determined
pursuant to the foregoing provisions of this clause (4) the current market price
per share shall be the Fair Value thereof.

(5) Securities. For the purpose of this Section 2.6, the term "shares of Common
Stock" shall mean (i) the class of stock designated as Common Stock, without par
value, of the Corporation on the date of filing this Certificate or (ii) any
other class of stock resulting from successive changes or reclassifications of
such shares consisting solely of changes in par value, or from par value to no
par value, or from no par value to par value.

(6) Re-Adjustment. If, at any time after any adjustment to the number of Shares
of Conversion Stock issuable upon conversion of the Preferred Stock and the
Conversion Price shall have been made pursuant to clause (2) of this Section
2.6, any rights, options, warrants or other securities convertible into or
exchangeable for shares of Common Stock shall have expired, or any thereof shall
not have been exercised, the Conversion Price and the number of shares of
Conversion Stock issuable upon conversion

A-8

of the Preferred Stock shall, upon such expiration, be readjusted and shall
thereafter be such as it would have been had it been originally adjusted (or had
the original adjustment not been required, as the case may be) as if (A) the
only shares of Common Stock offered were the shares of Common Stock, if any,
actually issued or sold upon the exercise of such rights, options or warrants
and (B) such shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Corporation for the issuance, sale or
grant of all such rights, options or warrants whether or not exercised;
provided, further that no such readjustment shall have the effect of increasing
the Conversion Price or decreasing the number of shares of Conversion Stock
issuable upon conversion of the Preferred Stock by an amount (calculated by
adjusting such increase or decrease as appropriate to account for all other
adjustments pursuant to this Section 2.6 following the date of the original
adjustment referred to above) in excess of the amount of the adjustment
initially made in respect of the issuance, sale or grant of such rights, options
or warrants.

(e) Reorganization, Reclassification Consolidation, Merger or Sale. Any
recapitalization, reorganization, reclassification, consolidation, merger, sale
of all or substantially all of the Corporation's assets to another Person or
other transaction which is effected in such a manner that holders of Common
Stock are entitled to receive (either directly or upon subsequent liquidation)
stock, securities or assets with respect to or in exchange for Common Stock is
referred to herein as an "Organic Change". Prior to the consummation of any
Organic Change, the Corporation shall make appropriate provisions to ensure that
each of the holders of each share of the Preferred Stock shall thereafter have
the right to acquire and receive, in lieu of or in addition to (as the case may
be) the shares of Conversion Stock immediately theretofore acquirable and
receivable upon the conversion of such holder's Preferred Stock, such shares of
stock, securities or assets as such holder would have received in connection
with such Organic Change if such holder had converted its Preferred Stock
immediately prior to such Organic Change. In each such case, the Corporation
shall also make appropriate provisions to ensure that the provisions of this
Section 2.6 hereof shall thereafter be applicable to the Preferred Stock. The
Corporation shall not effect any such consolidation, merger or sale, unless
prior to the consummation thereof, the successor corporation (if other than the
Corporation) resulting from consolidation or merger or the corporation
purchasing such assets assumes by written instrument the obligation to deliver
to each such holder such shares of stock, securities or assets as, in accordance
with the foregoing provisions, such holder may be entitled to acquire.

(f) Notices. (1) Immediately upon any adjustment of the number of shares
issuable upon conversion of the Preferred Stock, the Corporation shall give
written notice thereof to all holders of the Preferred Stock, setting forth in
reasonable detail and certifying the calculation of such adjustment.

(2) The Corporation shall give written notice to all holders of the Preferred
Stock at least 10 days prior to the date on which the Corporation closes its
books or takes a record of determining rights to receive any dividends or
distributions. The Corporation shall also give written notice to the holders of
the Preferred Stock at least 30 days prior to the date on which Organic Change
shall occur.

A-9

Section 2.7. Registration of Transfer. The Corporation shall keep a register for
the registration of the record holders of the Preferred Stock. Upon the
surrender of any certificate representing any shares of Preferred Stock, the
Corporation shall, at the request of the record holder of such certificate,
execute and

A-10

deliver (at the Corporation's expense, provided that the holder will be
responsible for any transfer taxes if the certificate is register in a new name)
a new certificate or certificates in exchange therefore representing in the
aggregate the number of shares of the Preferred Stock, as applicable,
represented by the surrendered certificate. Each such new certificate shall be
registered in such name and shall represent such number of shares of the
Preferred Stock, as applicable, as is requested by the holder of the surrendered
certificate and shall be substantially identical in form to the surrendered
certificate, and dividends shall accrue on the Preferred Stock represented by
such new certificate from the date to which dividends have been fully paid on
such Preferred Stock represented by the surrendered certificate.

Section 2.8. Replacement. Upon receipt of evidence reasonably satisfactory to
the Corporation (an affidavit of the registered holder and an undertaking of
indemnity from a creditworthy indemnitor shall be satisfactory) of the ownership
and the loss, theft, destruction or mutilation of any certificate evidencing
shares of the Preferred Stock, and in the case of any such loss, theft or
destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation, or, in the case of any such mutilation upon surrender of such
certificate, the Corporation shall (at its expense) execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
shares of such series represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate, and dividends shall accrue on the Preferred Stock represented by
such new certificate from the date to which dividends have been fully paid on
such lost, stolen, destroyed or mutilated certificate.

Section 2.9. Amendment and Waiver. No amendment, modification or waiver shall be
binding or effective with respect to any provision of Section 2.1 through
Section 2.10 of these Articles of Incorporation without the prior written
consent of a Majority in Interest of each of the Series A Preferred Stock,
Series B Preferred Stock or Series C Preferred Stock outstanding at the time
such action is taken.

Section 2.10. Notices. Except as otherwise expressly provided hereunder, all
notices referred to herein shall be in writing and shall be delivered by
registered or certified mail, return receipt requested and postage prepaid, or
by reputable overnight courier or telecopy service, charges prepaid, and shall
be deemed to have been given when so mailed or sent (a) to the Corporation, at
its principal executive offices and (b) to any stockholder, at such holder's
address as it appears in the stock records of the Corporation (unless otherwise
indicated by any such holder).

Section 3. Additional Preferred Stock. This Section 3 sets forth the
designation, preferences, limitations and relative rights of a series of
Preferred Stock of the corporation as determined by the board of directors of
the corporation pursuant to its authority under Oregon Revised Statutes 60.134
and Section 2 of Article IV of these Articles of Incorporation.

Section 3.1. Designation and Amount. The shares of such series shall be
designated as "Series R Participating Preferred Stock" and the number of shares
constituting such series shall be 125,000.

Section 3.2. Dividends and Distributions (a) The holders of shares of Series R
Participating Preferred Stock shall be entitled to receive, when and as declared
by the board of directors, out of funds legally available for the purpose,
dividends in an amount per share equal to 1,000 (the "Adjustment Number")
multiplied by the aggregate per share amount of all cash dividends, and the
Adjustment Number multiplied by the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions other than a dividend payable
in Common Stock or a subdivision of the outstanding Common Stock (by
reclassification or otherwise), declared on the Common Stock, without par value,
of the corporation (the "Common Stock") after the first issuance of any share or
fraction of a share of Series R Participating Preferred Stock.

(b) The corporation shall declare a dividend or distribution on the Series R
Participating Preferred Stock as provided in subparagraph 3.2(a) at the same
time that it declares a dividend or distribution on the Common Stock (other than
a dividend payable in Common Stock).

A-11

(c) Dividends shall not be cumulative. Unpaid dividends shall not bear interest.
Dividends paid on the shares of Series R Participating Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding.

Section 3.3. Voting Rights. The holders of Series R Participating Preferred
Stock shall have the following voting rights: (a) Each share of Series R
Participating Preferred Stock shall entitle the holder thereof to the number of
votes equal to the Adjustment Number then in effect on all matters submitted to
a vote of the shareholders of the corporation.

(b) Except as otherwise provided herein or by law, the holders of Series R
Participating Preferred Stock and the holders of Common Stock shall vote
together as one class on all matters submitted to a vote of shareholders of the
corporation.

Section 3.4. Certain Restrictions (a) Whenever dividends or distributions
payable on the Series R Participating Preferred Stock as provided in Section 3.2
have not been declared or paid for any fiscal year, until all such dividends and
distributions for such fiscal year on Series R Participating Preferred Stock
outstanding shall have been declared and paid in full, the corporation shall not
in such fiscal year

(i) declare or pay dividends on or make any other distributions on any shares of
stock ranking junior or on a parity (either as to dividends or upon liquidation,
dissolution or winding up) to the Series R Participating Preferred Stock except
dividends paid ratably on the Series R Participating Preferred Stock and all
such parity stock on which dividends are payable in proportion to the total
amounts to which the holders of all such shares are then entitled and dividends
or distributions payable in Common Stock;

(ii) purchase or otherwise acquire for consideration any shares of Series R
Participating Preferred Stock or any shares of stock ranking on a parity with
the Series R Participating Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the board of
directors) to all holders of such shares upon such terms as the board of
directors, after consideration of the respective dividend rates and other
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among the
respective series or classes.

(b) The corporation shall not permit any subsidiary of the corporation to
purchase or otherwise acquire for consideration any shares of stock of the
corporation unless the corporation could, under subparagraph 3.4 (a), purchase
or otherwise acquire such shares at such time and in such manner.

Section 3.5 Restriction on Issuance of Stock; Reacquired Stock. The corporation
shall not issue any shares of Series R Participating Preferred Stock except upon
exercise of rights (the "Rights") issued pursuant to the Rights Agreement dated
as of June 25, 2002, between the corporation and American Stock Transfer & Trust
Company (the "Rights Agreement"), a copy of which is on file with the secretary
of the corporation at its principal executive office and shall be made available
to shareholders of record without charge upon written request. Any shares of
Series R Participating Preferred Stock purchased or otherwise acquired by the
corporation in any manner whatsoever may be restored to the status of authorized
but unissued shares after the acquisition thereof. All such shares shall upon
any such restoration become authorized but unissued shares of Preferred Stock
and may be reissued as part of a new series of Preferred Stock to be created by
the board of directors, subject to the conditions and restrictions on issuance
set forth herein.

Section 3.6 Liquidation, Dissolution or Winding Up (a) Upon any liquidation
(voluntary or otherwise), dissolution or winding up of the corporation, no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series R Participating Preferred Stock unless, prior thereto, the holders of
shares of Series R Participating Preferred Stock shall have received the
Adjustment Number multiplied by the per share amount to be

A-12

distributed to holders of Common Stock, plus an amount equal to declared and
unpaid dividends and distributions thereon to the date of such payment (the
"Series R Liquidation Preference"). Following the payment of the full amount of
the Series R Liquidation Preference, no additional distributions shall be made
to the holders of shares of Series R Participating Preferred Stock.

(b) In the event that there are not sufficient assets available to permit
payment in full of the Series R Liquidation Preference and the liquidation
preferences of all other series of Preferred Stock, if any, which rank senior to
or on a parity with the Series R Participating Preferred Stock, then assets
shall be distributed first to holders of any series of Preferred Stock ranking
senior to the Series R Participating Preferred Stock to the extent of their
liquidation preferences and such remaining assets shall be distributed ratably
to the holders of Series R Participating Preferred Stock and such parity shares
in proportion to their respective liquidation preferences.

Section 3.7 Consolidation, Merger, etc. In case the corporation shall enter into
any consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case the shares of Series R
Participating Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share equal to the Adjustment Number multiplied by the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common Stock
is changed or exchanged.

Section 3.8 Anti-Dilution, Adjustments to Adjustment Number. In the event the
corporation shall at any time after July 19, 2002 (the "Rights Declaration
Date") (a) declare any dividend on Common Stock payable in shares of Common
Stock, (b) subdivide the outstanding shares of Common Stock, or (c) combine the
outstanding shares of Common Stock into a smaller number of shares, then in each
such case the Adjustment Number for all purpose of this Section 3 of Article IV
shall be adjusted by multiplying the Adjustment Number then in effect by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event. In the event the corporation shall at any time after the Rights
Declaration Date, fix a record date for the issuance of rights, options or
warrants to all holders of Common Stock entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe for or purchase
Common Stock or securities convertible into Common Stock at a price per share of
Common Stock (or having a conversion price per share, if a security convertible
into Common Stock) less than the then Current Per Share Market Price (as defined
in Section 11(d) of the Rights Agreement) of the Common Stock on such record
date, then in each such case the Adjustment Number for all purposes of this
Section 3 of Article IV shall be adjusted by multiplying the Adjustment Number
then in effect by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding on such record date plus the number of
additional shares of Common Stock to be offered for subscription or purchase (or
into which the convertible securities so to be offered are initially
convertible) and the denominator of which shall be the number of shares of
Common Stock outstanding on such record date plus the number of shares of Common
Stock which the aggregate offering price of the total number of shares of Common
Stock so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such Current Per
Share Market Price (as defined in Section 11(d) of the Rights Agreement). In
case such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the board of directors. Shares of Common Stock owned
by or held for the account of the corporation shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed. In the event that such
rights, options or warrants are not so issued, the Adjustment Number shall be
readjusted as if such record date had not been fixed; and to the extent such
rights, options or warrants are issued but not exercised prior to their
expiration, the Adjustment Number shall be readjusted to be the number which
would have resulted from the adjustment provided for in this paragraph 3.8 if
only the rights, options or warrants that were exercised had been issued.

A-13

Section 3.9 No Redemption. Shares of the Series R Participating Preferred Stock
shall not be redeemable at the option of the corporation or any holder thereof.
Notwithstanding the foregoing sentence, the corporation may acquire Series R
Participating Preferred Stock in any other manner permitted by law.

Section 3.10 Amendment. Subsequent to the Distribution Date (as defined in the
Rights Agreement) these articles of incorporation shall not be further amended
in any manner which would materially alter or change the preferences,
limitations and relative rights of the Series R Participating Preferred Stock so
as to affect them adversely without the affirmative vote of the holders of a
majority of the outstanding shares of Series R Participating Preferred Stock,
voting separately as a class.

Section 3.11 Fractional Shares. Shares of Series R Participating Preferred Stock
may be issued in fractions of a share in integral multiples of one
one-thousandth of a share, which shall entitle the holder, in proportion to such
holders' fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series R Participating Preferred Stock.

ARTICLE V

Preemptive Rights

The owners of shares of stock of the Corporation shall not have preemptive
rights to subscribe for or purchase any part of new or additional issues of
stock, or securities convertible into stock, of any class whatsoever, whether
now or hereafter authorized, and whether issued for cash, property, services, by
way of dividends, or otherwise.

ARTICLE VI

Cumulative Voting

Each shareholder entitled to vote at any election for directors shall have the
right to vote, in person or by proxy, the number of shares owned by him for as
many persons as there are directors to be elected and for those election he has
a right to vote, and no shareholder shall be entitled to cumulate his votes.

ARTICLE VII

Limitation of Directors' Liability

A director shall have no liability to the Corporation or its shareholders for
monetary damages for conduct as a director, except for (a) any breach of the
director's duty of loyalty to the Corporation or its shareholders; (b) acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law by the director; (c) conduct violating ORS 60.367; or (d) any
transaction from which the director derives an improper personal benefit. If the
Oregon Business Corporation Act is hereafter amended to authorize corporate
action further eliminating or limiting the personal liability of directors, then
the liability of a director shall be eliminated or limited to the full extent
permitted by the Oregon Business Corporation Act as so amended. Any repeal or
modification of this Article shall not adversely affect any right or protection
of a director that exists at the time of such repeal or modification and that
extends to an act or omission of such director occurring prior to such repeal or
modification.

A-14

ARTICLE VIII

Bylaws; Amendment of Articles

Section 1. Bylaws. The board of directors shall have full power to adopt, alter,
amend or repeal the Bylaws or adopt new Bylaws. Nothing herein shall deny the
concurrent power of the shareholders to adopt, alter, amend or repeal the
Bylaws.

Section 2. Amendment of Articles. The Corporation reserves the right to amend,
alter, change or repeal any provisions contained in its Articles of
Incorporation in any manner now or hereafter prescribed or permitted by statute.
All rights of shareholders of the Corporation are granted subject to this
reservation.

ARTICLE IX

Directors

Section 1. Number of Directors. The Board of Directors shall consist of not less
than six nor more than eleven, the exact number to be set as provided herein.
Until increased or decreased as provided herein, the Board of Directors shall
consist of eight members. The Board of Directors is authorized to increase or
decrease the size of the Board of Directors (within the range specified above)
at any time by the affirmative vote of two-thirds of the directors then in
office. Without the unanimous consent of the directors then in office, no more
than two additional directors shall be added to the Board of Directors in any
12-month period. Without the unanimous approval of the directors then in office,
no person who is affiliated as an owner, director, officer, employee or
consultant of a company or business deemed by the Board of Directors to be
competitive with that of the Corporation shall be eligible to serve of the Board
of Directors of the Corporation.

Section 2. Classified Board. The Board shall be divided into three classes:
Class I Directors, Class II Directors and Class III Directors. Each such class
of directors shall be nearly equal in number of directors as possible. Each
director shall serve for a term ending at the third annual shareholders' meeting
following the annual meeting at which such director was elected; provided,
however, that the directors first elected as Class I Directors shall serve for a
term ending at the annual meeting to be held in the year following the first
election of directors by classes, the directors first elected as Class II
Directors shall serve for a term ending at the annual meeting to be held in the
second year following the first election of directors by classes and the
directors first elected as Class III directors shall serve for a term ending at
the annual meeting to be held in the third year following the first election of
directors by classes. Notwithstanding the foregoing, each director shall serve
until his or her successor shall have been elected and qualified or until his or
her earlier death, resignation or removal.

At each annual election, the directors chosen to succeed those whose terms then
expire shall be identified as being of the same class as the directors they
succeed, unless, by reason of any intervening changes in the authorized number
of directors, the Board shall designate one or more directorships whose term
then expire as directorships of another class in order more nearly to achieve
equality in the number of directors among the classes. When the Board fills a
vacancy resulting from the death, resignation or removal of a director, the
director chosen to fill that vacancy shall be of the same class as

A-15

the director he or she succeeds, unless, by reason of any previous changes in
the authorized number of directors, the Board shall designate the vacant
directorship as a directorship of another class in order more nearly to achieve
equality in the number of directors among the classes. The terms of any director
elected by the Board to fill a vacancy will expire at the next shareholders
meeting at which directors are elected, despite the class such director has been
elected to fill.

Notwithstanding the rule that the three classes shall be as nearly equal in
number of directors as possible, upon any change in the authorized number of
directors, each director then continuing to serve as such will nevertheless
continue as a director of the class of which he or she is a member, until the
expiration of his or her current term or his or her earlier death, resignation
or removal.

Newly created directorships resulting from any increase in the number of
directors and any vacancies on the Board of Directors resulting from death,
resignation, removal or other cause shall be filled by the affirmative vote of a
majority of the remaining directors then in office, even though less than a
quorum of the Board of Directors. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director.

Section 3. Removal of Directors. Directors may be removed only for cause. For
purposes of this Amendment, "cause" shall mean that the director has: (i)
committed an act of fraud or embezzlement against the Corporation; (ii) been
convicted of, or plead nolo contendre to a crime involving moral turpitude;
(iii) failed to perform the director's duties as a director and such failure
constitutes a breach of the director's duty of loyalty to the Corporation or
provides an improper personal benefit to the director.

A-16

ARTICLE X

Shareholder Approval Of Certain Events

Notwithstanding any provision of Articles of Incorporation, as amended, or
Bylaws of the Corporation, and notwithstanding the fact that some lesser
percentage may be allowed by law, any amendment, change or repeal of Articles IX
or X, or any other amendment of the Articles of Incorporation, as amended, which
would have the effect of modifying or permitting circumvention of the provisions
of Articles IX or X, shall require the following shareholder votes: (i) the
affirmative votes of 75 percent of all outstanding shares of the Corporation
entitled to vote on the matter, voting together as a single class; and (ii) if
any shares of the Corporation are entitled to vote on the matter as a separate
group, the affirmative vote of 75 percent of such shares, voting separately.

A-17

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

AUGUST 8, 2002

PORTLAND, OREGON

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

(BIOJECT LOGO)

BIOJECT MEDICAL TECHNOLOGIES INC.
ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 19, 2002

This Proxy is Solicited on Behalf of the Board of Directors.

James C. O'Shea and John Gandolfo and each of them, as proxies, with full power
of substitution in each of them, are hereby authorized to represent and to vote,
as designated on the reverse of this proxy card, on all proposals and in the
discretion of the proxies on such other matters as may properly come before the
annual meeting of shareholders of Bioject Medical Technologies Inc. to be held
on September 19, 2002 or any adjournment(s), postponement(s), or other delay(s)
thereof (the "Meeting"), all shares of stock of Bioject Medical Technologies
Inc. (the "Company") to which the undersigned is entitled to vote at the
Meeting. Receipt of the Notice of Meeting and Proxy Statement is hereby
acknowledged by the undersigned.

(To be Signed on Reverse Side)

[REVERSE]

PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD BACK AS SOON AS POSSIBLE.

ANNUAL MEETING OF SHAREHOLDERS
BIOJECT MEDICAL TECHNOLOGIES INC.

SEPTEMBER 19, 2002

Please Detach and Mail in the Envelope Provided

[X] Please mark your votes as in this example.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE NOMINEES
LISTED BELOW AND "FOR" PROPOSAL #2.

1. Election of the following nominee(s) as directors to serve in such
capacities until their successors are duly elected and qualified.

[ ] FOR ALL (Except as marked [ ] WITHHELD FOR ALL
to the contrary below)

Nominees: Edward L. Flynn
William A. Gouveia

* Authority to vote for any nominee(s) may be withheld by lining through the
name(s) of any such nominee(s).

2. To approve the Company's 2002 Restated Articles of Incorporation.

[ ] For [ ] Against [ ] Abstain

3. To transact such other business as may properly come before the Meeting
or any adjournments thereof.

UNLESS OTHERWISE DIRECTED, THIS PROXY WILL BE VOTED "FOR" THE NOMINEES AND "FOR"
PROPOSAL TWO AND WILL BE VOTED IN THE DISCRETION OF THE PROXIES ON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.

PLEASE SIGN, DATE, AND MAIL YOUR PROXY TODAY.

SIGNATURE: ______________________________________ DATE: ______________________

SIGNATURE: ______________________________________ DATE: ______________________
(SIGNATURE, IF HELD JOINTLY)

NOTE: _________________________________________________________________________
Capacity (Title of Authority, i.e., Executor, Trustee)