<PAGE>


                                   EXHIBIT 4.5













                              DATA DIMENSIONS, INC.

                             1997 STOCK OPTION PLAN

<PAGE>

                              DATA DIMENSIONS, INC.
                             1997 STOCK OPTION PLAN


  I.  STATEMENT OF PURPOSE.
      --------------------


<PAGE>


      The principal purposes of this Stock Option Plan ("Plan") are to secure to
Data Dimensions, Inc. (the "Company") the advantages of the incentive inherent
in stock ownership on the part of employees, officers, directors, and
consultants responsible for the continued success of the Company and to create
in such individuals a proprietary interest in, and a greater concern for, the
welfare of the Company through the grant of options to acquire shares of the
common stock of the Company ("Common Stock"). Each incentive stock option
("ISO") granted hereunder is intended to constitute an "incentive stock option,"
as such term is defined in Section 422 of the Internal Revenue Code of 1986, as
the same may be amended from time to time (the "Code"), and this Plan and each
such ISO is intended to comply with all of the requirements of said Section 422
and of all other provisions of the Code applicable to incentive stock options
and to plans issuing the same. Each nonstatutory stock option ("Non-ISO")
granted hereunder is intended to constitute a nonstatutory stock option that
does not comply with the requirements of Section 422 of the Code. ISO's and
Non-ISO's shall sometimes hereinafter be referred to collectively as "Options".
This Plan is expected to benefit shareholders by enabling the Company to attract
and retain personnel of the highest caliber by offering to them an opportunity
to share in any increase in the value of the Common Stock to which such
personnel have contributed.

   2.    ADMINISTRATION.
         --------------

         2.1 The Plan shall be administered by the Board of Directors of the
Company ("Board") or a committee or committees (which term includes
subcommittees) appointed by, and consisting of two or more members of, the Board
(hereinafter, "Plan Administrator"). If and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934,
as amended ("Exchange Act"), the Board shall consider in selecting the Plan
Administrator and the membership of any committee acting as Plan Administrator
of the Plan with respect to any persons subject or likely to become subject to
Section 16 under the Exchange Act the provisions regarding (a) "outside
directors," as contemplated by Section 162(m) of the Code, and (b) "nonemployee
directors," as contemplated by Rule 16b-3 under the Exchange Act. The Board may
delegate the responsibility for administering the Plan with respect to
designated classes of eligible persons to different committees, subject to such
limitations as the Board deems appropriate. Committee members shall serve for
such term as the Board may determine, subject to removal by the Board at any
time.

         2.2 Except for the terms and conditions explicitly set forth in the
Plan, the Plan Administrator shall have exclusive authority, in its discretion,
to determine all matters relating to awards under the Plan, including the
selection of individuals to be granted awards of options, the type of options,
the number of shares of Common Stock subject to an Option, all terms,
conditions, restrictions and limitations, if any, of an Option, and the terms of
any instrument that evidences the Option. The Plan Administrator shall also have
exclusive authority to interpret the Plan and may from time to time adopt, and
change, rules and regulations of general application for the Plan's
administration. The Plan Administrator's interpretation of the Plan and its
rules and

                                       17

<PAGE>


regulations, and all actions taken and determinations made by the Plan
Administrator pursuant to the Plan, shall be conclusive and binding on all
parties involved or affected. The Plan Administrator may delegate administrative
duties to such of the Company's officers as it so determines.

     3.  ELIGIBILITY.
         -----------

         3.1 ISO's may be granted to any employee of the Company or of an
Affiliate of the Company, as defined in Section 3.2 below. Non-ISO's may be
granted to any employee, officer or director (whether or not also an employee),
or consultant of the Company or of an Affiliate of the Company. Each employee,
officer, director, or consultant selected by the Plan Administrator to receive
an Option shall sometimes hereinafter be referred to as an "Optionee".

         3.2 As used in this Plan, an "Affiliate" of a corporation shall refer
to a "parent corporation" of such corporation as described in Section 424(e) of
the Code or a "subsidiary corporation" of such corporation as described in
Section 424(f) of the Code.

         3.3 An Optionee who is not an employee of the Company or of an
Affiliate of the Company shall not be eligible to receive an ISO hereunder and
no ISO's shall be granted to any such non-employee Optionee.

         3.4 No Option shall be granted hereunder to any Optionee unless the
Plan Administrator shall have determined, based on the advice of counsel, that
the grant of such option (and the exercise thereof by the Optionee) will not
violate the securities law of the state where the Optionee resides.

    4.   SHARES SUBJECT TO THE PLAN.
         --------------------------

         4.1 The Plan Administrator, from time to time, may provide for the
option and sale in the aggregate of up to One Million (1,000,000) shares of
Common Stock. The number of such shares shall be adjusted to take account of the
events referred to in Section 10 hereof.

         4.2 Upon exercise of an Option, the number of shares of Common Stock
thereafter available hereunder and under the Option shall decrease by the number
of shares of Common Stock as to which such Option was exercised; provided that
if such shares are pledged to secure a promissory note given in payment of the
Option Price for such shares and, as a result of a default on such note, the
pledged shares are returned to the Company, then such shares shall again be
available for the purposes of this Plan.

         4.3 If any Option granted hereunder shall expire or terminate for any
reason without having been exercised in full, the unpurchased shares subject
thereto shall again be available for the purposes of this Plan.

                                       18

<PAGE>


         4.4 The Company shall at all times during the term of this Plan reserve
and keep available such number of shares as shall be sufficient to satisfy the
requirements of the Plan.

         4.5 Subject to any adjustment as provided in Section 10, if and so long
as the Common Stock is registered under Section 12 of the Exchange Act, not more
than One Hundred Thousand (100,000) shares of Common Stock may be made subject
to grants under the Plan to any one individual in the aggregate in any one
fiscal year of the Company, except the Company may make additional one-time
grants of up to Fifty Thousand (50,000) shares to a newly hired individual, such
limitation to be applied in a manner consistent with the requirements of, and
only to the extent required for compliance with, the exclusion from the
limitation on deductibility of compensation under Section 162(m) of the Code.

     5.  OPTION TERMS.
         ------------

         5.1 The Plan Administrator shall specify the following terms to be
contained in each Option granted to an Optionee hereunder, which Option shall be
executed by the Company and such Optionee:

         5.1.1 Whether such Option is an ISO or a Non-ISO;

         5.1.2 The number of shares of Common Stock subject to purchase pursuant
to such Option;

         5.1.3 The date on which the grant of such Option shall be effective
(the "Date of Grant");

         5.1.4 The period of time during which such Option shall be exercisable,
which shall in no event be more than ten (10) years following its Date of Grant
for ISO's; provided, however, that if an ISO is granted to an Optionee who on
the Date of Grant owns, either directly or indirectly within the meaning of
Section 424(d) of the Code, more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or an Affiliate of the
Company, the period of time during which such Option shall be exercisable shall
in no event be more than five (5) years following its Date of Grant;

         5.1.5 The price at which such Option shall be exercisable by the
Optionee (the "Option Price"); provided, however, that the Option Price shall in
no event be less than the fair market value, as defined in Section 5.2 below, on
the Date of Grant, of the shares of Common Stock subject thereto; and provided
further that, if such Option is granted to an Optionee who on the Date of Grant
owns, either directly or indirectly within the meaning of Section 424(d) of the
Code, more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or an Affiliate of the Company, then the Option
Price specified in such Option shall be at least one hundred ten

                                       19

<PAGE>


percent (110%) of the fair market value, on the Date of Grant, of the Common
Stock subject thereto;

         5.1.6 Any vesting schedule upon which the exercise of an Option is
contingent; provided that the Plan Administrator shall have complete discretion
with respect to the terms of any vesting schedule upon which the exercise of an
Option is contingent, including, without limitation, discretion (a) to allow
full and immediate vesting upon grant of such Option, (b) to permit partial
vesting in stated percentage amounts based on the length of the holding period
of such Option, or (c) to permit full vesting after a stated holding period has
passed; and

         5.1.7 Such other terms and conditions as the Plan Administrator deems
advisable and as are consistent with the purpose of this Plan.

      5.2 Fair market value shall be determined as follows:

         5.2.1 If the Company's Common Stock is publicly traded at the time an
Option is granted hereunder, fair market value shall be determined as of the
last business day for which the prices or quotes discussed in this Section 5.2.1
are available prior to the date such Option is granted and shall mean:

            (a) The average (on that date) of the high and low prices of the
Common Stock on the principal national securities exchange on which the Common
Stock is traded, if the Common Stock is then traded on a national securities
exchange; or

            (b) The last reported sale price (on that date) of the Common Stock
on the NASDAQ National Market System, if the Common Stock is not then traded on
a national securities exchange; or

            (c) The closing bid price (or average of bid prices) last quoted on
such date by an established quotation service for over-the-counter securities,
if the Common Stock is not reported on the NASDAQ National Market System.

         5.2.2 If the Common Stock is not publicly traded at the time an Option
is granted hereunder, fair market value shall be deemed to be the fair value of
the Common Stock as determined by the Plan Administrator after taking into
consideration all factors that it deems appropriate, including, without
limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length.

         5.3 No Option shall be granted hereunder during the suspension of this
Plan or after the termination of this Plan pursuant to Section 11.2. Except as
expressly provided herein, nothing contained in this Plan shall require that the
terms and conditions of Options granted hereunder be uniform.

         5.4 Notwithstanding anything in the Plan to the contrary, the Plan
Administrator may grant Options under the Plan in substitution for options
issued under



                                       20

<PAGE>

other plans, or assume under the Plan awards issued under other plans, if the
other plans are or were plans of other acquired entities ("Acquired Entities")
(or the parent of the Acquired Entity) and the new Option is substituted, or the
old option is assumed, by reason of a merger, consolidation, acquisition of
property or of stock, reorganization or liquidation (the "Acquisition
Transaction"). In the event that a written agreement pursuant to which the
Acquisition Transaction is completed is approved by the Board and said agreement
sets forth the terms and conditions of the substitution for or assumption of
outstanding awards of the Acquired Entity, said terms and conditions shall be
deemed to be the action of the Plan Administrator without any further action by
the Plan Administrator, and the persons holding such Options shall be deemed to
be Optionees.

      6.  LIMITATION ON GRANTS OF ISO'S.
          -----------------------------

      In the event that the aggregate fair market value of Common Stock and
other stock with respect to which ISO's granted to an Optionee hereunder or
incentive stock options granted to such Optionee under any other plan of the
Company or any of its Affiliates are exercisable for the first time during any
calendar year, exceeds the maximum permitted under Section 422(d) of the Code,
then to the extent of such excess, such ISO's shall be treated as Non-ISO's.

      7.  EXERCISE OF OPTION.
          ------------------

      7.1 Subject to any limitations or conditions imposed upon an Option
pursuant to Section 5 above, an Optionee may exercise an Option or any part
thereof (unless partial exercise is specifically prohibited by the terms of the
Option), by giving written notice thereof to the Company at its principal place
of business accompanied by payment as described in Section 7.2.

      7.2 The exercise price for shares purchased under an Option shall be paid
in full to the Company by delivery of consideration equal to the Option Price
for the whole number of shares as to which it is exercised. Such consideration
must be paid in cash or by check, or, in the Plan Administrator's discretion, a
combination of cash and/or check and/or one or both of the following alternative
forms: (a) tendering (either actually or, if and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, by attestation)
Common Stock already owned by the Optionee for at least six (6) months (or any
shorter period necessary to avoid a charge to the Company's earnings for
financial reporting purposes) having a fair market value on the day prior to the
exercise date equal to the aggregate Option Price or (b) if and so long as the
Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act,
delivery of a properly executed exercise notice, together with irrevocable
instructions, to (i) a brokerage firm, that may from time to time be designated
by the Company in its discretion, to deliver to the Company the aggregate amount
of sale or loan proceeds to pay the Option Price and any withholding tax
obligations that may arise in connection with the exercise and (ii) the Company,
to deliver the certificates for such purchased shares directly to such brokerage
firm, all in accordance with the regulations of the Federal Reserve Board. In
addition, the exercise price for shares purchased under an

                                       21
<PAGE>


Option may be paid, either singly or in combination with one or more of the
alternative forms of payment authorized by this Section 7.2, by (y) a promissory
note; or (z) such other consideration as the Plan Administrator may permit. Any
promissory note delivered in connection with exercise of an Option shall bear
interest at a rate specified by the Plan Administrator but in no case less than
the rate required to avoid imputation of interest (taking into account any
exceptions) for federal income tax purposes.

         7.3 As soon as practicable after exercise of an option in accordance
with Sections 7.1 and 7.2 above, the Company shall issue a stock certificate
evidencing the Common Stock with respect to which the Option has been exercised.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of such stock
certificate, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to such Common Stock, notwithstanding the
exercise of the Option. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
except as provided in Section 10 below.

         7.4 The amount to be paid by the Optionee upon exercise shall be the
full Option Price together with the amount of any taxes required to be withheld
with respect to the grant or exercise of the Option. Subject to the Plan and to
applicable law, the Plan Administrator, in its sole discretion, may permit such
withholding obligations to be paid, in whole or in part, by electing to have the
Company withhold shares of Common Stock or by transferring shares of Common
Stock to the Company, in such amounts as are equivalent to the fair market value
of the withholding obligation.

    8.   TRANSFERABILITY AND POST-TERMINATION EXERCISES.
         ----------------------------------------------

         8.1 Except as provided otherwise in this Section 8, no Option shall be
transferable or exercisable by any person other than the Optionee to whom such
Option was originally granted.

         8.2 The Plan Administrator shall establish and set forth in each
instrument that evidences an Option whether the Option will continue to be
exercisable and the terms and conditions of such exercise, if the Optionee
ceases to be employed by or provide services to the Company or its Affiliates,
which may be waived or modified by the Plan Administrator. If not so established
and subject to Section 8.3, the Option will be exercisable in accordance with
the following terms, which may be waived or modified by the Plan Administrator:

              8.2.1 In case of termination of Optionee's employment or services
other than by reason of death, the Option shall be exercisable, to the extent of
the number of shares purchasable at the date of termination, only:

                    (a) Except as set forth in Section 8.3 with regard to ISO's,
within one year if termination is coincident with normal retirement (as defined
by the Plan Administrator), early retirement at the Company's request, or
disability; or

                                       22

<PAGE>


                    (b)  Within three months after the date the Optionee ceases
to be an employee or consultant of the Company or Affiliate, if termination is
for reason other than as specified in (a), but, in either case, no later than
the remaining term of the Option.

              8.2.2 Any Option exercisable at the time of the Optionee's death
may be exercised to the extent of the number of shares purchasable at the date
of death, by the personal representative of the Optionee's estate or the
person(s) to whom the Optionee's rights under the Option have passed by will or
applicable laws of descent and distribution at any time or from time to time
within one year after the date of death, but in no event later than the
remaining term of the Option.

              8.2.3 Any portion of an Option not exercisable on the date of
termination of the Optionee's employment or services shall terminate on such
date, unless the Plan Administrator determines otherwise.

              8.2.4 Subject to Section 8.3, the effect of a Company-approved
leave of absence on terms and conditions of an Option shall be determined by the
Plan Administrator in its sole discretion. A transfer of services or employment
between or among the Company and subsidiaries shall not be considered a
termination of employment or services.

         8.3 To the extent required by Section 422 of the Code, ISO's shall be
subject to the following additional terms and conditions: To qualify for ISO tax
treatment, an Option designated as an ISO must be exercised within three months
after termination of employment for reasons other than death, except that in the
case of termination of employment due to total disability, such Option must be
exercised within one year after such termination. Employment shall not be deemed
to continue beyond the first 90 days of a leave of absence unless the Optionee's
reemployment rights are guaranteed by statute or contract. For purposes of this
Section 8.3, "total disability" shall mean a mental or physical impairment
expected to result in death or that has lasted or is expected to last for a
continuous period of 12 months or more and that causes the Optionee to be
unable, in the opinion of the Company and two independent physicians, to perform
his or her duties for the Company and to be engaged in any substantial gainful
activity. Total disability shall be deemed to have occurred on the first day
after the Company and two independent physicians furnish their opinion of total
disability to the Plan Administrator.

         8.4 In the event that a qualified domestic relations order, as defined
by Section 414(p) of the Code or Title I of the Employee Retirement Income
Security Act or the rules thereunder, mandates the transfer of any Option that
could have been exercised immediately prior to the issuance of such order, such
Option shall pass to the person or persons entitled thereto pursuant to the
order and shall be exercisable by such person or persons in accordance with the
terms thereof. In addition, a Non-ISO may be exercised during the Optionee's
lifetime, by the Optionee's guardian or legal representative.

                                       23

<PAGE>


         8.5 The Plan Administrator may, in its discretion, authorize all or a
portion of the Non-ISO's granted to an Optionee to be on terms which permit
transfer by such Optionee to (i) the spouse, children or grandchildren of the
Optionee ("Immediate Family Members"), (ii) a trust or trusts for the exclusive
benefit of such Immediate Family Members, or (iii) a partnership in which such
Immediate Family Members are the only partners, provided that (x) there may be
no consideration for any such transfer, (y) the stock option agreement pursuant
to which such Options are granted must be approved by the Plan Administrator and
must expressly provide for transferability in a manner consistent with this
Section, and (z) subsequent transfers of transferred Options are prohibited
except those in accordance with Section 8 of the Plan. The Plan Administrator
may, in its discretion, in permitting transferability, impose additional
conditions in the Option Agreement consistent with this section, including
without limitation imposition of a post-exercise holding period on transferees.
Following transfer, any such Options shall continue to be subject to the same
terms and conditions as were applicable immediately prior to transfer; provided,
the events of termination of employment of Sections 8 and 9 hereof shall
continue to be applied with respect to the original Optionee, following which
the Options shall be exercisable by the transferee only to the extent and for
the periods specified. The Company disclaims any obligation to provide notice to
a transferee of early termination of the Option due to termination of employment
or otherwise. Notwithstanding a transfer pursuant to the foregoing, the original
Optionee will remain subject to applicable withholding taxes upon exercise. No
transfer will be effective until written notice of transfer is delivered to the
Company. The Company reserves the right to approve transfers hereunder.

    9.   TERMINATION OF OPTIONS.
         ----------------------

  To the extent not earlier exercised, an Option shall terminate at the earliest
of the following dates:

         9.1 The termination date specified for such Option in the respective
Option Agreement;

         9.2 As specified in Section 8 above:

         9.3 The date of any sale, transfer, or hypothecation, or any attempted
sale, transfer or hypothecation, of such Option in violation of Section 8 above;
or

         9.4 The date specified in Section 10.2 below for such termination in
the event of a Terminating Event.

   10.   ADJUSTMENTS TO OPTIONS.
         ----------------------

         10.1 In the event of a material alteration in the capital structure of
the Company on account of a recapitalization, stock split, reverse stock split,
stock dividend, or otherwise, then the Plan Administrator shall make such
adjustments to this Plan and to

                                       24

<PAGE>

the Options then outstanding and thereafter granted hereunder as the Plan
Administrator determines to be appropriate and equitable under the
circumstances, so that the proportionate interest of each holder of any such
Option shall, to the extent practicable, be maintained as before the occurrence
of such event. Such adjustments may include, without limitation (a) a change in
the number or kind of shares of stock of the Company covered by such Options,
and (b) a change in the Option Price payable per share; provided, however, that
the aggregate Option Price applicable to the unexercised portion of existing
Options shall not be altered, it being intended that any adjustments made with
respect to such Options shall apply only to the price per share and the number
of shares subject thereto. For purposes of this Section 10.1, neither (i) the
issuance of additional shares of stock of the Company in exchange for adequate
consideration (including services), nor (ii) the conversion of outstanding
preferred shares of the Company into Common Stock shall be deemed material
alterations of the capital structure of the Company. In the event the Plan
Administrator shall determine that the nature of a material alteration in the
capital structure of the Company is such that it is not practical or feasible to
make appropriate adjustments to this Plan or to the Options granted hereunder,
such event shall be deemed a Terminating Event as defined in Section 10.2 below.

         10.2 Subject to Section 10.3, all Options granted hereunder shall
terminate upon the occurrence of any of the following events ("Terminating
Events"): (a) the dissolution or liquidation of the Company; or (b) a material
change in the capital structure of the Company that is subject to this Section
10.2 by virtue of the last sentence of Section 10.1 above.

         10.3 The Plan Administrator shall give notice to Optionees not less
than thirty (30) days prior to the consummation of (a) a Terminating Event as
defined in Section 10.2 above; (b) a merger or consolidation of the Company with
one or more corporations as a result of which, immediately following such merger
or consolidation, the shareholders of the Company as a group will hold less than
a majority of the outstanding capital stock of the surviving corporation; or (c)
the sale or other disposition of all or substantially all of the assets of the
Company. Upon the giving of such notice, all Options granted hereunder shall
become immediately exercisable, without regard to any contingent vesting
provision to which such Options may have otherwise been subject.

         10.4 All Options granted hereunder shall become immediately
exercisable, without regard to any contingent vesting provision to which such
Options may have otherwise been subject, upon the occurrence of an event whereby
any person or entity, including any "person" as such term is used in Section
13(d)(3) of the Exchange Act, becomes the "beneficial owner", as defined in the
Exchange Act, of Common Stock representing fifty percent (50%) or more of the
combined voting power of the voting securities of the Company.

         10.5 In the event of a reorganization as defined in this Section 10.5
in which the Company is not the surviving or acquiring company, or in which the
Company is or becomes a wholly-owned subsidiary of another company after the
effective date of

                                       25


<PAGE>


the reorganization, then the plan or agreement respecting the reorganization
shall include appropriate terms providing for the assumption of each Option
granted hereunder, or the substitution of an option therefor, such that no
"modification" of any such Option occurs under Section 424 of the Code. For
purposes of this Section 10.5, reorganization shall mean any statutory merger,
statutory consolidation, sale of all or substantially all of the assets of the
Company, or sale, pursuant to an agreement with the Company, of securities of
the Company pursuant to which the Company is or becomes a wholly-owned
subsidiary of another corporation after the effective date of the
reorganization.

         10.6 The Plan Administrator shall have the right to accelerate the date
of exercise of any installment of any option; provided, however, that, without
the consent of the Optionee with respect to any Option, the Plan Administrator
shall not accelerate the date of any installment of any Option granted to an
employee as an ISO (and not previously converted into a Non-ISO pursuant to
Section 12 below) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as described in Section 6
above.

         10.7 Adjustments and determinations under this Section 10 shall be made
by the Plan Administrator (upon the advice of counsel), whose decisions as to
what adjustments or determination shall be made, and the extent thereof, shall
be final, binding, and conclusive.

   11.   TERMINATION AND AMENDMENT OF PLAN.
         ---------------------------------

         11.1 The Plan may be amended only by the Board as it shall deem
advisable; however, to the extent required for compliance with Section 422 of
the Code or any applicable law or regulation, shareholder approval will be
required for any amendment that will (a) increase the total number of shares as
to which Options may be granted under the Plan, (b) modify the class of persons
eligible to receive Options, or (c) otherwise require shareholder approval under
any applicable law or regulation.

         11.2 The Company's shareholders or the Board may suspend or terminate
the Plan at any time. The Plan will have no fixed expiration date; provided,
however, that no ISO may be granted more than ten (10) years after the earlier
of the Plan's adoption by the Board and approval by the shareholders.

         11.3 The amendment or termination of the Plan shall not, without the
consent of the Optionee under the Plan, impair or diminish any rights or
obligations under any Option theretofore granted under the Plan. Any change or
adjustment to an outstanding ISO shall not, without the consent of the holder,
be made in a manner so as to constitute a "modification" that would cause such
ISO to fail to continue to qualify as an incentive stock option.

                                       26

<PAGE>


   12.   CONVERSION OF ISO'S INTO NON-ISO'S.
         ----------------------------------

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

   13.   CONDITIONS UPON ISSUANCE OF SHARES.
         ----------------------------------

         13.1 Shares shall not be issued pursuant to the exercise of any Option
unless the exercise of such Option and the issuance and delivery of such shares
pursuant thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended ("Securities Act"),
the Exchange Act, any applicable state securities law, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed or otherwise traded, and such compliance has been
confirmed by counsel for the Company. The Company shall be under no obligation
to any participants to register for offering or resale or to qualify for an
exemption under the Securities Act, or to register or qualify under state
securities laws, any shares of Company's stock issued under the Plan or to
continue in effect any registrations or qualifications if made. The Company may
issue certificates for shares with such legends and subject to such restrictions
on transfer as counsel for the Company deems necessary or desirable for
compliance with federal and state securities laws.

         13.2 As a condition to the exercise of any Option, the Company may
require the participant exercising such Option to represent and warrant at the
time of any such exercise that the shares are being purchased only for
investment and without any present intention to sell or distribute such shares
if, in the opinion of counsel for the Company, such representations and
warranties are required by any relevant provision of law.

         13.3 The Company's inability to obtain authority from any regulatory
body having jurisdiction, which authority the Company's counsel has determined
to be

                                       27


<PAGE>


necessary to the lawful issuance and sale of any shares hereunder, shall relieve
the Company of any liability with respect to the failure to issue or sell such
shares.

   14.   USE OF PROCEEDS.
         ---------------

   Proceeds from the sale of Common Stock pursuant to the exercise of Options
granted hereunder shall constitute general funds of the Company and shall be
used for general corporate purposes.

   15.   NOTICES.
         -------

   All notices, requests, demands and other communications required or permitted
to be given under this Plan and the Options granted hereunder shall be in
writing and shall be either served personally on the party to whom notice is to
be given (in which case notice shall be deemed to have been duly given on the
date of such service), or mailed to the party to whom notice is to be given, by
first class mail, registered or certified, return receipt requested, postage
prepaid, and addressed to the party at his or its most recent known address, in
which case such notice shall be deemed to have been duly given on the third
(3rd) postal delivery day following the date of such mailing.

   16.   MISCELLANEOUS PROVISIONS.
         ------------------------

         16.1 Optionees shall be under no obligation to exercise Options granted
hereunder.

         16.2 Nothing contained in this Plan shall obligate the Company to
retain an Optionee as an employee, officer, director, or consultant for any
period, nor shall this Plan interfere in any way with the right of the Company
to reduce such Optionee's compensation.

         16.3 The provisions of this Plan and each Option issued to an Optionee
hereunder shall be binding upon such Optionee, the Qualified Successor or
Guardian of such Optionee, and the heirs, successors, and assigns of such
Optionee.

         16.4 This Plan is intended to constitute an "unfunded" plan and nothing
herein shall require the Company to segregate any monies or other property or
shares of Common Stock or create any trusts or deposits, and no Optionee shall
have rights greater than a general unsecured creditor of the Company.

         16.5 It is the Company's intention that, if and so long as any of the
Company's equity securities are registered pursuant to Section 12(b) or 12(g) of
the Exchange Act, the Plan shall comply in all respects with Rule 16b-3 under
the Exchange Act and, if any Plan provision is later found not to be in
compliance with such Rule 16b-3, the provision shall be deemed null and void,
and in all events the Plan shall be construed in favor of its meeting the
requirements of Rule 16b-3. Notwithstanding anything in the Plan to the
contrary, the Board, in its sole discretion, may bifurcate the

                                       28

<PAGE>

Plan so as to restrict, limit or condition the use of any provision of the Plan
to Optionees who are officers or directors subject to Section 16 of the Exchange
Act without so restricting, limiting or conditioning the Plan with respect to
other Optionees. Additionally, in interpreting and applying the provisions of
the Plan, any Option granted as an ISO pursuant to the Plan shall, to be extent
permitted by law, be construed as an "incentive stock option" within the meaning
of Section 422 of the Code.

          16.6 Where the context so requires, references herein to the singular
shall include the plural, and vice versa, and references to a particular gender
shall include either or both genders.

     17.  EFFECTIVE DATE OF PLAN AND AMENDMENTS.
          -------------------------------------

     This Plan was initially adopted by the Board of Directors on March 25, 1997
and approved by the shareholders on May 20, 1997.

                                      29