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           Spiros Development Corporation II, Inc. 1997 Stock Option Plan.


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                     SPIROS DEVELOPMENT CORPORATION II, INC.
                             1997 STOCK OPTION PLAN


                                   ARTICLE ONE

                               GENERAL PROVISIONS


   I.     PURPOSE OF THE PLAN

          This 1997 Stock Option Plan is intended to promote the interests of
Spiros Development Corporation II, Inc., a Delaware corporation, by providing
eligible persons with the opportunity to acquire a proprietary interest, or
otherwise increase their proprietary interest, in the Corporation as an
incentive for them to remain in the service of the Corporation.

          Capitalized terms shall have the meanings assigned to such terms in
the attached Appendix.

   II.    STRUCTURE OF THE PLAN

          A.   The Plan shall be comprised of a Discretionary Option Grant
Program under which eligible persons may, at the discretion of the Plan
Administrator, be granted options to purchase shares of Common Stock.

          B.   The Plan shall become effective on the date on which the Common
Stock is first registered under Section 12 of the 1934 Act (the "Plan Effective
Date"), and options may be granted at any time from and after the Plan Effective
Date until the date the Plan terminates in accordance with the provisions of
Section III of Article Three.

   III.   ADMINISTRATION OF THE PLAN

          A.   The Primary Committee shall have sole and exclusive authority to
administer the Discretionary Option Grant Program with respect to Section 16
Insiders. Administration of the Discretionary Option Grant Program with respect
to all other persons eligible to participate in those programs may, at the
Board's discretion, be vested in the Primary Committee or a Secondary Committee,
or the Board may retain the power to administer the program with respect to all
those other persons.

          B.   Members of the Primary Committee or any Secondary Committee shall
serve for such period of time as the Board may determine and may be removed by
the Board at any time.  The Board may also at any time terminate the functions
of any Secondary Committee and reassume all powers and authority previously
delegated to such committee.

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          C.   Each Plan Administrator shall, within the scope of its
administrative functions under the Plan, have full power and authority (subject
to the provisions of the Plan) to establish such rules and regulations as it may
deem appropriate for proper administration of the Discretionary Option Grant
Program and to make such determinations under, and issue such interpretations
of, the provisions of such programs and any outstanding options or stock
issuances thereunder as it may deem necessary or advisable.  Decisions of the
Plan Administrator within the scope of its administrative functions under the
Plan shall be final and binding on all parties who have an interest in the
Discretionary Option Grant Program under its jurisdiction or any outstanding
option thereunder.

          D.   Service on the Primary Committee or the Secondary Committee shall
constitute service as a Board member, and members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee.  No member of the Primary Committee
or the Secondary Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any option grants or stock issuances under the
Plan.

   IV.    ELIGIBILITY

          A.   The persons eligible to participate in the Discretionary Option
Grant Program are as follows:

                 (i)     Employees,

                (ii)     non-employee members of the Board or the board of
     directors of any Parent or Subsidiary, and

               (iii)     consultants and other independent advisors who
     provide services to the Corporation (or any Parent or Subsidiary).

          B.   Each Plan Administrator shall, within the scope of its
administrative jurisdiction under the Plan, have full authority to determine,
which eligible persons are to receive option grants, the time or times when such
option grants are to be made, the number of shares to be covered by each such
grant, the status of the granted option as either an Incentive Option or a Non-
Statutory Option, the time or times when each option is to become exercisable
and the maximum term for which the option is to remain outstanding.

   V.     STOCK SUBJECT TO THE PLAN

          A.   The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including shares
repurchased by the Corporation on the open market. The maximum number of
shares of Common Stock which may be issued over the term of the Plan shall
initially not exceed 700,000 shares (the "Overall Limitation").

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          B.   The Overall Limitation under the Plan shall automatically
increase on February 15 of each calendar year during the term of the Plan,
beginning with the 1998 calendar year, by that number of shares necessary to
cause the Overall Limitation to be equal to 15% of the then outstanding
shares of the Common Stock of the Company. No Incentive Options may be
granted on the basis of the additional shares of Common Stock resulting from
such annual increases.

          C.   No one person participating in the Plan may receive options,
separately exercisable stock appreciation rights and direct stock issuances
for more than 200,000 shares of Common Stock in the aggregate per calendar
year, beginning with the 1997 calendar year.

          D.   Shares of Common Stock subject to outstanding options shall be
available for subsequent issuance under the Plan to the extent (i) the
options (including any options incorporated from the predecessor Plan) expire
or terminate for any reason prior to exercise in full or (ii) the options are
cancelled in accordance with the cancellation-regrant provisions of Article
Two. All shares issued under the Plan (including shares issued upon exercise
of options incorporated from the Predecessor Plan), whether or not those
shares are subsequently repurchased by the Corporation pursuant to its
repurchase rights under the Plan, shall reduce on a share-for-share basis the
number of shares of Common Stock available for subsequent issuance under the
Plan. In addition, should the exercise price of an option under the Plan
(including any option incorporated from the Predecessor Plan) be paid with
shares of Common Stock or should shares of Common Stock otherwise issuable
under the Plan be withheld by the Corporation in satisfaction of the
withholding taxes incurred in connection with the exercise of an option or
the vesting of a stock issuance under the Plan, then the number of shares of
Common Stock available for issuance under the Plan shall be reduced by the gross
number of shares for which the option is exercised or which vest under the
stock issuance, and not by the net number of shares of Common Stock issued to
the holder of such option or stock issuance.

          E.   Should any change be made to the Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock as
a class without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and/or class of
securities issuable under the Plan, (ii) the maximum number and/or class of
securities for which the share reserve is to increase automatically each
year, (iii) the number and/or class of securities for which any one person
may be granted options, separately exercisable stock appreciation rights and
direct stock issuances per calendar year, (iv) the number and/or class of
securities for which automatic option grants are to be made subsequently per
Eligible Director under the Automatic Option Grant Program and (v) the number
and/or class of securities and the exercise price per share in effect under
each outstanding option (including any option incorporated from the
Predecessor Plan) in order to prevent the dilution or enlargement of benefits
thereunder. The adjustments determined by the Plan Administrator shall be
final, binding and conclusive.

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                                   ARTICLE TWO

                       DISCRETIONARY OPTION GRANT PROGRAM

   I.     OPTION TERMS

          Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; PROVIDED, however, that each such document
shall comply with the terms specified below.  Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.

          A.   EXERCISE PRICE.

               1.   The exercise price per share shall be fixed by the Plan
Administrator but shall not be less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the option grant date.

               2.   The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Section I of
Article Three and the documents evidencing the option, be payable in one or more
of the forms specified below:

                 (i)     cash or check made payable to the Corporation,

                (ii)     shares of Common Stock held for the requisite
     period necessary to avoid a charge to the Corporation's earnings for
     financial reporting purposes and valued at Fair Market Value on the
     Exercise Date, or

               (iii)     through a special sale and remittance procedure
     pursuant to which the Optionee shall concurrently provide irrevocable
     instructions to (a) a Corporation-designated brokerage firm to effect
     the immediate sale of the purchased shares and remit to the
     Corporation, out of the sale proceeds available on the settlement
     date, sufficient funds to cover the aggregate exercise price payable
     for the purchased shares plus all applicable Federal, state and local
     income and employment taxes required to be withheld by the Corporation
     by reason of such exercise and (b) the Corporation to deliver the
     certificates for the purchased shares directly to such brokerage firm
     in order to complete the sale.

          Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.

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          B.   EXERCISE AND TERM OF OPTIONS.  Each option shall be exercisable
at such time or times, during such period and for such number of shares as shall
be determined by the Plan Administrator and set forth in the documents
evidencing the option.  However, no option shall have a term in excess of ten
(10) years measured from the option grant date.

          C.   EFFECT OF TERMINATION OF SERVICE.

               1.   The following provisions shall govern the exercise of any
options held by the Optionee at the time of cessation of Service or death:

                 (i)     Any option outstanding at the time of the
     Optionee's cessation of Service for any reason shall remain
     exercisable for such period of time thereafter as shall be determined
     by the Plan Administrator and set forth in the documents evidencing
     the option, but no such option shall be exercisable after the
     expiration of the option term.

                (ii)     Any option exercisable in whole or in part by the
     Optionee at the time of death may be subsequently exercised by the
     personal representative of the Optionee's estate or by the person or
     persons to whom the option is transferred pursuant to the Optionee's
     will or in accordance with the laws of descent and distribution.

               (iii)     Should the Optionee's Service be terminated for
     Misconduct, then all outstanding options held by the Optionee shall
     terminate immediately and cease to be outstanding.

                (iv)     During the applicable post-Service exercise
     period, the option may not be exercised in the aggregate for more than
     the number of vested shares for which the option is exercisable on the
     date of the Optionee's cessation of Service.  Upon the expiration of
     the applicable exercise period or (if earlier) upon the expiration of
     the option term, the option shall terminate and cease to be
     outstanding for any otherwise exercisable shares for which the option
     has not been exercised.  However, the option shall, immediately upon
     the Optionee's cessation of Service, terminate and cease to be
     outstanding for any and all shares for the option is not otherwise at
     that time exercisable.

               2.   The Plan Administrator shall have complete discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding, to:

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                 (i)     extend the period of time for which the option is
     to remain exercisable following the Optionee's cessation of Service
     from the limited exercise period otherwise in effect for that option
     to such greater period of time as the Plan Administrator shall deem
     appropriate, but in no event beyond the expiration of the option term,
     and/or

                (ii)     permit the option to be exercised, during the
     applicable post-Service exercise period, not only with respect to the
     number of vested shares of Common Stock for which such option is
     exercisable at the time of the Optionee's cessation of Service but
     also with respect to one or more additional installments for which the
     option would have become exercisable had the Optionee continued in
     Service.

          D.   STOCKHOLDER RIGHTS.  The holder of an option shall have no
stockholder rights with respect to the shares subject to the option until such
person shall have exercised the option, paid the exercise price and become the
record holder of the purchased shares.

          E.   LIMITED TRANSFERABILITY OF OPTIONS.  During the lifetime of the
Optionee, Incentive Options shall be exercisable only by the Optionee and shall
not be assignable or transferable other than by will or by the laws of descent
and distribution following the Optionee's death.  However, a Non-Statutory
Option may, in connection with the Optionee's estate plan, be assigned in whole
or in part during the Optionee's lifetime to one or more members of the
Optionee's immediate family or to a trust established exclusively for one or
more such family members.  The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
the assignment. The terms applicable to the assigned portion shall be the same
as those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate.

   II.    INCENTIVE OPTIONS

          The terms specified below shall be applicable to all Incentive
Options.  Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Seven shall be applicable to Incentive
Options.  Options which are specifically designated as Non-Statutory Options
when issued under the Plan shall NOT be subject to the terms of this Section II.

          A.   ELIGIBILITY.  Incentive Options may only be granted to Employees.


          B.   DOLLAR LIMITATION.  The aggregate Fair Market Value of the shares
of Common Stock (determined as of the respective date or dates of grant) for
which one or more options granted to any Employee under the Plan (or any other
option plan of the Corporation or any Parent or Subsidiary) may for the first
time become exercisable as Incentive Options during

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any one calendar year shall not exceed the sum of One Hundred Thousand
Dollars ($100,000).  To the extent the Employee holds two (2) or more such
options which become exercisable for the first time in the same calendar
year, the foregoing limitation on the exercisability of such options as
Incentive Options shall be applied on the basis of the order in which such
options are granted.

          C.   10% STOCKHOLDER.  If any Employee to whom an Incentive Option is
granted is a 10% Stockholder, then the exercise price per share shall not be
less than one hundred ten percent (110%) of the Fair Market Value per share of
Common Stock on the option grant date, and the option term shall not exceed five
(5) years measured from the option grant date.

 III.     CORPORATE TRANSACTION/CHANGE IN CONTROL

          A.   In the event of any Corporate Transaction, each outstanding
option shall automatically accelerate so that each such option shall,
immediately prior to the effective date of the Corporate Transaction, become
exercisable for the total number of shares of Common Stock at the time subject
to such option and may be exercised for any or all of those shares as fully
vested shares.  However, an outstanding option shall NOT become exercisable on
such an accelerated basis if and to the extent:  (i) such option is, in
connection with the Corporate Transaction, to be assumed by the successor
corporation (or parent thereof) or (ii) such option is to be replaced with a
cash incentive program of the successor corporation which preserves the spread
existing at the time of the Corporate Transaction on any shares for which the
option is not otherwise at that time exercisable and provides for subsequent
payout in accordance with the same exercise/vesting schedule applicable to those
option shares or (iii) the acceleration of such option is subject to other
limitations imposed by the Plan Administrator at the time of the option grant.

          B.   Immediately following the consummation of the Corporate
Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof).

          C.   Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments to reflect such Corporate Transaction shall also be made
to (i) the exercise price payable per share under each outstanding option,
PROVIDED the aggregate exercise price payable for such securities shall remain
the same, (ii) the maximum number and/or class of securities available for
issuance over the remaining term of the Plan and (iii) the maximum number and/or
class of securities for which any one person may be granted stock options under
the Plan per calendar year.

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          D.   The Plan Administrator shall have the discretionary authority to
provide for the automatic acceleration of one or more outstanding options upon
the occurrence of a Corporate Transaction, whether or not those options are to
be assumed in the Corporate Transaction, so that each such option shall,
immediately prior to the effect date of such Corporate Transaction, become fully
exercisable for the total number of shares at the time subject to that option
and may be exercised for any or all of those shares as fully vested shares.

          E.   The Plan Administrator shall have full power and authority,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to provide for the automatic acceleration of one or
more outstanding options in the event the Optionee's Service is subsequently
terminated by reason of an Involuntary Termination within a designated period
(not to exceed eighteen (18) months) following the effective date of any
Corporate Transaction in which those options are assumed and do not otherwise
accelerate.  Any options so accelerated shall remain exercisable for fully
vested shares until the EARLIER of (i) the expiration of the option term or (ii)
the expiration of the one (1) year period measured from the effective date of
the Involuntary Termination.

          F.   The Plan Administrator shall have the discretionary authority to
provide for the automatic acceleration of one or more outstanding options upon
the occurrence of a Change in Control so that each such option shall,
immediately prior to the effect date of such Change in Control, become fully
exercisable for the total number of shares at the time subject to that option
and may be exercised for any or all of those shares as fully vested shares.
Alternatively, the Plan Administrator may condition the automatic acceleration
of one or more outstanding options upon the subsequent termination of the
Optionee's Service by reason of an Involuntary Termination within a designated
period (not to exceed eighteen (18) months) following the effective date of such
Change in Control.  Each option so accelerated shall remain exercisable for
fully vested shares until the EARLIER of (i) the expiration of the option term
or (ii) the expiration of the one (1) year period measured from the effective
date of Optionee's cessation of Service.

          G.   The portion of any Incentive Option accelerated in connection
with a Corporate Transaction or Change in Control shall remain exercisable as an
Incentive Option only to the extent the applicable One Hundred Thousand Dollar
limitation is not exceeded.  To the extent such dollar limitation is exceeded,
the accelerated portion of such option shall be exercisable as a Non-Statutory
Option under the Federal tax laws.

          H.   The outstanding options shall in no way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.

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  IV.     CANCELLATION AND REGRANT OF OPTIONS

          The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Discretionary Option
Grant Program and to grant in substitution new options covering the same or
different number of shares of Common Stock but with an exercise price per share
based on the Fair Market Value per share of Common Stock on the new grant date.

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                                  ARTICLE THREE

                                  MISCELLANEOUS

   I.     INTENTIONALLY OMITTED

  II.     TAX WITHHOLDING

          A.   The Corporation's obligation to deliver shares of Common Stock
upon the exercise of options under the Plan shall be subject to the satisfaction
of all applicable Federal, state and local income and employment tax withholding
requirements.

          B.   The Plan Administrator may, in its discretion, provide any or all
holders of Non-Statutory Options under the Plan with the right to use shares of
Common Stock in satisfaction of all or part of the Taxes incurred by such
holders in connection with the exercise of those options.  Such right may be
provided to any such holder in either or both of the following formats:

               STOCK WITHHOLDING:  The election to have the Corporation
withhold, from the shares of Common Stock otherwise issuable upon the exercise
of such Non-Statutory Option, a portion of those shares with an aggregate Fair
Market Value equal to the percentage of the Taxes (not to exceed one hundred
percent (100%)) designated by the holder.

               STOCK DELIVERY:  The election to deliver to the Corporation, at
the time the Non-Statutory Option is exercised, one or more shares of Common
Stock previously acquired by such holder (other than in connection with the
option exercise triggering the Taxes) with an aggregate Fair Market Value equal
to the percentage of the Taxes (not to exceed one hundred percent (100%))
designated by the holder.

 III.     EFFECTIVE DATE AND TERM OF THE PLAN

          A.   The Plan shall become effective immediately upon the Plan
Effective Date.  Options may be granted under the Discretionary Option Grant
Program at any time on or after the Plan Effective Date.  However, no options
granted under the Plan may be exercised, and no shares shall be issued under the
Plan, until the Plan is approved by the Corporation's

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stockholders.  If such stockholder approval is not obtained within twelve
(12) months after the Plan Effective Date, then all options previously
granted under this Plan shall terminate and cease to be outstanding, and no
further options shall be granted and no shares shall be issued under the Plan.

          B.   The Plan shall terminate upon the EARLIEST of (i) October 31,
2007, (ii) the date on which all shares available for issuance under the Plan
shall have been issued as fully-vested shares or (iii) the termination of all
outstanding options in connection with a Corporate Transaction.  Should the Plan
terminate on October 31, 2007, then all option grants outstanding at that time
shall thereafter continue to have force and effect in accordance with the
provisions of the documents evidencing those grants.

  IV.     AMENDMENT OF THE PLAN

          A.   The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects.  However, no such amendment
or modification shall adversely affect the rights and obligations with respect
to stock options at the time outstanding under the Plan unless the Optionee
consents to such amendment or modification. In addition, certain amendments may
require stockholder approval pursuant to applicable laws or regulations.

          B.   Options to purchase shares of Common Stock may be granted under
the Discretionary Option Grant Program which in excess of the number of shares
then available for issuance under the Plan, provided those options shall not
become exercisable for any of the excess shares unless and until there is
obtained stockholder approval of an amendment sufficiently increasing the number
of shares of Common Stock available for issuance under the Plan.  If such
stockholder approval is not obtained within twelve (12) months after the date
the first of such option grants is made, then all options with such excess
shares shall immediately terminate and cease to be exercisable with respect to
those excess shares.

   V.     USE OF PROCEEDS

          Any cash proceeds received by the Corporation from the sale of shares
of Common Stock under the Plan shall be used for general corporate purposes.

  VI.     REGULATORY APPROVALS

          A.   The implementation of the Plan or the granting of any stock
option under the Plan upon the exercise of any granted option shall be subject
to the Corporation's procurement of all approvals and permits required by
regulatory authorities having jurisdiction over the Plan, the stock options
granted under it and the shares of Common Stock issued pursuant to it.

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          B.   No shares of Common Stock or other assets shall be issued or
delivered under the Plan unless and until there shall have been compliance with
all applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any stock exchange (or the Nasdaq National Market, if applicable) on which
Common Stock is then listed for trading.

 VII.     NO EMPLOYMENT/SERVICE RIGHTS

          Nothing in the Plan shall confer upon the Optionee any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing or retaining such person) or of the Optionee, which rights
are hereby expressly reserved by each, to terminate such person's Service at any
time for any reason, with or without cause.

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                                    APPENDIX


          The following definitions shall be in effect under the Plan:

     A.   BOARD shall mean the Corporation's Board of Directors.

     B.   CHANGE IN CONTROL shall mean a change in ownership or control of the
Corporation effected through either of the following transactions:

            (i)     the acquisition, directly or indirectly by any person
     or related group of persons (other than the Corporation or a person
     that directly or indirectly controls, is controlled by, or is under
     common control with, the Corporation), of beneficial ownership (within
     the meaning of Rule 13d-3 of the 1934 Act) of securities possessing
     more than fifty percent (50%) of the total combined voting power of
     the Corporation's outstanding securities pursuant to a tender or
     exchange offer made directly to the Corporation's stockholders, or

           (ii)     a change in the composition of the Board over a period
     of thirty-six (36) consecutive months or less such that a majority of
     the Board members ceases, by reason of one or more contested elections
     for Board membership, to be comprised of individuals who either (A)
     have been Board members continuously since the beginning of such
     period or (B) have been elected or nominated for election as Board
     members during such period by at least a majority of the Board members
     described in clause (A) who were still in office at the time the Board
     approved such election or nomination.

     C.   CODE shall mean the Internal Revenue Code of 1986, as amended.

     D.   COMMON STOCK shall mean the Corporation's common stock.

     E.   CORPORATE TRANSACTION shall mean either of the following stockholder-
approved transactions to which the Corporation is a party:

            (i)     a merger or consolidation in which securities
     possessing more than fifty percent (50%) of the total combined voting
     power of the Corporation's outstanding securities are transferred to a
     person or persons different from the persons holding those securities
     immediately prior to such transaction, or

           (ii)     the sale, transfer or other disposition of all or
     substantially all of the Corporation's assets  in complete liquidation
     or dissolution of the Corporation.

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     F.   CORPORATION shall mean Spiros Development Corporation II, Inc., a
Delaware corporation, and its successors.

     G.   DISCRETIONARY OPTION GRANT PROGRAM shall mean the discretionary option
grant program in effect under the Plan.

     H.   EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

     I.   EXERCISE DATE shall mean the date on which the Corporation shall have
received written notice of the option exercise.

     J.   FAIR MARKET VALUE per share of Common Stock on any relevant date shall
be determined in accordance with the following provisions:

            (i)     If the Common Stock is at the time traded on the Nasdaq
     National Market, then the Fair Market Value shall be deemed equal to
     the closing selling price per share of Common Stock on the date in
     question, as such price is reported on the Nasdaq National Market.  If
     there is no closing selling price for the Common Stock on the date in
     question, then the Fair Market Value shall be the closing selling
     price on the last preceding date for which such quotation exists.

           (ii)     If the Common Stock is at the time listed on any Stock
     Exchange, then the Fair Market Value shall be deemed equal to the
     closing selling price per share of Common Stock on the date in
     question on the Stock Exchange determined by the Plan Administrator to
     be the primary market for the Common Stock, as such price is
     officially quoted in the composite tape of transactions on such
     exchange.  If there is no closing selling price for the Common Stock
     on the date in question, then the Fair Market Value shall be the
     closing selling price on the last preceding date for which such
     quotation exists.

     K.   INCENTIVE OPTION shall mean an option which satisfies the requirements
of Code Section 422.

     L.   INVOLUNTARY TERMINATION shall mean the termination of the Service of
any individual which occurs by reason of:

            (i)     such individual's involuntary dismissal or discharge by
     the Corporation for reasons other than Misconduct, or

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           (ii)     such individual's voluntary resignation following (A) a
     change in his or her position with the Corporation which materially
     reduces his or her duties and responsibilities or the level of
     management to which he or she reports, (B) a reduction in his or her
     level of compensation (including base salary, fringe benefits and
     target bonus under any performance based bonus or incentive programs)
     by more than fifteen percent (15%) or (C) a relocation of such
     individual's place of employment by more than fifty (50) miles,
     provided and only if such change, reduction or relocation is effected
     by the Corporation without the individual's consent.

     M.   MISCONDUCT shall mean the commission of any act of fraud, embezzlement
or dishonesty by the Optionee, any unauthorized use or disclosure by such person
of confidential information or trade secrets of the Corporation (or any Parent
or Subsidiary), or any other intentional misconduct by such person adversely
affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner.  The foregoing definition shall not be deemed
to be inclusive of all the acts or omissions which the Corporation (or any
Parent or Subsidiary) may consider as grounds for the dismissal or discharge of
any Optionee or other person in the Service of the Corporation (or any Parent or
Subsidiary).

     N.   1934 ACT shall mean the Securities Exchange Act of 1934, as amended.

     O.   NON-STATUTORY OPTION shall mean an option not intended to satisfy  the
requirements of Code Section 422.

     P.   OPTIONEE shall mean any person to whom an option is granted under the
Discretionary Option Grant Program.

     Q.   PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

     R.   PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the inability
of the Optionee or the Participant to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment expected
to result in death or to be of continuous duration of twelve (12) months or
more.

     S.   PLAN shall mean the Corporation's 1997 Stock Option Plan, as set forth
in this document.

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     T.   PLAN ADMINISTRATOR shall mean the particular entity, whether the
Primary Committee, the Board or the Secondary Committee, which is authorized to
administer the Discretionary Option Grant Program with respect to one or more
classes of eligible persons, to the extent such entity is carrying out its
administrative functions under the programs with respect to the persons under
its jurisdiction.

     U.   PLAN EFFECTIVE DATE shall mean the date on which the Common Stock is
first registered under Section 12 of the 1934 Act.

     V.   PRIMARY COMMITTEE shall mean the committee of two (2) or more non-
employee Board members appointed by the Board to administer the Discretionary
Option Grant Program with respect to Section 16 Insiders.

     W.   SECONDARY COMMITTEE shall mean a committee of one (1) or more Board
members appointed by the Board to administer the Discretionary Option Grant
Program with respect to eligible persons other than Section 16 Insiders.

     X.   SECTION 16 INSIDER shall mean an officer or director of the
Corporation subject to the short-swing profit liabilities of Section 16 of the
1934 Act.

     Y.   SERVICE shall mean the performance of services for the Corporation (or
any Parent or Subsidiary) by a person in the capacity of an Employee, a non-
employee member of the board of directors or a consultant or independent
advisor, except to the extent otherwise specifically provided in the documents
evidencing the option grant or stock issuance.

     Z.   STOCK EXCHANGE shall mean either the American Stock Exchange or the
New York Stock Exchange.

     AA.  SUBSIDIARY shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

     AB.  TAXES shall mean the Federal, state and local income and employment
tax liabilities incurred by the holder of Non-Statutory Options in connection
with the exercise of those options.

     AC.  10% STOCKHOLDER shall mean the owner of stock (as determined under
Code Section 424(d)) possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).


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