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                                                                     EXHIBIT 4.4

                             1997 STOCK OPTION PLAN
                             OF DSI INDUSTRIES, INC.


1.       Purpose, Types of Awards, Construction. The purpose of the 1997 Stock
Option Plan of DSI Industries, Inc. (the "Plan") is to afford an incentive to
executive officers, other employees and non-employee directors and consultants
of DSI Industries, Inc., a Delaware corporation (the "Company"), or any
Subsidiary (as defined below), to acquire a proprietary interest in the Company,
to continue as employees or non-employee directors (as the case may be), to
increase their efforts on behalf of the Company and to promote the success of
the Company's business. To further such purposes the Committee as deemed below
may grant stock options, stock appreciation rights and restricted stock. The
provisions of the Plan are intended to satisfy the requirements of Section 16(b)
of the Securities Exchange Act of 1934, and shall be interpreted in a manner
consistent with the requirements thereof, as now or hereafter construed,
interpreted and applied by regulations, rulings and cases.

2.       Definitions. As used in this Plan, the following words and phrases
shall have the meanings indicated:

         (a) "Agreement" shall mean an agreement entered into between the
Company and a Grantee in connection with an award under the Plan.

         (b) "Board" shall mean the Board of Directors of the Company.

         (c) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and any reference to a section of the Code or regulation
promulgated thereunder shall also refer to any successor of such section or
regulation.

         (d) "Committee" shall mean a committee established by the Board to
administer the Plan, the composition of which shall at all times satisfy the
provisions of Rule 16b-3 under the Exchange Act.

         (e) "Common Stock" shall mean shares of common stock, par value $.01
per share, of the Company.

         (f) "Company" shall mean DSI Industries, Inc., a corporation organized
under the laws of the State of Delaware, or any successor corporation.

         (g) "Disability" shall mean a Grantee's inability to perform his duties
with the Company or any Subsidiary for more than six consecutive months by
reason of any medically determinable physical or mental impairment, as
determined by a physician selected by the Grantee and acceptable to the Company.

         (h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and as now or hereafter construed, interpreted and
applied by regulations, rulings and cases, and any reference to a section of the
Exchange Act or rule or regulation promulgated thereunder shall also refer to
any successor of such section, rule or regulation.


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         (i) "Fair Market Value" per share as of a particular date shall mean
(i) the average high and low trading prices per share of Common Stock on the
national securities exchange on which the Common Stock is principally traded for
the last preceding date on which there was a sale of such Common Stock on such
exchange, or (ii) if the shares of Common Stock are then traded in an
over-the-counter market, the average high and low trading prices per share of
Common Stock in such over-the-counter market for the last preceding date on
which there was a sale of such Common Stock in such market, or (iii) if the
shares of Common Stock are not then listed on a national securities exchange or
traded in an over-the-counter market, such value as the Committee, in its sole
discretion, shall determine.

         (j) "Grantee" shall mean a person who receives a grant of Options,
Stock Appreciation Rights or Restricted Stock under the Plan.

         (k) "Incentive Stock Option" shall mean any option intended to be, and
designated as, an incentive stock option within the meaning of Section 422 of
the Code.

         (l) "Insider" shall mean a Grantee who is subject to the reporting
requirements of Section 16(a) of the Exchange Act.

         (m) "Option" or "Options" shall mean a grant to a Grantee of an option
or options to purchase shares of Common Stock. Options granted by the Committee
to an employee Grantee pursuant to the Plan shall constitute either Incentive
Stock Options or Nonqualified Stock Options. Options granted to any consultant
or non-employee director shall be Nonqualified Stock Options.

         (n) "Option Price" shall mean the exercise price of an Option per share
of Common Stock covered by the Option.

         (o) "Option Term" shall mean the period (determined at the Option's
grant) from its date of grant to the last date on which it can be exercised. The
Option Term of any Incentive Stock Option or any Option granted to any
consultant or non-employee director shall not be longer than ten (10) years. The
Option Term of any Incentive Stock Option granted to a Ten Percent Stockholder
shall not be longer than five (5) years.

         (p) "Plan" means this 1997 Stock Option Plan of DSI Industries, Inc.,
as amended from time to time.

         (q) "Retirement" shall mean a Grantee's retirement in accordance with
the terms of any pension or retirement plan adopted by the Company (or any
Subsidiary), if any, as the case may be, on the normal retirement date
prescribed from time to time by the Company or such Subsidiary.

         (r) "Rule 16b-3" shall mean Rule 16b-3, as from time to time in effect,
promulgated by the Securities and Exchange Commission under Section 16 of the
Exchange Act, including any successor to such Rule.

         (s) "Stock Appreciation Right" shall mean the right, granted to a
Grantee under Section 9, to be paid an amount measured by the appreciation in
the Fair Market Value of


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Common Stock from the date of grant to the date of exercise of the right, with
payment to be made in cash or Common Stock as specified in the award or
determined by the Committee.

         (t) "Subsidiary" shall be as defined in Section 424(f) of the Code and
shall include a subsidiary of any subsidiary.

         (u) "Ten Percent Stockholder" shall mean an employee Grantee who, at
the time an Incentive Stock Option is granted to such Grantee, owns stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the employer corporation or of its parent or subsidiary
corporation.

3.       Administration. The Plan shall be administered by the Committee. The
Committee shall have the authority in its discretion, subject to and not
inconsistent with the express provisions of the Plan, to administer the Plan and
to exercise all the powers and authorities either specifically granted to it
under the Plan or necessary or advisable in the administration of the Plan,
including, without limitation, the authority to grant Options, Stock
Appreciation Rights and Restricted Stock; to determine which Options shall
constitute Incentive Stock Options and which Options shall constitute
Nonqualified Stock Options; to determine the purchase price of the shares of
Common Stock covered by each Option; to determine the persons to whom, and the
time or times at which awards shall be granted; to determine the number of
shares to be covered by each award; to interpret the Plan; to prescribe, amend
and rescind rules and regulations relating to the Plan; to determine the terms
and provisions of the Agreements (which need not be identical) and to cancel or
suspend awards, as necessary; and to make all other determinations deemed
necessary or advisable for the administration of the Plan.

         The Committee may delegate to one or more of its members or to one or
more agents such administrative duties as it may deem advisable, and the
Committee or any person to whom it has delegated duties as aforesaid may employ
one or more persons to render advice with respect to any responsibility the
Committee or such person may have under the Plan. All decisions, determination
and interpretations of the Committee shall be final and binding on all Grantees
of any awards under this Plan. The Board shall fill all vacancies, however
caused, in the Committee. The Board may from time to time appoint additional
members to the Committee, and may at any time remove one or more Committee
members and substitute others. One member of the Committee shall be selected by
the Board as chairman. The Committee shall hold its meetings at such times and
places as it shall deem advisable. All determinations of the Committee shall be
made by a majority of its members either present in person or participating by
conference telephone at a meeting or by written consent. The Committee may
appoint a secretary and make such rules and regulations for the conduct of its
business as it shall deem advisable, and shall keep minutes of its meetings.

         No member of the Board or Committee shall be liable for any action
taken or determination made in good faith with respect to the Plan or any award
granted hereunder.

4.       Eligibility. Awards may be granted to executive officers and other key
employees, including officers and directors who are employees, and to
non-employee directors of and consultants to the Company, except as proscribed
by the Exchange Act or the Code. In determining the employees to whom awards
shall be granted and the number of shares to be


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covered by each award, the Committee shall take into account the duties of the
respective employees, their present and potential contributions to the success
of the Company and such other factors as the Committee shall deem relevant in
connection with accomplishing the purpose of the Plan.

5.       Stock. The maximum number of shares of Common Stock reserved for the
grant of awards under the Plan shall be 1,150,000 shares, subject to adjustment
as provided in Section 11 hereof. Such shares may, in whole or in part, be
authorized but unissued shares or shares that shall have been or may be
reacquired by the Company. For purposes of this Section 5, where the exercise
price of an Option is paid in Common Stock pursuant to Section 6(d) of the Plan,
only the net number of additional shares issued and which remain outstanding in
connection with such exercise shall be deemed "issued" for purposes of the Plan.

         If any outstanding award under the Plan should, for any reason expire,
be canceled or be forfeited (other than in connection with the exercise of a
Stock Appreciation Right), without having been exercised in full, the shares of
Common Stock allocable to the unexercised, canceled or terminated portion of
such award shall (unless the Plan shall have been terminated) become available
for subsequent grants of awards under the Plan; provided, however, that, in the
case of the cancellation or forfeiture of Restricted Stock with respect to which
dividends have been paid or accrued, the number of shares with respect to such
Restricted Stock shall not be available for subsequent grants hereunder unless,
in the case of shares with respect to which dividends were accrued by unpaid,
such dividends are also canceled or forfeited.

6.       Terms and Conditions of Options. Each Option granted pursuant to the
Plan shall be evidenced by a written agreement between the Company and the
Grantee (the "Option Agreement"), in such form and containing such terms and
conditions as the Committee shall from time to time approve, which Option
Agreement shall comply with and be subject to the following terms and
conditions, unless otherwise specifically provided in such Option Agreement.

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

         (b) Type of Option. Each Option Agreement shall specifically state that
the Option constitutes an Incentive stock Option or a Nonqualified Stock Option.

         (c) Option Price. Each Option Agreement shall state the Option Price,
which, in the case of an Incentive Stock Option, shall not be less than one
hundred percent (100%) of the Fair Market Value of a share of Common Stock
covered by the Option on the date of grant, and in any case shall not be less
than the par value of a share of the Common Stock covered by the Option. The
Option Price shall be subject to adjustment as provided in Section 11 hereof.
The date as of which the Committee adopts a resolution expressly granting an
Option shall be considered the day on which such Option is granted.

         (d) Medium and Time of Payment. Payment of the Option Price may be made
(as determined by the Board) (i) in cash, (ii) by certified check or bank
cashier's check payable to the order of the Company in the amount of such Option
Price, or, if permitted by the Committee:


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(iii) by promissory note issued by the Grantee in favor of the Company in an
amount equal to such Option Price and payable on terms prescribed by the
Committee and which provides for the payment of interest at a fair market rate,
as determined by the Committee, (iv) by delivery of capital stock to the Company
having a Fair Market Value (determined on the date of exercise) equal to the
Option Price, (v) by agreeing with the Company to cancel a portion of the
exercisable Options issued hereunder to such Grantee having a value (measured as
the difference between the current Fair Market Value (determined on the date of
exercise) and the Option Price of the Common Stock subject to such portion)
equal to the Option Price; or (vi) by any combination of the methods of payment
described in (i) through (v) above.

         (e) Term and Exercisability of Options. Each Option Agreement shall
provide the exercise schedule for the Option as determined by the Committee;
provided, however, that the Committee shall have the authority to accelerate the
exercisability of any outstanding Option at such circumstances as it, in its
sole discretion, deems appropriate. Each Option Agreement shall provide an
Option Term which shall be ten (10) years from the date of the grant of the
Option, unless otherwise provided in Section 2 hereof or otherwise determined by
the Committee. The Option Term shall be subject to earlier expiration as
provided in Sections 6(f) and 6(g) hereof. An Option may be exercised, as to any
or all full shares of Common Stock as to which the Option has become
exercisable, by written notice delivered in person or by mail to the Secretary
of the Company, specifying the number of shares of Common Stock with respect to
which the Option is being exercised.

         (f) Termination of Employee Grantee. Except as provided in this Section
6(f) and in Section 6(g) hereof, an Option granted to an employee of the Company
or a Subsidiary thereof may be exercised only if the employee Grantee is then in
the employ of the Company or a Subsidiary thereof (or a corporation issuing or
assuming the Option in a transaction to which Section 424(a) of the Code applies
(or a parent or subsidiary corporation of such corporation)), and the Grantee
has remained continuously so employed since the date of grant of the Option. In
the event that the employment of an employee Grantee shall terminate (other than
by reason of death, Disability or Retirement), all options of such Grantee that
are exercisable on the date of such termination shall continue to be exercisable
for three months after the date of such termination (or such longer period as
the Committee shall prescribe in the case of Nonqualified Stock Options).
Notwithstanding the foregoing provisions of this Section 6(f), no Option may be
exercised later than the expiration of its Option Term. To the extent that any
Option is not exercisable on the date of such termination of employment, its
Option Term shall expire on such date.

         (g) Termination of Employee Grantee by Death, Disability or Retirement.
If an employee Grantee shall die while employed by the Company or a Subsidiary
thereof, or within three months after the date of termination of such Grantee's
employment (or within such longer period as the Committee may have provided for
exercise of the Grantee's Options after termination of the Grantee's employment
pursuant to Section 6(f) hereof, or if the employee Grantee's employment shall
terminate by reason of Disability, all Options theretofore granted to such
Grantee (to the extent such Options are exercisable on the date the Grantee's
employment is terminated by such death or Disability) may be exercised by the
Grantee or by the Grantee's estate or by a person who acquired the right to
exercise such Options by bequest of inheritance or otherwise by reason of death
or Disability of the Grantee, at any time within six months after the


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death or Disability of the Grantee. In the event that an Option granted
hereunder shall be exercised by the legal representatives of a deceased or
Disabled Grantee, written notice of such exercise shall be accompanied by a
certified copy of letters testamentary or equivalent proof of the right of such
legal representatives to exercise such Option. In the event that the employment
of an employee Grantee shall terminate on account of such Grantee's Retirement,
all Options of such Grantee (to the extent such Options are exercisable on the
date of the Grantee's retirement) may be exercised at any time within three
months after the date of such Retirement. Notwithstanding the foregoing
provisions of this Section 6(g), no Option may be exercised later than the
expiration of its Option Term. To the extent that any Option is not exercisable
on the date of such termination of employment by reason of death, Disability or
Retirement, its Option Term shall expire on such date.

         (h) Other Provisions. The Option Agreement evidencing awards under the
Plan shall contain in such other terms and conditions not inconsistent with the
Plan as the Committee may determine.

7.       Nonqualified Stock Options. Option granted pursuant to this Section 7
are intended to constitute Nonqualified Stock Options and shall be subject only
to the general terms and conditions specified in Section 6 hereof. At the
discretion of the Committee, the early termination provisions contained in
Section 6 hereof may be waived by the Committee as evidenced by their exclusion
from any Option Agreement.

8.       Incentive Stock Options. Options granted pursuant to this Section 8 are
intended to constitute Incentive Stock Options and shall be subject to the
following special terms and conditions, in addition to the general terms and
conditions specified in Section 6 hereof.

         (a) Value of Shares. The aggregate Fair Market Value (determined as of
the date the Incentive Stock Option is granted) of the shares of Common Stock
with respect to which Incentive Stock Options granted under this Plan (and all
other plans of all employee Grantee's employer corporation and its parent and
subsidiary corporations) become exercisable for the first time by the Grantee
during any calendar year shall not exceed $100,000. To the extent that the grant
of an Option results in the aggregate Fair Market Value (determined at the time
of grant) of the Common Stock (or other capital stock of the Company or any
subsidiary) with respect to which Incentive Stock Options are exercisable for
the first time by a Grantee during any calendar year (under all plans of the
Company and subsidiary corporations) to exceed $100,000, such Option shall be
treated as a Nonqualified Stock Option to the extent of such excess. The
provisions of this subsection shall be construed and applied in accordance with
Section 422(d) of the Code and the regulations, if any, promulgated thereunder.
Nothing contained in the Plan shall be construed to limit the right of the
Committee to grant an Incentive Stock Option and a Nonqualified Stock Option
concurrently under a single stock option Agreement so long as each Option is
clearly identified as to its status.

         (b) Ten Percent Stockholder. In the case of an Incentive Stock Option
granted to a Ten Percent Stockholder, (i) the Option Price shall not be less
than one-hundred-ten percent (110%) of the Fair Market Value of a share of
Common Stock on the date of grant of such Incentive Stock Option, and (ii) the
Option Term shall not exceed five (5) years from the date of grant of such
Incentive Stock Option.


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         (c) Disqualifying Dispositions of Incentive Stock Options. If Common
Stock acquired upon exercise of any Incentive Stock Option is disposed of in a
disposition that, under Section 422 of the Code, disqualifies the Grantee from
the application of Section 421(a) of the Code, the Grantee immediately before
such disposition of Common Stock shall comply with any requirements imposed by
the Company in order to enable the Company to secure the related income tax
deduction to which it is entitled in such event.

9.       Stock Appreciation Rights. The Committee shall have authority to grant
a Stock Appreciation Right to the employee Grantee of any Option under the Plan
with respect to all or some of the shares of Common Stock covered by such
related Option. A Stock Appreciation Right shall, except as provided in this
Section 9, be subject to the same terms and conditions as the related Option.
Each Stock Appreciation Right granted pursuant to the Plan shall be evidenced by
a written Agreement between the Company and the Grantee in such form as the
Committee shall time to time approve.

         (a) Time of Grant. A Stock Appreciation Right may be granted either at
the time of grant, or at any time thereafter during the term of the Option;
provided, however, that Stock Appreciation Rights related to Incentive Stock
Options may only be granted at the time of grant of the related Option.

         (b) Payment. A Stock Appreciation Right shall entitle the holder,
thereof, upon exercise of the Stock Appreciation Right or any portion thereof,
to receive payment of an amount computed pursuant to Section 9(d).

         (c) Exercise. A Stock Appreciation Right shall be exercisable at such
time or times and only to the extent that the related Option is exercisable, and
will not be transferable except to the extent the related Option may be
transferable. A Stock Appreciation Right granted in connection with an Incentive
Stock Option shall be exercisable only if the Fair Market Value of a share of
Common Stock on the date of exercise exceeds the purchase price specified in the
related Incentive Stock Option.

         (d) Amount Payable. Upon the exercise of a Stock Appreciation Right,
the Grantee shall be entitled to receive an amount determined by multiplying (i)
the excess of the Fair Market Value of a share of Common Stock on the date of
exercise of such Stock Appreciation Right over the Option Price under the
related Option, by (ii) the number of shares of Common Stock as to which such
Stock Appreciation Right is being exercised. Notwithstanding the foregoing, the
Committee may limit in any manner the amount payable with respect to any Stock
Appreciation Right by including such a limit at the time it is granted.

         (e) Treatment of Related Options and Stock Appreciation Rights Upon
Exercise. Upon the exercise of a Stock Appreciation Right, the related Option
shall be canceled to the extent of the number of shares of Common Stock as to
which the Stock Appreciation Right is exercised and upon the exercise of an
Option granted in connection with a Stock Appreciation Right, the Stock
Appreciation Right shall be canceled to the extent of the number of shares of
Common Stock as to which the Option is exercised or surrendered.


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         (f) Method of Exercise. Stock Appreciation Rights shall be exercised by
a Grantee only by a written notice delivered in person or by mail to the
Secretary of the Company, specifying the number of shares of Common Stock with
respect to which the Stock Appreciation Right is being exercised. If requested
by the Committee, the Grantee shall deliver the Agreement evidencing the Stock
Appreciation Right being exercised and the Option Agreement evidencing any
related Option to the Secretary of the Company who shall endorse thereon a
notation of such exercise and return such Agreements to the Grantee.

         (g) Form of Payment. Payment of the amount determined under Section
9(d), may be made solely in whole shares of Common Stock in a number determined
based upon their Fair Market Value on the date of exercise of the Stock
Appreciation Right or, alternatively, at the sole discretion of the Committee,
solely in cash, or in a combination of cash and shares of Common Stock as the
Committee deems advisable. If the Committee decides to make full payment in
shares of Common Stock, and the amount payable results in a fractional share,
payment for the fractional share will be made in cash. Notwithstanding the
foregoing, to the extent required by Rule 16b-3 no payment in the form of cash
may be made upon the exercise of a Stock Appreciation Right pursuant to Section
9(d) to an Insider, unless the exercise of such Stock Appreciation Right is made
during the period beginning on the third business day and ending on the twelfth
business day following the date of release for publication of the Company's
quarterly or annual statements of earnings.

10.      Restricted Stock. The Committee may award shares of Restricted Stock to
any eligible employee. Each award of Restricted Stock under the Plan shall be
evidenced by a written Agreement between the Company and the Grantee, in such
form as the Committee shall from time to time approve, and shall comply with the
following terms and conditions (and with such other terms and conditions not
inconsistent with the terms of this Plan as the Committee, in its discretion,
shall establish:

         (a) Number of Shares. Each Agreement shall state the number of shares
of Restricted Stock to be subject to an award.

         (b) Restrictions. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, except by will or
the laws of descent and distribution, for such period as the Committee shall
determine from the date on which the award is granted (the "Restricted Period").
The Committee may also impose such other restrictions and conditions on the
shares as it deems appropriate including the satisfaction of performance
criteria. Certificates for shares of stock issued pursuant to Restricted Stock
awards shall bear an appropriate legend referring to such restrictions, and any
attempt to dispose of any such shares of stock in contravention of such
restrictions shall be null and void and without effect. During the Restricted
Period, such certificates shall be held in escrow by an escrow agent appointed
by the Committee. In determining the Restricted Period of an award, the
Committee may provide that the foregoing restrictions shall lapse with respect
to specified percentages of the awarded shares on successive anniversaries of
the date of such award.

         (c) Forfeiture. Subject to such exceptions as may be determined by the
Committee, if the Grantee's continuous employment with the Company or any
Subsidiary shall terminate for any reason prior to the expiration of the
Restricted Period of an award, any shares remaining


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subject to restrictions (after taking into account the provisions of Section
10(e) hereof shall thereupon be forfeited by the Grantee and transferred to, and
reacquired by, the Company or a Subsidiary at no cost to the Company or
Subsidiary.

         (d) Ownership. During the Restricted Period the Grantee shall possess
all incidents of ownership of such shares, subject to Section 10(b) hereof,
including the right to receive dividends with respect to such shares and to vote
such shares.

         (e) Accelerated Lapse of Restrictions. The Committee shall have the
authority (and the Agreement may, but need not, so provide) to cancel all or any
portion of any outstanding restrictions prior to the expiration of the
Restricted Period with respect to any or all of the shares of Restricted Stock
awarded on such terms and conditions as the Committee shall deem appropriate.

11. Effect of Certain Changes. In the event of any extraordinary dividend, stock
dividend, recapitalization, merger, consolidation, stock split, warrant or
rights issuances, or combination or exchange of such shares, or other similar
transactions, the number of shares of Common Stock available for awards, the
number of such shares covered by outstanding awards, and the price per share of
Options or the applicable market value of Stock Appreciation Right shall be
equitably adjusted by the Committee to reflect such event and preserve the value
of such awards; provided, however, that any fractional shares resulting from
such adjustment shall be eliminated. If the Company shall be reorganized,
consolidated, or merged with another corporation, or if all or subsequently all
of the assets of the Company shall be sold or exchanged, a Grantee shall at the
time of issuance of the stock under such a corporate event, be entitled to
receive upon the exercise of his award the same number and kind of shares of
stock or the same amount of property, cash or securities as he would have been
entitled to receive upon the occurrence of any such corporate event as if he had
been, immediately prior to such event, the holder of the number of shares
covered by his award and that his award shall have been fully vested at the time
of such event; provided, however, that in any of such events the Committee shall
have the discretionary power to take any action necessary or appropriate to
prevent Incentive Stock Options granted hereunder from being disqualified as
Incentive Stock Options. Any adjustment under this Section shall apply
proportionately to only the unexercised portion of any award granted hereunder.
If fractions of a share would result from any such adjustment, the adjustment
shall be revised to the next lower whole number of shares.

12. Surrender and Exchange of Awards. The Committee may permit the voluntary
surrender of all or a portion of any Option granted under the Plan to an
employee or any option granted under any other plan, program or arrangement of
the Company or any Subsidiary ("Surrendered Option"), to be conditioned upon the
granting to the employee Grantee of a new Option for the same number of shares
of Common Stock as the Surrendered Option, or may require such voluntary
surrender as a condition precedent to a grant of a new Option to such Grantee.
Subject to the provisions of the Plan, such new Option may be an Incentive Stock
Option or a Nonqualified Stock Option and shall be exercisable at the price,
during such period and on such other terms and conditions as are specified by
the Committee at the time the new Option is granted. The Committee may also
grant Restricted Stock in exchange for Surrendered Options to any holder of such
Surrendered Option.


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13. Period During Which Awards May be Granted. Awards may be granted pursuant to
the Plan from time to time within a period of ten (10) years from the date the
Plan is adopted by the Board, or the date the Plan is approved by the
stockholder of the Company, whichever is earlier.

14. Nontransferability of Awards. Awards may be granted under the Plan shall not
be transferable otherwise than by will or by the laws of descent and
distribution, and awards may be exercised or otherwise realized, during the
lifetime of the Grantee, only by the Grantee or by his guardian or legal
representative. No award granted under the Plan shall be subject to execution,
attachment or other process.

15. Approval of Shareholders. The Plan shall take effect as of the date
determined by the Board in its adoption of the Plan but the Plan (and any grants
of awards made prior to the shareholder approval described in this sentence
shall be subject to the approval of the holder(s) of a majority of the issued
and outstanding shares of voting securities of the Company entitled to vote,
which approval must occur within twelve months of the date the Plan is adopted
by the Board.

16. Agreement by Employee Grantee Regarding Withholding Taxes. If the Committee
shall so require, as a condition of exercise of an Option or Stock Appreciation
Right or the expiration of the Restricted Period (each a "Tax Event"), each
employee Grantee shall agree that, no later than the date of the Tax Event, the
Grantee will pay to the Company or make arrangement satisfactory to the
Committee regarding payment of any federal, state or local taxes of any kind
required by law to be withheld upon the Tax Event. Alternatively, the Committee
may provide that an employee Grantee may elect, to the extent permitted or
required by law, to have the Company deduct federal, state and local taxes of
any kind required by law to be withheld upon the Tax Event from any payment of
any kind due to the Grantee. The withholding obligation may be satisfied by the
withholding or delivery of Common Stock.

17. Amendment and Termination of the Plan.

         (a) The Board at any time and from time to time may suspend, terminate,
modify or amend the Plant; provided, however, that an amendment which requires
stockholder approval in order for the Plan to continue to comply with Rule 16b-3
or any other law, regulation or stock exchange requirement shall not be
effective unless approved by the requisite vote of stockholders. Except as
provided in Section 11 hereof, no suspension, termination, modification or
amendment of the Plan my adversely affect any award previously granted, unless
the written consent of the Grantee is obtained.

         (b) The Plan may from time to time be terminated, modified or amended
by the affirmative vote of the holders of a majority of the shares of the
Company's Common Stock present, or represented, and entitled to vote at a
meeting of stockholders duly held in accordance with applicable state law.

         (c) The Board of the Company may at any time terminate the Plan or from
time to time make such modifications or amendments of the Plan as it may deem
advisable; provided, however, that the Board shall not (i) modify or amend the
Plan in any way that would disqualify any Option issued pursuant to the Plan as
an Incentive Stock Option, or (ii) without approval by


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the affirmative vote of the holders of a majority of the shares of the Company's
Common Stock present, or represented, and entitled to vote at a meeting of
stockholders duly held in accordance with applicable state law increase (except
as provided by Section 11) the maximum number of Common Shares as to which
awards may be granted under the Plan or change the class of persons eligible to
receive award under the Plan.

         (d) No termination, modification or amendment of the Plan my adversely
affect the rights conferred by any awards without the consent of the Grantee
thereof.

18. Rights as a Shareholder. Except as provided in Section 10(d) hereof, a
Grantee of an award (or any individual acquiring rights under such award from
the Grantee) shall have no rights as a shareholder with respect to any shares
covered by the award until the date of the issuance of a stock certificate for
such shares to the Grantee (or such individual). No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distribution of other rights for which the record date is prior to
the date such stock certificate is issued, except as provided in Section 11
hereof.

19. No Rights to Employment. Nothing in the Plan or in any award granted or
Agreement entered into pursuant hereto shall confer upon any Grantee the right
to continue in the employ of, or a consultant relationship with, the Company or
any Subsidiary or to be entitled to any remuneration or benefits not set forth
in the Plan or such Agreement or to interfere with or limit in any way the right
of the Company or any of such Subsidiary to terminate such Grantee's employment.
Awards granted under the Plan shall not be affected by any change in duties or
position of a Grantee as long as such Grantee continues to be employed by, or in
a consultant relationship with, the Company or any Subsidiary.

20. Beneficiary. A Grantee may file with the Committee a written designation of
a beneficiary on such form as may be prescribed by the Committee and may, from
time to time, amend or revoke such designation. If no designated beneficiary
survives the Grantee, the executor or administrator of the Grantee's estate
shall be deemed to be the Grantee's beneficiary.

21. Governing Law. The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the State of Delaware.

22. Effective Date and Duration of the Plan. This Plan shall be effective as of
the date determined by the Company, subject to the approval of the Plan by the
stockholders of the Company, and shall terminate on the tenth anniversary of
such date, unless earlier terminated pursuant to Section 17 hereof. No awards
shall be granted after termination of the Plan.

23. Leave of Absence. For purposes of the Plan, an individual who is on military
or sick leave or other bona fide leave of absence (such as temporary employment
by the United States or any state government) shall be considered as remaining
in the employ of the Company or of a subsidiary corporation, if any, for 90 days
or such longer period as shall be determined by the Committee.


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<PAGE>   12


24. Further Conditions of Exercise.

         (a) Unless prior to the exercise of an award, the Common Stock issuable
upon such exercise are the subject of a registration statement filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), and there is then in effect a prospectus filed
as part of such registration statement meeting the requirements of Section
10(a)(3) of the Securities Act, the acceptance of such award and the notice of
exercise with respect to such award shall be accompanied by a representation or
agreement deemed hereunder to have been made by the Grantee to the Company to
the effect that such shares are being acquired for investment only and not with
a view to the resale or distribution thereof, or such other documentation as may
be required by the Company, unless, in the opinion of counsel to the Company,
such representation, agreement or documentation is not necessary to comply with
the Securities Act.

         (b) Anything in subsection (a) of this Section 24 to the contrary
notwithstanding, the Company shall not be obligated to issue or sell any Common
Stock until they have been listed on each securities exchange on which the
Common Stock may then be listed until and unless, in the opinion of counsel to
the Company, the Company may issue such shares pursuant to a qualification or an
effective registration statement, or an exemption from registration, under such
state and federal laws, rules or regulations as such counsel may deem
applicable. The Company shall use reasonable efforts to effect such listing,
qualification and registration, as the case may be.


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