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                                                                   EXHIBIT 10.2

                                  MOSAIX, INC.
           AMENDED AND RESTATED 1996 STOCK INCENTIVE COMPENSATION PLAN

                               SECTION 1. PURPOSE

         The purpose of the Mosaix, Inc. 1996 Stock Incentive Compensation Plan
(the "Plan") is to enhance the long-term shareholder value of Mosaix, Inc., a
Washington corporation (the "Company"), by offering opportunities to employees,
directors, officers, consultants, agents, advisors and independent contractors
of the Company and its Subsidiaries (as defined in Section 2) to participate in
the Company's growth and success, and to encourage them to remain in the service
of the Company and its Subsidiaries and to acquire and maintain stock ownership
in the Company.

                             SECTION 2. DEFINITIONS

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

2.1      AWARD

         "Award" means an award or grant made pursuant to the Plan, including,
without limitation, awards or grants of Options and Stock Awards, or any
combination of the foregoing.

2.2      BOARD

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

2.3      CAUSE

         "Cause" means dishonesty, fraud, misconduct, unauthorized use or
disclosure of confidential information or trade secrets, or conviction or
confession of a crime punishable by law (except minor violations), in each case
as determined by the Plan Administrator, and its determination shall be
conclusive and binding.

2.4      CODE

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

2.5      COMMON STOCK

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


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2.6      CORPORATE TRANSACTION

         "Corporate Transaction" means any of the following events:

                  (a) Consummation of any merger or consolidation of the Company
         in which the Company is not the continuing or surviving corporation, or
         pursuant to which shares of the Common Stock are converted into cash,
         securities or other property, if following such merger or consolidation
         the holders of the Company's outstanding voting securities immediately
         prior to such merger or consolidation own less than 66-2/3% of the
         outstanding voting securities of the surviving corporation;

                  (b) Consummation of any sale, lease, exchange or other
         transfer in one transaction or a series of related transactions of all
         or substantially all of the Company's assets other than a transfer of
         the Company's assets to a majority-owned subsidiary corporation (as the
         term "subsidiary corporation" is defined in Section 8.3) of the
         Company;

                  (c) Approval by the holders of the Common Stock of any plan or
         proposal for the liquidation or dissolution of the Company; or

                  (d) Acquisition by a person, within the meaning of Section
         3(a)(9) or of Section 13(d)(3) (as in effect on the date of adoption of
         the Plan) of the Exchange Act of a majority or more of the Company's
         outstanding voting securities (whether directly or indirectly,
         beneficially or of record).

         Ownership of voting securities shall take into account and shall
include ownership as determined by applying Rule 13d-3(d)(1)(i) (as in effect on
the date of adoption of the Plan) pursuant to the Exchange Act.

2.7      DISABILITY

         "Disability" means a mental or physical impairment of the Holder which
is expected to result in death or which has lasted or is expected to last for a
continuous period of 12 months or more and which causes the Holder 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 the two independent physicians have furnished their
opinion of total disability to the Plan Administrator.

2.8      EARLY RETIREMENT

         "Early Retirement" means early retirement as that term is defined by
the Plan Administrator from time to time for purposes of the Plan.


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2.9      EXCHANGE ACT

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

2.10     FAIR MARKET VALUE

         "Fair Market Value" shall be as established in good faith by the Plan
Administrator or (a) if the Common Stock is listed on the Nasdaq National
Market, the closing price for the Common Stock as reported by the Nasdaq
National Market for a single trading day or (b) if the Common Stock is listed on
the New York Stock Exchange or the American Stock Exchange, the closing price
for the Common Stock as such price is officially quoted in the composite tape of
transactions on such exchange for a single trading day. If there is no such
reported price for the Common Stock for the date in question, then such price on
the last preceding date for which such price exists shall be determinative of
Fair Market Value.

2.11     GOOD REASON

         "Good Reason" means the occurrence of any of the following events or
conditions and the failure of the Successor Corporation to cure such event or
condition within 30 days after receipt of written notice by the Holder:

                  (a) a change in the Holder's status, title, position or
responsibilities (including reporting responsibilities) that, in the Holder's
reasonable judgment, represents a substantial reduction in the status, title,
position or responsibilities as in effect immediately prior thereto; the
assignment to the Holder of any duties or responsibilities that, in the Holder's
reasonable judgment, are materially inconsistent with such status, title,
position or responsibilities; or any removal of the Holder from or failure to
reappoint or reelect the Holder to any of such positions, except in connection
with the termination of the Holder's employment for Cause, for Disability or as
a result of his or her death, or by the Holder other than for Good Reason;

                  (b) a reduction in the Holder's annual base salary;

                  (c) the Successor Corporation's requiring the Holder (without
the Holder's consent) to be based at any place outside a 35-mile radius of his
or her place of employment prior to a Corporate Transaction, except for
reasonably required travel on the Successor Corporation's business that is not
materially greater than such travel requirements prior to the Corporate
Transaction;

                  (d) the Successor Corporation's failure to (i) continue in
effect any material compensation or benefit plan (or the substantial equivalent
thereof) in which the Holder was participating at the time of a Corporate
Transaction, including, but not limited to, the Plan, or (ii) provide the Holder
with compensation and benefits substantially equivalent (in terms of benefit
levels and/or reward opportunities) to those provided for under each material


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employee benefit plan, program and practice as in effect immediately prior to
the Corporate Transaction;

                  (e) any material breach by the Successor Corporation of its
obligations to the Holder under the Plan or any substantially equivalent plan of
the Successor Corporation; or

                  (f) any purported termination of the Holder's employment or
service for Cause by the Successor Corporation that does not comply with the
terms of the Plan or any substantially equivalent plan of the Successor
Corporation.

2.12     GRANT DATE

         "Grant Date" means the date the Plan Administrator adopted the granting
resolution or a later date designated in a resolution of the Plan Administrator
as the date an Award is to be granted.

2.13     HOLDER

         "Holder" means the person to whom an Award is granted, a permitted
assignee or transferee or, for a Holder who has died, the personal
representative of the Holder's estate, the person(s) to whom the Holder's rights
under the Award have passed by will or the applicable laws of descent and
distribution or the beneficiary designated pursuant to Section 11.

2.14     INCENTIVE STOCK OPTION

         "Incentive Stock Option" means an Option to purchase Common Stock
granted under Section 7 with the intention that it qualify as an "incentive
stock option" as that term is defined in Section 422 of the Code.

2.15     NONQUALIFIED STOCK OPTION

         "Nonqualified Stock Option" means an Option to purchase Common Stock
granted under Section 7 other than an Incentive Stock Option.

2.16     OPTION

         "Option" means the right to purchase Common Stock granted under Section
7.

2.17     PLAN ADMINISTRATOR

         "Plan Administrator" means the Board or any committee of the Board
designated to administer the Plan under Section 3.1.


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2.18     RESTRICTED STOCK

         "Restricted Stock" means shares of Common Stock granted under Section
9, the rights of ownership of which are subject to restrictions prescribed by
the Plan Administrator.

2.19     RETIREMENT

         "Retirement" means retirement as of the individual's normal retirement
date under the Company's 401(k) Plan or other similar successor plan applicable
to salaried employees or, if no such plan exists, as that term is defined by the
Plan Administrator from time to time for purposes of the Plan.

2.20     SECURITIES ACT

         "Securities Act" means the Securities Act of 1933, as amended.

2.21     STOCK AWARD

         "Stock Award" means an Award granted under Section 9.

2.22     SUBSIDIARY

         "Subsidiary," except as provided in Section 8.3 in connection with
Incentive Stock Options, means any entity that is directly or indirectly
controlled by the Company or in which the Company has a significant ownership
interest, as determined by the Plan Administrator, and any entity that may
become a direct or indirect parent of the Company.

2.23     SUCCESSOR CORPORATION

         "Successor Corporation" has the meaning set forth under Section 12.2.

                            SECTION 3. ADMINISTRATION

3.1      PLAN ADMINISTRATOR

         The Plan shall be administered by the Board or a committee or
committees (which term includes subcommittees) appointed by, and consisting of
two or more members of, the Board. If and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the 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) "non-employee 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 


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Board deems appropriate. Committee members shall serve for such term as the
Board may determine, subject to removal by the Board at any time.

3.2      ADMINISTRATION AND INTERPRETATION BY THE PLAN ADMINISTRATOR

         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, the type of Awards, the number of shares of
Common Stock subject to an Award, all terms, conditions, restrictions and
limitations, if any, of an Award and the terms of any instrument that evidences
the Award. 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 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.

                      SECTION 4. STOCK SUBJECT TO THE PLAN

4.1      AUTHORIZED NUMBER OF SHARES

         Subject to adjustment from time to time as provided in Section 12.1, a
maximum of 2,250,000 shares of Common Stock shall be available for issuance
under the Plan. Shares issued under the Plan shall be drawn from authorized and
unissued shares.

4.2      LIMITATIONS

         (a) Subject to adjustment from time to time as provided in Section
12.1, not more than an aggregate of 300,000 shares shall be available for
issuance pursuant to grants of Stock Awards under the Plan.

         (b) Subject to adjustment from time to time as provided in Section
12.1, not more than 300,000 shares of Common Stock may be made subject to Awards
under the Plan to any individual in the aggregate in any one fiscal year of the
Company except that the Company may make additional one-time grants of up to
300,000 shares to 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.

4.3      REUSE OF SHARES

         Any shares of Common Stock that have been made subject to an Award that
cease to be subject to the Award (other than by reason of exercise or payment of
the Award to the extent it is exercised for or settled in shares) shall again be
available for issuance in connection 


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with future grants of Awards under the Plan; provided, however, that for
purposes of Section 4.2, any such shares shall be counted in accordance with the
requirements of Section 162(m) of the Code.

                             SECTION 5. ELIGIBILITY

         Awards may be granted under the Plan to those officers, directors and
key employees of the Company and its Subsidiaries as the Plan Administrator from
time to time selects. Awards may also be made to consultants, agents, advisors
and independent contractors who provide services to the Company and its
Subsidiaries.

                                SECTION 6. AWARDS

6.1      FORM AND GRANT OF AWARDS

         The Plan Administrator shall have the authority, in its sole
discretion, to determine the type or types of Awards to be made under the Plan.
Such Awards may include, but are not limited to, Incentive Stock Options,
Nonqualified Stock Options and Stock Awards. Awards may be granted singly or in
combination.

6.2      ACQUIRED COMPANY AWARDS

         Notwithstanding anything in the Plan to the contrary, the Plan
Administrator may grant Awards under the Plan in substitution for awards issued
under 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 Award is
substituted, or the old award 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
Awards shall be deemed to be Holders.

                          SECTION 7. AWARDS OF OPTIONS

7.1      GRANT OF OPTIONS

         The Plan Administrator is authorized under the Plan, in its sole
discretion, to issue Options as Incentive Stock Options or as Nonqualified Stock
Options, which shall be appropriately designated.


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7.2      OPTION EXERCISE PRICE

         Subject to Section 6.2, the exercise price for shares purchased under
an Option shall be as determined by the Plan Administrator, but shall not be
less than 100% of the Fair Market Value of the Common Stock on the Grant Date.

7.3      TERM OF OPTIONS

         The term of each Option shall be as established by the Plan
Administrator or, if not so established, shall be 10 years from the Grant Date.

7.4      EXERCISE OF OPTIONS

         The Plan Administrator shall establish and set forth in each instrument
that evidences an Option the time at which or the installments in which the
Option shall become exercisable, which provisions may be waived or modified by
the Plan Administrator at any time. If not so established in the instrument
evidencing the Option, the Option will become exercisable according to the
following schedule, which may be waived or modified by the Plan Administrator at
any time:

<TABLE>
<CAPTION>
 Period of Holder's Continuous Employment or Service With
              the Company or Its Subsidiaries                                Percent of Total Option
                From the Option Grant Date                                     That Is Exercisable
 --------------------------------------------------------                    -----------------------
<S>                                                                          <C>
                       After 1 year                                                     25%
                       After 2 years                                                    50%
                       After 3 years                                                    75%
                       After 4 years                                                   100%
</TABLE>

Unless the Plan Administrator determines otherwise, the vesting schedule of an
Option shall be adjusted proportionately to the extent a Holder's hours of
employment or service are reduced after the date of grant.

         To the extent that the right to purchase shares has accrued thereunder,
an Option may be exercised from time to time by written notice to the Company,
in accordance with procedures established by the Plan Administrator, setting
forth the number of shares with respect to which the Option is being exercised
and accompanied by payment in full as described in Section 7.5. The Plan
Administrator may determine at any time that an Option may not be exercised as
to less than ten shares at any one time (or the lesser number of remaining
shares covered by the Option).


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7.5      PAYMENT OF EXERCISE PRICE

         The exercise price for shares purchased under an Option shall be paid
in full to the Company by delivery of consideration equal to the product of the
Option exercise price and the number of shares purchased. Such consideration
must be paid in cash or by check, or, unless the Plan Administrator at any time
determines otherwise, a combination of cash and/or check and 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 Holder for at least six
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 exercise 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 designated by the Company to
deliver promptly to the Company the aggregate amount of sale or loan proceeds to
pay the Option exercise 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 Option may be paid, either singly or in
combination with one or more of the alternative forms of payment authorized by
this Section 7.5, by (y) a promissory note delivered pursuant to Section 10; or
(z) such other consideration as the Plan Administrator may permit.

7.6      POST-TERMINATION EXERCISES

         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 a Holder ceases to be employed by,
or to provide services to, the Company or its Subsidiaries, which provisions may
be waived or modified by the Plan Administrator at any time. If not so
established in the instrument evidencing the Option, the Option will be
exercisable according to the following terms and conditions, which may be waived
or modified by the Plan Administrator at any time.

         In case of termination of the Holder's employment or services other
than by reason of death or Cause, the Option shall be exercisable, to the extent
of the number of shares purchasable by the Holder at the date of such
termination, only (a) within one year if the termination of the Holder's
employment or services is coincident with Retirement, Early Retirement at the
Company's request or Disability or (b) within three months after the date the
Holder ceases to be an employee, director, officer, consultant, agent, advisor
or independent contractor of the Company or a Subsidiary if termination of the
Holder's employment or services is for any reason other than Retirement, Early
Retirement at the Company's request or Disability, but in no event later than
the remaining term of the Option. Any Option exercisable at the time of the
Holder's death may be exercised, to the extent of the number of shares
purchasable by the Holder at the date of the Holder's death, by the personal


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representative of the Holder's estate, the person(s) to whom the Holder's rights
under the Award have passed by will or the applicable laws of descent and
distribution or the beneficiary designated pursuant to Section 11 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. Any portion of an Option that is not
exercisable on the date of termination of the Holder's employment or services
shall terminate on such date, unless the Plan Administrator determines
otherwise. In case of termination of the Holder's employment or services for
Cause, the Option shall automatically terminate upon first notification to the
Holder of such termination, unless the Plan Administrator determines otherwise.
If a Holder's employment or services with the Company are suspended pending an
investigation of whether the Holder shall be terminated for Cause, all the
Holder's rights under any Option likewise shall be suspended during the period
of investigation.

         A transfer of employment or services between or among the Company and
its Subsidiaries shall not be considered a termination of employment or
services. The effect of a Company-approved leave of absence on the terms and
conditions of an option shall be determined by the Plan Administrator, in its
sole discretion.

                  SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS

         To the extent required by Section 422 of the Code, Incentive Stock
Options shall be subject to the following additional terms and conditions:

8.1      DOLLAR LIMITATION

         To the extent the aggregate Fair Market Value (determined as of the
Grant Date) of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time during any calendar year (under the Plan and all
other stock option plans of the Company) exceeds $100,000, such portion in
excess of $100,000 shall be treated as a Nonqualified Stock Option. In the event
the optionee holds two or more such Options that become exercisable for the
first time in the same calendar year, such limitation shall be applied on the
basis of the order in which such Options are granted.

8.2      10% SHAREHOLDERS

         If an individual owns more than 10% of the total voting power of all
classes of the Company's stock, then the exercise price per share of an
Incentive Stock Option shall not be less than 110% of the Fair Market Value of
the Common Stock on the Grant Date and the Option term shall not exceed five
years. The determination of 10% ownership shall be made in accordance with
Section 422 of the Code.

8.3      ELIGIBLE EMPLOYEES

         Individuals who are not employees of the Company or one of its parent
corporations or subsidiary corporations may not be granted Incentive Stock
Options. For purposes of this 


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Section 8.3, "parent corporation" and "subsidiary corporation" shall have the
meanings attributed to those terms for purposes of Section 422 of the Code.

8.4      TERM

         The term of an Incentive Stock Option shall not exceed 10 years.

8.5      EXERCISABILITY

         To qualify for Incentive Stock Option tax treatment, an Option
designated as an Incentive Stock Option 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
Holder's reemployment rights are guaranteed by statute or contract. For purposes
of this Section 8.5, "total disability" shall mean a mental or physical
impairment of the Holder that is 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 Holder 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 the two independent
physicians have furnished their opinion of total disability to the Plan
Administrator.

8.6      TAXATION OF INCENTIVE STOCK OPTIONS

         In order to obtain certain tax benefits afforded to Incentive Stock
Options under Section 422 of the Code, the Holder must hold the shares issued
upon the exercise of an Incentive Stock Option for two years after the Grant
Date of the Incentive Stock Option and one year from the date of exercise. A
Holder may be subject to the alternative minimum tax at the time of exercise of
an Incentive Stock Option. The Plan Administrator may require a Holder to give
the Company prompt notice of any disposition of shares acquired by the exercise
of an Incentive Stock Option prior to the expiration of such holding periods.

8.7      PROMISSORY NOTES

         The amount of any promissory note delivered pursuant to Section 10 in
connection with an Incentive Stock 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 to the
imputed interest rules) for federal income tax purposes.


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                             SECTION 9. STOCK AWARDS

9.1      GRANT OF STOCK AWARDS

         The Plan Administrator is authorized to make Awards of Common Stock on
such terms and conditions and subject to such restrictions, if any (which may be
based on continuous service with the Company or the achievement of performance
goals related to operating profit as a percentage of revenues, revenue and
profit growth, profit-related return ratios, such as return on equity, or cash
flow, where such goals may be stated in absolute terms or relative to comparison
companies), as the Plan Administrator shall determine, in its sole discretion,
which terms, conditions and restrictions shall be set forth in the instrument
evidencing the Award. The terms, conditions and restrictions that the Plan
Administrator shall have the power to determine shall include, without
limitation, the manner in which shares subject to Stock Awards are held during
the periods they are subject to restrictions and the circumstances under which
forfeiture of Restricted Stock shall occur by reason of termination of the
Holder's services.

9.2      ISSUANCE OF SHARES

         Upon the satisfaction of any terms, conditions and restrictions
prescribed in respect to a Stock Award, or upon the Holder's release from any
terms, conditions and restrictions of a Stock Award, as determined by the Plan
Administrator, the Company shall deliver, as soon as practicable, to the Holder
or, in the case of the Holder's death, to the personal representative of the
Holder's estate or as the appropriate court directs, a stock certificate for the
appropriate number of shares of Common Stock.

9.3      WAIVER OF RESTRICTIONS

         Notwithstanding any other provisions of the Plan, the Plan
Administrator may, in its sole discretion, waive the forfeiture period and any
other terms, conditions or restrictions on any Restricted Stock under such
circumstances and subject to such terms and conditions as the Plan Administrator
shall deem appropriate.

           SECTION 10. LOANS, INSTALLMENT PAYMENTS AND LOAN GUARANTEES

         To assist a Holder (including a Holder who is an officer or director of
the Company) in acquiring shares of Common Stock pursuant to an Award granted
under the Plan, the Plan Administrator, in its sole discretion, may authorize,
either at the Grant Date or at any time before the acquisition of Common Stock
pursuant to the Award, (a) the extension of a loan to the Holder by the Company,
(b) the payment by the Holder of the purchase price, if any, of the Common Stock
in installments, or (c) the guarantee by the Company of a loan obtained by the
grantee from a third party. The terms of any loans, installment payments or loan
guarantees, including the interest rate and terms of and security for repayment,
will be subject to the Plan Administrator's discretion. Loans, installment
payments and loan guarantees may 


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be granted with or without security. The maximum credit available is the
purchase price, if any, of the Common Stock acquired, plus the maximum federal
and state income and employment tax liability that may be incurred in connection
with the acquisition.

                            SECTION 11. ASSIGNABILITY

         No Option granted under the Plan may be assigned or transferred by the
Holder other than by will or by the laws of descent and distribution, and,
during the Holder's lifetime, such Awards may be exercised only by the Holder or
a permitted assignee or transferee of the Holder (as provided below).
Notwithstanding the foregoing, and to the extent permitted by Section 422 of the
Code, the Plan Administrator, in its sole discretion, may permit such
assignment, transfer and exercisability and may permit a Holder of such Awards
to designate a beneficiary who may exercise the Award or receive compensation
under the Award after the Holder's death; provided, however, that any Award so
assigned or transferred shall be subject to all the same terms and conditions
contained in the instrument evidencing the Award.

                             SECTION 12. ADJUSTMENTS

12.1     ADJUSTMENT OF SHARES

         In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to shareholders other than a normal cash
dividend or other change in the Company's corporate or capital structure results
in (a) the outstanding shares, or any securities exchanged therefor or received
in their place, being exchanged for a different number or class of securities of
the Company or of any other corporation or (b) new, different or additional
securities of the Company or of any other corporation being received by the
holders of shares of Common Stock of the Company, then the Plan Administrator
shall make proportional adjustments in (i) the maximum number and class of
securities subject to the Plan as set forth in Section 4.1, (ii) the maximum
number and class of securities that may be made subject to Awards to any
individual as set forth in Section 4.2, and (iii) the number and class of
securities that are subject to any outstanding Award and the per share price of
such securities, without any change in the aggregate price to be paid therefor.
The determination by the Plan Administrator as to the terms of any of the
foregoing adjustments shall be conclusive and binding.

12.2     CORPORATE TRANSACTION

         Except as otherwise provided in the instrument that evidences the
Award, in the event of any Corporate Transaction, each Award that is at the time
outstanding shall automatically accelerate so that each such Award shall,
immediately prior to the specified effective date for the Corporate Transaction,
become 100% vested, except that such acceleration will not occur if, in the
opinion of the Company's accountants, it would render unavailable "pooling of
interest" accounting for a Corporate Transaction that would otherwise qualify
for such accounting treatment. Awards to persons other than executive officers,
as designated by the 


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Board from time to time, shall not so accelerate, however, if and to the extent
that (a) such Award is, in connection with the Corporate Transaction, either to
be assumed by the successor corporation or parent thereof (the "Successor
Corporation") or to be replaced with a comparable award for the purchase of
shares of the capital stock of the Successor Corporation or (b) such Award is to
be replaced with a cash incentive program of the Successor Corporation that
preserves the spread existing at the time of the Corporate Transaction and
provides for subsequent payout in accordance with the same vesting schedule
applicable to such Award. The determination of Award comparability above shall
be made by the Plan Administrator, and its determination shall be conclusive and
binding. All such Awards shall terminate and cease to remain outstanding
immediately following the consummation of the Corporate Transaction, except to
the extent assumed by the Successor Corporation. Any such Awards that are
assumed or replaced in the Corporate Transaction and do not otherwise accelerate
at that time shall be accelerated in the event that the Holder's employment or
services should subsequently terminate within two years following such Corporate
Transaction, unless such employment or services are terminated by the Successor
Corporation for Cause or by the Holder voluntarily without Good Reason.

12.3     FURTHER ADJUSTMENT OF AWARDS

         Subject to Section 12.2, the Plan Administrator shall have the
discretion, exercisable at any time before a sale, merger, consolidation,
reorganization, liquidation or change in control of the Company, as defined by
the Plan Administrator, to take such further action as it determines to be
necessary or advisable, and fair and equitable to Holders, with respect to
Awards. Such authorized action may include (but shall not be limited to)
establishing, amending or waiving the type, terms, conditions or duration of, or
restrictions on, Awards so as to provide for earlier, later, extended or
additional time for exercise, lifting restrictions and other modifications, and
the Plan Administrator may take such actions with respect to all Holders, to
certain categories of Holders or only to individual Holders. The Plan
Administrator may take such action before or after granting Awards to which the
action relates and before or after any public announcement with respect to such
sale, merger, consolidation, reorganization, liquidation or change in control
that is the reason for such action.

12.4     LIMITATIONS

         The grant of Awards will in no way affect the Company's right to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.

                             SECTION 13. WITHHOLDING

         The Company may require the Holder to pay to the Company the amount of
any withholding taxes that the Company is required to withhold with respect to
the grant or exercise of any Award. Subject to the Plan and applicable law, the
Plan Administrator, in its sole discretion, may permit the Holder to satisfy
withholding obligations, in whole or in part, 


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<PAGE>   15
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. The Company
shall have the right to withhold from any Award or any shares of Common Stock
issuable pursuant to an Award or from any cash amounts otherwise due or to
become due from the Company to the Holder an amount equal to such taxes. The
Company may also deduct from any Award any other amounts due from the Holder to
the Company or a Subsidiary.

                  SECTION 14. AMENDMENT AND TERMINATION OF PLAN

14.1     AMENDMENT OF PLAN

         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 Awards
may be granted under the Plan or that may be issued as Stock Awards, (b) modify
the class of persons eligible to receive Options, or (c) otherwise require
shareholder approval under any applicable law or regulation.

14.2     TERMINATION OF PLAN

         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 Incentive Stock Options may be granted more than 10 years after
the earlier of the Plan's adoption by the Board and approval by the
shareholders.

14.3     CONSENT OF HOLDER

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

                               SECTION 15. GENERAL

15.1     AWARD AGREEMENTS

         Awards granted under the Plan shall be evidenced by a written agreement
that shall contain such terms, conditions, limitations and restrictions as the
Plan Administrator shall deem advisable and that are not inconsistent with the
Plan.


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<PAGE>   16
15.2     CONTINUED EMPLOYMENT OR SERVICES; RIGHTS IN AWARDS

         None of the Plan, participation in the Plan as a Holder or any action
of the Plan Administrator taken under the Plan shall be construed as giving any
Holder or employee of the Company any right to be retained in the employ of the
Company or limit the Company's right to terminate the employment or services of
the Holder.

15.3     REGISTRATION; CERTIFICATES FOR SHARES

         The Company shall be under no obligation to any Holder to register for
offering or resale or to qualify for exemption under the Securities Act, or to
register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if made.
The Company may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws.

         Inability of the Company to obtain, from any regulatory body having
jurisdiction, the authority deemed by the Company's counsel to be necessary for
the lawful issuance and sale of any shares hereunder or the unavailability of an
exemption from registration for the issuance and sale of any shares hereunder
shall relieve the Company of any liability in respect of the nonissuance or sale
of such shares as to which such requisite authority shall not have been
obtained.

15.4     NO RIGHTS AS A SHAREHOLDER

         No Award shall entitle the Holder to any cash dividend, voting or other
right of a shareholder unless and until the date of issuance under the Plan of
the shares that are the subject of such Award, free of all applicable
restrictions.

15.5     COMPLIANCE WITH LAWS AND REGULATIONS

         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 Plan so as to
restrict, limit or condition the use of any provision of the Plan to Holders 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 Holders.
Additionally, in interpreting and applying the provisions of the Plan, any
Option granted as an Incentive Stock Option pursuant to the Plan shall, to the
extent permitted by law, be construed as an "incentive stock option" within the
meaning of Section 422 of the Code.


                                      -16-
<PAGE>   17
15.6     NO TRUST OR FUND

         The Plan is intended to constitute an "unfunded" plan. Nothing
contained herein shall require the Company to segregate any monies or other
property, or shares of Common Stock, or to create any trusts, or to make any
special deposits for any immediate or deferred amounts payable to any Holder,
and no Holder shall have any rights that are greater than those of a general
unsecured creditor of the Company.

15.7     SEVERABILITY

         If any provision of the Plan or any Award is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would
disqualify the Plan or any Award under any law deemed applicable by the Plan
Administrator, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Plan Administrator's determination, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such jurisdiction,
person or Award, and the remainder of the Plan and any such Award shall remain
in full force and effect.

                           SECTION 16. EFFECTIVE DATE

         The Plan's effective date is the date on which it is adopted by the
Board, so long as it is approved by the Company's shareholders at any time
within 12 months of such adoption or, if earlier, and to the extent required for
compliance with Rule 16b-3 under the Exchange Act, at the next annual meeting of
the Company's shareholders after adoption of the Plan by the Board.


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