AIRNET SYSTEMS, INC.

                            1996 INCENTIVE STOCK PLAN
                  (reflects amendments through March 31, 1997)


     SECTION  1.  Purposes.  The  purposes  of the  AirNet  Systems,  Inc.  1996
Incentive  Stock Plan are to promote the interests of AirNet  Systems,  Inc. and
its stockholders by (a) attracting and retaining exceptional executive personnel
and other key  employees of, and advisors and  consultants  to, and directors of
the Company and its  Subsidiaries;  (b) motivating such employees,  advisors and
consultants and Eligible Directors by means of performance-related incentives to
achieve  longer-range   performance  goals;  and  (c)  providing  all  long-term
employees  of  the  Company  and  its  Subsidiaries   with  the  opportunity  to
participate in the long-term growth and financial success of the Company.

     SECTION 2. Definitions. As used in the Plan, the following terms shall have
the meanings set forth below:

     "Award" shall mean any Option,  Restricted Stock Award or Performance Award
but shall not include any  Director  Option,  any Right to Purchase or any Share
issued pursuant to Section 10 of this Plan.

     "Award  Agreement"  shall mean any  written  agreement,  contract  or other
instrument or document evidencing any Award which may, but need not, be executed
or acknowledged by a Participant.

     "Board" shall mean the Board of Directors of the Company.

     "Cash Account" shall mean an account  established  for each  Participant to
which amounts withheld through payroll  deductions shall be credited to purchase
Shares under the provisions of Section 11.

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

     "Committee"  shall mean a committee of the Board designated by the Board to
administer  the Plan which shall satisfy the  requirements  contained in Section
1.162-27(c)(4) of the Final Regulations.  The Committee shall be composed of not
less than the  minimum  number of  persons  from time to time  required  by Rule
l6b-3,  each of whom shall be (a) a person  from time to time  permitted  by the
rules  promulgated  under Section 16 of the Act in order for grants of Awards to
be exempt transactions under said Section 16; and (b) receiving  remuneration in
no  other  capacity  than as a  director,  except  as  permitted  under  Section
1.162-27(e)(3) of the Final Regulations.

                                      -1-
<PAGE>

     "Company"  shall mean AirNet  Systems,  Inc.,  together  with any successor
thereto.

     "Covered  Employee"  shall mean any individual  who, on the last day of the
Company's taxable year, is

     (a) the  chief  executive  officer  of the  Company  or is  acting  in such
capacity; or

     (b) among  the four  highest  compensated  officers  (other  than the chief
executive officer).

For this purpose, whether an individual is the chief executive officer or one of
the four  highest  compensated  officers  of the  Company  shall  be  determined
pursuant to the executive compensation disclosure rules under the Exchange Act.

     "Director  Option" shall mean a Non-Qualified  Stock Option granted to each
Eligible  Director  pursuant to Section  6(e) without any action by the Board or
the Committee.

     "Eligible  Director"  shall mean, on any date, a person who is serving as a
member of the Board but shall not  include a person  who is an  Employee  of the
Company  or a  Subsidiary  or a person  who was a member  of the Board on May 1,
1996.

     "Employee"  shall mean (a) an employee of the Company or of any Subsidiary;
and (b) except with respect to an Incentive  Stock  Option,  a Right to Purchase
and the issuance of Shares  under  Section 10, an advisor or  consultant  to the
Company or to any Subsidiary.

     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

     "Fair  Market  Value"  shall mean the fair market  value of the property or
other item being valued,  as determined by the Committee in its sole discretion,
provided  that  the fair  market  value  of  Shares  of  Common  Stock  shall be
determined by reference to the most recent closing price  quotation or, if none,
the  average of the bid and asked  prices,  as  reported  as of the most  recent
available date with respect to the sale of Common Stock on any quotation  system
approved by the National  Association of Securities Dealers then reporting sales
of Common Stock or on any national securities exchange on which the Common Stock
is then listed.

     "Final  Regulations"  shall mean the final  regulations  promulgated by the
Internal Revenue Service under Section 162(m) of the Code.


                                      -2-
<PAGE>


     "Incentive  Stock  Option"  shall mean a right to purchase  Shares from the
Company that is granted under Section 6 of the Plan and that is intended to meet
the requirements of Section 422 of the Code or any successor provision thereto.

     "Non-Qualified Stock Option" shall mean a right to purchase Shares from the
Company that is granted  under Section 6 of the Plan and that is not intended to
be an Incentive Stock Option.

     "Offering" shall mean an opportunity  provided by the Committee to purchase
Shares under the  provisions  of Section 10.  Offerings  may be  consecutive  or
concurrent,  as determined by the Committee.  The Committee  shall designate the
maximum number of Shares that may be purchased  under each Offering.  Shares not
sold under one Offering may be offered again in any subsequent Offering.

     "Offering  Effective  Date" shall mean the first  business day of the month
designated by the Committee as the start of the Offering Period applicable to an
Offering.

     "Offering Period" shall mean the duration of an Offering,  as designated by
the Committee. The Offering Period for any Offering shall not exceed 12 months.

     "Option"  shall mean an  Incentive  Stock Option or a  Non-Qualified  Stock
Option but shall not include a Director Option.

     "Participant"  shall mean any Employee selected by the Committee to receive
an Award  under the Plan.  In  addition,  for  purposes  of Section 10, the term
"Participant"  shall include any Employee who has satisfied the  requirements of
such section to acquire Shares under the Plan.

     "Performance  Award" shall mean any right  granted  under  Section 8 of the
Plan.

     "Person" shall mean any individual, corporation,  partnership, association,
joint-stock company, trust, unincorporated organization, government or political
subdivision thereof or other entity.

     "Plan" shall mean the AirNet Systems, Inc. 1996 Incentive Stock Plan.

     "Restricted  Stock"  shall mean any Share  granted  under  Section 7 of the
Plan.

     "Right to Purchase"  shall mean an option to purchase  Shares  granted to a
Participant  who elects to  participate  in an Offering  under the provisions of
Section  10.  A Right  to  Purchase  granted  for an  Offering  shall  terminate
following  the close of business on the Right to Purchase Date for that Offering
to the extent  that such Right to  Purchase  is not  exercised  on such Right to
Purchase Date.


                                      -3-
<PAGE>


     "Right to Purchase  Date" shall mean the last  business  day of an Offering
Period to purchase Shares under the provisions of Section 10.

     "Rule l6b-3" shall mean Rule l6b-3 as  promulgated  and  interpreted by the
SEC under the Exchange  Act, or any successor  rule or regulation  thereto as in
effect from time to time.

     "SEC" shall mean the  Securities  and Exchange  Commission or any successor
thereto and shall include the staff thereof.

     "Shares"  shall mean  shares of Common  Stock,  without  par value,  of the
Company or such other  securities  of the  Company as may be  designated  by the
Committee from time to time.

     "Share Account" shall mean an account  established for each Participant who
exercises a Right to Purchase  under Section 10. A  Participant's  Share Account
will be credited  with the number of Shares  purchased on each Right to Purchase
Date and debited for the number of Shares  withdrawn  by the  Participant  after
such date.

     "Subsidiary"   shall   mean  any   corporation   which,   on  the  date  of
determination,  qualified as a subsidiary  corporation of the Corporation  under
Section 425(f) of the Code.

     "Substitute  Awards"  shall mean  Awards  granted in  assumption  of, or in
substitution for, outstanding awards previously granted by a company acquired by
the Company or with which the Company combines.

     "Ten Percent  Stockholder"  shall mean any stockholder  who, at the time an
Incentive Stock Option is granted to such stockholder,  owns (within the meaning
of Section  425(d) of the Code) more than ten percent of the voting power of all
classes of stock of the Company or a subsidiary.

     "Year of Service" shall mean each 12 consecutive month period, beginning on
an Employee's date of hire with the Company or a Subsidiary  (and  anniversaries
of such  date),  during  which an  Employee  is  employed  by the  Company  or a
Subsidiary. For this purpose, all service with the Company or a Subsidiary prior
to the  effective  date of this  Plan  (as  provided  in  Section  13)  shall be
included. Further, periods of service with the Company or a Subsidiary which are
interrupted by a termination of employment  (not including any authorized  leave
of absence) of more than two months shall not be aggregated.


                                      -4-
<PAGE>


     SECTION 3. Administration.

     (a) The Plan shall be administered  by the Committee.  Subject to the terms
of the Plan and  applicable  law,  and in addition to other  express  powers and
authorizations  conferred on the Committee by the Plan, the Committee shall have
full power and authority to: (i) designate Participants; (ii) determine the type
or types of Awards to be granted to an eligible  Employee;  (iii)  determine the
number of Shares to be covered by, or with respect to which payments,  rights or
other matters are to be calculated in connection with Awards; (iv) determine the
terms and  conditions of any Award;  (v) determine  whether,  to what extent and
under what  circumstances  Awards may be settled or exercised  in cash,  Shares,
other  securities,  other  Awards or other  property or  canceled,  forfeited or
suspended;  (vi) determine whether,  to what extent and under what circumstances
cash, Shares,  other securities,  other Awards, other property and other amounts
payable with respect to an Award shall be deferred  either  automatically  or at
the election of the holder  thereof or of the  Committee;  (vii)  interpret  and
administer the Plan and any  instrument or agreement  relating to, or Award made
under,  the Plan;  (viii)  establish,  amend,  suspend  or waive  such rules and
regulations and appoint such agents as it shall deem  appropriate for the proper
administration  of the Plan; and (ix) make any other  determination and take any
other  action  that  the  Committee   deems   necessary  or  desirable  for  the
administration of the Plan.  Notwithstanding anything else contained in the Plan
to the contrary,  neither the Committee nor the Board shall have any  discretion
regarding  whether an Eligible Director shall receive a Director Option pursuant
to  Section  6(e) or  regarding  the terms of any  Director  Option,  including,
without  limitation,  the number of Shares subject to such Director Option,  the
timing  of the  grant  or the  exercisability  of such  Director  Option  or the
exercise price per Share of such Director Option.

     (b) Unless  otherwise  expressly  provided in the Plan,  all  designations,
determinations, interpretations and other decisions under or with respect to the
Plan or any Award shall be within the sole  discretion of the Committee,  may be
made at any time and shall be final,  conclusive  and binding  upon all Persons,
including  the  Company,  any  subsidiary,   any  Participant,   any  holder  or
beneficiary of any Award, any stockholder and any Employee.

        SECTION 4.  Shares Available for the Plan.

     (a) SHARES  AVAILABLE.  Subject to  adjustment as provided in Section 4(b),
the number of Shares  available for issuance  under the Plan shall be 1,150,000.
If,  after the  effective  date of the Plan,  any Shares  covered by an Award or
Director Option granted under the Plan, or to which such an Award or

                                      -5-
<PAGE>


Director Option  relates,  or any Shares issued under Section 10, are forfeited,
or if an Award or Director Option  otherwise  terminates or is canceled  without
the delivery of Shares,  then the Shares which may be issued under this Plan, to
the extent of any such  settlement,  forfeiture,  termination  or  cancellation,
shall again be, or shall become,  Shares  available for issuance,  to the extent
permissible  under Rule l6b-3. In the event that any Option,  Director Option or
other Award granted hereunder is exercised  through the delivery of Shares,  the
number of Shares  available  under the Plan shall be  increased by the number of
Shares surrendered, to the extent permissible under Rule l6b-3.

     (b)  ADJUSTMENTS.  In the event  that any  dividend  or other  distribution
(whether  in the form of cash,  Shares,  other  securities  or other  property),
recapitalization,  stock split,  reverse  stock split,  reorganization,  merger,
consolidation,  split-up,  spin-off,  combination,  repurchase,  or  exchange of
Shares or other securities of the Company,  issuance of warrants or other rights
to  purchase  Shares  or other  securities  of the  Company,  or  other  similar
corporate  transaction  or event  affects the Shares such that an  adjustment is
necessary  in order to  prevent  dilution  or  enlargement  of the  benefits  or
potential  benefits  intended  to be made  available  under the  Plan,  then the
Committee  shall  proportionately  adjust any or all (as  necessary)  of (i) the
number of Shares or other securities of the Company (or number and kind of other
securities or property)  which may be issued under this Plan; (ii) the number of
Shares  or  other  securities  of the  Company  (or  number  and  kind of  other
securities  or  property)  subject to  outstanding  Awards;  (iii) the number of
Shares  or  other  securities  of the  Company  (or  number  and  kind of  other
securities  or property)  and the purchase  price per Share  subject to purchase
under  Section 10 hereof;  and (iv) the grant or exercise  price with respect to
any Award;  provided,  in each case,  that with  respect to Awards of  Incentive
stock Options,  no such  adjustment  shall be authorized to the extent that such
authority would cause the Plan to violate Section 422(b)(1) of the Code, as from
time to time amended.  If, pursuant to the preceding sentence,  an adjustment is
made to outstanding  Options held by  Participants,  a corresponding  adjustment
shall be made to outstanding  Director Options and if, pursuant to the preceding
sentence,  an adjustment is made to the number of Shares authorized for issuance
under the Plan, a corresponding adjustment shall be made to the number of Shares
subject to each Director Option thereafter granted pursuant to Section 6(e).


                                      -6-
<PAGE>


     (c) SOURCES OF SHARES. Any Shares issued pursuant to the terms of this Plan
may  consist,  in whole or in part,  of  authorized  and  unissued  Shares or of
Treasury Shares.

     SECTION 5.  Eligibility  for Awards and  Director  Options.  Any  Employee,
including any officer or employee-director of the Company or any Subsidiary, who
is not a  member  of  the  Committee,  shall  be  eligible  to be  designated  a
Participant  for purposes of receiving  an Award under the Plan.  Each  Eligible
Director shall receive nondiscretionary Director Options in accordance with, and
only in accordance with, Section 6(e) hereof.

     SECTION 6. Options and Director Options.

     (a) GRANT.  Subject to the provisions of the Plan, the Committee shall have
sole and complete  authority to determine the Employees to whom Options shall be
granted,  the number of Shares to be covered by each  Option,  the option  price
therefor and the  conditions and  limitations  applicable to the exercise of the
Option.  The Committee shall have the authority to grant Incentive Stock Options
or to grant  Non-Qualified  Stock Options or to grant both types of options.  In
the case of Incentive  Stock  Options,  the terms and  conditions of such grants
shall be subject to, and comply with, such rules as may be prescribed by Section
422 of the Code, as from time to time amended, and any regulations  implementing
such statute,  including,  without limitation,  the requirements of Code Section
422(d) which limit the aggregate Fair Market Value of Shares for which Incentive
Stock Options are  exercisable for the first time to $100,000 per calendar year.
Each provision of the Plan and of each written option  agreement  relating to an
Option  designated as an Incentive  Stock Option shall be construed so that such
Option qualifies as an Incentive Stock Option,  and any provision that cannot be
so construed shall be disregarded.

     (b) EXERCISE PRICE. The Committee shall establish the exercise price at the
time each Option is granted, which price, except in the case of Options that are
substitute  Awards,  shall not be less than  100% of the per Share  Fair  Market
Value on the date of grant.  Notwithstanding  any provision contained herein, in
the case of an  Incentive  Stock  Option,  the  exercise  price at the time such
Incentive  Stock  Option is granted  to any  Employee  who,  at the time of such
grant,  is a Ten  Percent  Stockholder,  shall  not be less than 110% of the per
Share Fair Market Value on the date of grant.

     (c) EXERCISE. Each Option shall be exercisable at such times and subject to
such terms and conditions as the Committee may, in its sole discretion,  specify
in the applicable  Award  Agreement or thereafter;  provided,  in the case of an
Incentive  Stock Option,  a Participant  may not exercise such  Incentive  Stock
Option  after  (i) the date  which  is ten  years  (five  years in the case of a

                                      -7-
<PAGE>


Participant  who is a Ten  Percent  Stockholder)  after  the date on which  such
Incentive  Stock  Option  is  granted;  or (ii) the date  which is three  months
(twelve months in the case of a Participant who becomes disabled,  as defined in
Section  22(e)(3) of the Code, or who dies) after the date on which he ceases to
be an Employee of the Company or a  Subsidiary.  The  Committee  may impose such
conditions  with  respect  to  the  exercise  of  Options,   including   without
limitation, any relating to the application of federal or state securities laws,
as it may deem  necessary or advisable.  The  Committee  shall have the right to
accelerate  the  exercisability  of any  Option  or  outstanding  Option  in its
discretion.

     (d) PAYMENT.  No Shares  shall be delivered  pursuant to any exercise of an
Option  until  payment in full of the option  price  therefor is received by the
Company.  Such payment may be made in cash, or its  equivalent or, if and to the
extent  permitted by the Committee,  by exchanging  Shares owned by the optionee
(which are not the  subject of any pledge or other  security  interest)  or by a
combination of the  foregoing,  provided that the combined value of all cash and
cash equivalents and the Fair Market Value of any such Shares so tendered to the
Company as of the date of such tender is at least equal to such option price.

     (e) DIRECTOR OPTIONS. Notwithstanding anything else contained herein to the
contrary,  each Eligible Director shall receive, on the first business day after
each annual meeting of stockholders  of the Company,  provided that the Eligible
Director is serving as a member of the Board on such date, a grant of a Director
Option to purchase 2,000 Shares at an exercise price per Share equal to the Fair
Market Value on the date of grant. A Director Option shall be exercisable  until
the earlier to occur of the following two dates:  (i) the tenth  anniversary  of
the date of grant of such Director  Option;  or (ii) three months (twelve months
in the case of an Eligible Director who becomes disabled,  as defined in Section
22(e)(3) of the Code or who dies) after the date the Eligible Director ceases to
be a member of the Board,  except that if the Eligible  Director  ceases to be a
member of the Board  after  having  been  convicted  of, or pled  guilty or nolo
contendere  to, a felony,  his Director  Option shall be canceled on the date he
ceases to be a member of the Board.  An Eligible  Director  may pay the exercise
price of a Director Option in the manner described in Section 6(d).


                                      -8-
<PAGE>


     SECTION 7. Restricted Stock.

     (a) GRANT.  Subject to the provisions of the Plan, the Committee shall have
sole and  complete  authority  to  determine  the  Employees  to whom  Shares of
Restricted  Stock shall be granted,  the number of Shares of Restricted Stock to
be granted to each Participant, the duration of the period during which, and the
conditions  under which, the Restricted Stock will vest and no longer be subject
to forfeiture to the Company and the other terms and  conditions of such Awards.
The Committee  shall have the right to accelerate  the vesting of any Restricted
Stock or outstanding Restricted Stock in its discretion.

     (b)  TRANSFER  RESTRICTIONS.  Until the lapse of  applicable  restrictions,
Shares of Restricted Stock may not be sold,  assigned,  transferred,  pledged or
otherwise  encumbered  except as  provided in the Plan or the  applicable  Award
Agreements.  Certificates  issued in respect of Shares of Restricted Stock shall
be registered in the name of the Participant and deposited by such  Participant,
together with a stock power endorsed in blank, with the Company.  Upon the lapse
of the restrictions  applicable to such Shares of Restricted  Stock, the Company
shall deliver such  certificates to the Participant or the  Participant's  legal
representative.

     (c) PAYMENT OF DIVIDENDS.  Dividends paid on any Shares of Restricted Stock
may be paid  directly to the  Participant,  or may be  reinvested  in additional
Shares  of  Restricted  Stock,  as  determined  by the  Committee  in  its  sole
discretion.

     SECTION 8. Performance Awards.

     (a)  GRANT.  The  Committee  shall  have  sole and  complete  authority  to
determine the Employees who shall  receive a Performance  Award  denominated  in
cash or Shares;  (i) valued, as determined by the Committee,  in accordance with
the achievement of such performance goals during such performance periods as the
Committee shall establish; and (ii) payable at such time and in such form as the
Committee shall determine.

     (b)  TERMS  AND  CONDITIONS.  Subject  to the  terms  of the  Plan  and any
applicable Award Agreement,  the Committee shall determine the performance goals
to be achieved  during any  performance  period,  the length of any  performance
period,  the  amount of any  Performance  Award and the  amount  and kind of any
payment or transfer to be made pursuant to any Performance Award.

     (c) PAYMENT OF PERFORMANCE AWARDS. Performance Awards may be paid in a lump
sum or in  installments  following  the close of the  performance  period or, in
accordance with procedures established by the Committee, on a deferred basis.


                                      -9-
<PAGE>


     SECTION 9. Code Section 162(m) Limitations.

     (a)  GENERAL  LIMITATIONS.  Any  Awards  issued  under this Plan to Covered
Employees must satisfy the requirements of this Section 9.

     (b)  REQUIREMENTS  FOR ALL AWARDS.  Any Award issued to a Covered  Employee
shall constitute qualified performance-based  compensation. For this purpose, an
Award shall constitute  qualified  performance-based  compensation to the extent
that:

          (i) it is granted by the Committee on account of the attainment of one
     or more  preestablished,  objective  performance  goals  established by the
     Committee,  in accordance with the provisions of Section  1.162-27(e)(2) of
     the Final Regulations;

          (ii) the material terms of the performance  goal under which the Award
     is issued are disclosed to and subsequently approved by the stockholders of
     the Company, in accordance with the provisions of Section 1.162-27(e)(4) of
     the Final Regulations; and

          (iii) the Committee certifies, in writing, prior to the payment of any
     compensation  under the  Award,  that the  performance  goals and any other
     material terms were in fact satisfied.

     (c) SPECIAL RULES FOR OPTIONS. The grant of an Option to a Covered Employee
under this Plan shall satisfy the  requirements  of Section 9(b)(i) above to the
extent that the following requirements are satisfied:

          (i) subject to the  provisions of Section  4(b),  no Covered  Employee
     shall receive Options for more than 50,000 Shares over any one-year period.
     For this  purpose,  to the extent that any Option is canceled (as described
     in Section  1.162-27(e)(2)(vi)(B) of the Final Regulations),  such canceled
     Option shall  continue to be counted  against the maximum  number of Shares
     for which Options may be granted to a Covered Employee under the Plan; and

          (ii) under the terms of the Option,  the amount of  compensation  that
     the  Covered  Employee  may  receive is based  solely on an increase in the
     value of the Shares after the grant of the Option, unless the grant of such
     Option  is  contingent  upon the  attainment  of a  performance  goal  that
     otherwise satisfies the requirements of Section 9(b)(i) above.


                                      -10-
<PAGE>


     SECTION 10. Stock Purchase Plan.

     (a)  ELIGIBILITY.  Each Employee who has at least one Year of Service on an
Offering  Effective  Date shall be eligible to participate in the Offering which
is applicable to such Offering  Effective Date.  Nothing contained herein and no
rules  and  regulations  prescribed  by  the  Committee  shall  permit  or  deny
participation  in  any  Offering  contrary  to  the  requirements  of  the  Code
(including,  without  limitation,  Sections  423(b)(3),  423(b)(4) and 423(b)(8)
thereof).  Nothing  contained herein and no rules and regulations  prescribed by
the Committee shall permit any Participant to be granted a Right to Purchase:

     (i)  if,  immediately  after  such  Right  to  Purchase  is  granted,  such
Participant  would own, and/or hold  outstanding  options or rights to purchase,
shares of the Company or of any Subsidiary, possessing five percent (5%) or more
of the total  combined  voting  power or value of all  classes  of shares of the
Company or such Subsidiary; or

     (ii) which  permits a  Participant's  rights to purchase  Shares  under all
employee stock purchase plans of the Company and of its  Subsidiaries  to accrue
at a rate which exceeds Twenty-Five Thousand Dollars ($25,000.00) of Fair Market
Value of Shares  (determined  as of the date such Right to  Purchase is granted)
for each  calendar  year in which such Right to Purchase is  outstanding  at any
time.

For purposes of clause (a)(i)  above,  the  provisions of Section  424(d) of the
Code shall apply in determining  the stock  ownership of each  Participant.  For
purposes of clause  (a)(ii) above,  the  provisions of Section  423(b)(8) of the
Code shall apply in determining  whether a Participant's  Rights to Purchase and
other rights are permitted to accrue at a rate in excess of the permitted rate.

     (b)  PURCHASE  PRICE.  The purchase  price for a Share under each  Offering
shall be determined by the Committee  prior to the Offering  Effective  Date and
shall be stated as a  percentage  of the Fair Market  Value of a Share on either
the Right to Purchase  Date or the  Offering  Effective  Date,  whichever is the
lesser,  but the purchase price shall not be less than the lesser of eighty-five
percent  (85%)  of the per  share  Fair  Market  Value of the  Shares  as of the
Offering  Effective  Date or  eighty-five  percent  (85%) of the per share  Fair
Market Value of the Shares as of the Right to Purchase Date for the Offering.


                                      -11-
<PAGE>


     (c)  PARTICIPATION  IN OFFERINGS.  Except as may be otherwise  provided for
herein,  each  Employee  who is  eligible  for and elects to  participate  in an
Offering  shall be granted Rights to Purchase for as many Shares as he may elect
to purchase during that Offering,  to be paid by payroll  deductions during such
period.  The Committee  shall  establish  administrative  rules and  regulations
regarding the payroll deduction process for this Section 10, including,  without
limitation,  minimum and maximum permissible deductions;  the timing for initial
elections,  changes in elections and suspensions of elections during an Offering
Period; and the complete  withdrawal by a Participant from an Offering.  Amounts
withheld  through payroll  deductions  under this paragraph shall be credited to
each Participant's  Cash Account.  Such amounts will be delivered to a custodian
for the Plan and held  pending the  purchase of Shares as described in paragraph
(e) of this Section 10. All amounts held in a  Participant's  Cash Account shall
bear interest at a rate as may be agreed upon by the Committee and the custodian
of the Plan. If a Participant  withdraws  entirely from an Offering (pursuant to
rules  established by the Committee),  his Cash Account balance will not be used
to purchase  Shares on the Right to Purchase Date.  Instead,  the portion of the
Cash Account equal to the Participant's payroll deductions under the Plan during
the  Offering  Period  will be  refunded  to the  Participant  without  interest
(notwithstanding any provision contained herein). Such a Participant will not be
eligible to  re-enroll in that  Offering,  but may resume  participation  on the
Offering  Effective Date for the next Offering.  In addition,  the Committee may
impose such other restrictions on the right to withdraw from Offerings as it may
deem appropriate.

     (d) GRANT OF RIGHTS TO PURCHASE.  Rights to Purchase with respect to Shares
shall be granted to Participants  who elect to participate in an Offering.  Such
Rights to Purchase may be exercised on the Right to Purchase Date  applicable to
the Offering.  The number of Shares  subject to Rights to Purchase on each Right
to Purchase Date shall not exceed the number of Shares  authorized  for issuance
during the applicable Offering.

     (e)  EXERCISE  OF RIGHTS  TO  PURCHASE.  Each  Right to  Purchase  shall be
exercised  on  the  applicable   Right  to  Purchase  Date.   Each   Participant
automatically and without any act on his part will be deemed to have exercised a
Right to Purchase on each Right to Purchase Date to purchase the number of whole
and  fractional  Shares  which the  amount in his Cash  Account  at that time is
sufficient to purchase at the applicable  purchase price.  Any remaining  amount
credited to a Participant's  Cash Account after such application shall remain in
such Participant's Cash Account for use in the next Offering unless withdrawn by
the Participant.  The Company shall deliver to the custodian of the Plan as soon
as  practicable  after each Right to Purchase Date a  certificate  for the total
number of Shares  purchased by all  Participants on such Right to Purchase Date.

                                      -12-
<PAGE>


The custodian shall allocate the proper number of Shares to the Share Account of
each Participant.  If the aggregate Cash Account balances of all Participants on
any Right to Purchase  Date  exceeds the amount  required to purchase all of the
Shares  subject to Rights to Purchase on that Right to Purchase  Date,  then the
Shares  subject  to Rights to  Purchase  shall be  allocated  pro rata among the
Participants  in the  proportion  that the number of Shares subject to Rights to
Purchase  bears to the number of Shares that could have been purchased with such
aggregate amount available,  if an unlimited number of Shares were available for
purchase.  Any balances  remaining in  Participants'  Cash  Accounts due to over
subscription will remain in the Participants'  Cash Accounts for use in the next
Offering unless withdrawn by the Participant.

     (f)  WITHDRAWALS   FROM  SHARE  ACCOUNTS  AND  DIVIDEND   REINVESTMENT.   A
Participant  may  withdraw  the  Shares  credited  to  his  Share  Account  on a
first-in-first-out  basis.  The Committee  shall establish rules and regulations
governing such withdrawals. All cash dividends paid, if any, with respect to the
Shares  credited  to a  Participant's  Share  Account  shall  be  added  to  the
Participant's  Cash Account and thereby  shall be applied to exercise  Rights to
Purchase for Shares on the Right to Purchase Date next  succeeding the date such
cash  dividends  are paid by the  Company.  An election to leave Shares with the
custodian shall  constitute an election to apply the cash dividends with respect
to such  Shares  to the  exercise  of Rights to  Purchase  hereunder.  Shares so
purchased  shall be applied to the Shares credited to each  Participant's  Share
Account.

     (g)  TERMINATION  OF  EMPLOYMENT.   If  the  employment  of  a  Participant
terminates  for any reason,  including  death,  disability,  retirement or other
cause, his participation in this Section 10 of the Plan shall  automatically and
without  any act on his  part  terminate  as of the date of  termination  of his
employment.  As soon as practicable  following the Participant's  termination of
employment, the Company shall refund to such Participant (or beneficiary, in the
case  of  the  Participant's  death)  any  amount  in  his  Cash  Account  which
constitutes  payroll  deductions,  without  interest,  and the  custodian  shall
deliver  to such  Participant  a share  certificate  issued  in his name for the
number of whole Shares credited to his Share Account through prior Offerings.

     (h) EFFECT OF MERGER OR LIQUIDATION INVOLVING THE COMPANY. In the event the
Company  merges with another  corporation  and the Company is not the  surviving
entity,  or in the event all or  substantially  all of the  Company's  assets or
stock is acquired by another corporation,  the Committee may, in connection with
any such transaction,  cancel each outstanding Right to Purchase and refund sums

                                      -13-
<PAGE>


previously  collected from  Participants  under the canceled Rights to Purchase,
or,  in its  discretion,  cause  each  Participant  with  outstanding  Rights to
Purchase to have his or her Rights to Purchase  exercised  immediately  prior to
such  transaction  and thereby the balance of his or her Cash Account applied to
the purchase of Shares at the purchase price in effect for that Offering,  which
would be treated as ending  with the  effective  date of such  transaction.  The
balances  of  the  Cash  Accounts  not  so  applied  shall  be  refunded  to the
Participants.  In the event of a merger in which the  Company  is the  surviving
entity,  each  Participant  shall be entitled  to receive,  for each Share as to
which such  Participant's  Rights to Purchase are  exercised,  the securities or
property that a holder of one Share was entitled to receive in  connection  with
the merger.  To the extent that this  paragraph is  inconsistent  with any other
provision in this Plan, this paragraph shall control.

     SECTION 11. Amendment and Termination.

     (a)  AMENDMENTS  TO  THE  PLAN.  The  Board  may  amend,  alter,   suspend,
discontinue or terminate the Plan or any portion  thereof at any time;  provided
that no such amendment, alteration,  suspension,  discontinuation or termination
shall be made  without  stockholder  approval if such  approval is  necessary to
comply with any tax or regulatory requirement,  including for these purposes any
approval  requirement  which is a prerequisite for exemptive relief from Section
16(b) of the  Exchange  Act for which or with which the Board deems it necessary
or desirable to qualify or comply; and, provided further,  that no amendment may
be made to Section 6(e) or any other  provision of the Plan relating to Director
Options  within  six  months of the last date on which  any such  provision  was
amended, other than to comport with changes in the Code or the rules thereunder.
Notwithstanding  anything to the contrary  herein,  the  Committee may amend the
Plan,  subject to any  stockholder  approval  required under Rule l6b-3, in such
manner as may be  necessary  so as to have the Plan conform with local rules and
regulations in any jurisdiction outside the United States.

     (b)  AMENDMENTS  TO  AWARDS.  Subject to the  provisions  of Section 9, the
Committee  may waive any  conditions  or  rights  under,  amend any terms of, or
alter,  suspend,  discontinue,  cancel or terminate any Award therefore granted,
prospectively  or  retroactively;  provided  that  any such  waiver,  amendment,
alteration, suspension,  discontinuance,  cancellation or termination that would
impair the rights of any  Participant  or any holder or beneficiary of any Award
therefore  granted shall not to that extent be effective  without the consent of
the affected Participant, holder or beneficiary.


                                      -14-
<PAGE>


     (c) CANCELLATION OF AWARD. Any provision of this Plan (except Section 9) or
any Award Agreement to the contrary notwithstanding, the Committee may cause any
Award granted  hereunder to be canceled in  consideration of the granting to the
holder of an  alternative  Award  having a Fair  Market  Value equal to the Fair
Market Value of such canceled Award.

     SECTION 12. General Provisions.

     (a) NONTRANSFERABILITY.

               (i) Each Award,  each Director Option and each Right to Purchase,
          and each right under any Award,  any  Director  Option or any Right to
          Purchase,  shall  be  exercisable  during  the  Participant's  or  the
          Eligible  Director's  lifetime only by the Participant or the Eligible
          Director or, if permissible under applicable law, by the Participant's
          or the  Eligible  Director's  guardian  or legal  representative  or a
          transferee receiving such Award,  Director Option or Right to Purchase
          pursuant  to  a  qualified  domestic  relations  order  ("QDRO"),   as
          determined by the Committee.

               (ii)  No  Award,  Director  Option  or  Right  to  Purchase  that
          constitutes a "derivative security," for purposes of Section 16 of the
          Exchange Act, may be assigned,  alienated,  pledged, attached, sold or
          otherwise  transferred  or  encumbered  by a  Participant  or Eligible
          Director  otherwise  than  by  will  or by the  laws  of  descent  and
          distribution or pursuant to a QDRO, and any such purported assignment,
          alienation, pledge, attachment, sale, transfer or encumbrance shall be
          void and unenforceable against the Company or any Subsidiary; provided
          that  the  designation  of  a  beneficiary  shall  not  constitute  an
          assignment,   alienation,   pledge,  attachment,   sale,  transfer  or
          encumbrance.

     (b) NO RIGHTS TO AWARDS.  No  Employee,  Participant  or other Person shall
have any  claim  to be  granted  any  Award,  and  there  is no  obligation  for
uniformity of treatment of Employees,  Participants or holders or  beneficiaries
of Awards.  The terms and conditions of Awards need not be the same with respect
to each recipient.

     (c) SHARE CERTIFICATES.  All certificates for Shares or other securities of
the Company or any Subsidiary  delivered under the Plan shall be subject to such
stop transfer orders and other  restrictions as the Committee may deem advisable
under the Plan or the rules,  regulations and other requirements of the SEC, any
stock  exchange or  national  securities  association  upon which such Shares or
other  securities are then listed and any applicable  federal or state laws; and
the Committee  may cause a legend or legends to be put on any such  certificates
to make appropriate reference to such restrictions.


                                      -15-
<PAGE>


     (d) WITHHOLDING.  A Participant or Eligible Director may be required to pay
to the Company or any Subsidiary  and the Company or any  Subsidiary  shall have
the right and is hereby  authorized to withhold from any Award,  Director Option
or Share otherwise  issued under the Plan, from any payment due or transfer made
under any Award or any Director  Option or otherwise under the Plan, or from any
compensation  or other amount owing to a Participant or Eligible  Director,  the
amount of any  applicable  withholding  taxes in respect of an Award, a Director
Option or a Share  otherwise  issued under the Plan, its exercise or any payment
or transfer under an Award,  under a Director Option or otherwise under the Plan
and to take such other  action as may be necessary in the opinion of the Company
to satisfy  all  obligations  for the  payment of such  taxes.  With  respect to
Participants  who are  not  subject  to  Section  16 of the  Exchange  Act,  the
withholding may be in the form of cash, shares,  other securities,  other Awards
or other property as the Committee may allow.  With respect to Participants  and
Eligible  Directors  who are  subject  to Section 16 of the  Exchange  Act,  the
withholding shall be in cash or in any other property permitted by Rule 16b-3 as
the Committee may allow.  The Committee may provide for additional cash payments
to Participants  or Eligible  Directors to defray or offset any tax arising from
the grant, vesting,  exercise or payments of any Award or Share otherwise issued
under this Plan.

     (e) AWARD  AGREEMENTS.  Each Award hereunder shall be evidenced by an Award
Agreement  which shall be delivered  to the  Participant  and shall  specify the
terms and conditions of the Award and any rules  applicable  thereto,  including
but not  limited to the effect on such Award of the death,  retirement  or other
termination of employment of a Participant  and the effect,  if any, of a change
in control of the Company.

     (f) NO LIMIT ON OTHER COMPENSATION  ARRANGEMENTS.  Nothing contained in the
Plan shall prevent the Company or any Subsidiary  from adopting or continuing in
effect other compensation arrangements, which may, but need not, provide for the
grant of options,  restricted  stock,  shares and other types of awards provided
for hereunder  (subject to  stockholder  approval if such approval is required),
and such  arrangements may be either generally  applicable or applicable only in
specific cases.

     (g) NO RIGHT TO EMPLOYMENT.  Eligibility for  participation in this Plan or
the grant of an Award shall not be construed as giving a  Participant  the right
to be  retained  in the employ of the Company or any  Subsidiary.  Further,  the
Company or a Subsidiary may at any time dismiss a Participant  from  employment,
free from any liability or any claim under the Plan, unless otherwise  expressly
provided in the Plan or in any Award Agreement.


                                      -16-
<PAGE>


     (h) NO RIGHTS AS STOCKHOLDER.  Subject to the provisions of the Plan and/or
the  applicable  Award,  no  Participant  or holder or beneficiary of any Award,
Director Option or Right to Purchase shall have any rights as a stockholder with
respect  to any  Shares to be  distributed  under  the Plan  until he or she has
become the holder of such Shares.  Notwithstanding the foregoing,  in connection
with each grant of  Restricted  Stock  hereunder,  the  applicable  Award  shall
specify  if and to what  extent the  Participant  shall not be  entitled  to the
rights of a stockholder in respect of such Restricted Stock.

     (i) GOVERNING  LAW. The validity,  construction  and effect of the Plan and
any rules and regulations  relating to the Plan and any Award Agreement shall be
determined in accordance with the laws of the State of Ohio.

     (j)  SEVERABILITY.  If any provision of the Plan or any Award is or becomes
or is deemed to be invalid,  illegal or  unenforceable in any jurisdiction or as
to any Person or Award, or would  disqualify the Plan or any Award under any law
deemed applicable by the Committee,  such provision shall be construed or deemed
amended to conform  to the  applicable  laws,  or if it cannot be  construed  or
deemed  amended  without,  in the  determination  of the  Committee,  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.

     (k) OTHER LAWS. The Committee may refuse to issue or transfer any Shares or
other  consideration  under  the Plan if,  acting  in its  sole  discretion,  it
determines  that  the  issuance  or  transfer  of  such  Shares  or  such  other
consideration  might  violate any  applicable  law or  regulation or entitle the
Company to recover the same under  Section  16(b) of the  Exchange  Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection  with the issuance of such Shares  shall be promptly  refunded to the
relevant Participant, holder or beneficiary.  Without limiting the generality of
the foregoing, no Award granted hereunder shall be construed as an offer to sell
securities of the Company,  and no such offer shall be  outstanding,  unless and
until the Committee in its sole  discretion has determined  that any such offer,
if made,  would be in compliance  with all applicable  requirements  of the U.S.
federal securities laws.


                                      -17-
<PAGE>


     (l) NO TRUST OR FUND  CREATED.  Neither the Plan nor any Award shall create
or be  construed  to create a trust or separate  fund of any kind or a fiduciary
relationship  between the Company or any  Subsidiary  and a  Participant  or any
other Person. To the extent that any Person acquires a right to receive payments
from the Company or any Subsidiary pursuant to the Plan, such rights shall be no
greater than the right of any unsecured  general  creditor of the Company or any
Subsidiary.

     (m) RULE L6B-3 COMPLIANCE. With respect to persons subject to Section 16 of
the Exchange Act,  transactions  under this Plan are intended to comply with all
applicable terms and conditions of Rule 16b-3 and any successor  provisions.  To
the extent that any provision of the Plan or action by the Committee fails to so
comply,  it shall be deemed null and void,  to the extent  permitted  by law and
deemed advisable by the Committee.

     (n)  HEADINGS.  Headings are given to the sections and  subsections  of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or  interpretation of
the Plan or any provision thereof.

     (o) NO IMPACT ON  BENEFITS.  Plan Awards or Shares  otherwise  issued under
this Plan shall not be treated as  compensation  for purposes of  calculating an
Employee's rights under any employee benefit plan.

     (p) INDEMNIFICATION.  Each person who is or shall have been a member of the
Committee or of the Board shall be indemnified  and held harmless by the Company
against and from any loss,  cost,  liability or expense that may be imposed upon
or reasonably  incurred by him in connection  with or resulting  from any claim,
action, suit or proceeding to which he may be made a party or in which he may be
involved  by reason of any  action  taken or  failure  to act under the Plan and
against and from any and all amounts paid by him in settlement thereof, with the
Company's  approval,  or paid by him in satisfaction of any judgment in any such
action,  suit or proceeding  against him,  provided he shall give the Company an
opportunity,  at its own  expense,  to  handle  and  defend  the same  before he
undertakes  to handle and defend it on his own behalf.  The  foregoing  right of
indemnification  shall not be exclusive  and shall be  independent  of any other
rights of  indemnification  to which  such  persons  may be  entitled  under the
Company's  Certificate of Incorporation or By-Laws, by contract,  as a matter of
law, or otherwise.


                                      -18-
<PAGE>


     SECTION 13. Term of the Plan.

     (a) EFFECTIVE DATE. The Plan shall be effective as of May 1, 1996, the date
of its approval by the stockholders of the Company.

     (b)  EXPIRATION  DATE. No Award or Right to Purchase shall be granted under
the Plan after May 1, 2006,  the ten year  anniversary  of the effective date of
the  Plan.  Unless  otherwise  expressly  provided  for  in  the  Plan  or in an
applicable Award Agreement,  any Award granted  hereunder may, and the authority
of the Board or the Committee to amend, alter, adjust,  suspend,  discontinue or
terminate  any such Award or to waive any  conditions  or rights  under any such
Award shall, continue after May 1, 2006.