BODYGUARD RECORDS.COM, INC.
                            LONG TERM INCENTIVE PLAN

                                                                February 4, 2000

         1. Purpose. The purposes of the Bodyguard  Records.com,  Inc. Long Term
Incentive Plan (the "Plan") are (i) to enable  Bodyguard  Records.com,  Inc. and
its  subsidiary  corporations  (hereinafter  referred  to,  unless  the  context
otherwise  require,  as the  "Company")  to  grant to its  directors,  executive
officers  and other  selected  key  employees  and agents the means to acquire a
proprietary  interest  in the  Company,  in order  that such  persons  will have
financial  incentives to contribute to the Company's  growth and  profitability,
and (ii) to  enhance  the  ability of the  Company to attract  and retain in its
employ  individuals of outstanding  ability upon whom the success of the Company
will depend.

         2.  Administration.  The Plan shall be administered by the Compensation
Committee or other similarly designated committee (the "Committee") appointed by
the Board of Directors of the Company.  Members of the Committee are eligible to
participate in the Plan and may grant to any or all members of the Committee any
award under the Plan.  The Committee may adopt such rules and  regulations as it
may deem necessary or advisable for the administration of the plan.

         3. Grant of Awards.  Subject to the terms and  provisions  of the Plan,
the Committee may grant to any participant an award (the "Award")  consisting or
one or more of the following:  (i) Incentive Stock Options,  (ii)  Non-Qualified
Stock  Options,  (iii)  Stock  Unit,  (iii)  Restricted  Stock,  and (iv)  Stock
Appreciation  Rights,  all as more fully described herein. The grant of an Award
shall be evidenced by a written letter (an "Award Letter") in such form as shall
be approved by the  Committee.  Each  recipient of an Award shall be required to
acknowledge receipt of the related Award Letter in writing.  However, failure to
do so shall not invalidate an Award which has been duly granted by resolution of
the Committee.

         4. Share Subject to the Plan. Subject to adjustment as provided herein,
an  aggregate of 150,000  shares of the Common  Stock of the Company,  $.001 par
value per share (the "Common Stock"),  shall be available for issuance  pursuant
to Awards  granted under the Plan.  Such shares may be  authorized  and unissued
shares or shares held in the Company's  treasury.  All shares  subject to Awards
that shall have  terminated or shall have been  forfeited in whole or in part or
canceled  for any reason  (other than by  surrender  for  cancellation  upon any
exercise or  conversion  of all or part of such Awards)  will be  available  for
issuance pursuant to Awards granted subsequently under the Plan.

         5.  Participants.  All directors,  officers and other key employees and
agents of the Company and its  subsidiaries  shall be eligible to receive Awards
and  thereby  become  participants  in  the  Plan.  As  used  herein,  the  term
"subsidiaries"  shall include any present or future corporation which would be a
"subsidiary  corporation" as that term is defined in Section 425 of the Internal
Revenue Code of 1986, as amended, (the "Code"). For


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purposes of determining  eligibility  of  individuals  to receive  Non-Qualified
Stock Options  hereunder,  and for such purposes only, the term "employee" shall
include  (without  limitation)  persons  who  are  employed  by the  Company  as
consultants or persons who are engaged in providing consultative services to the
Company from which services the Company derives  proprietary rights. No employee
or  participant  shall have any claim to be granted any Award under the Plan. In
granting Awards,  the Committee may include or exclude previous  participants in
the Plan, as the Committee may determine. Receipt of an Award shall in no way be
deemed to  constitute  a  contract  or promise of  continued  employment  by the
Company.

         6. Stock  Options.  (a) Stock options  granted  hereunder may be either
Incentive  Stock Options or  Non-Qualified  Stock Options.  As used herein,  (i)
"Incentive  Stock  Option"  means  an  option  that  is  intended  to  meet  the
requirements of Section 422A of the Code or any successor provision thereto, and
(ii) "Non-Qualified  Stock Option" means an option that is not intended to be an
Incentive  Stock Option.  Each Award of options  granted under the Plan shall be
designated  by the  Committee at the time of grant as either an Incentive  Stock
Option or a Non-Qualified Stock Option.

                  (b) Stock options  granted  hereunder  shall be subject to the
following terms and conditions and to such additional terms and conditions,  not
inconsistent  with the  provisions  of the Plan,  as the  Committee  shall  deem
desirable, all of which shall be reflected in the applicable Award Letter:

                           (i) The  purchase  price per share  purchasable  upon
exercise of an option (the "Exercise  Price") shall be not be less than the fair
market  value of a share of Common Stock on the date of grant as  determined  in
good faith by the  Committee.  Unless  otherwise  determined,  fair market value
shall be  determined  by and be equal to the closing bid price of the  Company's
Common  Stock in the  over-the-counter  market on the date the  Incentive  Stock
Option or Non-Qualified Stock Option is granted.

                           (ii)  Options  shall be  exercisable  at such time or
times as  determined  by the  Committee at the time of grant;  provided  that no
option shall be exercisable after the expiration of ten (10) years from the date
of grant and no Incentive  Stock Option issued to a shareholder  owning directly
or constructively  10% of the voting power of the Company,  shall be exercisable
after  the  expiration  of  five  (5)  years.   No  Incentive  Stock  Option  or
Non-Qualified  Stock Option shall be exercisable  during the one (1) year period
commencing on the date of grant.

                           (iii) If a participant  retires during the term of an
option,  such option shall be  exercisable by such  participant  only during the
three (3) months  following  his or her  retirement  (but in no event  after the
expiration  of the term of such option) and only as to the number of shares,  if
any, as to which it was exercisable immediately prior to such retirement.


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<PAGE>

                           (iv) If a  participant  dies  during  the  term of an
option, such option shall be exercisable by his or her executor or administrator
or, if not so  exercised,  by the  legatees  or the  distributees  of his or her
estate,  only  during the six (6) months  following  his or her death (but in no
event after the  expiration of the term of such  option).  During such six month
period,  the option shall be  exercisable  as to the full number of shares as to
which it had not been previously exercised.

                           (v) If a participant  ceases to be an employee of the
Company  for any cause  other  than  retirement  or death  during the term of an
option,  such option shall be  exercisable  by him or her only during the thirty
(30) days  following  the  cessation of his or her  employment  (but in no event
after the  expiration  of the term of such option) and only as for the number of
shares,  if any,  as to  which  it was  exercisable  immediately  prior  to such
cessation of employment.

                           (vi) Subject to the other  provisions of the Plan and
the applicable Award Letter, participants may make payment of the Exercise Price
by delivery of (A) cash, (B) a certified or bank cashier's  check, (C) shares of
Common Stock,  (D) when permitted by law and the Committee,  other Awards or (E)
any  combination  thereof,  which  has a fair  market  value  equal to the total
Exercise  Price,  as  determined  in good faith by the  Committee on the date of
exercise.

                           (vii) The aggregate fair market value  (determined as
of the time of  grant) of the  shares  with  respect  to which  Incentive  Stock
Options  held by any  participant  under the Plan (and  under any other  benefit
plans of Telpac Industries,  Inc. or of any parent or subsidiary  corporation of
Telpac  Industries,  Inc.)  which are  exercisable  for the  first  time by such
participant during any calendar year shall not exceed $100,000 or, if different,
the maximum  limitation in effect at the time of grant under Section 422A of the
Code, or any successor provision,  and any regulations  promulgated  thereunder.
The terms of any Incentive  Stock Option granted  hereunder  shall comply in all
respects  with the  provisions  of Section  422A of the Code,  or any  successor
provision, and any regulations promulgated thereunder.

                           (viii)  The  Committee  may  provide,  at the time of
grant and under  advice of  counsel or  otherwise,  that the shares to be issued
upon an option's exercise shall be in the form of Restricted Stock.

         7. Stock  Units.  (a) Stock  Units are  contractual  rights  awarded to
participants  pursuant to which shares may be issued as  hereinafter  provided .
Stock Units do not  constitute  securities of the Company and do not entitle the
participant to whom such Stock Units have been awarded to any right of ownership
with  respect to the shares  which may be issued  pursuant  thereto,  including,
without  limitation,  voting  rights  and the  right to  receive  ordinary  cash
dividends.  Awards of Stock Units may provide for the  issuance of Common  Stock
for no consideration other than services rendered.


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<PAGE>

                  (b) Subject to adjustment as provided herein,  each Stock Unit
awarded  hereunder shall vest over such period as the Committee shall specify at
the time of grant, and shall become convertible into shares of Common Stock over
such additional period as the Committee shall specify at the time of grant. Upon
such  conversion,  the  participant  shall be  entitled  to receive one share of
Common Stock per Stock Unit,  plus a distribution  in kind of all other property
(other than cash dividends)  which the  participant  would have been entitled to
receive if the shares  received upon the conversion of such Stock Units had been
owned  throughout  the period  beginning  on the date of the award of such Stock
Units ("the  Award  Date") and ending on the date of such  conversion,  less all
securities and property which would have been  surrendered or canceled  pursuant
to such distributions.

                  (c) In the  event  of the  cessation  of the  employment  of a
participant,  however  caused,  prior to the full  vesting  of his or her  Stock
Units,  such  participant's  Stock  Units  shall  automatically  either  (i)  be
forfeited  in their  entirety,  or (ii) be reduced to the number  determined  by
means of the  following  formula:  the total  number of Stock  Units  originally
awarded to the participant shall be multiplied by a fraction which shall have as
its numerator  the number of whole years elapsed  between the Award Date and the
date of  cessation  of  employment  and as its  denominator  the  length  of the
specified  vesting  period of such Stock Units,  provided that, if the resulting
product is not a whole  number,  it shall be reduced  to the next  lowest  whole
number. The Compensation  Committee shall specify,  in the related Award Letter,
whether  forfeiture or formula reduction shall apply to an Award of Stock Units.
All Stock Units  originally  issued to the  participant  in excess of the number
determined as set forth in this paragraph shall be automatically canceled by the
Company.

         8.  Restricted  Stock.  (a)  Restricted  Stock  Awards  may  be  issued
hereunder to participants, for no consideration other than services rendered, or
for such  consideration as may be required by applicable law, either alone or in
addition to other Awards  granted  under the Plan.  As used herein,  "Restricted
Stock" means any share of Common Stock issued  subject to the  restriction  that
the  holder  thereof  may  not  sell,  transfer,  pledge,  assign  or  otherwise
hypothecate such share and with such other restrictions as the Committee, in its
sole discretion,  may impose (including,  without limitation, any restriction on
the right to vote such share and the right to receive cash  dividends  and other
distributions with respect thereto),  which restrictions may lapse separately or
in  combination  at such time or times,  in  installments  or otherwise,  as the
Committee may deem  appropriate.  The provisions of Restricted Stock Awards need
not be the same with respect to each recipient.

                  (b) Any Restricted  Stock issued hereunder may be evidenced in
such manner as the  Committee  in its sole  discretion  shall deem  appropriate,
including,  without limitation,  book-entry  registration or issuance of a stock
certificate  or  certificates.  In the event any stock  certificate is issued in
respect of shares of Restricted  Stock awarded under the Plan, such  certificate
shall  be  registered  in the  name  of  the  participant,  and  shall  bear  an
appropriate   legend  referring  to  the  terms,   conditions  and  restrictions
applicable to such shares.


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<PAGE>

                  (c) The cessation of a participant's employment by the Company
at any time  during the  period of any  restrictions  due to such  participant's
retirement,  permanent  disability  or death  shall not  affect the terms of any
Restricted  Stock  Award  granted  to  such  participant.  Except  as  otherwise
determined by the Committee at the time of grant,  upon  cessation of employment
for any other  reason  during  the  period of any  restrictions,  all  shares of
Restricted  Stock  still  subject  to  restriction  shall  be  forfeited  by the
participant and reacquired by the Company. Notwithstanding the foregoing, in the
event of a participant's retirement,  permanent disability or death, or in other
cases of special  circumstances  following  the  cessation  of  employment  by a
participant,  the  Committee  may, when it finds in its sole  discretion  that a
waiver would be in the best interests of the Company,  waive in whole or in part
any or all remaining  restrictions with respect to such participant's  shares of
Restricted Stock.

         9. Stock  Appreciation  Rights.  (a) Stock  Appreciation  Rights may be
granted  hereunder to  participants  either alone or in addition to other Awards
granted  under the Plan and may,  but need  not,  relate  to a  specific  option
granted under Section 6 hereof. As used herein, "Stock Appreciation Right" means
a right to receive, upon exercise by the participant, the excess of (i) the fair
market value of one share of Common Stock on the date of exercise  over (ii) the
grant  price of the right as  specified  by the  Committee.  Stock  Appreciation
Rights shall be granted on such terms under conditions not inconsistent with the
Plan as the  Committee  may  determine,  all of which shall be  reflected in the
applicable Award Letter. Awards of Stock Appreciation Rights may provide for the
balance of Common Stock for no consideration  other than services rendered.  The
provisions  of Stock  Appreciation  Rights need not be the same with  respect to
each recipient.

                  (b) A Stock  Appreciation  Right  related  to a  Non-Qualified
Stock  Option may be  granted at the same time such  option is granted or at any
time  thereafter  before  exercise  or  expiration  of such  option.  Any  Stock
Appreciation  Right related to an Incentive  Stock Option must be granted at the
same time such  option  is  granted.  The  number  of  shares  subject  to Stock
Appreciation Rights shall be reduced to the extent that the related stock option
is exercised or terminated,  except that, in the case of any Stock  Appreciation
Right granted with respect to less than the full number of shares covered by the
related option,  such Stock  Appreciation  Rights shall not be reduced until the
exercise or  termination  of the related option exceeds the number of shares not
covered  by the  Stock  Appreciation  Right.  Any  option  related  to any Stock
Appreciation  Right  shall no longer be  exercisable  to the extent the  related
Stock Appreciation  Right has been exercised.  The Committee may, at the time of
award  impose  such  conditions  or  restrictions  on the  exercise of any Stock
Appreciation Right as it shall deem appropriate.

                   (c) Stock Appreciation  Rights which are related to an option
shall be  exercisable  only when and to the extent  that the  related  option is
exercisable.

                  (d) Stock  Appreciation  Rights  which are not  related  to an
option  ("Unrelated  Rights")  shall  be  exercisable  at such  time or times as
determined  by the  Committee at the time of grant,  and shall be subject to the
following terms and conditions:


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                           (i) If a  participant  retires  during the term of an
Unrelated  Right,  such Unrelated Right shall be exercisable by such participant
only  during the three (3) months  following  his or her  retirement  (but in no
event after the expiration of the term of such  Unrelated  Right) and only as to
the number of shares,  if any, as to which it was exercisable  immediately prior
to such retirement.

                           (ii) If a  participant  dies  during  the  term of an
Unrelated  Right,  such  Unrelated  Right  shall  be  exercisable  by his or her
executor  or  administrator  or, if not so  exercised,  by the  legatees  or the
distributees of his or her estate,  only during the six (6) months following his
or her death (but in no event after the expiration of the term of such Unrelated
Right).  During such six month period,  the Unrelated Right shall be exercisable
as to the  full  number  of  shares  as to  which  it had  not  been  previously
exercised.

                           (iii) If a  participant  ceases to be an  employee of
the Company for any cause other than  retirement  or death during the term of an
Unrelated  Right,  such Unrelated  Right shall be exercisable by him or her only
during the thirty (30) days  following  the  cessation of his or her  employment
(but in no event after the expiration of the term of such  Unrelated  Right) and
only  as to the  number  of  shares,  if any,  as to  which  it was  exercisable
immediately prior to such cessation of employment.

                  (e)  Any   payment   by  the   Company  in  respect  of  Stock
Appreciation  Rights  may be made  in  cash or  shares  of  Common  Stock,  or a
combination thereof, as the Committee,  in its sole discretion,  shall determine
at the time of exercise.

                  (f) Notwithstanding the foregoing, no Stock Appreciation Right
which is granted to an  executive  officer or  director  of the  Company or to a
participant  who  thereafter  becomes an  executive  officer or  director of the
Company may be exercised until the expiration of six (6) months from the date of
its grant.

         10.  Non-assignability  of  Awards.  No Award  shall be  assignable  or
transferable  by a participant  otherwise than by will or by the laws of descent
and  distribution.  Each Award shall be exercisable,  during the lifetime of any
participant,  only  by such  participant,  except  that,  if  permissible  under
applicable  law, Awards other than Incentive Stock options may also be exercised
by the guardian or legal representative of a participant.

         11. Term of Awards.  The term of each Award shall be for such period of
months  or  years  from  the  date  of its  grant  as may be  determined  by the
Committee;  provided  that in no event  shall  the term of any  Incentive  Stock
Option exceed a period of ten (10) years from the date of its grant.

         12.  Cancellation of Awards. (a) In the event that the Committee shall,
at any time prior to the issuance of shares pursuant to an Award (and regardless
of whether the participant is then in the employ of the Company), determine that
any  participant,  either before or after any cessation of his or her employment
by the Company, (i) has committed an act of misconduct for which he or she could
have been discharged for cause by the


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<PAGE>

Company;  or (ii)  has  participated  in or  engaged  in any  business  activity
determined  by the  Committee  to be in any way  harmful or  prejudicial  to the
interests  of the  Company,  all  Awards  then  outstanding  in the name of such
participant shall immediately be canceled.

                  (b) The Plan shall in no event be  interpreted  as restraining
any  participant  from  competing with the Company after the cessation of his or
her employment by the Company.  However, a participant who does compete with the
business of the Company  prior to the  expiration  of the period of one (1) year
commencing  with  the  date of the  cessation  of his or her  employment  by the
Company,  however  caused,  shall ipso facto be deemed to have  participated  or
engaged in a business  activity  harmful or  prejudicial to the interests of the
Company.  As used herein, the phrase' "compete with the business of the Company"
shall include,  without limitation,  (i) participating,  directly or indirectly,
whether as proprietor,  officer,  employee, agent or otherwise, or (ii) having a
material interest,  directly or indirectly,  through stock ownership (other than
ownership  of  less  than  five  percent  (5%)  of the  outstanding  stock  of a
publicly-traded company), investment of capital, lending of money or property or
otherwise, either alone or in association with others, in the formation, funding
or operation of any type of group,  business or enterprise  engaged, in whole or
in part,  in the  business  then being  conducted  by the  Company or any of its
subsidiaries.

                  (c) Any determination made hereunder by the Committee shall be
conclusive and binding upon both the Company and the participate. Nothing herein
shall be deemed to  relieve,  release  or  discharge  any  participant  from any
contractual or fiduciary obligation he or she may otherwise have to the Company.

         13.  Exercise of Awards.  To exercise an Award,  the holder  shall give
written  notice  thereof  to the  Company  either  by  delivery  in  hand to the
Treasurer or Assistant Treasurer of the Company or by mailing by registered mail
to the  Company,  marked  "Attention:  Treasurer",  at its  principal  place  of
business,  specifying  the date and type of Award  and the  number  of shares of
Common Stock with respect to which such Award is being exercised.  The date upon
which such written  notice shall be duly  received by the Treasurer or Assistant
Treasurer  shall be  deemed to be the date of  exercise  or  conversion  for all
purposes.

         14. Withholding Taxes; Issuance of Stock Certificates.  Notwithstanding
anything  to the  contrary  hereinbefore  contained,  the  Company  shall not be
required to issue certificates for shares purchased by exercise or conversion of
an Award  until  (i) the full  Exercise  Price or other  consideration  due with
respect  thereto,  if any,  has  been  paid,  and (ii)  the  participant  or the
participant's  heirs or legal  representatives,  as the case may be, provide for
payment to (or  withholding  by) the Company of all amounts  required under then
applicable  provisions  of the Code and state and local tax laws to be  withheld
with  respect to such  shares.  Participants  shall have none of the rights of a
stockholder  with  respect  to any  Award  until  certificates  for  the  shares
represented thereby have been issued.


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<PAGE>

         15.  Conditions to Exercise or Conversion of Awards.  Each  participant
who accepts  delivery of shares  issued  pursuant to the Plan shall be deemed to
have acquired such shares for his or her own account,  for  investment,  and not
with a view to or in  connection  with any  distribution.  As  conditions to the
exercise or conversion of any Award and the issuance of shares  thereunder,  the
Committee  may,  in its  discretion,  require  (i)  that a  participant  sign an
investment  covenant to the foregoing effect  confirming that he or she will not
effect any sale,  transfer,  pledge,  assignment or other  hypothecation of such
shares  (collectively,  a  "Transfer")  prior to (A)  receipt  of an  opinion of
counsel for the Company authorizing any proposed Transfer,  (B) receipt of a "no
action"  letter from the  Securities  and Exchange  Commission  permitting  such
Transfer, or (C) registration of the shares under the Securities Act of 1333, as
amended,  (the "Act") and (ii) that a registration  statement under the Act with
respect to the Award and the shares to be issued on the  exercise or  conversion
thereof  shall have become,  and  continue to be,  effective.  The  certificates
representing  shares issued pursuant to the Plan may bear an appropriate  legend
to the effect that the shares have been issued  subject to certain  restrictions
on transfer and may be transferred only in accordance therewith.

         16.  Effect of Change in  Common  Stock.  In the event the  outstanding
shares  of  Common  Stock  are  increased  or  decreased  as a result of a stock
dividend,  stock split,  recapitalization or other means having the same effect,
the number of shares available for issuance under the Plan, the number of shares
issuable  pursuant to any outstanding Award and the Exercise Price of any option
outstanding  under the Plan shall be  adjusted as the Board of  Directors  shall
deem  appropriate,  in  its  sole  discretion  upon  the  recommendation  of the
Committee,  and with the approval of counsel,  to preserve unimpaired the rights
of the  participants.  Notwithstanding  the  foregoing,  in any such  event  the
Exercise Price of any  outstanding  option shall,  in the case of an increase in
the number of shares, be proportionately  reduced, and in the case of a decrease
in the number of shares, be proportionately  increased.  All determinations made
by the Board hereunder shall be conclusive and binding upon the participants.

          17.   Effect  of   Reorganizations.   In  case  of  any  one  or  more
reclassifications, changes or exchanges of outstanding shares of Common Stock or
consolidations  of the  Company  with,  or mergers of the  Company  into,  other
corporations,   or  other   recapitalizations  or  reorganizations  (other  than
consolidations  with a  subsidiary  in  which  the  Company  is  the  continuing
corporation  and  which  do not  result  in any  reclassifications,  changes  or
exchanges of outstanding  shares of Common Stock), or in case of any one or more
sales or conveyances to another corporation of the property of the Company as an
entirety, or substantially as an entirety,  any of which are hereinafter in this
Section called  "Reorganizations,"  a participant shall have the right, upon any
subsequent  exercise or conversion of an Award,  to acquire same kind and amount
of  securities  and  property  which  such  participant  would then have if such
participant had exercised or converted such Award  immediately  before the first
of any such  Reorganizations  and continued to hold all  securities and property
which   came  to  such   participant   as  a  result  of  that  and   subsequent
Reorganizations,  less all  securities  and  property  surrendered  or  canceled
pursuant to any of same,  the  adjustment  rights in Section 16 and this Section
being continuing and


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<PAGE>

cumulative,   except   that,   anything  to  the   contrary   herein   contained
notwithstanding,  the  Committee  shall  have the right in  connection  with any
Reorganizations,  upon not less  than  thirty  (30) days  written  notice to the
participants, to accelerate the vesting provisions of all outstanding Awards and
terminate the term thereof so that, in such event, all outstanding awards may be
exercised  or  converted  in  whole  or in  part,  only  at a time  prior  to or
simultaneously with the consummation of such Reorganization.  The provisions and
term of Awards held by participants  who are no longer  employees of the Company
shall not be affected pursuant to the preceding sentence. In any such event such
Awards may be exercised or  converted,  to the extent  permitted by their terms,
prior to or simultaneously with the consummation of such Reorganization.

         18.  Effect of Change of Control.  If any  individual,  corporation  or
other entity (collectively, a "Person") shall become the beneficial owner of 40%
or more of the  outstanding  shares of Common  Stock  (other than by reason of a
merger in which the  Company is the  continuing  corporation  and which does not
result in any  reclassification  of  outstanding  shares of Common  Stock of the
Company),  then all of the  provisions set forth herein with respect to vesting,
cancellation  and forfeiture  shall ipso facto lapse and be of no further effect
whatsoever  as to any and all Awards then  outstanding,  and, upon the date such
event occurs (the "Date of Change of Control"),  all Awards theretofore  granted
hereunder  and not  fully  exercisable  or  convertible  shall,  subject  to the
provisions  of the Plan and any  other  limitation  applicable  to such  Awards,
become  exercisable  or  convertible  in full for a period of  thirty  (30) days
following the Date of Change of Control;  provided,  however,  that (i) no Award
shall be exercisable  or convertible by an executive  officer or director of the
Company,  or by a person who was an executive officer or director of the Company
at the time the Award was granted, within six (6) months of the date of grant of
such Award, and (ii) Awards of Incentive Stock Options shall become  exercisable
hereunder  only to the extent  possible  without  violation  of the  limitations
contained in clauses (ii), (iii), (iv), (v) and (vii) of Section 6(b) hereof.

         For the  purpose of this  Section,  a Person  shall be deemed to be the
beneficial  owner of shares  of  Common  Stock  which  are  beneficially  owned,
directly or indirectly, by any other Person (i) with which it or its "affiliate"
or  "associate"  (as  hereinafter  defined) has any  agreement,  arrangement  or
understanding  for the purposes of  acquiring,  holding,  voting or disposing of
Common Stock; or (ii) which is its "affiliate" or "associate".  For the purposes
of this  Section,  a Person is an  "affiliate"  of another  person if the former
directly,  or  indirectly  through  one or  more  intermediaries,  controls,  is
controlled by, or is under common  control with, the latter;  and a person is an
"associate" of (x) any  corporation or  organization  (other than the Company or
any of its  subsidiary  corporations)  of which  such  person is an  officer  or
partner or is,  directly or indirectly,  the beneficial  owner of 10% or more of
any class of equity securities, (y) any trust or estate in which such person has
a substantial  beneficial  interest or as to which such person serves as trustee
or in a  similar  fiduciary  capacity  and (z) any  relative  or  spouse of such
person, or any relative of such spouse,  who has the same home as such person or
who is a director or officer of Telpac Industries, Inc. or any of its subsidiary
corporations.


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<PAGE>

         19. Term of the Plan.  No Award  shall be granted  pursuant to the Plan
after March 31, 2010, but any Award  theretofore  granted may extend beyond that
date.

         20. Amendment and Termination. The Board of Directors of the Company by
resolution at any time may amend,  suspend or terminate the Plan,  provided that
(i) no such action  shall be taken which  impairs the rights of any  participant
under any outstanding Award, without such participant's consent, and (ii) except
in connection with an adjustment as  contemplated  hereunder or with the consent
of the  stockholders,  no such action shall be taken which  increases  the total
number of shares  available  for  issuance  under the Plan.  The  Committee  may
substitute new Awards for Awards previously granted to participants,  including,
without limitation, previously granted options having higher Exercise Prices.

         21.   Interpretation.   The  interpretation  and  construction  of  any
provision  of  the  Plan  and  the  adoption  of  rules  and   regulations   for
administering the Plan shall be made by the Committee,  subject, however, at all
times to the final  jurisdiction  which shall rest in the Board of  Directors of
the Company.  Determinations  made by the Committee and approved by the Board of
Directors with respect to any matter or provision contained in the Plan shall be
final, conclusive and binding upon the Company and upon all participants,  their
heirs and legal representatives. Any rule or regulation adopted by the Committee
whether  under the  authority of this Section or Section 2 above shall remain in
full force and effect unless and until altered, amended or repealed by the Board
of Directors.

         22.  Effective Date of Plan. The Plan shall not become  effective,  and
any Awards granted hereunder shall not be exercisable, unless and until the Plan
shall have been duly approved by the  stockholders  of the Company in accordance
with applicable  law. No Award shall be granted,  exercised or converted if such
grant, exercise or conversion, or the issuance of shares pursuant thereto, would
be contrary to law or the regulations of any duly  constituted  authority having
jurisdiction.


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