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                                                                    EXHIBIT 10.1




                      AMERICAN BANK NOTE HOLOGRAPHICS, INC.
                            1998 STOCK INCENTIVE PLAN

                     (As Amended Effective February 2, 2000)


                                    ARTICLE I
                                  INTRODUCTION

1.1 PURPOSE. The purpose of the American Bank Note Holographics, Inc. 1998 Stock
Incentive Plan (the "Plan") is to advance the interests of American Bank Note
Holographics, Inc. (the "Company") by encouraging and enabling present and
future employees and independent contractors of the Company and its parents and
subsidiaries and non-employee directors of the Company to acquire a financial
interest in the Company through stock options and other awards under the Plan.
The Company believes that the Plan will aid the Company and its parents and
subsidiaries in attracting and retaining outstanding employees, independent
contractors and, in the case of the Company, non-employee directors and in
stimulating the efforts of such individuals to work for the success of the
Company.

1.2 ADMINISTRATION.

         (a) General. The Plan shall be administered, construed and interpreted
by a committee (the "Committee") formed by the Board of Directors of the
Company, or if no such Committee is established, then by the Board of Directors.
In the event that there is not a Committee established at any time during the
term of any option granted hereunder, references herein to the Committee shall
be interpreted to be references to the Board of Directors. Notwithstanding
anything herein to the contrary, the Plan shall be administered, construed and
interpreted by the Board of Directors of the Company with regard to grants made
to non-employee directors of the Company.

         (b) Grant of Options. The Committee shall from time to time recommend
the persons who shall participate in the Plan and the extent of their
participation. The Committee also shall recommend the price to be paid for
shares upon the exercise of options granted under the Plan, the period within
which each option may be exercised, and the terms and conditions of each
individual Stock Option Agreement or Incentive Stock Option by and between the
Company and the holder of the option. The terms and conditions of each
individual Stock Option Agreement or Incentive Stock Option shall be consistent
with the provisions of the Plan, but the Committee may provide for such
additional terms and conditions, not in conflict with the provisions of the
Plan, as it deems advisable. All such recommendations by the Committee shall be
final upon approval of the Board of Directors.

         (c) Interpretation of Plan. In interpreting the Plan, the Committee and
Board of Directors shall be governed by the principles and requirements of the
applicable sections of the Internal Revenue Code of 1986, as amended ("the
Code"), and the Treasury Regulations. All terms used herein shall have and shall
be interpreted as having the meanings set forth in the applicable provisions of
the Code. The interpretation and construction by the Committee of any
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provision of or term used in the Plan or any option granted under the Plan and
any determination pursuant to any provision of the Plan or any such option shall
be final and conclusive, unless otherwise determined by the Board of Directors.
No member of the Committee or Board of Directors shall be liable for any action
or determination made in good faith, and members of the Committee and Board of
Directors shall be entitled to indemnification and reimbursement from time to
time for expenses incurred in defense of such good faith action or
determination.

1.3 TYPES OF AWARDS UNDER THE PLAN. Awards under the Plan may be in the form of
any one or more of the following as determined by the Committee:

         (a) Stock Options as described in Article III;

         (b) Incentive Stock Options as described in Article IV; and

         (c) Alternate Appreciation Rights, as described in Article V.

1.4 SHARES SUBJECT TO PLAN.

         (a) The shares subject to the Plan shall be authorized but unissued or
treasury shares of the Company's common stock (the "Common Stock") . Subject to
readjustment in accordance with the provisions of paragraph 7.4 of the Plan, the
maximum number of shares of Common Stock for which options or alternate
appreciation rights may be granted under the Plan shall be 1,863,000 shares of
Common Stock.

         (b) Shares tendered by a Participant as payment for shares issued upon
exercise of a Stock Option or Incentive Stock Option shall be available for
issuance under the Plan. In the event that any outstanding option granted under
the Plan for any reason expires or is terminated prior to the end of the period
during which options may be granted under the Plan, the shares of Common Stock
allocable to the unexercised portion of such option may again be subject in
whole or in part to any option granted under the Plan.

1.5 TERM OF PLAN. Unless sooner terminated by the Committee, as provided for
under Section 6.2, the Plan shall remain in effect for a period of ten (10)
years from the date the Plan becomes adopted.

                                   ARTICLE II
                                   ELIGIBILITY

2.1 ELIGIBILITY. Options and alternate appreciation rights may be granted to
present and future employees and independent contractors of the Company and its
subsidiaries and parents and to non-employee directors of the Company, provided
that Incentive Stock Options may only be granted to persons who are employed by
the Company or one of its Parent Corporations or Subsidiary Corporations at the
time of grant. For purposes of the Plan, a person to whom an option or alternate
appreciation right is granted shall be referred to as a "Grantee".


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                                   ARTICLE III
                                  STOCK OPTIONS


3.1 AWARD OF STOCK OPTIONS. The Committee may from time to time, and subject to
the provisions of the Plan and such other terms and conditions as the Committee
may prescribe, grant to any participant in the Plan one or more options to
purchase for cash or shares the number of shares of Common Stock ("Stock
Options") allotted by the Committee. The date a Stock Option is granted shall
mean the date selected by the Committee as of which the Committee allots a
specific number of shares to a participant pursuant to the Plan.

3.2 STOCK OPTION AGREEMENTS. The grant of Stock Option shall be evidenced by a
written Stock Option Agreement, executed by the Company and the Grantee, stating
the number of shares of Common Stock subject to the Stock Option evidenced
thereby, and in such form as the Committee may from time to time determine.

3.3 STOCK OPTION PRICE. The option price per share of Common Stock deliverable
upon the exercise of a Stock Option shall be one hundred percent (100%) of the
fair market value of a share of Common Stock on the date the Stock Option is
granted, or such other price as determined by the Board of Directors as approved
by the shareholders, if such approval is required by law.

         (a) The "fair market value" of the shares of Common Stock shall be the
mean between the high "bid" and the low "asked" prices of the common stock in
the over-the-counter market on the day on which such value is to be determined
or, if no shares were traded on such day, on the next preceding day on which
shares were traded, an reported. If the Common Stock is not regularly traded in
the over-the-counter market but is registered on a national securities exchange,
the "fair market value" of the shares of Common Stock shall mean the closing
price of the Common Stock on such national securities exchange on the day on
which such value is to be determined or, if no shares were traded on such day,
on the next preceding day on which shares were traded, as reported by National
Quotation Bureau, Incorporated or other national quotation service. If the
Common Stock is not regularly traded in the over-the-counter market or
registered in a national securities exchange the Committee shall determine the
fair market value of the common stock in good faith.

3.4 TERM AND EXERCISE. Options granted under the Plan will either become vested
and exercisable for up to 33 1/3% of the total optioned shares upon each
succeeding anniversary (until the option is fully exercisable at the end of the
third year) or, if immediately vested, will be exercisable for restricted shares
of Common Stock with restrictions lapsing with respect to 33 1/3% of such shares
upon each succeeding anniversary (until the restrictions expire at the end of
the third year). Notwithstanding anything herein to the contrary, the Board of
Directors, upon recommendation of the Committee, may provide for alternative
exercise options at any time and may determine whether the option shall be
exercisable in full at any time during the term or in cumulative or
non-cumulative installments during the term. No Stock Option shall be
exercisable after the expiration of its option term.


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3.5 MANNER OF PAYMENT. Each Stock Option Agreement shall set forth the procedure
governing the exercise of the Stock Option granted thereunder, and shall provide
that, upon such exercise in respect of any shares of Common Stock subject
thereto, the Grantee shall pay to the Company, in full, the option price for
such shares with cash or with shares of Common Stock owned for at least six (6)
months (free and clear of any liens or encumbrances) or shall pay such option
price in accordance with such other methods as approved by the Committee from
time to time.

3.6 DEATH OF GRANTEE.

         (a) Upon the death of the Grantee, any rights to the extent exercisable
on the date of death may be exercised by the Grantee's estate, or by a person
who acquires the right to exercise such Stock Option by be quest or inheritance
or by reason of the death of the Grantee, provided that such exercise occurs
within both the remaining effective term of the Stock Option and one year after
the Grantee's death.

         (b) The provisions of this Section shall apply notwithstanding the fact
that the Grantee's employment or service may have terminated prior to death, but
only to the extent of any rights exercisable on the date of death.

3.7 RETIREMENT OR DISABILITY. At the discretion of the Committee or unless
otherwise stated in the Stock Option Agreement, upon termination of the
Grantee's employment or service by reason of retirement or permanent disability
(as each is determined by the Committee), the Grantee may, within 36 months from
the date of termination, exercise any Stock Options to the extent such options
are exercisable during such 36-month period.

3.8 TERMINATION FOR OTHER REASONS. Except as provided in Sections 3.7 and 3.8,
or except as otherwise determined by the Committee, all Stock Options shall
terminate upon the termination of the Grantee's employment or service.

3.9 PERFORMANCE GRANTS. The Committee may, in its discretion, place additional
restrictions on the options granted under this Article III requiring that the
option will only vest if and when the Common Stock price exceeds the grant price
by a specific amount. Generally, Performance Grants will be subject to the same
requirements described in this Article III, unless the Committee decides
otherwise. If Performance Grants are granted the requirements and restrictions
will be detailed in the Stock Option Agreement.

3.10 PERFORMANCE UNITS. The Committee may, in its discretion, place additional
restrictions on the Stock Options granted under this Article III requiring that
on exercise of the Stock Options a Grantee will purchase shares that will be
forfeited if the Grantee terminates employment or service within a certain
number of years. In connection with options described under this Section 3.10,
additional transferability restrictions may be imposed. If Performance Units are
granted the requirements and restrictions will be detailed in the Stock Option
Agreement.


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                                   ARTICLE IV
                             INCENTIVE STOCK OPTIONS

4.1 TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS. Incentive Stock Options
granted pursuant to the Plan shall be evidenced by agreements (the "Incentive
Stock Option Agreements") in such form as the Committee and Board of Directors
shall, consistent with the provisions of Code sections 421 and 422 and related
sections of the Code and applicable Treasury Regulations, approve from time to
time for at least six (6) months (free and clear of any liens or encumbrances)
or shall be payable in accordance with such other methods as approved by the
Committee from time to time. Such Incentive Stock Option Agreements and the
options evidenced thereby shall comply with and be subject to the following
terms and conditions:

         (a) Number of Shares. Each Incentive Stock Option Agreement shall state
the total number of shares of Common Stock to which it pertains.

         (b) Amount Limitation. A key employee may not be granted incentive
stock options which are exercisable for the first time in any one calendar year
under the Plan and any other incentive stock option plan of the Company or any
parent or subsidiary corporation of the Company, for the purchase of Common
Stock with an aggregate fair market value of more than one hundred thousand
dollars ($100,000) (valued as of the date of grant of the Incentive Stock
Option).

         (c) Incentive Stock Option Price. The option price for each option
granted under this Article IV shall be the amount determined by the Board of
Directors, upon the recommendation of the Committee, but, subject to the
provisions of the Plan, shall not be less than one hundred percent (100%) of the
fair market value of the shares of Common Stock subject to the option on the
date of grant of the option. Notwithstanding the foregoing, the option price
shall not be less than one hundred ten percent (110%) of the fair market value
of the shares of Common Stock subject to the option on the date of grant of the
option as to any Grantee who at the time the option is granted, owned more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company. The date on which the Board of Directors approves the granting of
an option shall be considered the date on which such option is granted.

         (d) Fair Market Value. For purposes of this Article IV, the "fair
market value" of the shares of Common Stock shall be the mean between the high
"bid" and the low "asked" prices of the common stock in the over-the-counter
market on the day on which such value is to be determined or, if no shares were
traded on such day, on the next preceding day on which shares were traded, an
reported. If the Common Stock is not regularly traded in the over-the-counter
market but is registered on a national securities exchange, the "fair market
value" of the shares of Common Stock shall mean the closing price of the Common
Stock on such national securities exchange on the day on which such value is to
be determined or, if no shares were traded on such day, on the next preceding
day on which shares were traded, as reported by National Quotation Bureau,
Incorporated or other national quotation service. If the Common Stock is not
regularly traded in the over-the-counter market or registered in a national
securities exchange the Committee shall determine the fair market value of the
common stock in good faith in accordance with Code Section 422(c)(1) and
accompanying Treasury Regulations.


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         (e) Medium and Time of Payment. The option price shall be payable upon
the exercise of an option in cash or by check or, if provided in the Incentive
Stock Option or Stock Option Agreement, in shares of Common Stock owned by the
Grantee for at least six (6) months (free and clear of any liens or
encumbrances) or shall be payable in accordance with such other methods as
approved by the Committee from time to time. In the event that all or part of
the option price is paid in shares of Common Stock, the value of such shares
shall be equal to the fair market value of such shares on the date of exercise
of the option, and the Grantee shall deliver to the Company a certificate or
certificates representing such shares duly endorsed to the Company or
accompanied by a duly-executed separate instrument of transfer satisfactory to
the Committee.

         (f) Term of Incentive Stock Option. Each option granted under the Plan
shall be exercisable by the Grantee only during a term fixed by the Board of
Directors upon recommendation of the Committee ending not later than ten (10)
years after the date of grant of the option.

         (g) Exercise of Incentive Stock Option. Options granted under the Plan
will either become vested and exercisable for up to 33 1/3% of the total
optioned shares upon each succeeding anniversary (until the option is fully
exercisable at the end of the third year) or, if immediately vested, will be
exercisable for restricted shares of Common Stock with restrictions lapsing with
respect to 33 1/3% of such shares upon each succeeding anniversary (until the
restrictions expire at the end of the third year). Notwithstanding anything
herein to the contrary, the Board of Directors, upon recommendation of the
Committee, may provide for alternative exercise options at any time, and may
determine whether the option shall be exercisable in full at any time during the
term or in cumulative or non-cumulative installments during the term.

         (h) Method of Exercise. All options granted under the Plan shall be
exercised by written notice directed to the officer of the Company indicated in
the Incentive Stock Option Agreement at the Company's principal place of
business. Such written notice shall specify the form of payment made by the
Grantee or his successor of the Plan and shall be accompanied by payment in full
of the option price for the shares for which such option is being exercised. The
Company shall make delivery of certificates representing the shares for which an
option has been exercised within a reasonable period of time; provided, however,
that if any law, regulation or agreement required the Company to take any action
with respect to the shares for which an option has been exercised before the
issuance thereof, then the date of delivery of such shares shall be extended for
the period necessary to take such action.

         (i) Effect of Termination of Employment or Death.

                  (1) Termination of Employment. Except as otherwise provided in
this subparagraph (1) or in subparagraphs (2) or (3) below, upon termination of
the employment of any Grantee with the Company or any parent or subsidiary
corporation of the Company for any reason, all options held by the Grantee under
the Plan shall immediately terminate. Whether military, government or other
service or other leave of absence shall constitute a termination of employment
shall be determined in each case by the Committee in its discretion, and any
determination by the Committee shall be final and conclusive. The Board of
Directors upon

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recommendation of the Committee at its election may provide that the Grantee may
exercise an option at any time within three (3) months after the termination of
employment of the Grantee with the Company or any parent or subsidiary
corporation then employing the Grantee (or within one (1) year after the
termination of such employment if such employment is terminated due to the
Grantee's permanent disability). In no event, however, will the option be
exercisable after the expiration of the term of the option. In addition,
exercise of the option following termination of the Grantee's employment shall
be subject to the following terms and conditions: (a) with respect to any and
all installments of the option that had not become exercisable at the time of
termination of employment, the period of extension shall not, unless otherwise
provided in the Incentive Stock Option Agreement, operate to permit such
installment to become exercisable within such period; and (b) with respect to
any installment of the option that had become exercisable at the time of
termination of employment, the period of extension shall not operate to permit
the exercise of such installment after the expiration of the period within which
such installment may be exercised. For purposes of this subparagraph (1), if any
corporation ceases to be a parent or subsidiary of the Company, the employment
of any Grantee employed by such corporation shall be deemed to have terminated
unless such Grantee becomes an employee of the Company or another parent or
subsidiary of the Company simultaneously with or prior to the time such
corporation ceases to be a parent or subsidiary of the Company. For purposes of
this Section, "permanent disability" shall mean a permanent disability as
defined in Code Section 22(e)(3).

                  (2) Death. In granting any option under the Plan, the Board of
Directors and Committee may provide in the Incentive Stock Option Agreement
representing such option that in the event of the death of a Grantee at a time
when an option in exercisable by the Grantee, the Grantee's personal
representatives, heirs or legatees (the "Grantee's Successors") may exercise all
or any portion of such option held by the Grantee on the date of his death upon
proof satisfactory to the Company of their authority. The Grantee's Successors
must exercise any such option within twelve (12) months after the date of the
Grantee's death and in any event prior to the date of expiration of the option.
Such exercise otherwise shall be subject to the terms and conditions of the
Plan; provided, however, that with respect to any installment of the option that
had not become exercisable on the date of the Grantee's death, the period of
extension shall not, unless otherwise provided in the option Agreement, operate
to permit such installment to become exercisable within such period.

                  (3) Notwithstanding anything in this Section to the contrary,
the Committee may in its discretion, at any time extend the period available for
the exercise of the options under this Section. If the period available for
exercise of the options is extended beyond the restrictions outlined in Code
Section 422(a), favorable tax treatment under Code Section 421 will no longer be
available.

         (j) No Options in Certain Cases. No options shall be granted except
within a period of ten (10) years after the date on which the Incentive Stock
Option is granted. In no event shall an option be granted to any person who, at
the time such option is granted, owns (as defined in Code Section 422 (b)(6))
stock possessing more than ten percent (10%) of the total combined voting power
or value of all classes of stock of the Company or of any parent or subsidiary
corporation of the Company unless (i) the option price under such option is not
less than one

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hundred and ten percent (110%) of the fair market value of the shares of Common
Stock subject to such option on the date of grant of such option (determined as
provided in paragraph 5(c) of the Plan) and (ii) the terms of the Incentive
Stock Option Agreement shall make such option expire on the date that is no
later than the fifth (5th) anniversary after the date on which the option is
granted.

                                    ARTICLE V
                          ALTERNATE APPRECIATION RIGHTS

5.1 AWARD OF ALTERNATE RIGHTS. Concurrently with or subsequent to the award of
any Stock Option or Incentive Stock Option to purchase one or more shares of
Common Stock, the Committee may, at their discretion, and subject to the
provisions of the Plan and such other terms and conditions as the Committee may
prescribe, award to the Grantee with respect to each share of Common Stock, a
related alternate appreciation right ("Alternate Right"), permitting the Grantee
to be paid the appreciation on the option in lieu of exercising the option.

5.2 ALTERNATE RIGHTS AGREEMENT. Alternate Rights shall be evidenced by written
agreements in such form as the Committee may from time to time determine.

5.3 EXERCISE. A Grantee who has been granted Alternate Rights may, from time to
time, in lieu of the exercise of an equal number of options, elect to exercise
one or more Alternate Rights and thereby become entitled to receive from the
Company payment in Common Stock the number of shares determined pursuant to
Sections 5.4 and 5.5. Alternate Rights shall be exercisable only to same extent
and subject to the same conditions as the options related thereto are
exercisable, as provided in this Plan. The Committee may, in its discretion,
prescribe additional conditions to the exercise of any Alternate Rights.

5.4 AMOUNT OF PAYMENT. The amount of payment to which an Grantee shall be
entitled upon the exercise of each Alternate Right shall be equal to 100% of the
amount, if any, by which the fair market value (as defined in Section 3.3(a)) of
a share of Common Stock on the exercise date exceeds the fair market value of a
share of Common Stock on the date the option related to said Alternate Right was
granted or became effective, as the case may be.

5.5 FORM OF PAYMENT. The number of shares to be paid shall be determined by
dividing the amount of payment determined pursuant to Section 5.4 by the fair
market value of a share of Common Stock on the exercise date of such Alternate
Rights. As soon as practicable after exercise, the Company shall deliver to the
Grantee a certificate or certificates for such shares of Common Stock.

5.6 EFFECT OF EXERCISE. The exercise of any Alternate Rights shall cancel an
equal number of Stock Options and Incentive Stock Options, if any, related to
said Alternate Rights.

5.7 RETIREMENT OR DISABILITY. Upon termination of the Grantee's employment or
service (including employment or service as a director of the Company after an
Grantee terminates employment or service as an officer or key employee of the
Company) by reason of permanent disability or retirement (as each is determined
by the Committee), the Grantee may,

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within six months from the date of such termination, exercise any Alternate
Rights to the extent such Alternate Rights are exercisable during such six-month
period, or such longer period as determined by the Committee.

5.8 DEATH OF GRANTEE OR TERMINATION FOR OTHER REASONS. Except as provided in
Section 5.7, or except as otherwise determined by the Committee, all Alternate
Rights shall terminate upon the termination of the Grantee's employment or
service or upon the death of the Grantee, unless otherwise determined by the
Committee.

                                   ARTICLE VI
                            AMENDMENT AND TERMINATION

6.1 AMENDMENT. The Board of Directors of the Company by majority vote may at any
time and from time to time amend the Plan in such respects as it shall deem
advisable in order that options granted under the Plan shall comply with the
Code, or to conform to any change in the law, or for any other purpose;
provided, however, that without the approval of the stockholders of the Company,
if such approval is required by federal securities and tax regulation,
applicable state laws or stock exchange rules, no such amendment shall change:

         (a) The maximum number of shares of Common Stock as to which options
may be granted under the Plan (except by operation of the adjustment provisions
of the Plan); or

         (b) The date on which the Plan will terminate as provided by Section
1.5 of the Plan; or

         (c) The minimum option price (in the case of an Incentive Stock Option
only), other than to change the manner of determining the fair market value of
the Common Stock to conform with any provisions of the Code or Treasury
Regulations thereunder applicable to award under the Plan or if such change is
necessitated by a change in the manner in which Common Stock is traded; or

         (d) The period during which options may be granted as provided in the
Plan (provided, however, that the Board of Directors of the Company shall have
the power set forth in paragraph 6.2 to terminate the Plan).

Any amendment to the Plan shall not, without the written consent of the Grantee,
affect such Grantee's rights under any option theretofore granted to such
Grantee.

6.2 TERMINATION. The Board of Directors may terminate the Plan at any time prior
to the end of the term of the plan as defined in Section 1.5. Termination of the
Plan shall not alter or impair any of the rights or obligations under any option
theretofore granted under the Plan unless the Grantee shall so consent.


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                                   ARTICLE VII
                                  MISCELLANEOUS

7.1 NONASSIGNABILITY OF OPTION RIGHTS. No option shall be assignable or
transferable by the Grantee except by will or by the laws of descent and
distribution. During the lifetime of the Grantee, the option shall be
exercisable only by the Grantee.

7.2 RIGHTS AS STOCKHOLDER. Neither the Grantee nor the Grantee's Successors
shall have rights an a stockholder of the Company with respect to shares of
Common Stock covered by the Grantee's option until the Grantee or the Grantee's
Successors become the holder of record of such shares. No adjustment will be
made for dividends or other rights for which the record date is prior to the
date on which shares are issued upon exercise of an option except as provided
herein.

7.3 MISCELLANEOUS PROVISIONS. The Agreements authorized under the Plan may
contain such Other Provisions, not inconsistent with the Plan or the applicable
provisions of the Code, as the Committee shall deem advisable.

7.4 ADJUSTMENTS.

         (a) Recapitalization. In the event that, after the effective date of
the Plan, the outstanding shares decreased or changed into or exchanged for a
different number or kind of shares or other shares or other securities of the
Company by reason of a recapitalization, reclassification, stock split-up,
combination of shares, or dividend payable in stock, appropriate adjustments
shall be made by the Committee in the number and kind of shares or other
securities for which options may be granted under the Plan. In addition, the
Committee upon the occurrence of such an event shall make appropriate
adjustments in the number and kind of shares or other securities as to which
outstanding options, or portions thereof then unexercised, shall be exercisable,
so that each Grantee's proportionate interest shall be maintained as before the
occurrence of such event. Such adjustment in outstanding options shall be made
without change in the total price applicable to the unexercised portion of each
option and with a corresponding adjustment in the option price per share. Any
fractional shares resulting from any of the foregoing adjustments under this
subparagraph (a) shall be disregarded and eliminated. Each such adjustment under
this subparagraph (a) shall be made in such a manner that such adjustment will
not constitute a "modification" as defined in Code Section 424. All adjustments
made by the Committee unless otherwise determined by the Board of Directors)
under this subparagraph (a) shall be final and conclusive.

7.5 APPLICATION OF FUNDS. The proceeds received by the Company from the sale of
shares of Common Stock pursuant to options granted under the Plan will be used
for general corporate purposes.

7.6 NO OBLIGATION TO EXERCISE OPTION. The granting of an option shall impose no
obligation upon the Grantee to exercise such option.


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7.7 CHANGE IN CONTROL. Notwithstanding any provision in this Plan to the
contrary, upon a Change in Control all options granted will become immediately
vested and may be exercised immediately.

7.8 NON-UNIFORM DETERMINATIONS. The Committees determination's under the Plan
(including without limitation determinations of the persons to receive awards,
the form, amount and timing of such awards, the terms and provisions of such
awards and the agreements evidencing the same) need not be uniform and may be
made by it selectively among persons who receive, or are eligible to receive,
awards under the Plan, whether or not such persons are similarly situated.

7.9 WITHHOLDING TAXES. Whenever the Company proposes or is required to issue or
transfer shares of Common Stock under the Plan, the Company shall have the right
to require the Grantee to remit to the Company an amount sufficient to satisfy
and Federal, state and/or local withholding tax requirements prior to the
delivery of any certificate or certificates for such shares. Alternatively, the
Company may issue or transfer such shares of Common Stock net of the number of
shares sufficient to satisfy the withholding tax requirements, provided that, to
the extent required to avoid adverse accounting charges, shares may not be
withheld in excess of the minimum number of shares required to satisfy tax
withholding. For withholding tax purposes, the shares of Common Stock shall be
valued on the date the withholding obligation is incurred.

7.10 LEAVES OF ABSENCES. The Committee shall be entitled to make such rules,
regulations and determination as it deems appropriate under the Plan with
respect to any leave of absence taken by a Grantee.

                                  ARTICLE VIII
                                   DEFINITIONS

8.1 CHANGE IN CONTROL. A "Change in Control," unless otherwise determined by the
Board of Directors, shall mean:

         (a) the direct or indirect acquisition, whether by sale, merger,
consolidation, or purchase of assets or stock, by any person, corporation, or
other entity or group thereof of the beneficial ownership (as that term is used
in Section 13(d)(1) of the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder) of shares in the Company which,
when added to any other shares the beneficial ownership of which is held by the
acquirer, shall result in the acquirer's having more than fifty (50%) of the
votes that are entitled to be cast at meetings of stockholders as to matters on
which all outstanding shares are entitled to be voted as a single class;
provided however, that such acquisition shall not constitute a Change of Control
for purposes of this Agreement if prior to such acquisition a resolution
declaring that the acquisition shall not constitute a Change of Control is
adopted by the Board with the support of a majority of the Board members who
either were members of the Board for at least two years prior to the date of the
vote on such resolution or were nominated for election to the Board by at least
two-thirds of the directors then still in office who were members of the Board
at least two years prior to the date of the vote on such resolution; and
provided further, that neither the Company, nor any person who as of July __,
1998 was a director or officer of the Company, nor

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any trustee or other fiduciary holding securities under an employee benefit plan
of the Company, nor any corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of shares of the Company shall be deemed to be an "acquirer" for
purposes of this Section;

         (b) the election during any two-year period to a majority of the seats
on the Board of Directors of the Company of individuals who were not members of
the Board at the beginning of such period unless such additional or replacement
directors were approved by at least eighty percent (80%) of the continuing
directors; or

         (c) stockholder approval of a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.

8.2 PARENT CORPORATION. A "parent corporation" is any corporation in an unbroken
chain of corporations ending with the Company if, at the time the option is
granted, each of the corporations other than the Company owns 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 the chain. Such definition of parent
corporation shall be consistent with the definition of such terms as set forth
in Code Section 424.

8.3 SUBSIDIARY CORPORATION. A "subsidiary corporation" is any corporation in an
unbroken chain of corporations beginning with the Company if, at the time the
option is granted, each of the corporations, other than the last corporation in
the unbroken chain, owns 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 the chain. Such definition of subsidiary corporation shall be
consistent with the definition of such terms as set forth in Code Section 424.


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