ALLIANCE SEMICONDUCTOR CORPORATION

                             1992 Stock Option Plan

                            As Adopted April 7, 1992
                     and amended through September 19, 1996

         1. Purpose.  This 1992 Stock Option Plan ("Plan") is  established  as a
compensatory  plan to attract,  retain and provide equity incentives to selected
persons to promote the financial success of Alliance Semiconductor  Corporation,
a  Delaware  corporation,  (the  "Company").  Capitalized  terms not  previously
defined herein are defined in Section 17 of this Plan.

         2. Types of Options and Shares.  Options  granted  under this Plan (the
"Options") may be either (a) incentive stock options ("ISOs") within the meaning
of Section 422 of the Internal  Revenue Code of 1986,  as amended (the  "Revenue
Code"), or (b) nonqualified stock options  ("NQSOs"),  as designated at the time
of grant.  The shares of stock that may be  purchased  upon  exercise of Options
granted  under this Plan (the  "Shares") are shares of the common stock $.01 par
value per share, of the Company.

         3. Number of Shares.  The aggregate number of Shares that may be issued
pursuant to Options granted under this Plan is 9,000,000  Shares (as adjusted to
reflect all stock splits,  stock dividends or similar  transactions as of August
1, 1995),  subject to  adjustment  as provided  in this Plan.  "Named  Executive
Officers"  (as  that  term  is  defined  in Item  402(a)(3)  of  Regulation  S-K
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"))  shall each be  eligible  to receive an  aggregate  of up to a maximum of
2,250,000  Shares at any time during the term of this Plan pursuant to the grant
of Options  hereunder,  not to exceed  1,125,000  Shares (such numbers have been
adjusted to reflect all stock splits, stock dividends or similar transactions as
of August 1, 1995) during any twelve (12) month period, subject to adjustment as
provided in this Plan.  If any Option  expires or is  terminated  without  being
exercised  in whole or in part,  the  unexercised  or released  Shares from such
Options shall be available for future grant and purchase under this Plan. At all
times during the term of this Plan, the Company shall reserve and keep available
such  number of Shares as shall be  required  to  satisfy  the  requirements  of
outstanding Options under this Plan.

         4.  Eligibility.   Options  may  be  granted  to  employees,  officers,
directors,  consultants,  independent  contractors  and advisers  (provided such
consultants,   contractors  and  advisers  render  bona  fide  services  not  in
connection  with  the  offer  and  sale  of  securities  in  a   capital-raising
transaction)  of the  Company or any  Parent,  Subsidiary  or  Affiliate  of the
Company. ISOs may be granted only to employees (including officers and directors
who are also employees) of the Company or a Parent or Subsidiary of the Company.
The Committee (as defined in Section 14) in its sole discretion shall select the
recipients  of Options  ("Optionees").  An Optionee may be granted more than one
Option under this Plan. The Company may also,  from time to time,  substitute or
assume  outstanding  options granted by another  company,  whether in connection
with an acquisition  of such other company or otherwise,  by either (a) granting
an Option under this Plan in  replacement  of the option assumed by the Company,
or (b) treating the assumed  option as if it had been granted under this Plan if
the terms of such  assumed  option could be 

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applied to an Option granted under this Plan.  Such  substitution  or assumption
shall be  permissible  if the holder of the  substituted or assumed option would
have been  eligible to be granted an Option  hereunder if the other  company had
applied the rules of this Plan to such grant.

         5. Terms and  Conditions  of Options.  The  Committee  shall  determine
whether each Option is to be an ISO or an NQSO,  the number of Shares subject to
the Option, the exercise price of the Option, the period during which the Option
may be exercised,  and all other terms and conditions of the Option,  subject to
the following:

                  5.1 Form of Option Grant.  Each Option granted under this Plan
shall be  evidenced by a written  Stock Option Grant (the  "Grant") in such form
(which need not be the same for each Optionee) as the Committee  shall from time
to time  approve,  which Grant shall comply with and be subject to the terms and
conditions of this Plan.

                  5.2 Date of Grant. The date of grant of an Option shall be the
date on which the Committee makes the  determination to grant such Option unless
otherwise specified by the Committee.  The Grant representing the Option will be
delivered to Optionee  with a copy of this Plan within a  reasonable  time after
the granting of the Option.

                  5.3 Exercise  Price.  The exercise price of an Option shall be
determined by the Committee when the Option is granted and may be less than Fair
Market Value (but not less than the par value of the Shares) if permitted by the
Exchange Act; provided,  however, that the exercise price of an ISO shall be not
less than 100% of the Fair Market  Value of the Shares on the date the Option is
granted.  The exercise price of any ISO granted to a person owning more than 10%
of the total combined voting power of all classes of stock of the Company or any
Parent or Subsidiary of the Company  ("Ten  Percent  Stockholder")  shall not be
less than 110% of the Fair Market  Value of the Shares on the date the Option is
granted.

                  5.4 Exercise Period.  Options shall be exercisable  within the
times or upon the events  determined by the Committee as set forth in the Grant,
provided,  however,  that no Option shall be exercisable after the expiration of
ten (10) years from the date the Option is granted, and provided further that no
ISO  granted  to a Ten  Percent  Stockholder  shall  be  exercisable  after  the
expiration of five (5) years from the date the Option is granted.

                  5.5  Limitations  on ISOs.  The  aggregate  Fair Market  Value
(determined  as of the time an Option is granted) of stock with respect to which
ISOs are  exercisable for the first time by an Optionee during any calendar year
(under this Plan or under any other  incentive  stock option plan of the Company
or any  Affiliate,  Parent  or  Subsidiary  of the  Company)  shall  not  exceed
$100,000.  If the Fair  Market  Value of Shares  with  respect to which ISOs are
exercisable  for the first time by an Optionee  during any calendar year exceeds
$100,000,  the  Options  for the  first  $100,000  worth  of  Shares  to  become
exercisable; in such year shall be ISOs and the Options for the amount in excess
of $100,000 that become  exercisable  in that year shall be NQSOs.  In the event
that the Revenue  Code or the  regulations  promulgated  thereunder  are amended
after the  effective  date of this Plan to provide for a different  limit on the
Fair Market  Value of Shares  permitted  to be subject to ISOs,  such  different
limit shall be incorporated  herein and shall apply to any Options granted after
the effective date of such amendment.

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                  5.6 Options Non-Transferable.  Options granted under this Plan
and any interest  therein,  shall not be transferable or assignable by Optionee,
and may  not be made  subject  to  execution,  attachment  or  similar  process,
otherwise than by will or by the laws of descent and distribution,  and shall be
exercisable during the lifetime of Optionee only by Optionee; provided, however,
that NQSOs held by an Optionee  who is not an officer or director of the Company
or other person (in each case, an "Insider") whose transactions in the Company's
common  stock  are  subject  to  Section  16(b)  of  the  Exchange  Act,  may be
transferred to such family  members,  trusts and charitable  institutions as the
Committee,  in its sole  discretion,  shall  approve at the time of the grant of
such Option.

                  5.7  Assumed  Options.  In the event the  Company  assumes  an
option granted by another company, the terms and conditions of such option shall
remain unchanged  (except the exercise price and the number and nature of shares
issuable upon exercise, which will be adjusted appropriately pursuant to Section
424(c) of the  Revenue  Code).  In the event the  Company  elects to grant a new
option rather than assuming an existing option (as specified in Section 4), such
new option need not be granted at Fair Market Value on the date of grant and may
instead be granted with a similarly adjusted exercise price.

         6.       Exercise of Options.

                  6.1 Notice.  Options may be exercised  only by delivery to the
Company of a written stock option exercise agreement (the "Exercise  Agreement")
in a form  approved  by the  Committee  (which  need  not be the  same  for each
Optionee),  stating  the  number of Shares  being  purchased,  the  restrictions
imposed on the Shares, if any, and such representations and agreements regarding
Optionee's  investment  intent  and  access to  information,  if any,  as may be
required by the Company to comply with applicable securities laws, together with
payment in full of the exercise price for the number of Shares being purchased.

                  6.2  Payment.  Payment  for the Shares may be made in cash (by
check) or, where  permitted by law: (a) by  cancellation  of indebtedness of the
Company  to the  Optionee;  (b)  where  approved  by the  Committee  in its sole
discretion  at the time of grant,  by surrender of shares of common stock of the
Company having a Fair Market Value equal to the applicable exercise price of the
Options,  that have been owned by  Optionee  for more than six (6)  months  (and
which have been paid for  within the  meaning  of the  Securities  and  Exchange
Commission  ("SEC") Rule 144 and, if such Shares were purchased from the Company
by use of a promissory  note, such note has been fully paid with respect to such
shares),  or were obtained by Optionee in the open public market;  and are clear
of all liens,  claims,  encumbrances  and  security  interests  (c) by waiver of
compensation due or accrued to Optionee for services rendered; (d) provided that
a public  market  for the  Company's  stock  exists,  through  a "same day sale"
commitment  from Optionee and a  broker-dealer  that is a member of the National
Association  of  Securities   Dealers  (an  "NASD  Dealer")   whereby   Optionee
irrevocably elects to exercise the Option and to sell a portion of the Shares so
purchased to pay for the exercise price and whereby the NASD Dealer  irrevocably
commits upon receipt of such Shares to forward the  exercise  price  directly to
the Company;  (e) provided that a public market for the Company's  stock exists,
through a "margin"  commitment from Optionee and an NASD Dealer whereby Optionee
irrevocably  elects to 



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exercise  the Option and to pledge the Shares so purchased to the NASD Dealer in
a margin  account as  security  for a loan from the NASD Dealer in the amount of
the exercise price, and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the exercise price directly to the Company;  or (f) by
any' combination of the foregoing.

                  6.3  Withholding  Taxes.  At the  discretion of the Committee,
Optionees may satisfy  withholding  obligations  as provided in this  paragraph.
When an Optionee  incurs tax  liability in  connection  with an Option which tax
liability  is subject to tax  withholding  under  applicable  tax laws,  and the
Optionee is obligated to pay the Company an amount required to be withheld under
applicable tax laws, the Optionee may satisfy the  withholding tax obligation by
one or some combination of the following  methods:  (a) by cash payment,  or (b)
out of Optionee's current  compensation,  (c) if permitted by the Committee,  in
its  discretion,  by  surrendering to the Company Shares that (i) in the case of
Shares previously acquired from the Company, have been owned by the Optionee for
more than six months on the date of surrender, and (ii) have a Fair Market Value
on the date of  surrender  equal to or less than  Optionee's  marginal  tax rate
times the  ordinary  income  recognized,  or (d) by electing to have the Company
withhold from the Shares to be issued upon exercise of the Option that number of
Shares  having a Fair Market Value equal to the amount  required to be withheld.
For this  purpose,  the Fair Market Value of the Shares to be withheld  shall be
determined on the date that the amount of tax to be withheld is to be determined
(the "Tax Date").

                           Any  surrender  by an  Insider  of  previously  owned
Shares to satisfy tax  withholding  obligations  arising  upon  exercise of this
Option  must comply with the  applicable  provisions  of Rule 16b-3 and shall be
subject  to  such  additional  conditions  or  restrictions  as may be  required
thereunder to qualify for the maximum  exemption from Section 16 of the Exchange
Act with respect to Plan transactions.

                           All elections by an Optionee to have Shares  withheld
to  satisfy  tax  withholding  obligations  shall be made in  writing  in a form
acceptable to the Committee and shall be subject to the following restrictions:

                           (a) the  election  must be  made on or  prior  to the
applicable Tax Date;

                           (b) all elections  shall be subject to the consent or
disapproval of the Committee.

                           In the event the election to have Shares  withheld is
made by an Optionee  and the Tax Date is deferred  under  Section 83 of the Code
because no election is filed under Section 83(b) of the Code, the Optionee shall
receive the full number of Shares with  respect to which the Option is exercised
but such  Optionee  shall be  unconditionally  obligated  to tender  back to the
Company the proper number of Shares on the Tax Date.

                  6.4  Limitations  on  Exercise  Notwithstanding  the  exercise
periods set forth in the Grant, exercise of an Option shall always be subject to
the following:

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                           6.4.1  If  Optionee  ceases  to be  employed  by  the
Company or any Parent,  Subsidiary  or  Affiliate  of the Company for any reason
except death or disability, Optionee may exercise such Optionee's Options to the
extent (and only to the extent) that they would have been  exercisable  upon the
date of  termination,  within ninety (90) days after the date of termination (or
such shorter time period as may be specified in the Grant);

                           6.4.2 If  Optionee's  employment  with the Company or
any Parent,  Subsidiary or Affiliate of the Company is terminated because of the
death of  Optionee  or  disability  of  Optionee  within the  meaning of Section
22(e)(3) of the Revenue Code,  Optionee's Options may be exercised to the extent
(and only to the extent)  that they would have been  exercisable  by Optionee on
the date of termination by Optionee (or Optionee's legal representative)  within
twelve (12) months after the date of termination (or such shorter time period as
may be  specified in the Grant),  but in any event no later than the  expiration
date of the Options.

                           6.4.3 If  Optionee  is an  Insider,  the  Company  is
subject to Section 16(b) of the Exchange Act, and Optionee ceases to be employed
by the Company for any reason, Optionee's Option will remain exercisable,  as to
the  extent  (and only to the  extent)  that it was  exercisable  on the date of
termination,  until  the  later  of (i) the  last  date  such  option  would  be
exercisable under Section 6.4.1 or 6.4.2, as applicable,  or (ii) the end of the
thirty (30) day period commencing on the date six months after the grant of such
Option,  with any  extension  beyond  ninety  (90)  days  after  termination  of
employment deemed to be as an NQSO, and provided further that in no event may an
Option be exercisable later than the expiration date of the Option;

                           6.4.4  The   Committee   shall  have   discretion  to
determine  whether  Optionee  has ceased to be  employed  by the  Company or any
Parent,  Subsidiary, or Affiliate of the Company and the effective date on which
such employment terminated.

                           6.4.5 In the case of an  Optionee  who is a director,
independent  consultant,  contractor  or adviser,  the  Committee  will have the
discretion  to  determine  whether  Optionee is  "employed by the Company or any
Parent,  Subsidiary,  or  Affiliate of the  Company"  pursuant to the  foregoing
Sections.

                           6.4.6 The Committee may specify a reasonable  minimum
number of Shares that may be purchased  on any  exercise of an Option,  provided
that such minimum  number will not prevent  Optionee  from  exercising  the full
number of Shares as to which the Option is then exercisable.

                           6.4.7 An Option shall not be exercisable  unless such
exercise is in compliance with all applicable federal and state securities laws,
rules and regulations of any governmental body and the requirements of any stock
exchange or national market system upon which the Shares may then be listed,  as
they  are in  effect  on the date of  exercise.  The  Company  shall be under no
obligation to register the Shares with the SEC or to effect  compliance with the
registration.  qualification  or listing  requirements  of any state  securities
laws,  stock  exchange or national  market  system and the Company shall have no
liability for any inability or failure to do so.


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<PAGE>

         7.  Restrictions  on Shares.  At the discretion of the  Committee,  the
Company may reserve to itself and/or its assignee(s) in the Grant (a) a right of
first  refusal  to  purchase  all  Shares  that  an  Optionee  (or a  subsequent
transferee)  may  propose to  transfer  to a third  party  and/or (b) a right to
repurchase  a portion  of or all  Shares  held by an  Optionee  upon  Optionee's
termination of employment or service with the Company or a Parent, Subsidiary or
Affiliate of the Company,  for any reason within a specified  time as determined
by the Committee at the time of grant at (i) Optionee's original purchase price,
(ii) the Fair  Market  Value of such  Shares  or (iii) a price  determined  by a
formula or other provision set forth in the Grant.

         8. Modification,  Extension and Renewal of Options. The Committee shall
have the power to modify,  extend or renew outstanding  Options and to authorize
the grant of new Options in substitution therefor, provided that any such action
may not,  without the written consent of Optionee,  impair any of the Optionee's
rights  under  any  Option  previously  granted.  Any  outstanding  ISO  that is
modified,  extended, renewed or otherwise altered shall be treated in accordance
with Section 424(h) of the Revenue Code.  The Committee  shall have the power to
reduce  the  exercise  price of  outstanding  Options  without  the  consent  of
Optionees by a written notice to the Optionees affected; provided, however, that
the exercise price per Share may not be reduced below the minimum exercise price
that would be permitted  under  Section 5.3 of this Plan for Options  granted on
the date the action is taken to reduce the exercise price; and provided further,
that the Exercise Price shall not be reduced below the par value of the Shares.

         9.  Privileges of Stock  Ownership.  No Optionee  shall have any of the
rights of a  stockholder  with respect to any Shares  subject to an Option until
such Option is properly exercised.  No adjustment shall be made for dividends or
distributions  or other  rights for which the record date is prior to such date,
except as provided in this Plan.  However,  the  Company  shall  provide to each
Optionee,  annually,  during the period for which such  Optionee has one or more
Options  outstanding,  financial  statements of the Company,  consisting  of, at
minimum,  a balance  sheet and an income  statement.  The  Company  shall not be
required to provide such financial  statements to key employees  whose duties in
connection with the Company assure them access to equivalent information.

         10. No Obligation to Employ. Nothing in this Plan or any Option granted
under this Plan shall confer on any Optionee any right to continue in the employ
of, or other  relationship  with,  the  Company  or any  Parent,  Subsidiary  or
Affiliate  of the  Company  or limit in any way the right of the  Company or any
Parent,   Subsidiary  or  Affiliate  of  the  Company  to  terminate  Optionee's
employment or other relationship at any time, with or without cause.

         11.  Adjustment  of  Option  Shares.  In the event  that the  number of
outstanding  shares  of  common  stock  of the  Company  is  changed  by a stock
dividend,  stock split,  reverse stock split,  combination,  reclassification or
similar change in the capital structure of the Company without consideration, or
if a substantial  portion of the assets of the Company are distributed,  without
consideration in a spin-off or similar  transaction,  to the stockholders of the
Company,  the number of Shares  available  under this Plan, the number of Shares
subject to outstanding Options, the exercise price per Share of such Options and
the maximum number of Shares for which Options may be granted to Named Executive
Officers  of the  Company  shall be  



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proportionately  adjusted,  subject  to any  required  action  by the  Board  of
Directors  (the  "Board") or  stockholders  of the Company and  compliance  with
applicable securities laws; provided, however, that a fractional share shall not
be issued upon  exercise of any Option and any  fractions  of a Share that would
have  resulted  shall either be cashed out at Fair Market Value or the number of
Shares  issuable  under the  Option  shall be rounded  up to the  nearest  whole
number,  as determined by the Committee;  and provided further that the exercise
price may not be decreased to below the par value, if any, for the Shares.

         12.      Assumption of Options by Successors.

                  12.1 Assumption or Substitution.  In the event of (a) a merger
or  consolidation in which the Company is not the surviving  corporation  (other
than  a  merger   or   consolidation   with  a  wholly   owned   subsidiary,   a
reincorporation, or other transaction in which there is no substantial change in
the  stockholders of the corporation and the Options granted under this Plan are
assumed or replaced by the  successor  corporation,  which  assumption  shall be
binding on all Optionees),  (b) a dissolution or liquidation of the Company, (c)
the sale of  substantially  all of the assets of the  Company,  or (d) any other
transaction which qualifies as a "corporate transaction" under Section 424(a) of
the Revenue  Code wherein the  stockholders  of the Company give up all of their
equity interest in the Company (except for the acquisition,  sale or transfer of
all or substantially all of the outstanding  shares of the Company),  any or all
outstanding  Options may be assumed or replaced  by the  successor  corporation,
which  assumption  shall be binding on all Optionees.  In the  alternative,  the
successor   corporation   may   substitute  an  equivalent   option  or  provide
substantially similar consideration to Optionees as was provided to stockholders
(after taking into account the existing provisions of Optionee's  options,  such
as the exercise price and the vesting schedule).  The successor  corporation may
also issue, in place of outstanding  shares of the Company held by Optionee as a
result of the exercise of an Option that is subject to repurchase, substantially
similar shares or other property subject to similar  repurchase  restrictions no
less favorable to Optionee.

                  12.2 Expiration.  In the event such successor corporation,  if
any, refuses to assume or substitute Options,  as provided above,  pursuant to a
transaction   described  in  Section  12.1  above,  or  there  is  no  successor
corporation,  and if the  Company is  ceasing  to exist as a separate  corporate
entity,  the Options  shall,  notwithstanding  any contrary  terms in the Grant,
expire on (and, in the case of a merger or consolidation  under Section 12.1 (a)
above, if the Company has reserved to itself a right to repurchase Shares issued
on exercise of Options at the original purchase price of such Shares, such right
shall  terminate  on),  a date at least 20 days  after the Board  gives  written
notice to Optionees specifying the terms and conditions of such termination.

                  12.3   Additional   Provisions.   Subject  to  the   foregoing
provisions of this Section 12, in the event of the occurrence of any transaction
described in Section 12.1, any  outstanding  Option shall be treated as provided
in the  applicable  agreement  or plan of  merger,  consolidation,  dissolution,
liquidation, sale of assets or other "corporate transaction".


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<PAGE>

         13. Adoption and Stockholder Approval. This Plan shall become effective
on the date that it is adopted by the Board of the  Company.  This Plan shall be
approved  by  the  stockholders  of the  Company,  in any  manner  permitted  by
applicable  corporate  law,  within  twelve months before or after the date this
Plan is adopted by the Board. Upon the effective date of the Plan, the Board may
grant  Options  pursuant  to  this  Plan;  provided  that,  in  the  event  that
stockholder approval is not obtained within the time period provided herein, all
Options granted hereunder shall terminate.  No Option that is issued as a result
of any increase in the number of shares  authorized to be issued under this Plan
shall be  exercised  prior to the time such  increase  has been  approved by the
stockholders  of the  Company  and all such  Options  granted  pursuant  to such
increase shall similarly terminate if such stockholder approval is not obtained.
After the  Company  becomes  subject to Section  16(b) of the  Exchange  Act and
Section   162(m)  of  the  Revenue  Code,  the  Company  will  comply  with  the
requirements of Rule 16b-3 with respect to stockholder approval.

         14.  Administration.  This Plan may be  administered  by the Board or a
committee  appointed  by the  Board  (the  "Committee").  As used in this  Plan,
references to the "Committee"  shall mean either the committee  appointed by the
Board to administer this Plan or the Board if no committee has been established

                  14.1  Composition  of the  Committee.  The Committee  shall be
comprised  of at least two  members of the Board of  Directors,  all of whom are
Outside Directors and Disinterested  Persons.  The Company will take appropriate
steps to comply with the  disinterested  administration  requirements of Section
16(b) of the Exchange Act,  which shall consist of the  appointment by the Board
of a Committee  consisting  of not less than two  members of the Board,  each of
whom is a  Disinterested  Person and with the  requirements of Section 162(m) of
the Revenue Code with respect to Option grants to the Named  Executive  Officers
of the Company.

                  14.2  Committee  Authority.   The  Committee  shall  have  the
authority, without limitation, to:

                           (a) construe and  interpret  the Plan,  any Grant and
any other agreement or document executed pursuant to the Plan;

                           (b)   prescribe,   amend   and   rescind   rules  and
regulations relating to the Plan;

                           (c) select persons to receive Options;

                           (d) determine the form and terms of Options;

                           (e)  determine  the  number  of  Shares   subject  to
Options;

                           (f) grant waivers of Plan or Option conditions;

                           (g)  determine  the  vesting  and  exercisability  of
Options:



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                           (h)  correct  any  defect,  supply any  omission,  or
reconcile any  inconsistency  in the Plan,  any Grant or any other  agreement or
document executed pursuant to the Plan;

                           (i)  make  all  other  determinations   necessary  or
advisable for the administration of the Plan.

                  14.3 Committee  Interpretation  Binding. Any interpretation or
determination  made by the  Committee  with respect to any of the  provisions of
this  Plan or any  Option  granted  under  this  Plan  shall be made in its sole
discretion  and shall be final and  binding  upon the  Company  and all  persons
having an interest in any Option or any Shares purchased pursuant to an Option.

         15.  Term or Plan.  Options  may be granted  pursuant to this Plan from
time to time within a period of ten (10) years after the date on which this Plan
is adopted by the Board.

         l6.  Amendment or  Termination  of' Plan. The Committee may at any time
terminate  or amend this Plan in any  respect  including  (but not  limited  to)
amendment of any form of grant,  exercise agreement or instrument to be executed
pursuant to this Plan; provided,  however, that the Committee shall not, without
the approval of the  stockholders of the Company,  amend this Plan in any manner
that  requires  such  stockholder  approval  pursuant to the Revenue Code or the
regulations promulgated thereunder or pursuant to the Exchange Act or Rule 16b-3
(or its successor) promulgated thereunder.

         17.  Certain  Definitions.  As used in this Plan,  the following  terms
shall have the following meanings:

                  17.1  "Affiliate"  means any  corporation  that  directly,  or
indirectly through one or more intermediaries,  controls or is controlled by, or
is under common control with, another  corporation,  where "control"  (including
the terms "controlled by" and "under common control with") means the possession,
direct or indirect,  of the power to cause the direction of the  management  and
policies of the corporation, whether through the ownership of voting securities,
by contract or otherwise.

                  17.2  "Disinterested  Person" shall have the meaning set forth
in Rule  16b-(c)(2)(l)  as  promulgated  by the SEC under  Section  16(b) of the
Exchange  Act, as such rule is amended from time to time and as  interpreted  by
the SEC.

                  17.3 "Fair  Market  Value" shall mean the fair market value of
the Shares as determined by the Committee from time to time in good faith.  If a
public market exists for the Shares,  the Fair Market Value shall be the average
of the last reported bid and asked prices for common stock of the Company on the
last  trading day prior to the date of  determination  (or the  average  closing
price  over  the  number  of  consecutive  working  days  preceding  the date of
determination  as the  Committee  shall deem  appropriate)  or, in the event the
common  stock of the  Company  is listed on a stock  exchange  or on the  NASDAQ
National Market System. the Fair Market Value shall be the closing price on such
exchange  or  quotation  system  on the last  trading  



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day prior to the date of  determination  (or the average  closing price over the
number of consecutive  working days preceding the date of  determination  as the
Committee shall deem appropriate).

                  17.4 "Outside Director" shall mean any director who is not (i)
a current employee of the Company or any Parent,  Subsidiary or Affiliate of the
Company,  (ii) a former  employee of the Company or any  Parent,  Subsidiary  or
Affiliate of the Company who is receiving compensation for prior services (other
than benefits under a  tax-qualified  pension  plan),  (iii) a current or former
officer of the Company or any Parent,  Subsidiary or Affiliate of the Company or
(iv) currently  receiving  compensation  for personal  services in any capacity,
other  than as a  director,  from  the  Company  or any  Parent,  Subsidiary  or
Affiliate  of the  Company;  provided.  however,  that at such  time as the term
"Outside  Director",  as  used in  Section  162(m)  is  defined  in  regulations
promulgated under Section 162(m) of the Revenue Code,  "Outside  Director" shall
have the meaning set forth in such regulations, as amended from time to time and
as interpreted by the Internal Revenue Service.

                  17.5 "Parent" means any  corporation  (other than the Company)
in an unbroken chain of corporations  ending with the Company if, at the time of
the  granting of the Option,  each of such  corporations  other than the Company
owns stock  possessing  50% or more of the total  combined  voting  power of all
classes of stock in one of the other corporations in such chain.

                  17.6  "Subsidiary"  means  any  corporation  (other  than  the
Company) in an unbroken chain of corporations  beginning with the Company if, at
the time of granting of the Option. each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined  voting power of all classes of stock in one of the other  corporations
in such chain.


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