<PAGE>   1
                                                                   EXHIBIT 10.1




                              PETROCHEM NET, INC.

            1997 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN



          1.      DEFINITIONS.

                  Unless otherwise specified or unless the context otherwise
                  requires, the following terms, as used in this PETROCHEM
                  NET, INC. 1997 Employee, Director and Consultant Stock Option
                  Plan, have the following meanings:

                         Administrator means the Board of Directors, unless it
                         has delegated power to act on its behalf to the
                         Committee, in which case the Administrator means the
                         Committee.

                         Affiliate means a corporation which, for purposes of
                         Section 424 of the Code, is a parent or subsidiary of
                         the Company, direct or indirect.

                         Board of Directors means the Board of Directors of the
                         Company.

                         Code means the United States Internal Revenue Code of
                         1986, as amended.

                         Committee means the committee of the Board of
                         Directors to which the Board of Directors has
                         delegated power to act under or pursuant to the
                         provisions of the Plan.

                         Common Stock means shares of the Company's common
                         stock, no par value per share.

                         Company means PETROCHEM NET, INC., a Connecticut
                         corporation.

                         Disability or Disabled means permanent and total
                         disability as defined in Section 22(e)(3) of the Code.

                         Fair Market Value of a Share of Common Stock means:

                         (1) If the Common Stock is listed on a national
                         securities exchange or traded in the over-the-counter
                         market and sales prices are regularly reported for the
                         Common Stock, the closing or last price of the Common
                         Stock on the Composite Tape or other comparable
                         reporting system for the trading day immediately
                         preceding the applicable date;

                         (2) If the Common Stock is not traded on a national
                         securities exchange but is traded on the
                         over-the-counter market, if sales prices are not
                         regularly reported for


<PAGE>   2


                         the Common Stock for the trading day referred to in
                         clause (1), and if bid and asked prices for the Common
                         Stock are regularly reported, the mean between the bid
                         and the asked price for the Common Stock at the close
                         of trading in the over-the-counter market for the
                         trading day on which Common Stock was traded
                         immediately preceding the applicable date; and

                         (3) If the Common Stock is neither listed on a
                         national securities exchange nor traded in the
                         over-the-counter market, such value as the
                         Administrator, in good faith, shall determine.

                         ISO means an option meant to qualify as an incentive
                         stock option under Section 422 of the Code.

                         Key Employee means an employee of the Company or of an
                         Affiliate (including, without limitation, an employee
                         who is also serving as an officer or director of the
                         Company or of an Affiliate), designated by the
                         Administrator to be eligible to be granted one or more
                         Options under the Plan.

                         Non-Qualified Option means an option which is not
                         intended to qualify as an ISO.

                         Option means an ISO or Non-Qualified Option granted
                         under the Plan.

                         Option Agreement means an agreement between the
                         Company and a Participant delivered pursuant to the
                         Plan, in such form as the Administrator shall approve.

                         Participant means a Key Employee, director or
                         consultant to whom one or more Options are granted
                         under the Plan. As used herein, "Participant" shall
                         include "Participant's Survivors" where the context
                         requires.

                         Plan means this PETROCHEM NET, INC. 1997 Employee,
                         Director and Consultant Stock Option Plan.

                         Shares means shares of the Common Stock as to which
                         Options have been or may be granted under the Plan or
                         any shares of capital stock into which the Shares are
                         changed or for which they are exchanged within the
                         provisions of Paragraph 3 of the Plan. The Shares
                         issued upon exercise of Options granted under the Plan
                         may be authorized and unissued shares or shares held
                         by the Company in its treasury, or both.

                         Survivors means a deceased Participant's legal
                         representatives and/or any person or persons who
                         acquired the Participant's rights to an Option by will
                         or by the laws of descent and distribution.


                                       2

<PAGE>   3




          2.      PURPOSES OF THE PLAN.

                  The Plan is intended to encourage ownership of Shares by Key
          Employees and directors of and certain consultants to the Company in
          order to attract such people, to induce them to work for the benefit
          of the Company or of an Affiliate and to provide additional incentive
          for them to promote the success of the Company or of an Affiliate.
          The Plan provides for the granting of ISOs and Non-Qualified Options.


          3.      SHARES SUBJECT TO THE PLAN.

                  The number of Shares which may be issued from time to time
          pursuant to this Plan shall be 2,000 or the equivalent of such number
          of Shares after the Administrator, in its sole discretion, has
          interpreted the effect of any stock split, stock dividend,
          combination, recapitalization or similar transaction in accordance
          with Paragraph 16 of the Plan.

                  If an Option ceases to be "outstanding", in whole or in part,
          the Shares which were subject to such Option shall be available for
          the granting of other Options under the Plan. Any Option shall be
          treated as "outstanding" until such Option is exercised in full, or
          terminates or expires under the provisions of the Plan, or by
          agreement of the parties to the pertinent Option Agreement.


          4.      ADMINISTRATION OF THE PLAN.

                  The Administrator of the Plan will be the Board of Directors,
          except to the extent the Board of Directors delegates its authority
          to the Committee, in which case the Committee shall be the
          Administrator. Subject to the provisions of the Plan, the
          Administrator is authorized to:

                  a.       Interpret the provisions of the Plan or of any
                           Option or Option Agreement and to make all rules and
                           determinations which it deems necessary or advisable
                           for the administration of the Plan;

                  b.       Determine which employees of the Company or of an
                           Affiliate shall be designated as Key Employees and
                           which of the Key Employees, directors and
                           consultants shall be granted Options;

                  c.       Determine the number of Shares for which an Option
                           or Options shall be granted; and

                  d.       Specify the terms and conditions upon which an
                           Option or Options may be granted;

          provided, however, that all such interpretations, rules,
          determinations, terms and conditions shall be made and prescribed in
          the context of preserving the tax status under Section 422 of the
          Code


                                       3


<PAGE>   4







          of those Options which are designated as ISOs. Subject to the
          foregoing, the interpretation and construction by the Administrator
          of any provisions of the Plan or of any Option granted under it shall
          be final, unless otherwise determined by the Board of Directors, if
          the Administrator is the Committee.


          5.      ELIGIBILITY FOR PARTICIPATION.

                  The Administrator will, in its sole discretion, name the
          Participants in the Plan, provided, however, that each Participant
          must be a Key Employee, director or consultant of the Company or of
          an Affiliate at the time an Option is granted. Notwithstanding the
          foregoing, the Administrator may authorize the grant of an Option to
          a person not then an employee, director or consultant of the Company
          or of an Affiliate; provided, however, that the actual grant of such
          Option shall be conditioned upon such person becoming eligible to
          become a Participant at or prior to the time of the delivery of the
          Option Agreement evidencing such Option. ISOs may be granted only to
          Key Employees. Non-Qualified Options may be granted to any Key
          Employee, director or consultant of the Company or an Affiliate. The
          granting of any Option to any individual shall neither entitle that
          individual to, nor disqualify him or her from, participation in any
          other grant of Options.


          6.      TERMS AND CONDITIONS OF OPTIONS.

                  Each Option shall be set forth in writing in an Option
          Agreement, duly executed by the Company and, to the extent required
          by law or requested by the Company, by the Participant. The
          Administrator may provide that Options be granted subject to such
          terms and conditions, consistent with the terms and conditions
          specifically required under this Plan, as the Administrator may deem
          appropriate including, without limitation, subsequent approval by the
          shareholders of the Company of this Plan or any amendments thereto.

                  A.      Non-Qualified Options: Each Option intended to be a
                          Non-Qualified Option shall be subject to the terms
                          and conditions which the Administrator determines to
                          be appropriate and in the best interest of the
                          Company, subject to the following minimum standards
                          for any such Non-Qualified Option:

                          a.      Option Price: Each Option Agreement shall
                                  state the option price (per share) of the
                                  Shares covered by each Option, which option
                                  price shall be determined by the
                                  Administrator but shall not be less than the
                                  par value per share of Common Stock;

                          b.      Each Option Agreement shall state the
                                  number of Shares to which it pertains;

                          c.      Each Option Agreement shall state the date
                                  or dates on which it first is exercisable
                                  and the date after which it may no longer
                                  be exercised, and


                                       4


<PAGE>   5


                                  may provide that the Option rights accrue or
                                  become exercisable in installments over a
                                  period of months or years, or upon the
                                  occurrence of certain conditions or the
                                  attainment of stated goals or events; and

                          d.      Exercise of any Option may be conditioned
                                  upon the Participant's execution of a Share
                                  purchase agreement in form satisfactory to
                                  the Administrator providing for certain
                                  protections for the Company and its other
                                  shareholders, including requirements that:

                                  i.      The Participant's or the Participant's
                                          Survivors' right to sell or transfer
                                          the Shares may be restricted; and

                                  ii.     The Participant or the Participant's
                                          Survivors may be required to execute
                                          letters of investment intent and must
                                          also acknowledge that the Shares will
                                          bear legends noting any applicable
                                          restrictions.

                  B.      ISOs: Each Option intended to be an ISO shall be
                          issued only to a Key Employee and be subject to the
                          following terms and conditions, with such additional
                          restrictions or changes as the Administrator
                          determines are appropriate but not in conflict with
                          Section 422 of the Code and relevant regulations and
                          rulings of the Internal Revenue Service:

                          a.        Minimum standards: The ISO shall meet the
                                    minimum standards required of Non-Qualified
                                    Options, as described in Paragraph 6(A)
                                    above, except clauses (a) thereunder.

                          b.        Option Price: Immediately before the Option
                                    is granted, if the Participant owns,
                                    directly or by reason of the applicable
                                    attribution rules in Section 424(d) of the
                                    Code:

                                    i.  Ten percent (10%) or less of the total
                                        combined voting power of all classes of
                                        share capital of the Company or an
                                        Affiliate, the Option price per share of
                                        the Shares covered by each Option shall
                                        not be less than one hundred percent
                                        (100%) of the Fair Market Value per
                                        share of the Shares on the date of the
                                        grant of the Option.

                                    ii. More than ten percent (10%) of the
                                        total combined voting power of all
                                        classes of stock of the Company or an
                                        Affiliate, the Option price per share of
                                        the Shares covered by each Option shall
                                        not be less than one hundred ten percent
                                        (110%) of the said Fair Market Value on
                                        the date of grant.


                                       5



<PAGE>   6


                           c.      Term of Option: For Participants who own

                                   i.     Ten percent (10%) or less of the total
                                          combined voting power of all classes
                                          of share capital of the Company or an
                                          Affiliate, each Option shall
                                          terminate not more than ten (10)
                                          years from the date of the grant or
                                          at such earlier time as the Option
                                          Agreement may provide.

                                   ii.    More than ten percent (10%) of the
                                          total combined voting power of all
                                          classes of stock of the Company or an
                                          Affiliate, each Option shall
                                          terminate not more than five (5)
                                          years from the date of the grant or
                                          at such earlier time as the Option
                                          Agreement may provide.

                           d.      Limitation on Yearly Exercise: The Option
                                   Agreements shall restrict the amount of
                                   Options which may be exercisable in any
                                   calendar year (under this or any other ISO
                                   plan of the Company or an Affiliate) so that
                                   the aggregate Fair Market Value (determined
                                   at the time each ISO is granted) of the
                                   stock with respect to which ISOs are
                                   exercisable for the first time by the
                                   Participant in any calendar year does not
                                   exceed one hundred thousand dollars
                                   ($100,000), provided that this subparagraph
                                   (d) shall have no force or effect if its
                                   inclusion in the Plan is not necessary for
                                   Options issued as ISOs to qualify as ISOs
                                   pursuant to Section 422(d) of the Code.


          7.      EXERCISE OF OPTIONS AND ISSUE OF SHARES.

                  An Option (or any part or installment thereof) shall be
          exercised by giving written notice to the Company at its principal
          executive office address, together with provision for payment of the
          full purchase price in accordance with this Paragraph for the Shares
          as to which the Option is being exercised, and upon compliance with
          any other condition(s) set forth in the Option Agreement. Such
          written notice shall be signed by the person exercising the Option,
          shall state the number of Shares with respect to which the Option is
          being exercised and shall contain any representation required by the
          Plan or the Option Agreement. Payment of the purchase price for the
          Shares as to which such Option is being exercised shall be made (a)
          in United States dollars in cash or by check, or (b) at the
          discretion of the Administrator, through delivery of shares of Common
          Stock having a Fair Market Value equal as of the date of the exercise
          to the cash exercise price of the Option, or (c) at the discretion of
          the Administrator, by having the Company retain from the shares
          otherwise issuable upon exercise of the Option, a number of shares
          having a Fair Market Value equal as of the date of exercise to the
          exercised price of the Option, or (d) at the discretion of the
          Administrator, by delivery of the grantee's personal recourse note
          bearing interest payable not less than annually at no less than 100%
          of the applicable Federal rate, as defined in Section 1274(d) of the
          Code, or (e) at the discretion of the Administrator, in accordance
          with a cashless exercise program established with a securities
          brokerage firm, and approved by the Administrator, or (f) at the
          discretion of the Administrator, by any combination



                                       6


<PAGE>   7



          of (a), (b), (c), (d) and (e) above. Notwithstanding the foregoing,
          the Administrator shall accept only such payment on exercise of an
          ISO as is permitted by Section 422 of the Code.

                  The Company shall then reasonably promptly deliver the Shares
          as to which such Option was exercised to the Participant (or to the
          Participant's Survivors, as the case may be). In determining what
          constitutes "reasonably promptly," it is expressly understood that
          the delivery of the Shares may be delayed by the Company in order to
          comply with any law or regulation (including, without limitation,
          state securities or "blue sky" laws) which requires the Company to
          take any action with respect to the Shares prior to their issuance.
          The Shares shall, upon delivery, be evidenced by an appropriate
          certificate or certificates for fully paid, non-assessable Shares.

                  The Administrator shall have the right to accelerate the date
          of exercise of any installment of any Option; provided that the
          Administrator shall not accelerate the exercise date of any
          installment of any Option granted to any Key Employee as an ISO (and
          not previously converted into a Non-Qualified Option pursuant to
          Paragraph 19) if such acceleration would violate the annual vesting
          limitation contained in Section 422(d) of the Code, as described in
          Paragraph 6.B.d.

                  The Administrator may, in its discretion, amend any term or
          condition of an outstanding Option provided (i) such term or
          condition as amended is permitted by the Plan, (ii) any such
          amendment shall be made only with the consent of the Participant to
          whom the Option was granted, or in the event of the death of the
          Participant, the Participant's Survivors, if the amendment is adverse
          to the Participant, and (iii) any such amendment of any ISO shall be
          made only after the Administrator, after consulting the counsel for
          the Company, determines whether such amendment would constitute a
          "modification" of any Option which is an ISO (as that term is defined
          in Section 424(h) of the Code) or would cause any adverse tax
          consequences for the holder of such ISO.


          8.      RIGHTS AS A SHAREHOLDER.

                  No Participant to whom an Option has been granted shall have
          rights as a shareholder with respect to any Shares covered by such
          Option, except after due exercise of the Option and tender of the
          full purchase price for the Shares being purchased pursuant to such
          exercise and registration of the Shares in the Company's share
          register in the name of the Participant.


          9.      ASSIGNABILITY AND TRANSFERABILITY OF OPTIONS.

                  By its terms, an Option granted to a Participant shall not be
          transferable by the Participant other than (i) by will or by the laws
          of descent and distribution, or (ii) as otherwise determined by the
          Administrator and set forth in the applicable Option Agreement. The
          designation of a beneficiary of an Option by a Participant shall not
          be deemed a transfer prohibited by this Paragraph. Except as provided
          above, an Option shall be exercisable, during the Participant's


                                       7

<PAGE>   8




          lifetime, only by such Participant (or by his or her legal
          representative) and shall not be assigned, pledged or hypothecated in
          any way (whether by operation of law or otherwise) and shall not be
          subject to execution, attachment or similar process. Any attempted
          transfer, assignment, pledge, hypothecation or other disposition of
          any Option or of any rights granted thereunder contrary to the
          provisions of this Plan, or the levy of any attachment or similar
          process upon an Option, shall be null and void.


          10.     EFFECT OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR
                  DEATH OR DISABILITY.

                  Except as otherwise provided in the pertinent Option
          Agreement, in the event of a termination of service (whether as an
          employee, director or consultant) with the Company or an Affiliate
          before the Participant has exercised all Options, the following rules
          apply:

                  a.      A Participant who ceases to be an employee, director
                          or consultant of the Company or of an Affiliate (for
                          any reason other than termination "for cause",
                          Disability, or death for which events there are
                          special rules in Paragraphs 11, 12, and 13,
                          respectively), may exercise any Option granted to him
                          or her to the extent that the Option is exercisable
                          on the date of such termination of service, but only
                          within such term as the Administrator has designated
                          in the pertinent Option Agreement.

                  b.      Except as provided in Subparagraph (c) below, or
                          Paragraph 12 or 13, in no event may an Option
                          Agreement provide, if the Option is intended to be an
                          ISO, that the time for exercise be later than three
                          (3) months after the Participant's termination of
                          employment.

                  c.      The provisions of this Paragraph, and not the
                          provisions of Paragraph 12 or 13, shall apply to a
                          Participant who subsequently becomes Disabled or dies
                          after the termination of employment, director status
                          or consultancy, provided, however, in the case of a
                          Participant's Disability or death within three (3)
                          months after the termination of employment, director
                          status or consultancy, the Participant or the
                          Participant's Survivors may exercise the Option
                          within one (1) year after the date of the
                          Participant's termination of employment, but in no
                          event after the date of expiration of the term of the
                          Option.

                   d.     Notwithstanding anything herein to the contrary, if
                          subsequent to a Participant's termination of
                          employment, termination of director status or
                          termination of consultancy, but prior to the exercise
                          of an Option, the Board of Directors determines that,
                          either prior or subsequent to the Participant's
                          termination, the Participant engaged in conduct which
                          would constitute "cause", then such Participant shall
                          forthwith cease to have any right to exercise any
                          Option.




                                       8



<PAGE>   9


                   e.     A Participant to whom an Option has been granted
                          under the Plan who is absent from work with the
                          Company or with an Affiliate because of temporary
                          disability (any disability other than a permanent and
                          total Disability as defined in Paragraph 1 hereof),
                          or who is on leave of absence for any purpose, shall
                          not, during the period of any such absence, be
                          deemed, by virtue of such absence alone, to have
                          terminated such Participant's employment, director
                          status or consultancy with the Company or with an
                          Affiliate, except as the Administrator may otherwise
                          expressly provide.

                   f.     Except as required by law or as set forth in the
                          pertinent Option Agreement, Options granted under the
                          Plan shall not be affected by any change of a
                          Participant's status within or among the Company and
                          any Affiliates, so long as the Participant continues
                          to be an employee, director or consultant of the
                          Company or any Affiliate.


           11.     EFFECT OF TERMINATION OF SERVICE "FOR CAUSE".

                   Except as otherwise provided in the pertinent Option
           Agreement, the following rules apply if the Participant's service
           (whether as an employee, director or consultant) with the Company or
           an Affiliate is terminated "for cause" prior to the time that all
           his or her outstanding Options have been exercised:

                   a.      All outstanding and unexercised Options as of the
                           time the Participant is notified his or her service
                           is terminated "for cause" will immediately be
                           forfeited.

                   b.      For purposes of this Plan, "cause" shall include
                           (and is not limited to) dishonesty with respect to
                           the Company or any Affiliate, insubordination,
                           substantial malfeasance or non-feasance of duty,
                           unauthorized disclosure of confidential information,
                           and conduct substantially prejudicial to the
                           business of the Company or any Affiliate. The
                           determination of the Administrator as to the
                           existence of "cause" will be conclusive on the
                           Participant and the Company.

                   c.      "Cause" is not limited to events which have occurred
                           prior to a Participant's termination of service, nor
                           is it necessary that the Administrator's finding of
                           "cause" occur prior to termination. If the
                           Administrator determines, subsequent to a
                           Participant's termination of service but prior to
                           the exercise of an Option, that either prior or
                           subsequent to the Participant's termination the
                           Participant engaged in conduct which would
                           constitute "cause," then the right to exercise any
                           Option is forfeited.

                  d.       Any definition in an agreement between the
                           Participant and the Company or an Affiliate, which
                           contains a conflicting definition of "cause" for
                           termination and which is in effect at the time of
                           such termination, shall supersede the definition in
                           this Plan with respect to such Participant.



                                       9

<PAGE>   10


          12. EFFECT OF TERMINATION OF SERVICE FOR DISABILITY.



                  Except as otherwise provided in the pertinent Option
          Agreement, a Participant who ceases to be an employee, director or
          consultant of the Company or of an Affiliate by reason of Disability
          may exercise any Option granted to such Participant:

                  a.      To the extent exercisable but not exercised on the
                          date of Disability; and

                  b.      In the event rights to exercise the Option accrue
                          periodically, to the extent of a pro rata portion of
                          any additional rights as would have accrued had the
                          Participant not become Disabled prior to the end of
                          the accrual period which next ends following the date
                          of Disability. The proration shall be based upon the
                          number of days of such accrual period prior to the
                          date of Disability.

                  A Disabled Participant may exercise such rights only within
          the period ending one (1) year after the date of the Participant's
          termination of employment, directorship or consultancy, as the case
          may be, notwithstanding that the Participant might have been able to
          exercise the Option as to some or all of the Shares on a later date
          if the Participant had not become disabled and had continued to be an
          employee, director or consultant or, if earlier, within the
          originally prescribed term of the Option.

                  The Administrator shall make the determination both of
          whether Disability has occurred and the date of its occurrence
          (unless a procedure for such determination is set forth in another
          agreement between the Company and such Participant, in which case
          such procedure shall be used for such determination). If requested,
          the Participant shall be examined by a physician selected or approved
          by the Administrator, the cost of which examination shall be paid for
          by the Company.


          13. EFFECT OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.

                  Except as otherwise provided in the pertinent Option
          Agreement, in the event of the death of a Participant while the
          Participant is an employee, director or consultant of the Company or
          of an Affiliate, such Option may be exercised by the Participant's
          Survivors:

                  a.      To the extent exercisable but not exercised on the
                          date of death; and

                  b.      In the event rights to exercise the Option accrue
                          periodically, to the extent of a pro rata portion of
                          any additional rights which would have accrued had
                          the Participant not died prior to the end of the
                          accrual period which next ends following the date of
                          death. The proration shall be based upon the number
                          of days of such accrual period prior to the
                          Participant's death.

                  If the Participant's Survivors wish to exercise the Option,
          they must take all necessary steps to exercise the Option within one
          (1) year after the date of death of such Participant,


                                       10



<PAGE>   11



          notwithstanding that the decedent might have been able to exercise
          the Option as to some or all of the Shares on a later date if he or
          she had not died and had continued to be an employee, director or
          consultant or, if earlier, within the originally prescribed term of
          the Option.


          14.     PURCHASE FOR INVESTMENT.

                  Unless the offering and sale of the Shares to be issued upon
          the particular exercise of an Option shall have been effectively
          registered under the Securities Act of 1933, as now in force or
          hereafter amended (the "1933 Act"), the Company shall be under no
          obligation to issue the Shares covered by such exercise unless and
          until the following conditions have been fulfilled:

                  a.      The person(s) who exercise(s) such Option shall
                          warrant to the Company, prior to the receipt of such
                          Shares, that such person(s) are acquiring such Shares
                          for their own respective accounts, for investment,
                          and not with a view to, or for sale in connection
                          with, the distribution of any such Shares, in which
                          event the person(s) acquiring such Shares shall be
                          bound by the provisions of the following legend which
                          shall be endorsed upon the certificate(s) evidencing
                          their Shares issued pursuant to such exercise or such
                          grant:

                                   "The shares represented by this certificate
                                   have been taken for investment and they may
                                   not be sold or otherwise transferred by any
                                   person, including a pledgee, unless (1)
                                   either (a) a Registration Statement with
                                   respect to such shares shall be effective
                                   under the Securities Act of 1933, as
                                   amended, or (b) the Company shall have
                                   received an opinion of counsel satisfactory
                                   to it that an exemption from registration
                                   under such Act is then available, and (2)
                                   there shall have been compliance with all
                                   applicable state securities laws."

                  b.      At the discretion of the Administrator, the Company
                          shall have received an opinion of its counsel that
                          the Shares may be issued upon such particular
                          exercise in compliance with the 1933 Act without
                          registration thereunder.


          15.     DISSOLUTION OR LIQUIDATION OF THE COMPANY.

                  Upon the dissolution or liquidation of the Company, all
          Options granted under this Plan which as of such date shall not have
          been exercised will terminate and become null and void; provided,
          however, that if the rights of a Participant or a Participant's
          Survivors have not otherwise terminated and expired, the Participant
          or the Participant's Survivors will have the right immediately prior
          to such dissolution or liquidation to exercise any Option to the
          extent that the Option is exercisable as of the date immediately
          prior to such dissolution or liquidation.




                                    11
<PAGE>   12





          16.     ADJUSTMENTS.


                  Upon the occurrence of any of the following events, a
          Participant's rights with respect to any Option granted to him or her
          hereunder which has not previously been exercised in full shall be
          adjusted as hereinafter provided, unless otherwise specifically
          provided in the pertinent Option Agreement:

                  A. Stock Dividends and Stock Splits. If (i) the shares of
          Common Stock shall be subdivided or combined into a greater or
          smaller number of shares or if the Company shall issue any shares of
          Common Stock as a stock dividend on its outstanding Common Stock, or
          (ii) additional shares or new or different shares or other securities
          of the Company or other non-cash assets are distributed with respect
          to such shares of Common Stock, the number of shares of Common Stock
          deliverable upon the exercise of such Option may be appropriately
          increased or decreased proportionately, and appropriate adjustments
          may be made in the purchase price per share to reflect such events.

                  B. Consolidations or Mergers. If the Company is to be
          consolidated with or acquired by another entity in a merger, sale of
          all or substantially all of the Company's assets or otherwise (an
          "Acquisition"), the Administrator or the board of directors of any
          entity assuming the obligations of the Company hereunder (the
          "Successor Board"), shall, as to outstanding Options, either (i) make
          appropriate provision for the continuation of such Options by
          substituting on an equitable basis for the Shares then subject to
          such Options either the consideration payable with respect to the
          outstanding shares of Common Stock in connection with the Acquisition
          or securities of any successor or acquiring entity; or (ii) upon
          written notice to the Participants, provide that all Options must be
          exercised (either to the extent then exercisable or, at the
          discretion of the Administrator, all Options being made fully
          exercisable for purposes of this Subparagraph), within a specified
          number of days of the date of such notice, at the end of which period
          the Options shall terminate; or (iii) terminate all Options in
          exchange for a cash payment equal to the excess of the Fair Market
          Value of the shares subject to such Options (either to the extent
          then exercisable or, at the discretion of the Administrator, all
          Options being made fully exercisable for purposes of this
          Subparagraph) over the exercise price thereof.

                  C. Recapitalization or Reorganization. In the event of a
          recapitalization or reorganization of the Company (other than a
          transaction described in Subparagraph B above) pursuant to which
          securities of the Company or of another corporation are issued with
          respect to the outstanding shares of Common Stock, a Participant upon
          exercising an Option shall be entitled to receive for the purchase
          price paid upon such exercise the securities which would have been
          received if such Option had been exercised prior to such
          recapitalization or reorganization.

                  D. Modification of ISOs. Notwithstanding the foregoing, any
          adjustments made pursuant to Subparagraph A, B or C with respect to
          ISOs shall be made only after the Administrator, after consulting
          with counsel for the Company, determines whether such adjustments
          would constitute a "modification" of such ISOs (as that term is
          defined in Section 424(h) of the Code) or would cause any adverse tax
          consequences for the holders of such ISOs. If the Administrator
          determines that such adjustments made with respect to ISOs would


                                       12

<PAGE>   13
constitute a modification of such ISOs, it may refrain from making such
adjustments, unless the holder of an ISO specifically requests in writing that
such adjustment be made and such writing indicates that the holder has full
knowledge of the consequences of such "modification" on his or her income tax
treatment with respect to the ISO.

17.  ISSUANCES OF SECURITIES.

     Except as expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares subject to Options. Except as
expressly provided herein, no adjustments shall be made for dividends paid in
cash or in property (including without limitation, securities) of the Company.

18.  FRACTIONAL SHARES.

     No fractional shares shall be issued under the Plan and the person
exercising such right shall receive from the Company cash in lieu of such
fractional shares equal to the Fair Market Value thereof.

19.  CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.

     The Administrator, at the written request of any Participant, may in its
discretion take such actions as may be necessary to convert such Participant's
ISOs (or any portions thereof) that have not been exercised on the date of
conversion into Non-Qualified Options at any time prior to the expiration of
such ISOs, regardless of whether the Participant is an employee of the Company
or an Affiliate at the time of such conversion. Such actions may include, but
not be limited to, extending the exercise period or reducing the exercise price
of the appropriate installments of such Options. At the time of such conversion,
the Administrator (with the consent of the Participant) may impose such
conditions on the exercise of the resulting Non-Qualified Options as the
Administrator in its discretion may determine, provided that such conditions
shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to
give any Participant the right to have such Participant's ISOs converted into
Non-Qualified Options, and no such conversion shall occur until and unless the
Administrator takes appropriate action. The Administrator, with the consent of
the Participant, may also terminate any portion of any ISO that has not been
exercised at the time of such conversion.

20.  WITHHOLDING.

     In the event that any federal, state, or local income taxes, employment
taxes, Federal Insurance Contributions Act ("F.I.C.A.") withholdings or other
amounts are required by


                                       13


<PAGE>   14




applicable law or governmental regulation to be withheld from the Participant's
salary, wages or other remuneration in connection with the exercise of an Option
or a Disqualifying Disposition (as defined in Paragraph 21), the Company may
withhold from the Participant's compensation, if any, or may require that the
Participant advance in cash to the Company, or to any Affiliate of the Company
which employs or employed the Participant, the amount of such withholdings
unless a different withholding arrangement, including the use of shares of the
Company's Common Stock or a promissory note, is authorized by the Administrator
(and permitted by law). For purposes hereof, the fair market value of the
shares withheld for purposes of payroll withholding shall be determined in the
manner provided in Paragraph 1 above, as of the most recent practicable date
prior to the date of exercise. If the fair market value of the shares withheld
is less than the amount of payroll withholdings required, the Participant may be
required to advance the difference in cash to the Company or the Affiliate
employer. The Administrator in its discretion may condition the exercise of an
Option for less than the then Fair Market Value on the Participant's payment of
such additional withholding.

21.  NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.

     Each Key Employee who receives an ISO must agree to notify the Company in
writing immediately after the Key Employee makes a Disqualifying Disposition of
any shares acquired pursuant to the exercise of an ISO. A Disqualifying
Disposition is any disposition (including any sale) of such shares before the
later of (a) two years after the date the Key Employee was granted the ISO, or
(b) one year after the date the Key Employee acquired Shares by exercising the
ISO. If the Key Employee has died before such stock is sold, these holding
period requirements do not apply and no Disqualifying Disposition can occur
thereafter.

22.  TERMINATION OF THE PLAN.

     The Plan will terminate on October 27, 2007, the date which is ten (10)
years from the earlier of the date of its adoption and the date of its approval
by the shareholders of the Company. The Plan may be terminated at an earlier
date by vote of the shareholders of the Company; provided, however, that any
such earlier termination shall not affect any Option Agreements executed prior
to the effective date of such termination.

23.  AMENDMENT OF THE PLAN AND AGREEMENTS.

     The Plan may be amended by the shareholders of the Company. The Plan may
also be amended by the Administrator, including, without limitation, to the
extent necessary to qualify any or all outstanding Options granted under the
Plan or Options to be granted under the Plan for favorable federal income tax
treatment (including deferral of taxation upon exercise) as may be afforded
incentive stock options under Section 422 of the Code, and to the extent
necessary to qualify the shares issuable upon exercise of any outstanding
Options granted, or Options to be granted, under the Plan for listing on any
national securities exchange or quotation in any


                                       14

<PAGE>   15
national automated quotation system of securities dealers. Any amendment
approved by the Administrator which the Administrator determines is of a scope
that requires shareholder approval shall be subject to obtaining such
shareholder approval. Any modification or amendment of the Plan shall not,
without the consent of a Participant, adversely affect his or her rights under
an Option previously granted to him or her. With the consent of the Participant
affected, the Administrator may amend outstanding Option Agreements in a manner
which may be adverse to the Participant but which is not inconsistent with the
Plan. In the discretion of the Administrator, outstanding Option Agreements may
be amended by the Administrator in a manner which is not adverse to the
Participant.

24.  EMPLOYMENT OR OTHER RELATIONSHIP.

     Nothing in this Plan or any Option Agreement shall be deemed to prevent the
Company or an Affiliate from terminating the employment, consultancy or director
status of a Participant, nor to prevent a Participant from terminating his or
her own employment, consultancy or director status or to give any Participant a
right to be retained in employment or other service by the Company or any
Affiliate for any period of time.

25.  GOVERNING LAW.

     This Plan shall be construed and enforced in accordance with the law of the
State of Connecticut.







                                       15