GHS, INC.

                             1997 STOCK OPTION PLAN
<PAGE>

                                    GHS, INC.

                             1997 STOCK OPTION PLAN

            1. Purpose. The purpose of this Plan is to strengthen GHS, Inc. by
providing an incentive to its employees, consultants and directors, encouraging
them to devote their abilities to the success of the Company. It is intended
that this purpose be achieved by extending to employees, consultants and
directors of the Company or any subsidiary an added long-term incentive for high
levels of performance and exceptional efforts through the grant of options to
purchase shares of the Company's common stock under this GHS, Inc. 1997 Stock
Option Plan.

            2. Definitions. For purposes of the Plan:

                  2.1. "Agreement" means the written agreement between the
Company and an Optionee evidencing the grant of an Option and setting forth the
terms and conditions thereof.

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

                  2.3. "Cause" means with respect to an Eligible Employee,
including an Eligible Employee who is a director of the Company, (i) the
voluntary termination of employment by such Eligible Employee, (ii) intentional
failure to perform, or habitual neglect of, reasonably assigned duties, (iii)
dishonesty or willful misconduct in the performance of an Optionee's duties,
(iv) an Optionee's engaging in a transaction in connection with the performance
of such Optionee's duties to the Company or any of its Subsidiaries thereof
which transaction is adverse to the interests of the Company or any of its
Subsidiaries and which is engaged in for personal profit to the Optionee, (v)
willful violation of any law, rule or regulation in connection with the
performance of an Optionee's duties, (vi) willful violation of any policy
adopted by the Company relating to the performance or behavior of employees or
(vii) acts of carelessness or misconduct which have in the reasonable judgment
of the Company's Board of Directors, an adverse effect on the Company.

                  2.4. "Change in Capitalization" means any increase or
reduction in the number of Shares, or any change (including, but not limited to,
a change in value) in the Shares or exchange of Shares for a different number or
kind of shares or other securities of the Company, by reason of a
reclassification, recapitalization, merger, consolidation, reorganization,
spin-off, split-up, issuance of warrants or rights or debentures, stock
dividend, stock split or reverse stock split, cash dividend, property dividend,
combination or exchange of shares, repurchase of shares, public offering,
private placement, change in corporate structure or otherwise.

                  2.5. "Code" means the Internal Revenue Code of 1986, as
amended.

                  2.6. "Company" means GHS, Inc.
<PAGE>

                  2.7. "Consultant Option" means an Option granted to a
consultant pursuant to Section 7.

                  2.8. "Director Option" means an Option granted to a
Nonemployee Director pursuant to Section 5.

                  2.9. "Disability" means a physical or mental infirmity which
impairs the Optionee's ability to perform substantially his or her duties for a
period of sixty (60) consecutive days.

                  2.10. "Eligible Employee" means any officer or other employee
of the Company or a Subsidiary who is designated by the Board as eligible to
receive Options subject to the conditions set forth herein.

                  2.11. "Employee Options" means an Option granted to an
Eligible Employee pursuant to Section 6.

                  2.12. "Exchange Act" means the Securities Exchange Act of
1934, as amended.

                  2.13. "Fair Market Value" on any date means, as long as the
Shares are quoted on the OTC Bulletin Board or similar over-the-counter means,
the closing bid price on the OTC Bulletin Board, and if the Shares are not so
quoted, the average of the high and low sales prices of the Shares on such date
on the principal national securities exchange on which such Shares are listed or
admitted to trading, or if such Shares are not so listed or admitted to trading,
the arithmetic mean of the per Share closing bid price and per Share closing
asked price on such date as quoted on the National Association of Securities
Dealers Automated Quotation System or such other market in which such prices are
regularly quoted, or, if there have been no published bid or asked quotations
with respect to Shares on such date, the Fair Market Value shall be the value
established by the Board in good faith and in accordance with Section 422 of the
Code.

                  2.14. "Incentive Stock Option" means an Option satisfying the
requirements of Section 422 of the Code and designated by the Board as an
Incentive Stock Option.

                  2.15. "Nonqualified Stock Option" means an Option which is not
an Incentive Stock Option.

                  2.16. "Nonemployee Director" means a director of the Company
who is not a full-time employee of the Company or any Subsidiary.

                  2.17. "Option" means an Employee Option, a Director Option, a
Consultant Option or any or all of them.


                                       2
<PAGE>

                  2.18. "Optionee" means a person to whom an Option has been
granted under the Plan.

                  2.19. "Parent" means any corporation which is a parent
corporation (within the meaning of Section 424(e) of the Code) with respect to
the Company.

                  2.20. "Plan" means the GHS, Inc. 1997 Stock Option Plan.

                  2.21. "Shares" means the common stock, par value $.01 per
share, of the Company.

                  2.22. "Subsidiary" means any corporation which is a subsidiary
corporation (within the meaning of Section 424(f) of the Code) with respect to
the Company.

                  2.23. "Successor Corporation" means a corporation, or a parent
or subsidiary thereof within the meaning of Section 424(a) of the Code, which
issues or assumes a stock option in a transaction to which Section 424(a) of the
Code applies.

                  2.24. "Ten-Percent Stockholder" means an Eligible Employee or
other eligible Plan participant, who, at the time an Incentive Stock Option is
to be granted to him or her, owns (within the meaning of Section 422(b)(6) of
the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company, or of a Parent or a
Subsidiary.

            3. Administration.

                  3.1. The Plan shall be administered by the Board which shall
hold meetings at such times as may be necessary for the proper administration of
the Plan. The Board shall keep minutes of its meetings. A quorum shall consist
of not less than a majority of the Board and a majority of a quorum may
authorize any action. Any decision or determination reduced to writing and
signed by a majority of all of the members of the Board shall be as fully
effective as if made by a majority vote at a meeting duly called and held. No
member of the Board shall be liable for any action, failure to act,
determination or interpretation made in good faith with respect to this Plan or
any transaction hereunder, except for liability arising from his or her own
willful misfeasance, fraud or bad faith. The Company hereby agrees to indemnify
each member of the Board for all costs and expenses and, to the extent permitted
by applicable law, any liability incurred in connection with defending against,
responding to, negotiation for the settlement of or otherwise dealing with any
claim, cause of action or dispute of any kind arising in connection with any
action or failure to act in administering this Plan or in authorizing or denying
authorization to any transaction hereunder.

                  3.2. Subject to the express terms and conditions set forth
herein, the Board shall have the power from time to time to determine those
Optionees to whom Options shall be granted under the Plan and the number of
Incentive Stock Options and/or Nonqualified Stock Options to be 


                                       3
<PAGE>

granted to such Optionee and to prescribe the terms and conditions (which need
not be identical) of each Option, including the purchase price per Share subject
to each Option, and make any amendment or modification to any Agreement
consistent with the terms of the Plan.

                  3.3. Subject to the express terms and conditions set forth
herein, the Board shall have the power from time to time:

                        (a) to construe and interpret the Plan and the Options
granted thereunder and to establish, amend and revoke rules and regulations for
the administration of the Plan, including, but not limited to, correcting any
defect or supplying any omission, or reconciling any inconsistency in the Plan
or in any Agreement, in the manner and to the extent it shall deem necessary or
advisable to make the Plan fully effective, and all decisions and determinations
by the Board in the exercise of this power shall be final, binding and
conclusive upon the Company, its Subsidiaries, the Optionees and all other
persons having any interest therein;

                        (b) to determine the duration and purposes for leaves of
absence which may be granted to an Optionee on an individual basis without
constituting a termination of employment or service for purposes of the Plan;

                        (c) to exercise its discretion with respect to the
powers and rights granted to it as set forth in the Plan;

                        (d) generally, to exercise such powers and to perform
such acts as are deemed necessary or advisable to promote the best interests of
the Company with respect to the Plan.

                  3.4 Notwithstanding anything to the contrary contained herein,
the Board may designate a committee which shall have and may exercise all the
powers and authority of the Board in administering this Plan. Any action
specified herein to be taken by the Board, shall, if a committee is formed to
administer the Plan, be satisfied by the action of the committee.

            4. Stock Subject to Plan.

                  4.1. The maximum number of Shares that may be made the subject
of Options granted under the Plan is 750,000 Shares (or the number and kind of
shares of stock or other securities to which such Shares are adjusted upon a
Change in Capitalization pursuant to Section 9) and the Company shall reserve
for the purposes of the Plan, out of its authorized but unissued Shares or out
of Shares held in the Company's treasury, or partly out of each, such number of
Shares as shall be determined by the Board.

                  4.2. Whenever any outstanding Option or portion thereof
expires, is canceled or is otherwise terminated for any reason, the Shares
allocable to the canceled or otherwise terminated Option or portion thereof may
again be the subject of Options granted hereunder.


                                       4
<PAGE>

            5. Option Grants for Nonemployee Directors.

                  5.1. Authority of Board. Subject to the provisions of the
Plan, the Board shall have full and final authority to select those Nonemployee
Directors who will receive Director Options, the terms and conditions of which
shall be set forth in an Agreement.

                  5.2. Purchase Price. The purchase price or the manner in which
the purchase price is to be determined for Shares under each Director Option
shall be determined by the Board and set forth in the Agreement evidencing the
Option, provided that the purchase price per Share under each Director Option
shall be not less than the Fair Market Value of a Share on the date the Director
Option is granted.

                  5.3. Duration. Director Options shall be for a term to be
designated by the Board and set forth in the Agreement evidencing the Option.

                  5.4. Vesting. Each Director Option shall, commencing not
earlier than the date of its grant, become exercisable in such installments
(which need not be equal or may be one installment) and at such times as may be
designated by the Board and set forth in the Agreement evidencing the Option. To
the extent not exercised, installments shall accumulate and be exercisable, in
whole or part, at any time after becoming exercisable, to not later than the
date the Director Option expires. The Board may accelerate the exercisability of
any Option or portion thereof at any time.

            6. Option Grants for Eligible Employees.

                  6.1. Authority of Board. Subject to the provisions of the
Plan, the Board shall have full and final authority to select those Eligible
Employees who will receive Employee Options, the terms and conditions of which
shall be set forth in an Agreement; provided, however, that no Eligible Employee
shall receive an Incentive Stock Option unless he is an employee of the Company,
a Parent or a Subsidiary at the time the Incentive Stock Option is granted.

                  6.2. Purchase Price. The purchase price or the manner in which
the purchase price is to be determined for Shares under each Employee Option
shall be determined by the Board and set forth in the Agreement evidencing the
Option, provided that the purchase price per Share under each Employee Option
shall be (i) except as provided in clause (ii) of this Section 6.2, not less
than the Fair Market Value of a Share on the date the Employee Option is
granted; and (ii) with respect to any Incentive Stock Option granted to a Ten
Percent Stockholder, not less than 110% of the Fair Market Value of a Share on
the date the Option is granted.

                  6.3. Duration. Employee Options granted hereunder shall be for
such term as the Board shall determine, provided that no Employee Option shall
be exercisable after the expiration of ten (10) years from the date it is
granted (five (5) years in the case of an Incentive Stock Option granted to a
Ten-Percent Stockholder). The Board may, subsequent to the granting of any
Employee 


                                       5
<PAGE>

Option, extend the term thereof but in no event shall the term as so extended
exceed the maximum term provided for in the preceding sentence.

                  6.4. Vesting. Each Employee Option shall, commencing not
earlier then the date of its grant, become exercisable in such installments
(which need not be equal or may be in one installment) and at such times as may
be designated by the Board and set forth in the Agreement evidencing the Option.
To the extent not otherwise provided by the Board, Employee Options shall be
exercisable in three (3) equal installments each equal to one-third of the
entire Option granted, the first of which shall become exercisable on the first
anniversary of the date of the grant of the Employee Option, the second
installment of which shall become exercisable on the second anniversary of the
date of grant of the Employee Option, and the final installment of which shall
become exercisable on the third anniversary of the date of grant. To the extent
not exercised, installments shall accumulate and be exercisable, in whole or
part, at any time after becoming exercisable, to not later than the date the
Employee Option expires. The Board may accelerate the exercisability of any
Option or portion thereof at any time.

            7. Option Grants for Consultants.

                  7.1. Authority of Board. Subject to the provisions of the
Plan, the Board shall have full and final authority to select those consultants
to the Company or a Subsidiary who will receive Consultant Options, the terms
and conditions of which shall be set forth in an Agreement. An employee or
officer of the Company shall not be deemed a consultant.

                  7.2. Purchase Price. The purchase price or the manner in which
the purchase price is to be determined for Shares under each Consultant Option
shall be determined by the Board and set forth in the Agreement evidencing the
Option, provided that the purchase price per Share under each Consultant Option
shall be not less than the Fair Market Value of a Share on the date the
Consultant Option is granted.

                  7.3. Duration. Consultant Options granted hereunder shall be
for such term as the Board shall determine, provided that no Consultant Option
shall be exercisable after the expiration of ten (10) years from the date it is
granted. The Board may, subsequent to the granting of any Consultant Option,
extend the term thereof but in no event shall the term as so extended exceed the
maximum term provided for in the preceding sentence.

                  7.4. Vesting. Each Consultant Option shall, commencing not
earlier then the date of its grant, become exercisable in such installments
(which need not be equal or may be in one installment) and at such times as may
be designated by the Board and set forth in the Agreement evidencing the Option.
To the extent not otherwise provided by the Board, Consultant Options shall be
exercisable in three (3) equal installments each equal to one-third of the
entire Option granted, the first of which shall become exercisable on the first
anniversary of the date of grant of the Consultant Options, the second
installment of which shall become exercisable on the second anniversary of the
date of grant, and the final installment of which shall become exercisable on
the third anniversary of the 


                                       6
<PAGE>

date of grant. To the extent not exercised, installments shall accumulate and be
exercisable, in whole or part, at any time after becoming exercisable, to not
later than the date the Consultant Option expires. The Board may accelerate the
exercisability of any Option or portion thereof at any time.

            8. Terms and Conditions Applicable to All Options

                  8.1. Non-transferability. No Option granted hereunder shall be
transferable by the Optionee to whom granted otherwise than by will or the laws
of descent and distribution, and an Option may be exercised during the lifetime
of such Optionee only by the Optionee or his or her guardian or legal
representative. The terms of each Option shall be final, binding and conclusive
upon the beneficiaries, executors, administrators, heirs and successors of the
Optionee.

                  8.2. Method of Exercise. The exercise of an Option shall be
made only by a written notice delivered in person or by mail to the Secretary of
the Company at the Company's principal executive office, specifying the number
of Shares to be purchased and accompanied by payment therefor and otherwise in
accordance with the Agreement pursuant to which the Option was granted. The
purchase price for any Shares purchased pursuant to the exercise of an Option
shall be paid in full upon such exercise, as determined by the Board in its
discretion, by any one or a combination of the following: (i) cash, (ii)
transferring Shares to the Company upon such terms and conditions as determined
by the Board; or (iii) as otherwise determined by the Board. At the Optionee's
request and subject to the consent of the Board, Shares to be acquired upon the
exercise of a portion of an Option will be applied automatically to pay the
purchase price in connection with the exercise of additional portions of the
Option then being exercised. The written notice pursuant to this Section 8.2 may
also provide instructions from the Optionee to the Company that upon receipt of
the purchase price in cash from the Optionee's broker or dealer, designated as
such on the written notice, in payment for any Shares purchased pursuant to the
exercise of an Option, the Company shall issue such Shares directly to the
designated broker or dealer. Any Shares transferred to the Company as payment of
the purchase price under an Option shall be valued at their Fair Market Value on
the day preceding the date of exercise of such Option. If requested by the
Board, the Optionee shall deliver the Agreement evidencing the Option to the
Secretary of the Company who shall endorse thereon a notation of such exercise
and return such Agreement to the Optionee. No fractional shares (or cash in lieu
thereof) shall be issued upon exercise of an Option and the number of Shares
that may be purchased upon exercise shall be rounded to the nearest number of
whole Shares.

                  8.3. Rights of Optionees. No Optionee shall be deemed for any
purpose to be the owner of any Shares subject to any Option unless and until (i)
the Option shall have been exercised pursuant to the terms thereof, (ii) the
Company shall have issued and delivered the Shares to the Optionee and (iii) the
Optionee's name shall have been entered as a stockholder of record on the books
of the Company. Thereupon, the Optionee shall have full voting, dividend and
other ownership rights with respect to such Shares.

                  8.4. Termination of Employment or Services. Unless otherwise
provided in the Agreement evidencing the Option, an Option (other than an Option
granted to a consultant or a 


                                       7
<PAGE>

Nonemployee Director) shall terminate upon an Optionee's termination of
employment (or similar arrangement) with the Company and its Subsidiaries as
follows:

                        (a) in the event the Optionee's employment terminates as
a result of Disability, the Optionee may at any time within three (3) months
after such event exercise the Option or portion thereof that was exercisable on
the date of such termination;

                        (b) if an Optionee's employment terminates for Cause,
the Option shall terminate immediately and no rights thereunder may be
exercised;

                        (c) if an Optionee's employment terminates without
Cause, the Optionee may at any time within one (1) month after such event
exercise the Option or portion thereof that was exercisable on the date of such
termination; and

                        (d) if an Optionee dies while an employee of the Company
or any Subsidiary or within six (6) months after termination as a result of
Disability as described in clause (a) of this Section 8.4, the Option may be
exercised at any time within six (6) months after the Optionee's death by the
person or persons to whom such rights under the Option shall pass by will or by
the laws of descent and distribution; provided, however, that an Option may be
exercised to the extent, and only to the extent, that the Option or portion
thereof was exercisable on the date of death or earlier termination.

                  Notwithstanding the foregoing, in no event may any Option be
exercised by anyone after the expiration of the term of the Option.

                  8.5. Termination of Nonemployee Director Options and
Consultant Options. Nonemployee Director Options and Consultant Options granted
to Nonemployee Directors and consultants to the Company or a Subsidiary shall
terminate under such circumstances as are provided in the Agreement evidencing
the Option, and if not expressly specified, as of the close of business on the
last day of the term of the Option, but in no event may such an Option be
exercised by anyone after the expiration of the term of the Option.

                  8.6. Modification or Substitution. The Board may, in its
discretion, modify outstanding Options or accept the surrender of outstanding
Options (to the extent not exercised) and grant new Options in substitution for
them. Notwithstanding the foregoing, no modification of an Option shall
adversely alter or impair any rights or obligations under the Option without the
Optionee's consent.

            9. Adjustment Upon Changes in Capitalization.

                  9.1. Subject to Section 10, in the event of a Change in
Capitalization, the Board shall conclusively determine the appropriate
adjustments, if any, to the maximum number or class of Shares or other stock or
securities with respect to which Options may be granted under the 


                                       8
<PAGE>

Plan, the number and class of Shares or other stock or securities which are
subject to outstanding Options granted under the Plan, and the purchase price
therefor, if applicable.

                  9.2. Any such adjustment in the Shares or other stock or
securities subject to outstanding Incentive Stock Options (including any
adjustments in the purchase price) shall be made in such manner as not to
constitute a modification as defined by Section 424(h)(3) of the Code and only
to the extent otherwise permitted by Sections 422 and 424 of the Code.

                  9.3. If, by reason of a Change in Capitalization, an Optionee
shall be entitled to exercise an Option with respect to new, additional or
different shares of stock or securities, such new, additional or different
shares shall thereupon be subject to all of the conditions which were applicable
to the Shares subject to the Option, as the case may be, prior to such Change in
Capitalization.

            10. Effect of Certain Transactions.

                  In the event of (i) the liquidation or dissolution of the
Company or (ii) a merger or consolidation of the Company (a "Transaction"), the
Plan and the Options issued hereunder shall continue in effect in accordance
with their respective terms and each Optionee shall be entitled to receive in
respect of each Share subject to any outstanding Options, as the case may be,
upon exercise of any Option, the same number and kind of stock, securities,
cash, property, or other consideration that each holder of a Share was entitled
to receive in the Transaction in respect of a Share. In the event that, after a
Transaction, there occurs any change of a type described in Section 2.4 hereof
with respect to the shares of the surviving or resulting corporation, then
adjustments similar to, and subject to the same conditions as, those in Section
9 hereof shall be made by the Board.

            11. Termination and Amendment of the Program.

                  11.1. The Plan shall terminate on the day preceding the tenth
anniversary of the date of its adoption by the Board and no Option may be
granted thereafter. The Board may sooner terminate or amend the Plan at any time
and from time to time; provided, however, that to the extent necessary under
Section 16(b) of the Exchange Act and the rules and regulations promulgated
thereunder or other applicable law, no amendment shall be effective unless
approved by the stockholders of the Company in accordance with applicable law
and regulations at an annual or special meeting held within twelve (12) months
after the date of adoption of such amendment.

                  11.2. Except as provided in Sections 9 and 10 hereof, rights
and obligations under any Option granted before any amendment or termination of
the Plan shall not be adversely altered or impaired by such amendment or
termination, except with the consent of the Optionee, nor shall any amendment or
termination deprive any Optionee of any Shares which he may have acquired
through or as a result of the Plan.

            12. Non-Exclusivity of the Plan. The adoption of the Plan by the
Board shall not be construed as amending, modifying or rescinding any previously
approved incentive arrangement or 


                                       9
<PAGE>

as creating any limitations on the power of the Board to adopt such other
incentive arrangements as it may deem desirable, including, without limitation,
the granting of stock options otherwise than under the Plan, and such
arrangements may be either applicable generally or only in specific cases.

            13. Limitation of Liability. As illustrative of the limitations of
liability of the Company, but not intended to be exhaustive thereof, nothing in
the Plan shall be construed to:

                  (i) give any person any right to be granted an Option other
than at the sole discretion of the Board;

                  (ii) give any person any rights whatsoever with respect to
Shares except as specifically provided in the Plan;

                  (iii) limit in any way the right of the Company to terminate
the employment of any person at any time; or

                  (iv) be evidence of any agreement or understanding, expressed
or implied, that the Company will employ any person at any particular rate of
compensation or for any particular period of time.

            14. Regulations and Other Approvals; Governing Law.

                  14.1. This Plan and the rights of all persons claiming
hereunder shall be construed and determined in accordance with the laws of the
State of Delaware.

                  14.2. The obligation of the Company to sell or deliver Shares
with respect to Options granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Board.

                  14.3. The Plan is intended to comply with Rule 16b-3
promulgated under the Exchange Act and the Board shall interpret and administer
the provisions of the Plan or any Agreement in a manner consistent therewith.
Any provisions inconsistent with such Rule shall be inoperative and shall not
affect the validity of the Plan.

                  14.4. The Board may make such changes as may be necessary or
appropriate to comply with the rules and regulations of any government
authority, or to obtain for Eligible Employees granted Incentive Stock Options
the tax benefits under the applicable provisions of the Code and regulations
promulgated thereunder.

                  14.5. Each Option is subject to the requirement that, if at
any time the Board determines, in its discretion, that the listing, registration
or qualification of Shares issuable pursuant to the Plan is required by any
securities exchange or under any state or federal law, or the consent or


                                       10
<PAGE>

approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an Option or the issuance of
Shares, no Options shall be granted or payment made or Shares issued, in whole
or in part, unless listing, registration, qualification, consent or approval has
been effected or obtained free of any conditions, or as otherwise determined to
be acceptable to the Board.

                  14.6. Notwithstanding anything contained in the Plan to the
contrary, in the event that the disposition of Shares acquired pursuant to the
Plan is not covered by a then current registration statement under the
Securities Act of 1933, as amended, and is not otherwise exempt from such
registration, such Shares shall be restricted against transfer to the extent
required by the Securities Act of 1933, as amended, and Rule 144 or other
regulations thereunder. The Board may require any individual receiving Shares
pursuant to the Plan, as a condition precedent to receipt of such Shares upon
exercise of an Option, to represent and warrant to the Company in writing that
the Shares acquired by such individual are acquired without a view to any
distribution thereof and will not be sold or transferred other than pursuant to
an effective registration thereof under said act or pursuant to a exemption
applicable under the Securities Act of 1933, as amended, or the rules and
regulations promulgated thereunder. The certificates evidencing any of such
Shares shall be appropriately amended to reflect their status as restricted
securities as aforesaid.

            15. Miscellaneous.

                  15.1. Multiple Agreements. The terms of each Option may differ
from other Options granted under the Plan at the same time, or at some other
time. The Board may also grant more than one Option to a given Eligible Employee
during the term of the Plan, either in addition to, or in substitution for, one
or more Options previously granted to that Eligible Employee.

                  15.2. Withholding of Taxes. (a) The Company shall have the
right to deduct from any distribution of cash to any Optionee, an amount equal
to the federal, state and local income taxes and other amounts as may be
required by law to be withheld (the "Withholding Taxes") with respect to any
Option. If an Optionee is entitled to receive Shares upon exercise of an Option,
the Optionee shall pay the Withholding Taxes to the Company prior to the
issuance of such Shares. In satisfaction of the Withholding Taxes, the Optionee
may make a written election (the "Tax Election"), which may be accepted or
rejected in the discretion of the Board, to have withheld a portion of the
Shares issuable to him or her upon exercise of the Option having an aggregate
Fair Market Value, on the date preceding the date of exercise, equal to the
Withholding Taxes, provided that in respect of an Optionee who may be subject to
liability under Section 16(b) of the Exchange Act either (i) (A) the Optionee
makes the Tax Election at least six (6) months after the date the Option was
granted, (B) the Option is exercised during the ten day period beginning on the
third business day and ending on the twelfth business day following the release
for publication of the Company's quarterly or annual statements of earnings (a
"Window Period") and (C) the Tax Election is made during the Window Period in
which the Option is exercised or prior to such Window Period and subsequent to
the immediately preceding Window Period or (ii) (A) the Tax Election is made at
least six months prior to the date the Option is exercised and (B) the Tax
election is irrevocable with respect to the exercise of 


                                       11
<PAGE>

all Options which are exercised prior to the expiration of six months following
an election to revoke the Tax Election. Notwithstanding the foregoing, the Board
may, by the adoption of rules or otherwise, (i) modify the provisions in the
preceding sentence or impose such other restrictions or limitations on Tax
Elections as may be necessary to ensure that the Tax Elections will be exempt
transactions under Section 16(b) of the Exchange Act, and (ii) permit Tax
Elections to be made at such other times and subject to such other conditions as
the Board determines will constitute exempt transactions under Section 16(b) of
the Exchange Act.

                        (b) If an Optionee makes a disposition, within the
meaning of Section 424(c) of the Code and regulations promulgated thereunder, of
any Share or Shares issued to such Optionee pursuant to the exercise of an
Incentive Stock Option within the two-year period commencing on the day after
the date of transfer of such Share or Shares to the Optionee pursuant to such
exercise, the Optionee shall, within ten (10) days of such disposition, notify
the Company thereof, by delivery of written notice to the Company at its
principal executive office, and immediately deliver to the Company the amount of
Withholding Taxes.

                  15.3. Designation of Beneficiary. Each Optionee may designate
a person or persons to receive in the event of his or her death, any Option or
any amount payable pursuant thereto, to which he or she would then be entitled.
Such designation will be made upon forms supplied by and delivered to the
Company and may be revoked in writing. If an Optionee fails effectively to
designate a beneficiary, then his or her estate will be deemed to be the
beneficiary.

            16. Effective Date. The effective date of the Plan shall be the date
of its adoption by the Board, subject only to the approval by the affirmative
votes of the holders of a majority of the securities of the Company present, or
represented, and entitled to vote at a meeting of stockholders duly held in
accordance with the applicable laws of the State of Delaware within twelve (12)
months of such adoption.


                                       12