EXHIBIT 10.17
 




















                                 ANICOM, INC.

                                 1998 ASSOCIATE

                               STOCK PURCHASE PLAN

                        (Adopted effective July 1, 1998)







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                                  ANICOM, INC.
                                 1998 ASSOCIATE
                               STOCK PURCHASE PLAN
                        (Adopted effective July 1, 1998)

                                TABLE OF CONTENTS
                                                                        Page

ARTICLE I                  ESTABLISHMENT AND PURPOSE........................1

         1.1               Purpose..........................................1


ARTICLE II        DEFINITIONS...............................................1

         2.1               Account..........................................1
         2.2               Agreement or Option Agreement....................1
         2.3               Board of Directors or Board......................1
         2.4               Code or Internal Revenue Code....................1
         2.5               Committee........................................2
         2.6               Common Stock.....................................2
         2.7               Company..........................................2
         2.8               Continuous Service...............................2
         2.9               Contribution Rate................................2
         2.10              Disability.......................................2
         2.11              Eligible Employee................................2
         2.12              Exercise Date....................................3
         2.13              Exchange Act.....................................3
         2.14              Fair Market Value................................3
         2.15              Grant Date.......................................3
         2.16              Option...........................................3
         2.17              Option Period....................................3
         2.18              Option Price.....................................3
         2.19              Participant......................................3
         2.20              Plan.............................................4
         2.21              Plan Year........................................4
         2.22              Representative...................................4
         2.23              Retirement.......................................4
         2.24              Securities Act...................................4
         2.25              Subsidiary.......................................4
         2.26              Termination of Employment........................4



                                     



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Article III       ADMINISTRATION............................................5

         3.1               Committee Structure and Authority................5


ARTICLE IV        STOCK PROVISIONS..........................................7

         4.1               Number of Shares Subject to the Plan.............7
         4.2               Release of Shares................................7
         4.3               Restrictions on Shares...........................7
         4.4               Stockholder Rights...............................8
         4.5               Stock Valuation..................................8
         4.6               Custodian........................................8


ARTICLE V                  ELIGIBILITY; OPTION PROVISIONS...................9

         5.1               Eligibility......................................9
         5.2               Grant of Options.................................9
         5.3               Option Period....................................9
         5.4               Option Price....................................10
         5.5               Contribution Rate...............................10
         5.6               Purchase of Shares..............................11
         5.7               Cancellation of Options.........................11
         5.8               Terminated Employees............................11
         5.9               Deceased Employees..............................11
         5.10              Disabled or Retired Employees...................12
         5.11              Limitations.....................................12
         5.12              Nonassignability................................12


ARTICLE VI        GENERAL PROVISIONS APPLICABLE
                             TO THE PLAN...................................13

         6.1               Termination of Plan.............................13
         6.2               Investment Representation.......................13
         6.3               Effect of Certain Changes.......................13
         6.4               Withholding.....................................16
         6.5               No Company Obligation...........................17
         6.6               Committee Discretion............................17









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ARTICLE VII                MISCELLANEOUS...................................17

         7.1               Indemnification of the Board and
                             Committee.....................................17
         7.2               Mitigation of Excise Tax........................18
         7.3               Interpretation..................................18
         7.4               Governing Law...................................18
         7.5               Limitations on Liability........................18
         7.6               Validity........................................19
         7.7               Assignment......................................19
         7.8               Captions........................................19
         7.9               Amendments......................................19
         7.10              Entire Agreement................................19
         7.11              Rights with Respect to Continuance of
                             Employment....................................19
         7.12              Options for Shares in Substitution for
                             Stock Options Granted by Other
                             Corporations..................................20
         7.13              Procedure for Adoption..........................20
         7.14              Procedure for Withdrawal........................20
         7.15              Expenses........................................20






















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                                  ANICOM, INC.

                                 1998 ASSOCIATE

                               STOCK PURCHASE PLAN

                        (Adopted effective July 1, 1998)


                                    ARTICLE I

                            ESTABLISHMENT AND PURPOSE

         1.1 Purpose.  The Anicom,  Inc. 1998 Associate Stock Purchase Plan (the
"Plan")  is hereby  established  effective  July 1,  1998 by  Anicom,  Inc.  The
adoption of the Plan is expressly  conditioned  upon the Plan's  approval by the
security  holders of Anicom,  Inc.  within twelve (12) months after the date the
Plan is adopted.  The  purpose of the Plan is to promote  the overall  financial
objectives of the Company and its stockholders by motivating participants in the
Plan to achieve long-term growth in stockholder equity in the Company.  The Plan
is intended as an "employee  stock  purchase plan" within the meaning of Section
423 of the Code,  and Options  granted  hereunder  are  intended  to  constitute
options  granted under such a plan,  and the Plan document and all actions taken
in connection with the Plan shall be constructed consistently with such intent.


                                   ARTICLE II

                                   DEFINITIONS

         The following  sections of this Article II provide basic definitions of
terms used  throughout  the Plan,  and whenever used therein in the  capitalized
form, except as otherwise expressly provided,  the terms shall be deemed to have
the following meanings:

         2.1 "Account" shall mean the bookkeeping  account established on behalf
of a  Participant  to which shall be  credited  all  contributions  paid for the
purpose of purchasing Common Stock under the Plan, and to which shall be charged
all  purchases  of Common  Stock  pursuant to the Plan.  The Company  shall have
custody of such Account.

         2.2   "Agreement"  or  "Option   Agreement"   means,   individually  or
collectively,  any enrollment and withholding agreement entered into pursuant to
the Plan.  An  Agreement  shall be the right of the  Company  to  withhold  from
payroll amounts to be applied to purchase Common Stock.

         2.3 "Board of Directors" or "Board" means the Board of Directors of the
Company.
                                   

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         2.4 "Code" or "Internal  Revenue Code" means the Internal  Revenue Code
of 1986, as amended,  and any  subsequent  Internal  Revenue Code. If there is a
subsequent Internal Revenue Code, any references herein to Internal Revenue Code
sections  shall be  deemed to refer to  comparable  sections  of any  subsequent
Internal Revenue Code.

         2.5 "Committee"  means the person or persons  appointed by the Board of
Directors to administer the Plan, as further described in the Plan.

         2.6 "Common Stock" means the shares of the Common Stock of the Company,
$.001 par value per share,  whether presently or hereafter issued, and any other
stock or security resulting from adjustment thereof as described in Section 6.3.

         2.7 "Company" means Anicom, Inc. and includes any successor or assignee
corporation  or  corporations  into which the Company may be merged,  changed or
consolidated; any corporation for whose securities the securities of the Company
shall be exchanged; and any assignee of or successor to substantially all of the
assets of the Company.

         2.8  "Continuous  Service" shall mean,  subject to  modification by the
Committee,  an Eligible  Employee's number of full years and completed months of
continuous employment with the Company or a Subsidiary from his last hiring date
to his date of  Termination  of  Employment  for any reason.  The  Committee may
provide rules from time to time regarding the calculation of Continuous  Service
and the method for crediting such service.

         2.9 "Contribution Rate" means the rate determined under Section 5.5
                   
         2.10 "Disability"  means a mental or physical illness that entitles the
Participant  to receive  benefits  under the  long-term  disability  plan of the
Company or a Subsidiary,  or if the  Participant  is not covered by such plan, a
mental or physical  illness that renders a Participant  permanently  and totally
incapable  of  performing  his  duties  as  an  employee  of  the  Company  or a
Subsidiary.  Notwithstanding the foregoing, a Disability shall not qualify under
this  Plan if it is the  result  of (a) a  willfully  self-inflicted  injury  or
willfully  self-induced  sickness;  or  (b) an  injury  or  disease  contracted,
suffered,   or  incurred,   while  participating  in  a  criminal  offense.  The
determination of Disability shall be made by the Committee. The determination of
Disability  for  purposes of this Plan shall not be construed to be an admission
of disability for any other purpose.

         2.11  "Eligible  Employee"  means  each  employee  of the  Company or a
Subsidiary  (if the Subsidiary has adopted the Plan) on a Grant Date except that
the Committee in its sole discretion may exclude:

      (a) any employee who has accrued less than a minimum  period of Continuous
Service established by the Committee (but not to exceed 2 years).

      (b) any employee whose customary employment is 20 hours or less per week;

          




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      (c) any employee whose customary  employment is for not more than 5 months
in any calendar year;

      (d) any employee who would  directly or indirectly  own or hold  (applying
the  rules  of  Section  424(d)  of  the  Code  to  determine  stock  ownership)
immediately  following  the grant of an Option  hereunder  an  aggregate of five
percent  (5%) or  more of the  total  combined  voting  power  or  value  of all
outstanding shares of all classes of stock of the Company or any Subsidiary; and

      (e) any  employee who is a highly  compensated  employee of the Company or
Subsidiary within the meaning of Section 414(q) of the Code.

Any period of service  described in the  preceding  sentence may be decreased in
the discretion of the Committee.

     2.12  "Exercise  Date"  means  such  one or more  dates  determined  by the
Committee  on which the  accumulated  value of the  Account  shall be applied to
purchase Common Stock. The Committee may accelerate an Exercise Date in order to
satisfy the employment period requirement of Section 423(a)(2).

     2.13 "Exchange Act" means the Securities  Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

     2.14 "Fair  Market  Value" means the value  determined  on the basis of the
good faith  determination  of the Committee  pursuant to the  applicable  method
described in Section 4.5 and as adjusted,  averaged or otherwise modified by the
Committee.

     2.15 "Grant Date" means the date or dates  established  by the Committee on
which one or more Options are granted  pursuant to the Plan.  The  Committee may
determine  for any Plan Year that there shall be no Grant Date, in which case no
Options  shall be granted for that Plan Year.  The terms and  conditions  of any
Option  granted on a particular  Grant Date shall be  independent of and have no
effect on the terms and conditions of any Option granted on another Grant Date.

     2.16 "Option" means the right to purchase Common Stock pursuant to the Plan
and any Agreement.

     2.17  "Option  Period"  means the  period  beginning  on the Grant Date and
expiring on the Exercise  Date as determined  by the  Committee,  subject to the
limitations of Section 5.3.

     2.18  "Option  Price" means the price at which the  Company's  Common Stock
granted as of a specific Grant Date may be purchased under an Option.  The price
shall be subject to the limitation set forth in Section 5.4.








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     2.19 "Participant" means an Eligible Employee who satisfies the eligibility
conditions  of the Plan and to whom an Option has been granted by the  Committee
under  the  Plan,  and  in  the  event  a  Representative  is  appointed  for  a
Participant,   then  the  term   "Participant"   shall   mean   such   appointed
Representative,  or successor  Representative(s)  appointed, as the case may be,
provided  that  "Termination  of  Employment"  shall  mean  the  Termination  of
Employment of the Participant.

     2.20 "Plan" means the Anicom, Inc. Stock Purchase Plan, as herein set forth
and as may be amended from time to time.

     2.21 "Plan Year"  means,  for the first Plan Year,  the period  starting on
July 1, 1998,  and ending on December  31,  1998;  and for all  subsequent  Plan
Years, the twelve (12) consecutive month period starting on January 1 and ending
on the following  December 31. The  Committee may at any time in its  discretion
designate another period as the Plan Year.

     2.22 "Representative" means (a) the person or entity acting as the executor
or  administrator  of a  Participant's  estate  pursuant  to the  last  will and
testament of a Participant or pursuant to the laws of the  jurisdiction in which
the  Participant  had his  primary  residence  at the date of the  Participant's
death; (b) the person or entity acting as the guardian or temporary  guardian of
a Participant's  estate; or (c) the person or entity which is the beneficiary of
the  Participant  upon or following the  Participant's  death. A Participant may
file a  written  designation  of his  Representative  with the  Committee.  Such
designation of his  Representative may be changed by the Participant at any time
by written notice given in accordance  with rules and procedures  established by
the Committee.

     2.23 "Retirement"  means the Participant's  Termination of Employment after
attaining  either  the  normal  retirement  age or the early  retirement  age as
defined in the principal (as determined by the Committee)  tax-qualified plan of
the Company or a Subsidiary,  if the Participant is covered by such plan, and if
the  Participant is not covered by such a plan,  then age 65, or age 55 with the
accrual of 10 years of service.

     2.24  "Securities  Act" shall mean the  Securities Act of 1933, as amended,
and the rules and regulations promulgated pursuant thereto.

     2.25 "Subsidiary" means any company, as currently defined in Section 424(f)
of the Code. Unless otherwise  indicated the term "Company" shall hereinafter be
deemed to include all Subsidiaries of the Company which have adopted the Plan.

     2.26  "Termination  of Employment"  means the latest date on which a person
ceases,  for whatever reason, to be an employee of the Company.  For determining
whether and when a  Participant  has incurred a Termination  of  Employment  for
cause,  "cause"  shall mean any act or  omission  which  permits  the Company to
terminate the employment  agreement or arrangement  between the  Participant and
the Company for cause as defined in such  agreement  or  arrangement,  or in the
event there is no such employment agreement or arrangement or the agreement or





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arrangement  does not define the term  "cause,"  then "cause" shall mean (a) any
act or omission  which the Company  believes  is of a criminal  nature,  and the
result of which the Company  believes is  detrimental  to the  interests  of the
Company;  (b) the  material  breach of a  fiduciary  duty owing to the  Company,
including  without  limitation,  fraud and  embezzlement;  or (c) conduct or the
omission of conduct on the part of the Participant  which constitutes a material
breach of any statutory or common-law duty of loyalty to the Company.


                                   ARTICLE III

                                 ADMINISTRATION

         3.1 Committee  Structure and Authority.  The Plan shall be administered
by the Committee.  The Committee shall be comprised of two or more disinterested
members  of the Board of  Directors  selected  by the Board.  A majority  of the
Committee shall constitute a quorum at any meeting thereof (including  telephone
conference)  and  the  acts  of a  majority  of the  members  present,  or  acts
unanimously approved in writing by the entire Committee without a meeting, shall
be the acts of the  Committee.  A person shall be considered  disinterested  for
this purpose only if, at the time he exercises  discretion in administering  the
Plan, he is a "disinterested  person" within the meaning of Rule 16b-3 under the
Exchange Act. The Board shall have the authority to remove,  replace or fill any
vacancy of any member of the  Committee  upon  notice to the  Committee  and the
affected  member.  Any member of the  Committee  may resign  upon  notice to the
President of the Company or to the Board.  The Committee may allocate  among one
or more of its  members,  or may  delegate  to one or more of its  agents,  such
duties and responsibilities as it determines.  Subject to the provisions of this
Plan, the Committee shall have full and final authority in its discretion to:

                           (a)  determine  from time to time whether a person is
         is an Eligible Employee as of any Grant Date;

                           (b) determine the Option Price;

                           (c)  determine  the number of shares of Common  Stock
         available as of any Grant Date or subject to each Option;

                           (d)  determine  any  Grant  Date,  Exercise  Date and
         Option  Period,  and  provide  for all  aspects of  payroll  deduction,
         suspension or withdrawal;

                           (e) determine, subject to the Plan, the time or times
         and the manner when each Option shall be  exercisable  and the duration
         of the Option Period;

                           (f)  provide  for the  acceleration  of the  right to
         exercise an Option (or portion thereof);

                           





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                           (g)  prescribe   additional  terms,   conditions  and
         restrictions in the Agreement and to provide for the forms of Agreement
         to be utilized in connection with this Plan;

                           (h) determine  whether a  Participant  has incurred a
         Disability;

                           (i) determine what securities laws  requirements  are
         applicable to the Plan,  Options,  and the issuance of shares of Common
         Stock hereunder and request of a Participant that appropriate action be
         taken;

                           (j)  cancel,  with the  consent  of the  holder or as
         otherwise provided in the Plan or an Agreement, outstanding Options;

                           (k)  require as a  condition  of the  exercise  of an
         Option or the issuance or transfer of a  certificate  of Common  Stock,
         the withholding from a Participant of the amount of any federal,  state
         or  local  taxes  as may be  necessary  in  order  for the  Company  or
         Subsidiary  to obtain a deduction  and as may be otherwise  required by
         law;

                           (l)   determine   whether  and  for  what  reason  an
         individual  has incurred a  Termination  of Employment or an authorized
         leave of absence;

                           (m) treat all or any  portion  of any  period  during
         which a Participant  is on an approved  leave of absence as a period of
         employment for purposes of accrual of his rights under an Option;

                           (n) determine whether the Company or any other person
         has a right or obligation  to purchase  Common Stock from a Participant
         and, if so, the terms and  conditions  on which such Common Stock is to
         be purchased;

                           (o) determine the  restrictions or limitations on the
         transfer of Common Stock;

                           (p)  determine  whether an Option is to be  adjusted,
         modified or purchased,  or become fully exercisable,  under Section 6.3
         of the Plan or the terms of an Agreement;

                           (q)  adopt,   amend  and   rescind   such  rules  and
         regulations as, in its opinion,  may be advisable in the administration
         of this Plan;

                           (r) appoint and compensate agents, counsel,  auditors
         or other specialists to aid it in the discharge of its duties;







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                           (s)  correct  any  defect or supply any  omission  or
         reconcile any inconsistency in the Plan or in any Agreement relating to
         an  Option,  in such  manner  and to the  extent  the  Committee  shall
         determine in order to carry out the purposes of the Plan; and

                           (t) construe and interpret  this Plan, any Agreement,
         and take all other actions,  and make all other determinations and take
         all other actions deemed necessary or advisable for the  administration
         of this Plan.

         In the  absence  of the  appointment  of a  Committee,  the two or more
members of the Board who have  served the  longest  period of time as members of
the Board and who are disinterested  persons within the meaning of Rule 16b-3 of
the  Exchange  Act shall be the  Committee.  No member of the  Committee,  while
serving as such,  shall be eligible to receive  any Option  hereunder,  although
membership on the Committee  shall not affect or impair any such member's rights
under  any  Option  granted  to him at a time  when he was not a  member  of the
Committee.  A  member  of  the  Committee  shall  not  exercise  any  discretion
respecting himself under the Plan.


                                   ARTICLE IV

                                STOCK PROVISIONS

         4.1  Number of Shares  Subject  to the Plan.  The stock  subject to the
Options  granted  under this Plan shall be the Company's  Common  Stock.  Unless
otherwise  amended by the Board and approved by the  stockholders of the Company
to the  extent  required  by law, a maximum  number of 200,000  shares of Common
Stock of the  Company  (or such number as may result  following  any  adjustment
pursuant to Section 6.3) shall be reserved  and  available  for Options  granted
under the Plan.  The shares issued with respect to Options under the Plan may be
authorized and unissued shares, or shares issued and reacquired by the Company.

         4.2  Release of Shares.  If any shares of Common  Stock  available  for
subscription  are  unsubscribed,  or if any Option  granted  hereunder  shall be
cancelled,  forfeited,  expire or terminate for any reason  without  having been
exercised  or  realized  in  full,   any  shares  of  Common  Stock  subject  to
subscription  or  subject  to such  Option  shall  again  be  available  and may
thereafter be granted or otherwise applied under this Plan.

         4.3 Restrictions on Shares. Shares of Common Stock issued upon exercise
of an Option shall be subject to the terms and conditions  specified  herein and
to such  other  terms,  conditions  and  restrictions  as the  Committee  in its
discretion may determine or provide in the  Agreement.  The Company shall not be
required to issue or deliver any  certificates  for shares of Common Stock prior
to (1) the listing of such shares on any stock exchange (or other public market)
on which the Common  Stock may then be listed  (or  regularly  traded),  (2) the
completion of any  registration or qualification of such shares under federal or
state law, or any ruling or








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regulation of any governmental body which the Committee, in its sole discretion,
determines to be necessary or advisable, and (3) the tendering to the Company of
such documents  and/or payments as the Committee may deem  necessary,  including
documents the Committee  deems  necessary to satisfy any applicable  withholding
obligation  in order for the Company or another  entity to obtain a deduction on
its  federal,  state or local tax  return  with  respect to the  exercise  of an
Option.  The Company may cause any  certificate for any share of Common Stock to
be delivered to be properly  marked with a legend or other  notation  reflecting
the  limitations on transfer of such Common Stock as provided in this Plan or as
the Committee may otherwise  require.  The Company has no obligation to register
shares of Common Stock issued pursuant to the Plan.  Fractional shares shall not
be delivered, but shall be rounded to the next lower whole number of shares.

         4.4  Stockholder   Rights.  No  person  shall  have  any  rights  of  a
stockholder  as to shares of Common  Stock  subject  to an Option  until,  after
proper exercise of the Option or other action  required,  such shares shall have
been  recorded  on the  Company's  official  stockholder  records as having been
issued or transferred.  No adjustment  shall be made for cash dividends or other
rights for which the record date is prior to the date such  shares are  recorded
as issued or transferred in the Company's official stockholder  records,  except
as provided in Section 6.3.

         4.5 Stock  Valuation.  If and when the value of Common  Stock  shall be
required  to be  determined,  it  shall be  determined  in  accordance  with the
following provisions by the Committee, as applicable:

                  (a) if the  Common  Stock is listed on a  national  securities
         exchange or quoted on the NASDAQ National Market System ("NASDAQ/NMS"),
         the closing price of the Common Stock on the relevant date, as reported
         on the composite tape or by the NASDAQ/NMS, as the case may be;

                  (b) if the Common Stock is not listed on a national securities
         exchange   or  quoted  on  the   NASDAQ/NMS,   but  is  traded  in  the
         over-the-counter  market,  the  average  of the  closing  bid and asked
         prices for the Common  Stock on the relevant  date,  or the most recent
         preceding day for which such quotations are reported by NASDAQ/NMS; and

                  (c) if, on the relevant date, the Common Stock is not publicly
         traded or reported  as  described  in (i) or (ii),  on the basis of the
         good faith determination of the Committee.

         4.6 Custodian.  Shares of Common Stock  purchased  pursuant to the Plan
may be delivered to and held in the custody of such investment or financial firm
as shall be appointed by the  Committee.  The  custodian  may hold in nominee or
street name  certificates  for shares  purchased  pursuant to the Plan,  and may
commingle shares in its custody pursuant to the Plan in a single account without
identification as to individual Participants. By appropriate instructions to the
custodian on forms to be provided for the purpose,  a Participant  may from time
to time






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obtain  (a)  transfer  into the  Participant's  own name or into the name of the
Participant  and  another   individual  as  joint  tenants  with  the  right  of
survivorship  of all or part of the whole shares held by the  custodian  for the
Participant's  account  and  delivery  of such  shares to the  Participant;  (b)
transfer of all or part of the whole shares held for the  Participant's  account
by the custodian to a regular individual  brokerage account in the Participant's
own name or in the  name of the  Participant  and  another  individual  as joint
tenants  with the right of  survivorship,  either  with the firm then  acting as
custodian or with another  firm,  or (c) sale of all or part of the whole shares
held by the custodian for the  Participant's  account at the market price at the
time the order is executed and remittance of the net proceeds of the sale to the
Participant.  Upon termination of participation in the Plan, and upon receipt of
instructions  from the  Participant,  the shares held by the  custodian  for the
account of the Participant  will be transferred and delivered to the Participant
in accordance with (a) above,  transferred to a brokerage  account in accordance
with (b), or sold in accordance with (c), above.


                                    ARTICLE V

                         ELIGIBILITY; OPTION PROVISIONS

         5.1 Eligibility.  Except as herein  provided,  the persons who shall be
eligible to  participate in the Plan as of any Grant Date shall be those persons
(and only those persons) who are Eligible  Employees of the Company (including a
Subsidiary that has adopted the Plan) on a Grant Date.

         5.2 Grant of  Options.  The  Committee  shall have  authority  to grant
Options  under  the  Plan  at any  time or  from  time  to time to all  Eligible
Employees  as of a Grant  Date.  (To the  extent  an Option  is  granted  to any
Eligible Employee of an entity on a relevant date, all Eligible Employees of the
entity  shall be  granted an Option to the  extent  required  by law.) An Option
shall  entitle  the  Participant  to  receive  shares  of  Common  Stock  at the
conclusion of the Option Period,  subject to the  Participant's  satisfaction in
full of any conditions,  restrictions or limitations  imposed in accordance with
the Plan or an Agreement,  including without  limitation,  payment of the Option
Price.  Each Option  granted under this Plan shall be evidenced by an Agreement,
in a form approved by the Committee, which shall embody the terms and conditions
of such Option and which shall be subject to the  express  terms and  conditions
set forth in this Plan and to such other terms and  conditions  as the Committee
may deem  appropriate.  The grant and  exercise  of Options  hereunder  shall be
subject to all applicable  federal,  state and local laws, rules and regulations
and to  such  approvals  by any  governmental  or  regulatory  agency  as may be
required.  As of any Grant Date, each Eligible Employee shall be granted Options
with the same rights and privileges as any other Eligible Employee on that Grant
Date,  except the  amount of the  Common  Stock  which may be  purchased  by any
Participant  under  any  Option  may bear a  uniform  relationship  to the total
compensation,  or the basic or regular rate of  compensation,  (as determined by
the Committee) of all Eligible  Employees on that Grant Date, and the Option may
establish a maximum amount of Common Stock which may be purchased.






                                      - 9 -

<PAGE>




         5.3 Option Period.  Each  Agreement  shall specify the period for which
the Option thereunder is granted, which shall be determined by the Committee. In
no event  shall the Option  Period  extend  beyond the  period  permitted  under
Section 423(b)(7) of the Code.

         5.4 Option Price. Subject to the limits stated herein, the Option Price
per share at which  shares of Common Stock may be acquired  upon  exercise of an
Option shall be determined by the Committee.  Unless otherwise  specified by the
Committee, with respect to any Exercise Date, the Option Price shall not be less
than the lesser of eighty-five percent (85%) of the Fair Market Value of a share
of Common Stock (averaged over such period as the Committee may determine and as
permitted by law) on the applicable Grant Date and eighty-five  percent (85%) of
the Fair Market Value of a share of Common Stock  (averaged  over such period as
the Committee may determine and as permitted by law) on the applicable  Exercise
Date. The Committee reserves the right to increase the Option Price by the value
of any  accretion to the amounts  credited to an Account if the  Participant  is
credited with such  accretion  regardless  of the method of accounting  for such
accretion.

         5.5 Contribution  Rate. If an Eligible  Employee elects to participate,
the  Participant  shall file an  Agreement  with the  Committee  within the time
period designated by the Committee. The Committee may provide that the Agreement
shall specify either a percentage of the Participant's  compensation (as defined
by the  Committee)  or a  dollar  amount  determined  by the  Participant  to be
deducted  each  pay  period,  or the  Committee  may  permit  only  a  specified
percentage or a specified  amount.  Such amount shall be credited to the Account
and shall be the Participant's Contribution Rate. Such deductions shall begin as
of the first regularly scheduled payroll date on or after the later of the Grant
Date and the date  specified  by the  Committee.  The  Committee  may  establish
minimum and maximum  percentages or amounts to be contributed and a date by when
such Agreement must be filed with the Committee.  Notwithstanding the foregoing,
in no event may more than $8,000 be deducted from the Participant's compensation
(as defined by the  Committee)  for each Option Period and the maximum number of
shares which can be purchased by a  Participant  during the Option  Period shall
not exceed such amount divided by  eighty-five  percent of the Fair Market Value
of a share of Common Stock on the  applicable  grant date (as  determined  under
Section  5.4).  Such  contributions  will be held in the  general  funds  of the
Company,  and no  interest  shall  accrue on any  amounts  held under this Plan,
unless expressly determined by the Committee.  If payroll deductions are made by
a Subsidiary,  that  corporation will promptly remit the amount of the deduction
to the Company.  A  Participant's  Contribution  Rate, once  established,  shall
remain in effect  during the Option Period  unless and until  contributions  are
suspended or fully  discontinued  in order to comply with Section  401(k) of the
Code or for such  other  reasons as the  Committee  in its sole  discretion  may
determine, or if the Participant shall request suspension or discontinuance.  If
a Participant  requests to suspend payroll  deductions the Participant may do so
at such times and in such manner as the  Committee  may permit,  and  previously
deducted  amounts  shall be retained  until the earlier of the Exercise Date and
the date the Participant totally  discontinues payroll deductions and requests a
distribution of the Account.  A Participant who has suspended  contributions may
recommence  payroll  deductions  at such time,  if at all, as  determined by the
Committee. If a Participant requests to






                                     - 10 -

<PAGE>




totally discontinue  payroll deductions,  the Participant may do so by providing
written  notice to the  Committee.  There shall be paid to the  Participant  the
value of the Participant's Account as soon as administratively  possible and the
Participant shall not receive any shares as of the Exercise Date.

         5.6 Purchase of Shares.  Subject to Sections  5.7,  5.8,  5.9, 5.10 and
5.11 on each  Exercise  Date,  a  Participant  who has  previously  executed  an
Agreement  with respect to a specific  Grant Date and made one or more  payments
described  in Section  5.5 shall be deemed to have  exercised  the Option to the
extent of the value of the  Account,  subject to the  $8,000  limit set forth in
Section 5.5 with respect to the Option being  exercised,  and shall be deemed to
have purchased such number of full shares of Common Stock as equals the value of
the Account,  subject to the limits of Sections  423(b)(3)  and 423(b)(8) of the
Code  and  the  number  of  shares   available  as  of  the  Exercise  Date  and
proportionably  allocable to other  Participants for that Grant Date. The number
of shares of Common  Stock to be  purchased  as of any  Exercise  Date  shall be
determined  by dividing  the Option Price per share of the Common Stock into the
Account  value and the value of the shares so purchased  shall be charged to the
Account.  Any value remaining in an Account of the Participant shall be returned
to the  Participant  and not applied to purchase  Common Stock.  Certificates of
Common Stock  purchased  hereunder  may be held by the  custodian as provided in
Section  4.6.  Any  Common  Stock  issued to the  Participant  who is subject to
reporting  under  Section 16 of the Exchange Act must be held for six (6) months
to the extent  required by law to avoid  liability  under the Exchange  Act. The
Committee  may amend the Plan or any  Agreement  or  provide  in  operation  for
Participants  to dispose of shares of Common  Stock  received  upon the Exercise
Date on or  immediately  thereafter  (which time may  include any period  during
which  the  Option  is held) to the  extent  such  change  would  not  result in
liability under Section 16 of the Exchange Act. If the total number of shares to
be purchased as of any Exercise Date by all  Participants  exceeds the number of
shares  authorized  under this Plan or made available by the Committee as to any
Exercise Date, a pro rata allocation of the available  shares will be made among
all  Participants  authorizing  such payroll  deductions  based on the amount of
their respective payroll deductions through the Exercise Date.

         5.7  Cancellation  of  Options.  Except  as  otherwise  provided  in an
Agreement,  an Option shall cease to be exercisable and shall be cancelled on or
after the expiration of the Option Period.

         5.8 Terminated Employees. Except as otherwise provided by the Committee
or in an Agreement,  any  Participant who incurs a Termination of Employment for
any reason,  except death,  Disability or  Retirement,  during the Option Period
shall cease to be a  Participant,  the Option shall be null and void on the date
of the  Termination  of Employment  without  notice to the  Participant  and the
balance of the Account of the Participant shall be distributed to him as soon as
administratively possible.

         5.9 Deceased  Employees.  If a  Participant  shall die during an Option
Period while an Eligible  Employee,  no further  contributions by deduction from
regularly  scheduled  payments on behalf of the  deceased  Participant  shall be
made, except that the Representative may make a single







                                     - 11 -

<PAGE>




sum  payment  with  respect to the Option at any time on or before the  Exercise
Date equal to the amount the Participant would have contributed as determined by
the  Committee  for the payroll  periods  remaining  to the Exercise  Date.  The
Representative may at any time prior to the Exercise Date request a distribution
of the  Account.  If the  Representative  does not request a  distribution,  the
balance  accumulated  in the  deceased  Participant's  Account  shall be used to
purchase shares of the Common Stock on the previously mentioned Exercise Date.

         5.10  Disabled  or  Retired  Employees.   If  a  Participant  incurs  a
Termination  of  Employment  due to  Disability,  or if a  Participant  incurs a
Termination of Employment due to Retirement, during an Option Period, no further
contributions  by deduction from regularly  scheduled  payments on behalf of the
disabled or retired  Participant  shall be made, except that the Participant may
make a single sum  payment  with  respect to the Option at any time on or before
the Exercise Date equal to the amount the Participant  would have contributed as
determined by the Committee  for the payroll  periods  remaining to the Exercise
Date.  The  Participant  may at any time prior to the  Exercise  Date  request a
distribution of the Account.  If the Participant does not request a distribution
of the Account, the balance accumulated in the disabled or retired Participant's
Account shall be used to purchase  shares of the Common Stock on the  previously
mentioned Exercise Date.

         5.11 Limitations.  Notwithstanding any other provision of this Plan, in
no event may a  Participant  (i) purchase  under the Plan during a calendar year
Common Stock having a fair market value  (determined at Grant Date) of more than
$25,000 or (ii)  receive any rights to  purchase  stock  hereunder  if he or she
beneficially owns,  immediately after such receipt, five percent (5%) or more of
the total voting power or value of all classes of stock of the Company.

         5.12  Nonassignability.  Neither  the Option nor the  Account  shall be
assigned,  transferred (except as herein provided),  pledged, or hypothecated in
any way (whether by operation  of law or  otherwise),  other than by will or the
laws of descent and distribution or pursuant to a domestic relations order which
would be a qualified  domestic  relations  order as defined in the Code or ERISA
(if the Plan were  described  in the relevant  Sections)  but only to the extent
consistent with Section 423 of the Code.  Except as provided herein,  the Option
is exercisable  during a  Participant's  lifetime only by the Participant or the
appointed guardian or legal  representative of the Participant,  and neither the
Option nor the Account  shall be subject to  execution,  attachment,  or similar
process. Any attempted assignment,  transfer,  pledge,  hypothecation,  or other
disposition contrary to the provisions hereof, and the levy of any attachment or
similar  process  upon  the  Option  or the  Account  shall be null and void and
without effect.  The Company shall have the right to terminate the Option or the
Account in the event of any such assignment,  transfer,  pledge,  hypothecation,
other disposition of the Option or the Account, or levy of attachment or similar
process,  by notice to that effect to the person then  entitled to exercise  the
Option;  provided,  however,  that termination of the Option hereunder shall not
prejudice  any rights or remedies  which the Company may have under an Agreement
or otherwise.






                                     - 12 -

<PAGE>




                                   ARTICLE VI

                    GENERAL PROVISIONS APPLICABLE TO THE PLAN

         6.1 Termination of Plan. To the extent required by law, this Plan shall
terminate  on the last  day of the ten  (10)  year  period  commencing  with the
effective  date or at such  earlier  time as the  Board  may  determine,  and no
Options shall be granted under the Plan after that date. Any Options outstanding
under the Plan at the time of its termination  shall remain in effect until they
shall have been exercised, expired or otherwise cancelled, settled or terminated
as provided herein or in an Agreement, and such outstanding Options shall not be
affected by such  termination of the Plan. The provisions of the Plan in respect
to the full and final authority of the Committee under the Plan,  other than the
authority  to grant  Options,  and in  respect  of a  Participant's  obligations
respecting shares of Common Stock received pursuant to the exercise of an Option
shall continue notwithstanding the termination of the Plan.

         6.2 Investment  Representation.  In the event the disposition of Common
Stock  acquired upon the exercise of any Option is not covered by a then current
registration statement under the Securities Act and is not otherwise exempt from
such  registration,  the Common Stock so acquired  shall be  restricted  against
transfer to the extent required by the Securities Act or regulations thereunder,
and each Agreement shall contain a requirement  that, upon demand by the Company
for such  representation,  the  individual  exercising  an Option shall state in
writing, as a condition precedent to each exercise of the Option, in whole or in
part, that the Common Stock acquired by such exercise is acquired for investment
purposes only and not for resale or with a view to  distribution.  The Committee
may set forth in an Agreement  such other terms and  conditions  relating to the
registration  or  qualification  of the  Common  Stock  under  federal  or state
securities laws as it desires,  including, in its discretion,  the imposition of
an  obligation  on the Company to cause the Common Stock issued to a Participant
to be registered under the Securities Act.

         6.3      Effect of Certain Changes.

                  (a) Anti-Dilution. In the event of any Company stock dividend,
         stock split,  combination  or exchange of shares,  recapitalization  or
         other  change  in  the  capital  structure  of the  Company,  corporate
         separation or division of the Company (including, but not limited to, a
         split-up,  spin-off,  split-off or distribution to Company shareholders
         other than a normal  cash  dividend),  sale by the  Company of all or a
         substantial  portion of its assets (as measured on either a stand-alone
         or consolidated  basis),  reorganization,  rights offering,  partial or
         complete  liquidation,  or any  other  corporate  transaction  or event
         involving  the  Company  and  having  an effect  similar  to any of the
         foregoing, then the Committee may adjust or substitute, as the case may
         be, the number of shares of Common Stock  available  for Options  under
         the Plan,  the number of shares of Common Stock covered by  outstanding
         Options,  the exercise price per share of outstanding  Options, and any
         other  characteristics  or terms of the Options as the Committee  shall
         deem necessary or appropriate to reflect  equitably the effects of such
         changes to the Participants; provided,






                                     - 13 -

<PAGE>




         however,  that any fractional  shares  resulting  from such  adjustment
         shall be  eliminated  by  rounding  to the next lower  whole  number of
         shares  with  appropriate  payment for such  fractional  share as shall
         reasonably be determined by the Committee.

                  (b) Change in Control.  If there is a Change in Control of the
         Company (as defined herein) or the Committee  reasonably  anticipates a
         Change in Control is likely to occur then (1) the  Committee  may cause
         each  Option  to be  immediately  exercisable;  (2) the  Committee  may
         provide that any Option  exercisable  on the date of any such Change in
         Control  may be  purchased  by the  Company  in an amount  equal to the
         excess,  if any, of the aggregate fair market value per share of Common
         Stock  subject to the Option (or portion  thereof)  over the  aggregate
         Option Price of the shares  subject to the Option (or portion  thereof)
         which the  Committee  determines  to  purchase;  or (3) the Company may
         provide for any combination of (1) and (2) above.  For purposes of this
         Section  6.3(b),  the  aggregate  fair market value per share of Common
         Stock subject to the Option that the  Committee  determines to purchase
         shall be  determined  by the Committee by reference to the cash or fair
         market value, determined by the Committee, of the securities,  property
         or other  consideration  receivable  pursuant  to the Change in Control
         described in this Section  6.3(b).  The  aggregate  Option Price of the
         Common  Stock shall be  determined  by  multiplying  the number of such
         shares  by the  Option  Price.  If the  event  of a Change  in  Control
         described in Section  6(c)(iii),  and if the Option is unexercised  and
         the Committee  does not exercise its  discretion  hereunder to purchase
         the Option,  then the Option  shall be regarded as the right to receive
         the securities,  property,  cash or other  consideration  receivable by
         shareholders of the Company  immediately prior to the Change in Control
         described in Section  6(c)(iii).  The provisions of this Section 6.3(b)
         shall be construed  consistently  with the terms or  conditions  of any
         regulation or ruling respecting the status of Options under Section 423
         of the Code and the receipt of cash or other  consideration  coincident
         with the  cancellation  of such  Options,  and in order to provide  the
         Participant  the  economic  benefit  of the  Option  without  incurring
         liability under Section 16(b) of the Exchange Act.

                  (c)  "Change in Control"  shall be deemed to have  occurred on
         the first to occur of any of the following events:

                           (i) The  acquisition  by any  individual,  entity  or
                  group  (within the meaning of Section  13(d)(3) or 14(d)(2) of
                  the Exchange Act (a "Person") of beneficial  ownership (within
                  the meaning of Rule 13d-3  promulgated under the Exchange Act)
                  of  twenty-five  percent  25% or more of  either  (A) the then
                  outstanding  shares  of  common  stock  of  the  Company  (the
                  "Outstanding Company Common Stock") or (B) the combined voting
                  power of the then outstanding voting securities of the Company
                  entitled to vote  generally in the election of directors  (the
                  "Outstanding Company Voting Securities");  provided,  however,
                  that the following  acquisitions shall not constitute a Change
                  in Control of the Company:  (1) any acquisition  directly from
                  the Company (excluding an acquisition by virtue of the






                                     - 14 -

<PAGE>




                  exercise of a conversion  privilege),  (2) any  acquisition by
                  the Company,  (3) any acquisition by any employee benefit plan
                  (or related  trust)  sponsored or maintained by the Company or
                  any  corporation   controlled  by  the  Company,  or  (4)  any
                  acquisition by any corporation  pursuant to a  reorganization,
                  merger or  consolidation,  if, following such  reorganization,
                  merger or consolidation,  the conditions  described in clauses
                  (A),  (B) and (C) of  subsection  (iii)  of this  Section  are
                  satisfied; or

                     (ii)  Individuals  who,  as of the  effective  date of this
                  Plan,  constitute  the Board of  Directors of the Company (the
                  "Incumbent  Board of the  Company")  cease  for any  reason to
                  constitute  at least a majority of the Board of  Directors  of
                  the Company; provided, however, that any individual becoming a
                  director  subsequent  to the date hereof  whose  election,  or
                  nomination  for election by the  Company's  shareholders,  was
                  approved  by a vote of at least a  majority  of the  directors
                  then  comprising  the Incumbent  Board of the Company shall be
                  considered  as  though  such  individual  were a member of the
                  Incumbent  Board  of the  Company,  but  excluding,  for  this
                  purpose,  any such  individual  whose  initial  assumption  of
                  office  occurs as a result  of either an actual or  threatened
                  election contest (as contemplated by Rule 14a-11 of Regulation
                  14A  promulgated  under the  Exchange  Act) or other actual or
                  threatened solicitation of proxies or consents by or on behalf
                  of a Person  other than the Board of Directors of the Company;
                  or

                    (iii)  Approval  by the  shareholders  of the  Company  of a
                  reorganization, merger or consolidation, in each case, unless,
                  following such  reorganization,  merger or consolidation,  (A)
                  more than  seventy-five  percent (75%) of,  respectively,  the
                  then  outstanding  shares of common  stock of the  corporation
                  resulting from such  reorganization,  merger or  consolidation
                  and the combined voting power of the then  outstanding  voting
                  securities of such  corporation  entitled to vote generally in
                  the election of directors is then beneficially owned, directly
                  or indirectly,  by all or substantially all of the individuals
                  and entities who were the beneficial owners, respectively,  of
                  the Outstanding  Company Common Stock and Outstanding  Company
                  Voting Securities  immediately  prior to such  reorganization,
                  merger or consolidation in substantially  the same proportions
                  as their ownership,  immediately prior to such reorganization,
                  merger or  consolidation,  of the  Outstanding  Company Common
                  Stock and Outstanding  Company Voting Securities,  as the case
                  may be, (B) no Person  (excluding  the  Company,  any employee
                  benefit  plan  (or  related  trust)  of the  Company  or  such
                  corporation  resulting  from  such  reorganization,  merger or
                  consolidation and any Person  beneficially  owning immediately
                  prior  to  such   reorganization,   merger  or  consolidation,
                  directly or indirectly,  twenty-five  percent (25%) or more of
                  the  Outstanding  Company Common Stock or  Outstanding  Voting
                  Securities, as the case may be) beneficially owns, directly or
                  indirectly,    twenty-five   percent   (25%)   or   more   of,
                  respectively,  the then outstanding  shares of common stock of
                  the corporation resulting from such reorganization, merger or





                                     - 15 -

<PAGE>




                  consolidation  or  the  combined  voting  power  of  the  then
                  outstanding voting securities of such corporation  entitled to
                  vote generally in the election of directors and (C) at least a
                  majority  of the  members  of the  board of  directors  of the
                  corporation  resulting  from  such  reorganization,  merger or
                  consolidation  were  members  of the  Incumbent  Board  of the
                  Company at the time of the execution of the initial  agreement
                  providing for such reorganization, merger or consolidation; or

                           (iv) Approval by the  shareholders  of the Company of
                  the sale or other  disposition of all or substantially  all of
                  the assets of the Company,  other than to a corporation,  with
                  respect to which following such sale or other disposition, (A)
                  more than  seventy-five  percent (75%) of,  respectively,  the
                  then  outstanding  shares of common stock of such  corporation
                  and the combined voting power of the then  outstanding  voting
                  securities of such  corporation  entitled to vote generally in
                  the election of directors is then beneficially owned, directly
                  or indirectly,  by all or substantially all of the individuals
                  and entities who were the beneficial owners, respectively,  of
                  the Outstanding  Company Common Stock and Outstanding  Company
                  Voting  Securities  immediately  prior  to such  sale or other
                  disposition  in  substantially  the same  proportion  as their
                  ownership,   immediately   prior   to  such   sale  or   other
                  disposition,  of the  Outstanding  Company  Common  Stock  and
                  Outstanding Company Voting Securities, as the case may be, (B)
                  no Person  (excluding the Company,  any employee  benefit plan
                  (or related trust) of the Company or such  corporation and any
                  Person beneficially owning,  immediately prior to such sale or
                  other disposition, directly or indirectly, twenty-five percent
                  (25%)  or more of the  Outstanding  Company  Common  Stock  or
                  Outstanding  Company  Voting  Securities,  as the case may be)
                  beneficially owns, directly or indirectly, twenty-five percent
                  (25%) or more of, respectively, the then outstanding shares of
                  common stock of such corporation and the combined voting power
                  of the then outstanding  voting securities of such corporation
                  entitled to vote  generally in the  election of directors  and
                  (3) at  least  a  majority  of the  members  of the  board  of
                  directors of such  corporation  were members of the  Incumbent
                  Board  of the  Company  at the  time of the  execution  of the
                  initial  agreement or action of the Board  providing  for such
                  sale or other disposition of assets of the Company.

                  (d)  The  Committee  may,  in  its  discretion,  grant  to the
         Participant,  in exchange for the  surrender  and  cancellation  of the
         Option,  a new Option on such terms and conditions as may be determined
         by the Committee in accordance with the Plan.

         6.4  Withholding.  Notwithstanding  any other  provision  hereof,  as a
condition of delivery or transfer of shares of Common  Stock,  the  Committee in
its sole  discretion may require the  Participant to pay to the Company,  or the
Committee may at its election  withhold from any wages,  salary,  or stock to be
issued to a Participant  pursuant to the exercise of an Option, or other payment
due to the Participant, an amount sufficient to satisfy all present or estimated
future






                                     - 16 -

<PAGE>




federal,  state  and local  withholding  tax  requirements  related  thereto.  A
Participant or former  Participant shall notify the Company  immediately of such
disposition  in writing  and make all  necessary  arrangements  in order for the
Company or a Subsidiary to obtain any and all  deductions,  as determined by the
Committee.  The  Participant  may satisfy any  requirement  under the Plan or an
Agreement with respect to the Company's federal,  state or local tax withholding
obligation by requesting  that the Committee  withhold and not transfer or issue
shares  of Common  Stock  with a Fair  Market  Value  equal to such  withholding
obligation,  otherwise  issuable or transferable to him pursuant to the exercise
of that  portion of the Option.  An  Agreement  may provide for shares of Common
Stock to be  delivered  or withheld  having a Fair Market Value in excess of the
minimum  amount  required  to be  withheld,  but  not in  excess  of the  amount
determined by applying the Participant's maximum marginal tax rate. Any right or
election  of the  Participant  under  this  Section  6.4 shall be subject to the
approval of the  Committee  and shall be in  compliance  with  Section 16 of the
Exchange Act. The amount of required  withholding  shall, at the election of the
Participant,  be at a specified rate not less than the statutory minimum federal
and state  withholding rate and not greater than the maximum federal,  state and
local  marginal tax rate  applicable to the  Participant  and to the  particular
option exercise transaction.

         6.5 No Company Obligation. The Company shall have no duty or obligation
to  affirmatively  disclose to a record or beneficial  holder of an Option,  and
such  holder  shall have no right to be advised  of,  any  material  information
regarding  the  Company at any time  prior to,  upon or in  connection  with the
exercise of an Option.

         6.6 Committee  Discretion.  The  Committee  may in its sole  discretion
include in any Agreement an obligation that the Company purchase a Participant's
shares of Common Stock  received upon the exercise of an Option  (including  the
repurchase of any unexercised Options which have not expired), or may obligate a
Participant  to sell shares of Common  Stock to the Company  upon such terms and
conditions as the  Committee  may  determine and set forth in an Agreement.  The
provisions  of this Article VI shall be  construed by the  Committee in its sole
discretion,  and shall be  subject  to such other  terms and  conditions  as the
Committee may from time to time determine.


                                   ARTICLE VII

                                  MISCELLANEOUS

         7.1  Indemnification  of the Board and  Committee.  In addition to such
other rights of  indemnification as they may have and to the extent permitted by
law,  the Company  shall  indemnify,  defend and hold  harmless  the Board,  the
Committee,  the members of the Committee,  the officers of the Company,  and any
agent  or  representative  selected  by the  Board  or  Committee  (collectively
"indemnified  party")  against  the  reasonable  expenses,   including,  without
limitation,  attorneys'  fees,  actually and necessarily  incurred in connection
with the defense of any action, suit or proceeding, or any threat thereof, or in
connection with any appeal therein, to which they or






                                     - 17 -

<PAGE>




any of them may be a party by reason of any act or omission in  connection  with
the Plan or any Option granted thereunder,  and against all amounts paid by them
in settlement  thereof  (provided  such  settlement is approved by legal counsel
selected by the  Company) or paid by them in  satisfaction  of a judgment in any
action,  suit or proceeding,  except in relation to matters as to which it shall
be adjudged in such action,  suit or proceeding that such  indemnified  party is
liable  for gross  negligence  or gross  misconduct  in the  performance  of his
duties;  provided  that  within  sixty (60) days after  institution  of any such
action,  suit or proceeding the indemnified party may in writing elect to defend
the same at its sole expense,  and if such  election is made,  the Company shall
have no further  liability or  obligations to the  indemnified  party under this
Section.  The  provisions  of this  Section  7.1 shall in no way limit any other
obligation or  arrangements  the Company may have with regard to indemnifying an
indemnified party.

         7.2  Mitigation  of Excise Tax.  If any payment or right  accruing to a
Participant  under this Plan  (without the  application  of this  Section  7.2),
either  alone  or  together  with  other  payments  or  rights  accruing  to the
Participant  from the Company ("Total  Payments")  would constitute a "parachute
payment"  (as defined in Section 280G of the Code and  regulations  thereunder),
such payment or right shall be reduced to the largest  amount or greatest  right
that will result in no portion of the amount payable or right accruing under the
Plan  being  subject to an excise  tax under  Section  4999 of the Code or being
disallowed as a deduction under Section 280G of the Code. The  determination  of
whether  any  reduction  in the rights or  payments  under this Plan is to apply
shall  be made by the  Committee  in good  faith  after  consultation  with  the
Participant,  and such  determination  shall be  conclusive  and  binding on the
Participant. The Participant shall cooperate in good faith with the Committee in
making such  determination  and  providing the  necessary  information  for this
purpose.  The foregoing  provisions of this Section 7.2 shall apply with respect
to any person only if after  reduction  for any  applicable  federal  excise tax
imposed by Section 4999 of the Code and federal  income tax imposed by the Code,
the Total Payments  accruing to such person would be less than the amount of the
Total Payments as reduced, if applicable,  under the foregoing provisions of the
Plan and after reduction for only federal income taxes.

         7.3 Interpretation.  Whenever necessary or appropriate in this Plan and
where the context so requires,  the singular term and the related pronouns shall
include the plural and the masculine and feminine gender.

         7.4 Governing Law. The Plan and any Agreement  shall be governed by the
laws of the State of Delaware (other than its laws respecting choice of law).

         7.5 Limitations on Liability.  No liability whatever shall attach to or
be incurred by any past, present or future stockholders,  officers or directors,
merely  as  such,  of the  Company  under  or by  reason  of  any of the  terms,
conditions or agreements contained in this Plan, in an Agreement or implied from
either  thereof,  and any and all  liabilities  of,  and any and all  rights and
claims against the Company, or any shareholder,  officer or director,  merely as
such,  whether  arising  at common  law or in equity or  created  by  statute or
constitution or otherwise, pertaining






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<PAGE>




to this Plan or to an  Agreement,  are hereby  expressly  waived and released by
every  Participant as a part of the  consideration  for any benefits provided by
the Company  under this Plan. A person who shall claim a right or benefit  under
this Plan shall be entitled only to claim against the Company for such benefit.

         7.6  Validity.  If any  provision  of this Plan shall for any reason be
held to be invalid or unenforceable,  such invalidity or unenforceability  shall
not affect any other  provision  hereof,  and this Plan shall be construed as if
such invalid or unenforceable provision were omitted.

         7.7 Assignment.  This Plan shall inure to the benefit of and be binding
upon the parties hereof and their respective successors and permitted assigns.

         7.8  Captions.   The  captions  and  headings  to  this  Plan  are  for
convenience of reference only and in no way define,  limit or describe the scope
or the intent of this Plan or any part  hereof,  nor in any way affect this Plan
or any part hereof.

         7.9  Amendments.  The Board of Directors may at any time amend,  waive,
discharge or terminate the Plan even with prejudice to a Participant.  The Board
or the Committee may amend, waive, discharge, terminate, modify, extend, replace
or renew an outstanding  Option  Agreement even with prejudice to a Participant;
provided such a change does not cause the Plan to fail to be a plan as described
in Section 423 of the Code.

         7.10  Entire  Agreement.  This Plan and the  Agreement  constitute  the
entire agreement with respect to the subject matter hereof and thereof, provided
that in the event of any inconsistency  between the Plan and the Agreement,  the
terms and conditions of this Plan shall control.

         7.11  Rights  with  Respect  to  Continuance  of  Employment.   Nothing
contained  herein  or in an  Agreement  shall be  deemed  to alter  the  at-will
employment  relationship  between the Company or a Subsidiary and a Participant.
Nothing  contained  herein or in an Agreement shall be construed to constitute a
contract of employment  between the Company or a Subsidiary  and a  Participant.
The Company or, as applicable,  the Subsidiary and the Participant each continue
to have the right to terminate the employment  relationship  at any time for any
reason.  The  company  or  Subsidiary  shall  have no  obligation  to retain the
Participant in its employ as a result of this Plan.  There shall be no inference
as to the length of employment  hereby,  and the Company or Subsidiary  reserves
the same rights to terminate  the  Participant's  employment as existed prior to
the individual becoming a Participant in this Plan.

         7.12 Options for Shares in  Substitution  for Stock Options  Granted by
Other  Corporations.  Options may be granted under the Plan from time to time in
substitution for stock options or stock  appreciation  rights held by employees,
directors  or service  providers of other  corporations  who are about to become
employees  of the  Company  as the  result of a merger or  consolidation  of the
employing corporation with the Company, or the acquisition by the Company






                                     - 19 -

<PAGE>




of the assets of the employing corporation, or the acquisition by the Company of
the stock of the  employing  corporation,  as the  result of which it  becomes a
designated  employer  under the Plan. The terms and conditions of the Options so
granted  may vary from the terms  and  conditions  set forth in this Plan at the
time of such grant as the  majority  of the  members of the  Committee  may deem
appropriate to conform, in whole or in part, to the provisions of the Options in
substitution for which they are granted.

         7.13  Procedure  for  Adoption.  Any  Subsidiary  of the Company may by
resolution  of such  Subsidiary's  board of  directors,  with the consent of the
Board of Directors and subject to such conditions as may be imposed by the Board
of  Directors,  adopt the Plan for the benefit of its  employees  as of the date
specified in the board  resolution.  The Board shall have the power to make such
designation before or after the Plan is approved by stockholders.

         7.14 Procedure for  Withdrawal.  Any  Subsidiary  which has adopted the
Plan may, by resolution of the board of directors of such  Subsidiary,  with the
consent  of the Board of  Directors  and  subject to such  conditions  as may be
imposed by the Board of Directors,  terminate its adoption of the Plan; provided
such  termination  of  adoption  does  not  cause  the Plan to fail to be a plan
described in Section 423 of the Code.

         7.15  Expenses.  Expenses of the Plan,  including  the fees or expenses
incurred by the transfer  agent in connection  with the transfer of Common Stock
and brokerage fees or expenses  incurred in connection  with the  acquisition of
Common Stock in connection with the Plan or transfer to the  Participant,  shall
be charged to the Accounts of affected  Participants or charged to the accretion
to the amounts  credited to any Account if the Participant is credited with such
accretion  regardless of the method of accounting for such accretion,  except to
the extent paid by the Company or otherwise  accounted  for by the Company.  Any
expense  or fee  associated  with the  Common  Stock,  including,  for  example,
custodian  or  brokerage  fees  after the  Common  Stock is  transferred  to the
Participant or for his account,  or fees or  commissions in connection  with the
disposition of shares, shall be borne by the Participant.

         Executed and effective as of the _____ day of ____________, 1998.



                                      ANICOM, INC.


                                      By:     _______________________________ 

                                      Title:  _______________________________




                                                     


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