<PAGE>   1
                                                                   EXHIBIT 10.75


                                AMENDMENT TO SOP

                                  JUNE 2, 1998
<PAGE>   2
                          THE SPORTS CLUB COMPANY, INC.

                            1994 STOCK INCENTIVE PLAN

                     (AS AMENDED AND RESTATED JUNE 2, 1998)

                                    ARTICLE 1

                             GENERAL PURPOSE OF PLAN

        The name of this plan is The Sports Club Company, Inc. 1994 Stock
Incentive Plan (the "Plan"). The purpose of the Plan is to enable The Sports
Club Company, Inc. (the "Company") and any Parent or any Subsidiary to obtain
and retain the services of the types of employees, consultants, officers and
directors who will contribute to the Company's long range success and to provide
incentives which are linked directly to increases in share value which will
inure to the benefit of all shareholders of the Company.

                                    ARTICLE 2

                                   DEFINITIONS

        For purposes of the Plan, the following terms shall be defined as set
forth below:

        "Administrator" shall have the meaning as set forth in Article 3.

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

        "Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor thereto.

        "Committee" means a committee of at least two Directors appointed by the
Board to administer the Plan.

        "Company" means The Sports Club Company, Inc., a corporation organized
under the laws of the State of Delaware (or any successor corporation).

        "Date of Grant" means the date on which the Administrator adopts a
resolution expressly granting a Right to a Participant.

        "Director" means a member of the Board.

        "Disability" means permanent and total disability as defined by the
Administrator.

        "Eligible Person" means an employee or officer or any consultant or
Director of the Company, any Parent or any Subsidiary, other than the
Administrator.

        "Fair Market Value" per share at any date shall mean (i) if the Stock is
listed on an exchange or exchanges, or admitted for trading in the Nasdaq
National Market ("National Market"), the last reported sales price per share on
the last business day prior to such date on the principal exchange on which it
is traded, or on the National Market, as applicable, or if no sale was made on
such day on such principal exchange or on the National Market, as applicable,
the last reported sales price per share on the most recent day prior to such
date on which a sale was reported on such exchange or the National Market, as
applicable; or (ii) if the Common Stock is not then traded on an exchange or in
the National Market, the average of the closing bid and asked prices per share
for the Common Stock in the over-the-counter market as quoted on NASDAQ on the
day prior to such date; or (iii) if the Common Stock is not listed on an
exchange or quoted on NASDAQ, an amount determined in good faith by the
Administrator.

<PAGE>   3

        "Grantee" means an Eligible Participant who is granted a SAR pursuant to
the Plan.

        "Incentive Stock Option" means a Stock Option intended to qualify as an
"incentive stock option" as that term is defined in Section 422 of the Code.

        "Non-Statutory Option" means a Stock Option not intended to qualify as
an Incentive Stock Option.

        "Offeree" means an Eligible Participant who is granted a Purchase Right
pursuant to the Plan.

        "Optionee" means an Eligible Participant who is granted a Stock Option
pursuant to the Plan.

        "Parent" means any present or future corporation which would be a
"parent corporation" as that term is defined in Section 424 of the Code.

        "Participant" means any Eligible Person selected by the Administrator,
pursuant to the Administrator's authority in Article 3, to receive grants of
Rights.

        "Plan" means The Sports Club Company, Inc. 1994 Stock Incentive Plan, as
the same may be amended or supplemented from time to time.

        "Purchase Right" means the right to purchase Stock granted pursuant to
Article 8.

        "Rights" means Stock Options, Purchase Rights and SARs.

        "Retirement" means retirement from active employment with the Company or
any Parent or Subsidiary as defined by the Administrator.

        "SAR" means a stock appreciation right granted alone or in tandem with a
Stock Option pursuant to Article 7.

        "Special Terminating Event" with respect to a Participant shall mean the
death, Disability or Retirement of that Participant.

        "Stock" means the Common Stock, par value $.01 per share, of the
Company.

        "Stock Option" means any option to purchase shares of Stock granted
pursuant to Article 6; and, with respect to SARs, also includes options to
purchase shares of Stock granted pursuant to Other Plans.

        "Subsidiary" means any present or future corporation which would be a
"subsidiary corporation" as that term is defined in Section 424 of the Code.

        "Ten Percent Shareholder" means a person who on the Date of Grant owns,
either directly or through attribution as provided in Section 424(d) of the
Code, Stock possessing more than 10% of the total combined voting power of all
classes of stock of his or her employer corporation or of any Parent or
Subsidiary.


<PAGE>   4

                                    ARTICLE 3

                                 ADMINISTRATION

        SECTION 3.1 THE ADMINISTRATOR.

        (a) Administrator. The Plan shall be administered by either (i) the
Board; or (ii) the Committee (the group that administers the Plan is referred to
as the "Administrator").

        (b) Powers in General. The Administrator shall have the power and
authority to grant to Eligible Persons, pursuant to the terms of the Plan: (i)
Stock Options; (ii) SARs; (iii) Purchase Rights; or (iv) any combination of the
foregoing.

        (c) Specific Powers. In particular, the Administrator shall have the
authority: (i) to construe and interpret the Plan and apply its provisions; (ii)
to promulgate, amend and rescind rules and regulations relating to the
administration of the Plan; (iii) to authorize any person to execute, on behalf
of the Company, any instrument required to carry out the purposes of the Plan;
(iv) to determine, subject to the limitations set forth in Article 7, when
Rights are to be granted under the Plan; (v) from time to time to select,
subject to the limitations set forth in this Plan, those Eligible Participants
to whom Rights shall be granted; (vi) to determine the number of shares of Stock
to be made subject to each Right; (vii) to prescribe the terms and conditions of
each Stock Option, including, without limitation, the exercise price and medium
of payment, to determine whether the Stock Option is to be an Incentive Stock
Option or a Non-Statutory Option and to specify the provisions of the Stock
Option agreement relating to such Stock Option; (viii) to prescribe the terms
and conditions of each SAR, including, without limitation, to determine whether
such SAR is to be granted alone or in tandem with Stock Options during the term
of the Related SAR Option and to specify the provisions of the SAR agreement
relating to such SAR including, without limitation, vesting provisions; (ix) to
prescribe the terms and conditions of each Purchase Right, including, without
limitation, the purchase price and medium of payment, vesting provisions and
repurchase provisions, and to specify the provisions of the Stock purchase
agreement relating to such sale; (x) to amend any outstanding Rights for the
purpose of modifying the purchase price, exercise price or Initial Valuations
(as defined in Article 7), as the case may be, thereunder or otherwise, subject
to applicable legal restrictions and to the consent of the other party to such
agreement; (xi) to determine when a consultant's relationship with the Company
is sufficient to constitute employment with the Company for purposes of the
Plan; (xii) to determine the duration and purpose of leaves of absences which
may be granted to a Participant without constituting termination of their
employment for purposes of the Plan; and (xiii) to make any and all other
determinations which it determines to be necessary or advisable for
administration of the Plan.

        (d) Decisions Final. All decisions made by the Administrator pursuant to
the provisions of the Plan shall be final and binding on the Company and the
Participants.

        (e) The Committee. The Board may, in its sole and absolute discretion,
from time to time delegate any or all of its duties and authority with respect
to the Plan to a Committee of not less than two Directors to be appointed by and
to serve at the pleasure of the Board. Once appointed, the Committee shall
continue to serve until otherwise directed by the Board. From time to time, the
Board may increase or decrease (to not less than two members) the size of the
Committee, add additional members to, remove members (with or without cause)
from, appoint new members in substitution therefor, and fill vacancies, however
caused, in the Committee. The Committee shall act pursuant to a vote of the
majority of its members or, in the case of a Committee comprised of two
Directors, the unanimous vote of its members, whether present or not, or by the
written consent of the majority of its members or, in the case of a Committee
comprised of two Directors, the unanimous vote of its members, and minutes shall
be kept of all of its meetings and copies thereof shall be provided to the
Board. Subject to the limitations prescribed by the Plan and the Board, the
Committee may establish and follow such rules and regulations for the conduct of
its business as it may determine to be advisable.



<PAGE>   5
                                    ARTICLE 4

                              STOCK SUBJECT TO PLAN


        SECTION 4.1 STOCK SUBJECT TO THE PLAN.

        Subject to adjustment as provided in Article 10, the total number of
shares of Stock reserved and available for issuance under the Plan shall be
1,800,000 shares. The total number of shares of Stock with respect to which SARs
granted with relating to Related SAR Options may be granted shall be equal to
1,800,000 shares. Solely for purposes of determining the number of shares of
Stock reserved and available for issuance under the Plan, each SAR granted
without relation to a Stock Option shall be treated as a Stock Option. Shares
reserved hereunder may consist, in whole or in part, of authorized and unissued
shares or treasury shares.

        SECTION 4.2 UNEXERCISED RIGHTS.

        To the extent that any Rights expire or are otherwise terminated without
being exercised, the shares underlying such Rights (and shares related thereto)
shall again be available for issuance in connection with future Rights under the
Plan. Shares acquired by the Company upon exercise of Rights pursuant to Section
6.2(e) or Section 8.2(c) or Section 12.3 shall not increase the shares available
for issuance under the Plan.

                                    ARTICLE 5

                                   ELIGIBILITY

        Officers, employees, consultants and Directors of the Company, any
Parent or any Subsidiary, other than the Administrator, who are responsible for
or contribute to the management, growth or profitability of the business of the
Company, any Parent or any Subsidiary shall be eligible to be granted Rights
hereunder subject to limitations set forth in this Plan. The Participants under
the Plan shall be selected from time to time by the Administrator, in its sole
discretion, from among those Eligible Persons.

                                    ARTICLE 6

                                  STOCK OPTIONS

        SECTION 6.1 GENERAL.

        Stock Options may be granted alone or in addition to other Rights
granted under the Plan. Any Stock Option granted under the Plan shall be in such
form as the Administrator may from time to time approve, and the provisions of
Stock Option grants need not be the same with respect to each Optionee or each
Stock Option granted. Stock Options granted under the Plan may be either
Incentive Stock Options or Non-Statutory Options.

        SECTION 6.2 TERMS AND CONDITIONS OF STOCK OPTIONS.

        Each Stock Option granted pursuant to the Plan shall be evidenced by a
written option agreement between the Company and the Optionee, which agreement
shall comply with and be subject to the following terms and conditions:

        (a) Number of Shares. Each Stock Option agreement shall state the number
of shares of Stock to which the Stock Option relates.

        (b) Type of Option. Each Stock Option agreement shall identify the
portion (if any) of the Stock Option which constitutes an Incentive Stock
Option.

<PAGE>   6

        (c) Exercise Price. Each Stock Option agreement shall state the price at
which shares subject to the Stock Option may be purchased (the "Exercise
Price"), which shall with respect to Incentive Stock Options be not less than
one hundred percent (100%) of the Fair Market Value of the shares of Stock on
the Date of Grant; provided, however, that in the case of an Incentive Stock
Option granted to a Ten Percent Shareholder, the Exercise Price shall not be
less than one hundred ten percent (110%) of such Fair Market Value. With respect
to Non-Statutory Options, the Exercise Price shall not be less than eighty-five
percent (85%) of the Fair Market Value of the shares of Stock on the Date of
Grant of the Non-Statutory Option.

        (d) Value of Shares. The Fair Market Value of the shares of Stock
(determined as of the Date of Grant) with respect to which Incentive Stock
Options are exercisable by an Optionee under this Plan and all other incentive
option plans of the Company and any Parent or Subsidiary shall not, in the
aggregate, exceed $100,000 in any calendar year.

        (e) Medium and Time of Payment. The Exercise Price shall be paid in
full, at the time of exercise, in cash or cash equivalents or, with the approval
of the Administrator, in shares of Stock which have been held by the Optionee
for a period of at least six calendar months preceding the date of surrender and
which have a Fair Market Value equal to the Exercise Price, or in a combination
of cash and such shares, and may be effected in whole or in part (i) with monies
received from the Company at the time of exercise as a compensatory cash
payment; or (ii) to the extent that the Exercise Price exceeds the par value of
the shares so purchased, with monies borrowed from the Company in accordance
with Section 12.5.

        (f) Term and Exercise of Stock Options. Stock Options shall be
exercisable over the exercise period at the times the Administrator may
determine, as reflected in the related Stock Option agreements. The exercise
period of any Stock Option shall be determined by the Administrator, but shall
not exceed ten years from the Date of Grant of the Stock Option. In the case of
an Incentive Stock Option granted to a Ten Percent Shareholder, the exercise
period shall be determined by the Administrator, but shall not exceed five years
from the Date of Grant of the Stock Option. The exercise period shall be subject
to earlier termination as provided in Sections 12.6 and 12.7. A Stock Option may
be exercised, as to any or all full shares of Stock as to which the Stock Option
has become exercisable, by giving written notice of such exercise to the
Company.

        (g) Employee's or Engagement Agreement. Each person receiving a Stock
Option under the Plan shall agree to remain in the employ of, and/or to render
services pursuant to his or her engagement with, the Company, any Subsidiary or
any Parent, as the Administrator may from time to time direct, for a period of
one year from the Date of Grant, but such agreement shall not obligate the
Company, any Subsidiary or any Parent to continue to employ or maintain the
engagement of the Optionee for any period whatsoever. The sole remedy of the
Company for breach of this employment or engagement term by the Optionee shall
be cancellation of the Stock Option granted to the Optionee.

                                    ARTICLE 7

                            STOCK APPRECIATION RIGHTS

        SECTION 7.1 GENERAL.

        The Administrator shall have the authority to grant SARs in tandem with
Stock Options granted under this Plan (the "Related SAR Option") with respect to
all or some of the shares of Stock covered by the Related SAR Option. SARs
granted in tandem with Related SAR Options may be granted either at the time of
grant of the Related SAR Option or at any time thereafter during the term of the
Related SAR Option. The Administrator shall also have the authority to grant
SARs without relation to any Stock Option granted under this Plan. Each SAR
shall be granted on such terms and conditions not inconsistent with the Plan as
the Administrator may determine. The

<PAGE>   7
provisions of the various SAR awards need not be the same with respect to each
Grantee or with respect to any SARs granted to the same Grantee.

        SECTION 7.2 TERMS AND CONDITIONS OF SARS.

        Each SAR granted pursuant to the Plan shall be evidenced by a written
SAR agreement between the Company and the Grantee, which agreement shall comply
with and be subject to the following terms and conditions:

        (a) Number of SARs. Each SAR agreement shall state the number of SARs
granted pursuant to the agreement.

        (b) Initial Valuations. Each SAR agreement shall provide that each SAR
granted in tandem with a Related Stock Option is valued at the Exercise Price of
the Related SAR Option and that each SAR granted without relation to a Stock
Option is valued at the Fair Market Value of a share of Stock on the Date of
Grant (the "Initial Valuation").

        (c) Term and Exercise of SARs.

                (i) Each SAR granted otherwise than in tandem with a Stock
        Option shall be exercisable as determined by the Administrator, but in
        no event after 10 years from the date of Grant. Each other SAR shall be
        exercisable only if, and to the extent that, the Related SAR Option is
        exercisable and has not yet terminated or expired, and in the case of a
        SAR granted in respect of an Incentive Stock Option, only when the Fair
        Market Value per share of the Stock exceeds the Exercise Price of the
        Related SAR Option; and upon the exercise of a SAR, the Related SAR
        Option shall cease to be exercisable to the extent of the shares of
        Stock with respect to which such SAR is exercised, and shall be
        considered to have been exercised to that extent for purposes of
        determining the number of shares available for the grant of further
        Rights pursuant to the Plan. Upon the exercise or termination of a
        Related SAR Option, the SAR granted in tandem with such Related SAR
        Option shall terminate to the extent of the shares of Stock with respect
        to which the Related SAR Option was exercised or terminated.

               (ii) To exercise a SAR granted in tandem with a Related SAR
        Option, the Grantee shall (A) give written notice thereof to the Company
        specifying the number of shares of Stock with respect to which the SAR
        is being exercised and the percentage of the total amount that the
        Grantee is entitled to receive which the Grantee elects to receive in
        cash or shares of Stock with respect to the exercise of the SAR; and (B)
        if requested by the Administrator, deliver the Related SAR Option
        agreement to the Secretary of the Company, who shall endorse thereon a
        notation of such exercise and return the Related SAR Option agreement to
        the Grantee. To exercise a SAR granted without relation to a Stock
        Option, the Grantee shall give written notice thereof to the Company
        specifying the number of shares of Stock with respect to which the SAR
        is being exercised and the percentage of the total amount that the
        Grantee is entitled to receive which the Grantee elects to receive in
        cash or shares of Stock with respect to the exercise of the SAR. The
        date of exercise of a SAR which is validly exercised shall be deemed to
        be the date on which there shall have been delivered to the Company the
        appropriate aforesaid instruments.

              (iii) Upon the exercise of a SAR, the holder thereof shall be
        entitled at the holder's election to receive either:

                      (A) a number of shares of Stock equal to the quotient
                   computed by dividing the Spread (as defined in Section
                   7.2(c)(iv)) by the Fair Market Value per share of Stock on
                   the date of exercise of the SAR; provided, however, that in
                   lieu of fractional shares, the Company shall pay in cash or
                   cash equivalent an amount equal to the same fraction of the
                   Fair Market Value per share of Stock on the date of exercise
                   of the SAR; or

<PAGE>   8

                      (B) an amount of money payable in cash or cash equivalent
                   equal to the Spread; or

                      (C) a combination of an amount payable in cash or cash
                   equivalent and a number of shares calculated as provided in
                   Section 7.2(c)(iii)(A) (after reducing the Spread by such
                   dollar amount); plus any amounts payable in lieu of any
                   fractional shares as provided above.

               (iv) The term "Spread" as used in Section 7.2(c) shall mean an
        amount equal to the product computed by multiplying (A) the excess of
        (x) the Fair Market Value per share of Stock on the date the SAR is
        exercised, over either (y) in the case of an SAR granted in tandem with
        a Related SAR Option, the Exercise Price per share of the Related SAR
        Option, or (z) in the case of an SAR not granted in tandem with a Stock
        Option, the Initial Valuation of the SAR; by (B) the number of shares
        with respect to which such SAR is being exercised.

                (v) Notwithstanding the provisions of Section 7.2(c)(iii), the
        Administrator shall have sole discretion to consent to or disapprove a
        Participant's election to receive an amount of money payable in cash or
        cash equivalent in whole or in part ("Cash Election") upon the exercise
        of a SAR. Such consent or disapproval may be given at any time after the
        election to which it relates. If the Administrator shall disapprove a
        Cash Election the exercise of the SAR with respect to which the Cash
        Election was made shall be of no effect, but without prejudice to the
        right of the holder to exercise such SAR in the future in accordance
        with its terms.

               (vi) Notwithstanding the foregoing, in the case of a SAR granted
        in tandem with an Incentive Stock Option, the holder may not receive an
        amount in excess of such amount as will enable the Stock Option to
        qualify as an Incentive Stock Option.

        (d) Securities Laws. The Company intends that this Section 7.2 shall
comply with the requirements of Rule 16b-3 and any future rules promulgated in
substitution therefor (the "Rule") under the Exchange Act, during the term of
the Plan. Should any provision of Section 7.2 not be necessary to comply with
the requirements of the Rule or should any additional provisions be necessary
for Section 7.2 to comply with the requirements of the Rule, the Board may amend
the Plan to add to or modify the provisions of the Plan accordingly.

        (e) Limitation on Amounts Payable. Notwithstanding Section 7.2(c)(iii),
the Administrator may place a limitation on the amount payable in cash, Stock or
both upon exercise of a SAR. Any such limitation must be determined as of the
Date of Grant, and noted on the instrument evidencing the Participant's SAR
granted hereunder.

                                    ARTICLE 8

                                 PURCHASE RIGHTS

        SECTION 8.1 GENERAL.

        Purchase Rights may be granted alone or in addition to other Rights
under the Plan. Each sale of Stock under this Article 8 shall be evidenced by a
Stock purchase agreement between the Offeree and the Company in the form from
time to time adopted by the Administrator and containing such terms and
conditions which the Administrator deems appropriate; provided, that such terms
and conditions are not inconsistent with the Plan. The provisions of the various
Stock purchase agreements entered into under the Plan need not be identical.

<PAGE>   9
        SECTION 8.2 TERMS AND CONDITIONS OF PURCHASE RIGHTS.

        Each Purchase Right granted pursuant to the Plan shall be evidenced by a
written Stock purchase agreement between the Company and the Offeree, which
agreement shall comply with and be subject to the following terms and
conditions:

<PAGE>   10
        (a) Number of Shares. Each Stock purchase agreement shall state the
number of shares of Stock which may be purchased pursuant to such agreement.

        (b) Purchase Price. Each Stock purchase agreement shall state the price
at which the Stock subject to such purchase agreement may be purchased (the
"Purchase Price"); provided, however, that the Purchase Price shall not be less
than 85% of the Fair Market Value of the Stock on the Date of Grant.

        (c) Medium and Time of Payment. The Purchase Price shall be paid in
full, at the time of exercise, in cash or cash equivalent or, with the approval
of the Administrator, in shares of Stock which have been held by the Optionee
for a period of at least six calendar months preceding the date of surrender and
which have a Fair Market Value equal to the Purchase Price or in a combination
of cash or cash equivalent and such shares, and may be effected in whole or in
part (i) with monies received from the Company at the time of exercise as a
compensatory cash payment; or (ii) to the extent the purchase price exceeds the
par value of the shares so purchased, with monies borrowed from the Company in
accordance with Section 12.5 of the Plan.

                                    ARTICLE 9

                             [INTENTIONALLY OMITTED]

                                   ARTICLE 10

                                   ADJUSTMENTS


        SECTION 10.1 EFFECT OF CERTAIN CHANGES.

        (a) Stock Dividends, Splits, Etc.. If there is any change in the number
of outstanding shares of Stock through the declaration of Stock dividends or
through a recapitalization resulting in Stock splits, or combinations or
exchanges of the outstanding shares, (i) the number of shares of Stock available
for Rights, (ii) the number of shares covered by outstanding Rights, (iii) the
Exercise Price or Purchase Price of any Stock Option or Purchases Right and (iv)
the Initial Valuations of SARs, in effect prior to such change shall be
proportionately adjusted by the Administrator to reflect any increase or
decrease in the number of issued shares of Stock; provided, however, that any
fractional shares resulting from the adjustment shall be eliminated.

        (b) Liquidating Event. In the event of the proposed dissolution or
liquidation of the Company, or in the event of any corporate separation or
division, including, but not limited to, a split-up, split-off or spin-off
(each, a "liquidating event"), the Administrator may provide that the holder of
any Right then exercisable shall have the right to exercise such Right (at the
price provided in the Rights agreement) subsequent to the liquidating event, and
for the balance of its term, solely for the kind and amount of shares of Stock
and other securities, property, cash or any combination thereof receivable upon
such liquidating event by a holder of the number of shares of Stock for or with
respect to which such Right might have been exercised immediately prior to such
liquidating event; or the Administrator may provide, in the alternative, that
each Right granted under the Plan shall terminate as of a date to be fixed by
the Board; provided, however, that not less than 30 days written notice of the
date so fixed shall be given to each Rights holder and if such notice is given,
each Rights holder shall have the right, during the period of 30 days preceding
such termination, to exercise the Right as to all or any part of the shares of
Stock covered thereby, without regard to any installment or vesting provisions
in his or her Rights agreement, on the condition, however, that the liquidating
event actually occurs; and if the liquidating event actually occurs, such
exercise shall be deemed effective (and, if applicable, the Rights holder shall
be deemed a shareholder with respect to the Rights exercised immediately
preceding the occurrence of the liquidating event, or the date of record for
shareholders entitled to share in such liquidating event, if a record date is
set).

<PAGE>   11
        (c) Merger or Consolidation. Each outstanding Right shall terminate upon
a merger or consolidation in which the Company is not the surviving corporation,
provided that (A) each Rights holder to whom no Rights have been tendered by the
surviving corporation pursuant to the terms of item (B) immediately below shall
have the right exercisable during a ten-day period ending on the fifth day prior
to such merger or consolidation in which the Company is not the surviving
corporation, to exercise his or her Rights in whole or in part, without regard
to any installment provisions under his or her Rights agreement on the
condition, however, that the merger or consolidation is actually effected; and
if the merger or consolidation is actually effected, such exercise shall be
deemed effective (and, if applicable, the Participant shall be deemed a
shareholder with respect to the Rights exercised) immediately preceding the
effective time of such merger or consolidation (on the date of record for
shareholders entitled to share in the securities or property distributed in such
merger or consolidation, if a record date is set); and (B) in its sole and
absolute discretion, the surviving corporation may, but shall not be obligated
to, tender to any Rights holder Rights with respect to the surviving
corporation, and such new Rights shall contain such terms and provisions as
shall substantially preserve the rights and benefits of any Rights then
outstanding under this Plan.

        (d) Where Company Survives. Section 10.1(c) shall not apply to a merger
or consolidation in which the Company is the surviving corporation, unless
shares of Stock are converted into or exchanged for securities other than
publicly-traded common stock, cash (excluding cash in payment for actual shares)
or any other thing of value. Notwithstanding the preceding sentence, in case of
any consolidation or merger of another corporation into the Company in which the
Company is the surviving corporation and in which there is a reclassification or
change (including a change to the right to receive an amount of money payable by
cash or cash equivalent or other property) of the shares of Stock (other than a
change in par value, or from par value to no par value, or as a result of a
subdivision or combination, but including any change in such shares into two or
more classes or series of shares), the Administrator may provide that the holder
of each Right then exercisable shall have the right to exercise such Right
solely for the kind and amount of shares of Stock and other securities
(including those of any new direct or indirect Parent of the Company), property,
cash or any combination thereof receivable upon such reclassification change,
consolidation or merger by the holder of the number of shares of Stock for which
such Right might have been exercised.

        (e) Surviving Corporation Defined. The determination as to which party
to a merger or consolidation is the "surviving corporation" shall be made on the
basis of the relative equity interests of the shareholders in the corporation
existing after the merger or consolidation, as follows: if following any merger
or consolidation the holders of outstanding voting securities of the Company
immediately prior to the merger or consolidation own equity securities
possessing more than fifty percent (50%) of the voting power of the corporation
existing following the merger or consolidation, then for purposes of this Plan,
the Company shall be the surviving corporation. In all other cases, the Company
shall not be the surviving corporation. In making the determination of ownership
by the shareholders of a corporation immediately after the merger or
consolidation, of equity securities pursuant to this Section 10.1(e), equity
securities which the shareholders owned immediately before the merger or
consolidation as shareholders of another party to the transaction shall be
disregarded. Further, for purposes of this Section 10(e) only, outstanding
voting securities of a corporation shall be calculated by assuming the
conversion of all equity securities convertible (immediately or at some future
time) into shares entitled to vote.

        (f) Par Value Changes. In the event of a change in the Stock of the
Company as presently constituted which is limited to a change of all of its
authorized shares with par value, into the same number of shares without par
value, or a change in the par value, the shares resulting from any such change
shall be "Stock" within the meaning of the Plan.

        (g) Decision of Administration Final. To the extent that the foregoing
adjustments relate to stock or securities of the Company, such adjustments shall
be made by the Administrator, whose determination in that respect shall be
final, binding and conclusive; provided that each Incentive Stock Option granted
pursuant to the Plan shall not be adjusted in a manner that causes such Stock
Option to fail to continue to qualify as an Incentive Stock Option.

<PAGE>   12
        (h) No Other Rights. Except as hereinbefore expressly provided in this
Article 10, no Rights holder shall have any rights by reason of any subdivision
or consolidation of shares of Stock or the payment of any dividend or any other
increase or decrease in the number of shares of Stock of any class or by reason
of any liquidating event, merger, or consolidation of assets or stock of another
corporation, or any other issue by the Company of shares of stock of any class,
or securities convertible into shares of stock of any class; and except as
provided in this Article 10, none of the foregoing events shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Stock subject to Rights. The grant of a Right pursuant to the Plan
shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structures or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or part of its business or assets.

        (i) No Rights as Shareholder. Except as specifically provided in this
Article 10, a Rights holder or a transferee of a Right shall have no rights as a
shareholder with respect to any shares covered by the Rights until the date of
the issuance of a Stock certificate to him or her for such shares, and no
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions of other rights for which
the record date is prior to the date such Stock certificate is issued, except as
provided in Section 10.1(b) or 10.1(c).

                                   ARTICLE 11

                            AMENDMENT AND TERMINATION

        The Board may, at any time, amend, alter or discontinue the Plan, but no
amendment, alteration or discontinuation shall be made which would impair the
rights of a Participant under any Right theretofore granted without such
Participant's consent. Stockholder approval for amendments to the Plan shall be
obtained in such a manner and to such degree as required to comply with all
applicable laws and regulations.

        The Administrator may amend the terms of any Right theretofore granted,
prospectively or retroactively, but, subject to Article 3, no such amendment
shall impair the rights of any Participant under any Right theretofore granted
without such Participant's consent.

                                   ARTICLE 12

                               GENERAL PROVISIONS

        SECTION 12.1  GENERAL RESTRICTIONS.

        (a) No View to Distribute. The Administrator may require each person
purchasing shares of Stock pursuant to the Plan to represent to and agree with
the Company in writing that such person is acquiring the shares without a view
to distribution thereof. The certificates for such shares may include any legend
which the Administrator deems appropriate to reflect any restrictions on
transfer.

        (b) Legends. All certificates for shares of Stock delivered under the
Plan shall be subject to such stop transfer orders and other restrictions as the
Administrator may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Stock is then listed and any applicable federal or state securities
laws, and the Administrator may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.


<PAGE>   13

        SECTION 12.2  OTHER COMPENSATION ARRANGEMENTS.

        Nothing contained in this Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to shareholder approval
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases.

        SECTION 12.3  WITHHOLDING TAXES.

        (a) Withholding Required. Each Participant shall, no later than the date
as of which the value of a Right first becomes includable in the gross income of
the Participant for federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Administrator regarding payment of, any
federal, state or local taxes of any kind required by law to be withheld with
respect to the Right or its exercise. The obligations of the Company under the
Plan shall be conditioned upon such payment or arrangements and the Participant
shall, to the extent permitted by law, have the right to request that the
Company deduct any such taxes from any payment of any kind otherwise due to the
Participant.

        (b) Withholding Right. The Administrator may, in its discretion, grant a
Rights holder the right (a "Withholding Right") to elect to make such payment by
irrevocably requiring the Company to withhold from shares issuable upon exercise
of the Right that number of full shares of Common Stock having a Fair Market
Value on the Tax Date (as defined below) equal to the amount (or portion of the
amount) required to be withheld. The Withholding Right may be granted with
respect to all or any portion of the Right.

        (c) Exercise of Withholding Right. To exercise a Withholding Right, the
Rights holder must follow the election procedures set forth below, together with
such additional procedures and conditions as may be set forth in the related
Rights agreement or otherwise adopted by the Administrator:

                (i) The Rights holder must deliver to the Company his or her
        written notice of election (the "Election") to have the Withholding
        Right apply to all (or a designated portion) of his or her Right.

                (ii) The Election must be delivered to the Company not less than
        20 days before the date of exercise of the Right to which it relates;

                (iii) unless disapproved by the Administrator as provided in
        Subsection (iv) below, the Election once made will be irrevocable; and

                (iv) no Election is valid unless the Administrator consents to
        the Election; the Administrator has the right and power, in its sole
        discretion, with or without cause or reason therefor, to consent to the
        Election, to refuse to consent to the Election, or to disapprove the
        Election; and if the Administrator has not consented to the Election on
        or prior to the date that the amount of tax to be withheld is, under
        applicable federal income tax laws, fixed and determined by the Company
        (the "Tax Date"), the Election will be deemed approved.

        (d) Effect. If the Administrator consents to an Election of a Rights
Holder's Withholding Right, then upon the exercise of the Right (or any portion
thereof) to which the Withholding Right relates, the Company will withhold from
the shares otherwise issuable that number of full shares of Stock having an
actual Fair Market Value equal to the amount (or portion of the amount, as
applicable) required to be withheld under applicable federal and/or state income
tax laws as a result of the exercise.

        SECTION 12.4 INDEMNIFICATION.

        In addition to such other rights of indemnification as they may have as
Directors or members of the Committee, and to the extent allowed by applicable
law, the Administrators shall be indemnified by the Company

<PAGE>   14

against the reasonable expenses, including attorney's fees, actually incurred in
connection with any action, suit or proceeding or in connection with any appeal
therein, to which they or any one of them may be party by reason of any action
taken or failure to act under or in connection with the Plan or any option
granted under the Plan, and against all amounts paid by them in settlement
thereof (provided that the settlement has been approved by the Company, which
approval shall not be unreasonably withheld) or paid by them in satisfaction of
a judgment in any such action, suit or proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit or proceeding that such
Administrator did not act in good faith and in a manner which such person
reasonably believed to be in the best interests of the Company, and in the case
of a criminal proceeding, had no reason to believe that the conduct complained
of was unlawful; provided, however, that within 60 days after institution of any
such action, suit or proceeding, such Administrator shall, in writing, offer the
Company the opportunity at its own expense to handle and defend such action,
suit or proceeding.

        SECTION 12.5 LOANS.

        The Company may make loans to Optionees and Offerees as the
Administrator, in its discretion, may determine in connection with the exercise
of outstanding Stock Options and Purchase Rights granted under the Plan. Such
loans shall (i) be evidenced by promissory notes entered into by the holders in
favor of the Company; (ii) be subject to the terms and conditions set forth in
this Section 12.5 and such other terms and conditions, not inconsistent with the
Plan, as the Administrator shall determine; and (iii) bear interest, if any, at
such rate as the Administrator shall determine. In no event may the principal
amount of any such loan exceed the Exercise Price or the Purchase Price less the
par value of the shares of Stock covered by the Stock Option or Purchase Right,
or portion thereof, exercised by the Optionee or Offeree. The initial term of
the loan, the schedule of payments of principal and interest under the loan, the
extent to which the loan is to be with or without recourse against the holder
with respect to principal and applicable interest and the conditions upon which
the loan will become payable in the event of the holder's termination of
employment shall be determined by the Administrator; provided, however, that the
term of the loan, including extensions, shall not exceed 10 years. Unless the
Administrator determines otherwise, when a loan shall have been made, shares of
Stock having a Fair Market Value at least equal to the principal amount of the
loan shall be pledged by the holder to the Company as security for payment of
the unpaid balance of the loan and such pledge shall be evidenced by a pledge
agreement, the terms of which shall be determined by the Administrator, in its
discretion; provided, however, that each loan shall comply with all applicable
laws, regulations and rules of the Board of Governors of the Federal Reserve
System and any other governmental agency having jurisdiction.

        SECTION 12.6  TERMINATION OF EMPLOYMENT.

        Except as provided in this Section 12.6, no Right may be exercised
unless the Rights Holder is then a Director of the Company, or in the employ of
the Company or any Parent or Subsidiary, or rendering services as a consultant
to the Company or any Parent or Subsidiary, and unless he or she has remained
continuously so employed since the Date of Grant. If the employment or services
of a Rights holder shall terminate (other than by reason of a Special
Terminating Event), all Rights previously granted to the Rights holder which are
exercisable at the time of such termination may be exercised for the period
ending ninety days after such termination, unless otherwise provided in the
Rights agreement; provided, however, that no Right may be exercised following
the date of its expiration. Nothing in the Plan or in any Right granted pursuant
to the Plan shall confer upon an employee any right to continue in the employ of
the Company or any Parent or Subsidiary or interfere in any way with the right
of the Company or any Parent or Subsidiary to terminate such employment at any
time.

        SECTION 12.7 SPECIAL TERMINATING EVENTS.

        If a Special Terminating Event occurs, all Rights theretofore granted to
such Rights holder may, unless earlier terminated in accordance with their
terms, be exercised by the Rights holder or by his or her estate or by a person
who acquired the right to exercise such Right by bequest or inheritance or
otherwise by reason of the death or Disability of the Rights holder, at any time
within one year after the date of the Special Terminating Event.

<PAGE>   15
        Notwithstanding the foregoing, an Incentive Stock Option and any SAR
granted in relation to an Incentive Stock Option shall only be exercisable at
any time within three months after the date of Retirement or termination of
employment of an Optionee.

        SECTION 12.8 NON-TRANSFERABILITY OF RIGHTS.

        Unless otherwise approved by the Administrator, Rights granted under the
Plan shall not be transferable otherwise than by will or by the laws of descent
and distribution or pursuant to a qualified domestic relations order (as defined
in the Code), and Rights may be exercised, during the lifetime of the Rights
holder, only by the Rights holder or by his or her guardian or legal
representative.

        SECTION 12.9 REGULATORY MATTERS.

        Each Rights agreement shall provide that no shares shall be purchased or
sold thereunder unless and until (A) any then applicable requirements of state
or federal laws and regulatory agencies shall have been fully complied with to
the satisfaction of the Company and its counsel, and (B) is required to do so by
the Company, the Optionee or Offeree shall have executed and delivered to the
Company a letter of investment intent in such form and containing such
provisions as the Board or Committee may require.

        SECTION 12.10 RECAPITALIZATIONS.

        Each Stock Option and Purchase Right Agreement shall contain provisions
required to reflect the provisions of Article 10.

        SECTION 12.11  DELIVERY.

        Upon exercise of a Right granted under this Plan, the Company shall
issue Stock or pay any amounts due within a reasonable period of time
thereafter. Subject to any statutory obligations the Company may otherwise have,
for purposes of this Plan, thirty days shall be considered a reasonable period
of time.

        SECTION 12.12 OTHER PROVISIONS.

        The Rights agreements authorized under the Plan may contain such other
provisions not inconsistent with this Plan, including, without limitation,
restrictions upon the exercise of the Rights, as the Administrator may deem
advisable.
<PAGE>   16
                                   ARTICLE 13

                             EFFECTIVE DATE OF PLAN

        The Plan shall become effective on the date on which the Plan is adopted
by the Board and approved by its shareholders. Any Right granted before the
approval of the Plan by the Company's shareholders shall be expressly
conditioned upon, and shall not be exercisable until, such approval is obtained.

                                   ARTICLE 14

                                  TERM OF PLAN

        No Right shall be granted pursuant to the Plan on or after January 1,
2002, but Rights theretofore granted may extend beyond that date.