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                                                                    EXHIBIT 10.2


                                 UNIDIGITAL INC.

                           1997 EQUITY INCENTIVE PLAN


         1. Purposes of the Plan. The purposes of this Equity Incentive Plan are
to attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, non-Employee
members of the Board and Consultants of the Company and its Parent and
Subsidiaries and to promote the success of the Company's business. Options
granted under the Plan may be incentive stock options (as defined under Section
422 of the Code) or non-statutory stock options, as determined by the
Administrator at the time of grant of an option and subject to the applicable
provisions of Section 422 of the Code, as amended, and the regulations
promulgated thereunder. Stock purchase rights and SARs may also be granted under
the Plan.

         2. Certain Definitions. As used herein, the following definitions shall
apply:

                  (a) "Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.

                  (b) "Award" means any award granted to a Participant under the
Plan.

                  (c) "Board" means the Board of Directors of the Company.

                  (d) "Code" means the Internal Revenue Code of 1986, as
amended.

                  (e) "Committee" means the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan.

                  (f) "Common Stock" means the Common Stock of the Company.

                  (g) "Company" means Unidigital Inc., a Delaware corporation.

                  (h) "Consultant" means any person, including an advisor, who
is engaged by the Company or any Parent or Subsidiary to render services and is
compensated for such services, and any director of the Company whether
compensated for such services or not.

                  (i) "Continuous Status as an Employee" means the absence of
any interruption or termination of the employment relationship by the Company or
any Parent or Subsidiary. Continuous Status as an Employee shall not be
considered interrupted in the case of: (i) sick leave; (ii) military leave;
(iii) any other leave of absence approved by the Board, provided that such leave
is for a period of not more than ninety (90) days, unless reemployment upon the
expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to Company policy adopted from time to time; or (iv)
transfers between locations of the Company or between the Company, its Parent,
its Subsidiaries or its successor.
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                  (j) "Employee" means any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.

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

                  (l) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:

                           (i) If the Common Stock is listed on any established
         stock exchange or a national market system including without limitation
         the National Market System of the National Association of Securities
         Dealers, Inc. Automated Quotation ("Nasdaq") System, its Fair Market
         Value shall be the closing sales price for such stock (or the closing
         bid, if no sales were reported) as quoted on such system or exchange
         for the last market trading day prior to the time of determination as
         reported in the Wall Street Journal or such other source as the
         Administrator deems reliable or;

                           (ii) If the Common Stock is quoted on Nasdaq (but not
         on the National Market System thereof) or regularly quoted by a
         recognized securities dealer but selling prices are not reported, its
         Fair Market Value shall be the mean between the high and low asked
         prices for the Common Stock or;

                           (iii) In the absence of an established market for the
         Common Stock, the Fair Market Value thereof shall be determined in good
         faith by the Administrator.

                  (m) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.

                  (n) "Nonstatutory Stock Option" means an Option not intended
to qualify as an Incentive Stock Option.

                  (o) "Option" means a stock option granted pursuant to the
Plan.

                  (p) "Optioned Stock" means the Common Stock subject to an
Option.

                  (q) "Optionee" means an Employee or Consultant who receives an
Option.

                  (r) "Parent" means a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.

                  (s) "Participant" means an Employee or Consultant who receives
an Award under the Plan.

                  (t) "Plan" means this 1997 Equity Incentive Plan.


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                  (u) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of stock purchase rights under Section 11 below.

                  (v) "SAR" means a stock appreciation right, which is the right
to receive an amount equal to the appreciation, if any, in the Fair Market Value
of a Share from the date of the grant of the right to the date of its payment,
as adjusted in accordance with Section 13 of the Plan.

                  (w) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.

                  (x) "Subsidiary" means a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.

         3. Stock Subject to the Plan. Subject to the provisions of Section 13
of the Plan, the maximum aggregate number of Shares which may be optioned,
issued or sold under the Plan is 300,000 Shares of Common Stock. The Shares may
be authorized, but unissued Shares, reacquired Shares, Shares acquired on the
open market specifically for distribution under this Plan, or any combination
thereof.

                  If an Option or SAR should expire or become unexercisable for
any reason without having been exercised in full, or if shares of Restricted
Stock are forfeited, the unused Shares which were subject thereto shall, unless
the Plan shall have been terminated, become available for future grant under the
Plan.

         4. Administration of the Plan.

                  (a) Procedure.

                           (i) Administration With Respect to Directors and
         Officers. With respect to grants of Awards to Employees who are also
         officers or directors of the Company, the Plan shall be administered by
         (A) the Board, if the Board may administer the Plan in compliance with
         Rule 16b-3 promulgated under the Exchange Act or any successor thereto
         ("Rule 16b-3") with respect to a plan intended to qualify thereunder as
         a discretionary plan, or (B) a Committee designated by the Board to
         administer the Plan, which Committee shall be constituted in such a
         manner as to permit the Plan to comply with Rule 16b-3 with respect to
         a plan intended to qualify thereunder as a discretionary plan. Once
         appointed, such Committee shall continue to serve in its designated
         capacity until otherwise directed by the Board. From time to time the
         Board may increase the size of the Committee and appoint additional
         members thereof, remove members (with or without cause) and appoint new
         members in substitution therefor, fill vacancies, however caused, and
         remove all members of the Committee and thereafter directly administer
         the Plan, all to the extent permitted by Rule 16b-3 with respect to a
         plan intended to qualify thereunder as a discretionary plan.


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                           (ii) Multiple Administrative Bodies. If permitted by
         Rule 16b-3, the Plan may be administered by different bodies with
         respect to directors, non-director officers and Employees who are
         neither directors nor officers.

                           (iii) Administration With Respect to Consultants and
         Other Employees. With respect to grants of Awards to Employees who are
         neither directors nor officers of the Company or to Consultants, the
         Plan shall be administered by (A) the Board, if the Board may
         administer the Plan in compliance with Rule 16b-3, or (B) a Committee
         designated by the Board, which Committee shall be constituted in such a
         manner as to satisfy the legal requirements relating to the
         administration of incentive stock option plans, if any, of Delaware
         corporate law and applicable securities laws and of the Code (the
         "Applicable Laws"). Once appointed, such Committee shall continue to
         serve in its designated capacity until otherwise directed by the Board.
         From time to time the Board may increase the size of the Committee and
         appoint additional members thereof, remove members (with or without
         cause) and appoint new members in substitution therefor, fill
         vacancies, however caused, and remove all members of the Committee and
         thereafter directly administer the Plan, all to the extent permitted by
         the Applicable Laws.

                  (b) Powers of the Administrator. Subject to the provisions of
the Plan and in the case of a Committee, the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:

                           (i) to determine the Fair Market Value of the Common
         Stock, in accordance with Section 2(l) of the Plan;

                           (ii) to select the officers, Consultants and
         Employees to whom Awards may from time to time be granted hereunder;

                           (iii) to determine whether and to what extent
         Options, stock purchase rights or SARs, or any combination thereof, are
         granted hereunder;

                           (iv) to determine the number of shares of Common
         Stock to be covered by each such Award granted hereunder;

                           (v) to approve forms of agreement for use under the
         Plan;

                           (vi) to determine the terms and conditions, not
         inconsistent with the terms of the Plan, of any Award granted hereunder
         (including, but not limited to, the share price and any restriction or
         limitation or waiver of forfeiture restrictions regarding any Option or
         other Award and/or the shares of Common Stock relating thereto, based
         in each case on such factors as the Administrator shall determine, in
         its sole discretion);

                           (vii) to determine whether and under what
         circumstances an Option or SAR may be settled in cash under subsection
         9(f) instead of Common Stock;


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                           (viii) to determine whether, to what extent and under
         what circumstances Common Stock and other amounts payable with respect
         to an Award under this Plan shall be deferred either automatically or
         at the election of the participant (including providing for and
         determining the amount, if any, of any deemed earnings on any deferred
         amount during any deferral period);

                           (ix) to reduce the exercise price of any Option or
         SAR to the then current Fair Market Value if the Fair Market Value of
         the Common Stock covered by such Option or SAR shall have declined
         since the date the Option or SAR was granted; and

                           (x) to determine the terms and restrictions
         applicable to stock purchase rights and the Restricted Stock purchased
         by exercising such stock purchase rights.

                  (c) Effect of Committee's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Participants and any other holders of any Awards granted
hereunder.

         5. Eligibility.

                  (a) Nonstatutory Stock Options and SARs may be granted to
Employees, non-Employee Members of the Board and Consultants. Incentive Stock
Options may be granted only to Employees. An Employee or Consultant who has been
granted an Option or SAR may, if he is otherwise eligible, be granted additional
Options or SARs.

                  (b) Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designations, to the extent that the aggregate
Fair Market Value of the Shares with respect to which Options designated as
Incentive Stock Options are exercisable for the first time by any optionee
during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonstatutory Stock Options.

                  (c) For purposes of Section 5(b), Incentive Stock Options
shall be taken into account in the order in which they were granted, and the
Fair Market Value of the Shares shall be determined as of the time the Option
with respect to such Shares is granted.

                  (d) The Plan shall not confer upon any Participant any right
with respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with his right or the Company's right
to terminate his employment or consulting relationship at any time, with or
without cause.

         6. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company as


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described in Section 19 of the Plan. It shall continue in effect for a term of
ten (10) years unless sooner terminated under Section 15 of the Plan.

         7. Terms of Options and SARs. The term of each Option or SAR shall be
the term stated in the written agreement evidencing such Option or SAR;
provided, however, that in the case of an Incentive Stock Option, the term shall
be no more than ten (10) years from the date of grant thereof or such shorter
term as may be provided in the Option Agreement. However, in the case of an
Option granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five (5) years from the date of grant thereof or such shorter term as may be
provided in the written agreement evidencing such Option.

         8. Option Exercise Price and Consideration.

                  (a) The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Board, but shall be subject to the following:

                           (i) In the case of an Incentive Stock Option

                           (A) granted to an Employee who, at the time of the
         grant of such Incentive Stock Option, owns stock representing more than
         ten percent (10%) of the voting power of all classes of stock of the
         Company or any Parent or Subsidiary, the per Share exercise price shall
         be no less than 110% of the Fair Market Value per Share on the date of
         grant.

                           (B) granted to any Employee, the per Share exercise
         price shall be no less than 100% of the Fair Market Value per Share on
         the date of grant.

                           (ii) In the case of a Nonstatutory Stock Option

                           (A) granted to a person who, at the time of the grant
         of such Option, owns stock representing more than ten percent (10%) of
         the voting power of all classes of stock of the Company or any Parent
         or Subsidiary, the per Share exercise price shall be no less than 110%
         of the Fair Market Value per Share on the date of the grant.

                           (B) granted to any person, the per Share exercise
         price shall be no less than 85% of the Fair Market Value per Share on
         the date of grant.

                  (b) The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares which (x) in the case of


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Shares acquired upon exercise of an Option either have been owned by the
Optionee for more than six months on the date of surrender or were not acquired,
directly or indirectly, from the Company, and (y) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised, (5) authorization from the Company to
retain from the total number of Shares as to which the Option is exercised that
number of Shares having a Fair Market Value on the date of exercise equal to the
exercise price for the total number of Shares as to which the option is
exercised, (6) delivery of a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the Company the
amount of sale or loan proceeds required to pay the exercise price, (7) by
delivering an irrevocable subscription agreement for the Shares which
irrevocably obligates the option holder to take and pay for the Shares not more
than twelve months after the date of delivery of the subscription agreement, (8)
any combination of the foregoing methods of payment, or (9) such other
consideration and method of payment for the issuance of Shares to the extent
permitted under Applicable Laws. In making its determination as to the type of
consideration to accept, the Administrator shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company.

         9. Exercise of Options or SARs.

                  (a) Procedure for Exercise; Rights as a Shareholder. Any
Option or SAR granted hereunder shall be exercisable at such times and under
such conditions as determined by the Administrator, including performance
criteria with respect to the Company and/or the Participant, and as shall be
permissible under the terms of the Plan.

                           An Option or SAR may not be exercised for a fraction
of a Share.

                           An Option or SAR shall be deemed to be exercised when
written notice of such exercise has been given to the Company in accordance with
the terms of the Option or SAR by the person entitled to exercise such Option or
SAR and, if an Option is to be exercised, full payment for the Shares with
respect to which the Option is exercised has been received by the Company. Full
payment may, as authorized by the Administrator, consist of any consideration
and method of payment allowable under Section 8(b) of the Plan. Until the
issuance (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company) of the stock certificate
evidencing such Shares, no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 13 of the Plan.

                           Exercise of an Option or SAR in any manner shall
result in a decrease in the number of Shares which thereafter may be available,
both for purposes of the Plan and for


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sale under the Option or SAR, by the number of Shares as to which the Option or
SAR is exercised.

                  (b) Termination of Employment. In the event of termination of
a Participant's consulting relationship or Continuous Status as an Employee with
the Company (as the case may be), such Participant may, but only within ninety
(90) days (or such other period of time as is determined by the Board, with such
determination in the case of an Incentive Stock Option being made at the time of
grant of the Option and not exceeding ninety (90) days) after the date of such
termination (but in no event later than the expiration date of the term of such
Option or SAR as set forth in the written agreement evidencing such Option or
SAR), exercise his Option or SAR to the extent that such Participant was
entitled to exercise it at the date of such termination. To the extent that such
Participant was not entitled to exercise the Option or SAR at the date of such
termination, or if such Participant does not exercise such Option or SAR to the
extent so entitled within the time specified herein, the Option or SAR shall
terminate.

                  (c) Disability of Optionee. Notwithstanding the provisions of
Section 9(b) above, in the event of termination of a Participant's consulting
relationship or Continuous Status as an Employee as a result of his total and
permanent disability (as defined in Section 22(e)(3) of the Code), such
Participant may, but only within twelve (12) months from the date of such
termination (but in no event later than the expiration date of the term of such
Option or SAR as set forth in the written agreement evidencing such Option or
SAR), exercise the Option or SAR to the extent otherwise entitled to exercise it
at the date of such termination. To the extent that such Participant was not
entitled to exercise the Option or SAR at the date of termination, or if such
Participant does not exercise such Option or SAR to the extent so entitled
within the time specified herein, the Option or SAR shall terminate.

                  (d) Death of Optionee. In the event of the death of a
Participant, the Option or SAR may be exercised, at any time within twelve (12)
months following the date of death (but in no event later than the expiration
date of the term of such Option or SAR as set forth in the written agreement
evidencing such Option or SAR), by the Participant's estate or by a person who
acquired the right to exercise the Option or SAR by bequest or inheritance, but
only to the extent the Participant was entitled to exercise the Option or SAR at
the date of death. To the extent that such Participant was not entitled to
exercise the Option or SAR at the date of death, or if such Participant's estate
or any person who acquired the right to exercise the Option or SAR by bequest or
inheritance does not exercise such Option or SAR to the extent so entitled
within the time specified herein, the Option or SAR shall terminate.

                  (e) Rule 16b-3. Options or SARs granted to persons subject to
Section 16(b) of the Exchange Act must comply with Rule 16b-3 and shall contain
such additional conditions or restrictions as may be required thereunder to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.



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                  (f) Buyout Provisions. The Administrator may at any time offer
to buy out for a payment in cash or Shares, an Option or SAR previously granted,
based on such terms and conditions as the Administrator shall establish and
communicate to the Participant at the time that such offer is made.

                  (g) Payout Provisions. At the discretion of the Company, the
payment to a Participant upon exercise of a SAR, may be in cash, in Shares of
equivalent value, or in some combination thereof, subject to the availability of
Shares to the Company under the Plan.

         10. Non-Transferability of Options or SARs. The Option or SAR may not
be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Participant, only by the Participant. The
terms of the Option or SAR shall be binding upon the executors, administrators,
heirs, successors and assigns of the Participant.

         11. Stock Purchase Rights.

                  (a) Rights to Purchase. Stock purchase rights may be issued
either alone, in addition to, or in tandem with other Awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer stock purchase rights under the Plan, it shall
advise the offeree in writing of the terms, conditions and restrictions related
to the offer, including the number of Shares that such person shall be entitled
to purchase, the price to be paid (which price shall not be less than 50% of the
Fair Market Value of the Shares as of the date of the offer), and the time
within which such person must accept such offer, which shall in no event exceed
thirty (30) days from the date upon which the Administrator made the
determination to grant the stock purchase right. The offer shall be accepted by
execution of a Restricted Stock purchase agreement in the form determined by the
Administrator.

                  (b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at such rate as the Committee
may determine.

                  (c) Other Provisions. The Restricted Stock purchase agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock purchase agreements need not be the
same with respect to each purchaser.

                  (d) Rights as a Shareholder. Once the stock purchase right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the



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Company. No adjustment will be made for a dividend or other right for which the
record date is prior to the date the stock purchase right is exercised, except
as provided in Section 13 of the Plan.

         12. Stock Withholding to Satisfy Withholding Tax Obligations. At the
discretion of the Administrator, Participants may satisfy withholding
obligations as provided in this paragraph. When a Participant incurs tax
liability in connection with an Option, stock purchase right or SAR, which tax
liability is subject to tax withholding under applicable tax laws, and the
Participant is obligated to pay the Company an amount required to be withheld
under applicable tax laws, the Participant may satisfy the withholding tax
obligation by electing to have the Company withhold from the Shares to be issued
upon exercise of the Option or SAR, or the Shares to be issued in connection
with the stock purchase right, if any, that number of Shares having a Fair
Market Value equal to the amount required to be withheld. The Fair Market Value
of the Shares to be withheld shall be determined on the date that the amount of
tax to be withheld is to be determined (the "Tax Date").

                  In the event that the Company elects to make a payment to the
Participant in cash upon the exercise of a SAR, the Participant may satisfy the
withholding tax obligation by electing to have the Company withhold from such
payment the amount required to satisfy such withholding tax obligation.

                  All elections by a Participant to have Shares or cash withheld
for this purpose, as the case may be, shall be made in writing in a form
acceptable to the Administrator and shall be subject to the following
restrictions:

                  (a) the election must be made on or prior to the applicable
Tax Date;

                  (b) once made, the election shall be irrevocable as to the
particular Shares of the Option, stock purchase right or SAR, as to which the
election is made;

                  (c) all elections shall be subject to the consent or
disapproval of the Administrator;

                  (d) if the Participant is subject to Rule 16b-3, the election
must comply with the applicable provisions of Rule 16b-3 and shall be subject to
such additional conditions or restrictions as may be required thereunder to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.

                  In the event the election to have Shares or cash withheld is
made by a Participant and the Tax Date is deferred under Section 83 of the Code
because no election is filed under Section 83(b) of the Code, the Participant
shall receive the full number of Shares or full amount of cash, as the case may
be, with respect to which the Option, stock purchase right or SAR is exercised
but such Participant shall be unconditionally obligated to tender back to the
Company the proper number of Shares, or the proper amount of cash, as the case
may be, on the Tax Date.



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         13. Adjustments Upon Changes in Capitalization or Merger. Subject to
any required action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option or SAR, and the number of shares
of Common Stock which have been authorized for issuance under the Plan but as to
which no Options or SARs have yet been granted or which have been returned to
the Plan upon cancellation or expiration of an Option or SAR, as well as the
price per share of Common Stock covered by each such outstanding Option or SAR,
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock, or any
other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an Option or SAR.

                  In the event of the proposed dissolution or liquidation of the
Company, the Board shall notify the Participant at least fifteen (15) days prior
to such proposed action. To the extent it has not been previously exercised, the
Option or SAR will terminate immediately prior to the consummation of such
proposed action. In the event of a merger or consolidation of the Company with
or into another corporation or the sale of all or substantially all of the
Company's assets (hereinafter, a "merger"), the Option or SAR shall be assumed
or an equivalent option or stock appreciation right shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation.
In the event that such successor corporation does not agree to assume the Option
or SAR, or to substitute an equivalent option or stock appreciation right, the
Board shall, in lieu of such assumption or substitution, provide for the
Participant to have the right to exercise all Options or SARs previously granted
to such Participant, including Options or SARs which would not otherwise be
exercisable. If the Board makes an Option or SAR fully exercisable in lieu of
assumption or substitution in the event of a merger, the Board shall notify the
Participant that the Option or SAR shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the Option or SAR will
terminate upon the expiration of such period. For the purposes of this
paragraph, the Option or SAR shall be considered assumed if, following the
merger, the Option or SAR, confers the right to purchase, or receive the
appreciation in Fair Market Value, as the case may be, for each Share of stock
subject to the Option or SAR immediately prior to the merger, the consideration
(whether stock, cash, or other securities or property) received in the merger by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger was not
solely common stock of the successor corporation or its Parent, the Board may,
with the consent of the successor corporation and the participant, provide for
the consideration to be received upon the



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exercise of the Option or SAR, for each Share of stock subject to the Option or
SAR, to be solely common stock of the successor corporation or its Parent equal
in Fair Market Value to the per share consideration received by holders of
Common Stock in the merger or sale of assets.

         14. Time of Granting Options. The date of grant of an Option or SAR
shall, for all purposes, be the date on which the Administrator makes the
determination granting such Option or SAR, or such other date as is determined
by the Board. Notice of the determination shall be given to each Employee or
Consultant to whom an Option or SAR is so granted within a reasonable time after
the date of such grant.

         15. Amendment and Termination of the Plan.

                  (a) Amendment and Termination. The Board may at any time
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made which would impair the rights of any
Participant under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3 under
the Exchange Act or with Section 422 of the Code (or any other applicable law or
regulation, including the requirements of the NASD or an established stock
exchange), the Company shall obtain shareholder approval of any Plan amendment
in such a manner and to such a degree as required.

                  (b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options or SARs already granted and
such Options or SARs shall remain in full force and effect as if this Plan had
not been amended or terminated, unless mutually agreed otherwise between the
Participant and the Board, which agreement must be in writing and signed by the
Participant and the Company.

         16. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option or SAR unless the exercise of such Option
or SAR and the issuance and delivery of such Shares pursuant thereto shall
comply with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the Shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

                  As a condition to the exercise of an Option or SAR, the
Company may require the person exercising such Option or SAR to represent and
warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required by any of the aforementioned relevant provisions of law.

         17. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.


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<PAGE>   13
                  The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.

         18. Agreements. Options, stock purchase rights and SARs shall be
evidenced by written agreements in such form as the Board shall approve from
time to time.

         19. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law.

         20. Information to Participants. The Company shall provide to each
Participant, during the period for which such Participant has one or more
Options or SARs outstanding, copies of all annual reports and other information
which are provided to all shareholders of the Company. The Company shall not be
required to provide such information if the issuance of Options or SARs under
the Plan is limited to key employees whose duties in connection with the Company
assure their access to equivalent information.


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