<PAGE>   1


                                                                  Exhibit 10.1.2


                                    RESTATED
                               TELXON CORPORATION
                             1990 STOCK OPTION PLAN
                        AS AMENDED THROUGH AND EFFECTIVE
                            AS OF SEPTEMBER 10, 1997



         1.  PURPOSE OF THE PLAN. The purpose of this Plan is to promote the
best interests of the Company and its stockholders by enabling the Company to
attract and retain highly qualified personnel through rewarding valued
employees with the opportunity, pursuant to Options granted under the Plan, to
acquire a proprietary interest in the Company and thereby encourage them to put
forth their maximum efforts for the continued success and growth of the
Company.

         2.  DEFINITIONS. In addition to such other capitalized terms as are
defined elsewhere in this Plan, the following terms shall when used in this
Plan have the respective meanings set forth below:

                  (a)  "Act" means the Securities Exchange Act of 1934, as
         amended from time to time.

                  (b)  "Authorized Shares" means the maximum aggregate number of
         shares of Common Stock specified in Section 3(a) as being authorized
         for issuance and sale under Options granted pursuant to the Plan,
         subject to adjustment thereof in accordance with Section 12 of the
         Plan.

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

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

                  (e)  "Commission" means the United States Securities and
         Exchange Commission.

                  (f)  "Committee" means the Committee appointed by the Board in
         accordance with Paragraph (a) of Section 4 of the Plan, if a Committee
         is appointed. If, with respect to any individual grant of Options
         under this Plan, any member or members of the Committee would cause
         such Committee not to satisfy the disinterested administration
         requirement of Rule 16b-3, as then applicable to the Company under the
         Act, or the "outside director" administration requirement of Code
         Section 162(m)(4)(C) and the regulations thereunder, then in such
         event the Committee shall be comprised of the Committee without such


<PAGE>   2


         member or members. If no Committee has been appointed, any reference
         to the "Committee" shall be deemed a reference to the "Board".

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

                  (h)  "Company" means Telxon Corporation, a Delaware
         corporation.

                  (i)  "Continuous Employment" means with respect to any
         Employee, the continued employment of such Employee by the Company or
         any Subsidiary without interruption or termination after the grant of
         an Option to such Employee. Continuous Employment shall not be
         considered interrupted in the case of sick leave, military leave or
         any other leave of absence approved by the Board (provided that such
         leave is for a period of not more than ninety (90) days or
         re-employment upon the expiration of such leave is mandated by
         contract or statute) or in the case of transfers between locations of
         the Company or between the Company, any Subsidiary or any of their
         respective successors.

                  (j)  "Employee" means any person, including officers and
         directors who are also officers, employed by the Company or any
         Subsidiary. The payment of director's fees by the Company shall not be
         sufficient to constitute a person as an "Employee" of the Company.

                  (k)  "Option" means a right granted to a non-Employee Director
         pursuant to the Plan to purchase a specified number of shares of
         Common Stock at a specified price during a specified period and on
         such other terms and conditions as may be specified pursuant to the
         Plan. Options may be granted as Tax Qualified Options or as Options
         which do not qualify as Tax Qualified Options.

                  (l)  "Option Agreement" means the written agreement evidencing
         an Option by and between the Company and the Optionee as required by
         Section 14.

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

                  (n)  "Optionee" means an Employee who receives an Option.

                  (o)  "Plan" means this 1990 Stock Option Plan, as amended from
         time to time.

                  (p)  "Predecessor Plan" means the Company's 1988 Stock Option
         Plan, as amended.

                  (q)  "Repricing Transaction" means any grant(s) of Option(s)
         reasonably related to any prior or potential Option(s), whether by an
         exchange of existing Options or Options with new terms or the grant of
         new Options in tandem with previously granted Options that will
         operate to cancel the previously granted Options upon exercise, which
         adjusts or amends the exercise price of a previously granted Option,
         or repricing of previously granted


                                       2
<PAGE>   3


         Options or any other grant which would be required to be reported as a
         repricing under Item 402(i) of Regulation S-K as then in effect under
         the Act; but excluding any repricing occurring through the operation
         of the antidilution provisions of Section 12 of the Plan.

                  (r)  "Rule 16b-3" means Rule 16b-3 promulgated by the
         Commission under the Act or any similar successor regulation exempting
         certain transactions involving stock-based compensation arrangements
         from the liability provisions of Section 16 of the Act, as adopted and
         amended from time to time and as interpreted by formal or informal
         opinions of, and releases published or other interpretive advice
         provided by, the Staff of the Commission.

                  (s)  "Section 16 Person" means an Employee who is subject to
         Section 16 of the Act, as interpreted by the rules and regulations
         promulgated by the Commission thereunder, as adopted and amended from
         time to time, and by formal or informal opinions of, and releases
         published or other interpretive advice provided by, the Staff of the
         Commission.

                  (t)  "Securities Law Requirements" means the Act and the rules
         and regulations promulgated by the Commission thereunder, as adopted
         and amended from time to time, including but not limited to Rule
         16b-3, and as interpreted by formal or informal opinions of, and
         releases published or other interpretive advice provided by, the Staff
         of the Commission, and the requirements of any stock exchange,
         automated interdealer quotation system or other recognized securities
         market on which the Common Stock is listed or traded or in which the
         Common Stock is included, as adopted and amended from time to time and
         as interpreted by formal or informal opinions of, and other
         interpretive advice, provided by the representatives of such stock
         exchange, quotation system or other securities market.

                  (u)  "Shares" means the Common Stock as adjusted in accordance
         with Section 12 of the Plan.

                  (v)  "Subsidiary" means a corporation of which not less than
         fifty percent (50%) of the voting shares are owned by the Company or a
         Subsidiary, whether or not such corporation now exists or is hereafter
         organized or acquired by the Company or a Subsidiary.

                  (w)  "Successor" means the estate of an Optionee or a person
         who succeeds by will or the laws of descent and distribution to an
         Optionee's right to exercise an Option.

                  (x)  "Tax Qualified Option" means an Option which is intended
         at the time of grant to qualify for special tax treatment under
         Section 422A or other particular provisions of the Code and the
         regulations, rulings and procedures promulgated, published or
         otherwise provided thereunder, as adopted and amended from time to
         time.


                                       3
<PAGE>   4
         3.       STOCK SUBJECT TO THE PLAN.

                  (a)  Number of Shares Issuable. Subject to adjustment in
         accordance with the provisions of Section 12 of the Plan, the maximum
         aggregate number of Authorized Shares which may be issued and sold
         under Options granted pursuant to the Plan is equal to the sum of the
         following:

                           (i)  Pre-1995 Authorized Shares. 2,500,000 shares of
                  Common Stock, plus such number of the 1,200,000 shares of
                  Common Stock authorized for issuance and sale under the
                  Predecessor Plan which (A) as of the October 18, 1990 date
                  this Plan was originally approved by the stockholders of the
                  Company, were not subject to grants (including conditional
                  grants) of stock options then outstanding under the
                  Predecessor Plan (from and after stockholder approval of this
                  Plan, no further grants shall be made under the Predecessor
                  Plan, but any grants (including conditional grants) of stock
                  options outstanding under the Predecessor Plan at the time of
                  such approval shall continue in full force and effect in
                  accordance with their respective terms) or (B) to the extent
                  grants (including conditional grants) outstanding under the
                  Predecessor Plan as of the date of original stockholder
                  approval of this Plan are not exercised in full, are, as of
                  any subsequent date, (x) issued pursuant to the exercise of a
                  stock option granted under the Predecessor Plan in an amount
                  equal to the number of Shares already owned by the person
                  exercising such stock option which are delivered by such
                  person to the Company in payment of the exercise price and/or
                  related withholding taxes, (y) withheld by the Company, in
                  payment of the withholding taxes with respect to the exercise
                  of a stock option granted under the Predecessor Plan, from the
                  total number of shares with respect to which such option is
                  exercised, or (z) no longer subject to grants under the
                  Predecessor Plan by reason of such grants having expired or
                  lapsed or having been canceled, surrendered, forfeited or
                  otherwise terminated; plus

                           (ii)  1995 Authorized Shares. 850,000 Shares of
                  Common Stock (the "1995 Authorized Shares"); and plus

                           (iii)  1997 Authorized Shares. 750,000 Shares of
                  Common Stock (the "1997 Authorized Shares").

         The inclusion under this Plan of such shares reserved for issuance and
         sale under the Predecessor Plan as hereinabove provided shall not be
         affected by the expiration or other termination of the Predecessor
         Plan. The Shares issued and sold upon the exercise of Options may be
         treasury Shares, Shares of original issue or a combination thereof.

                  (b) Computation of Shares Available for Grant. For purposes of
         computing the number of Authorized Shares available from time to time
         under the Plan for the grant of Options, the number of Shares subject
         to each Option granted pursuant to the Plan shall be provisionally
         counted against the Authorized Shares from and after the grant of such
         Option but only for so long as and to the extent that such Option shall
         remain outstanding and unexercised. Upon the exercise, in whole or in
         part, of an Option, the number of Shares 

                                       4
<PAGE>   5


         issued upon such exercise shall be permanently deducted from the
         Authorized Shares, provided that no such permanent deduction shall be
         made, and the provisional deduction against the Authorized Shares
         shall be reversed, to the extent that the exercise price and/or the
         withholding taxes with respect to such exercise are paid through the
         delivery to the Company by the person exercising the Option of Shares
         already owned by such person and/or through the withholding by the
         Company of Shares from the total number of Shares with respect to
         which the Option is exercised. The provisional deduction against the
         Authorized Shares shall likewise be reversed to the extent of the
         unexercised portion of an Option upon the expiration, lapse,
         cancellation, surrender, forfeiture or other termination of such
         Option. The Shares covered by any such reversal of a provisional
         deduction against the Authorized Shares shall immediately become
         available for the granting of new Options under the Plan with respect
         thereto; provided, however, that any Shares covered by any such
         reversal which were 1995 Authorized Shares or 1997 Authorized Shares
         shall be subject to the restrictions set forth in Section 4(c) of the
         Plan.

         4.       ADMINISTRATION OF THE PLAN.

                  (a)  Procedure. The Plan shall be administered by the Board or
         the Board may, in its discretion, appoint a Committee to administer the
         Plan subject to such terms and conditions as the Board may prescribe;
         provided that the terms upon which, including the time or times at or
         within which, and the price or prices at which Shares may be purchased
         upon the exercise of Options shall be approved or ratified by such
         action of the Board or a committee duly designated by the Board from
         its members as may be required by the Delaware General Corporation Law,
         as amended from time to time. Once appointed, the Committee shall
         continue to serve until otherwise directed by the Board. From time to
         time the Board may increase the size of the Committee and may appoint
         additional members thereof, remove members (with or without cause),
         fill vacancies however caused and remove all members of the Committee
         and thereafter directly administer the Plan.

                  (b)  Powers of the Committee. Subject to the provisions of
         this Plan, the Committee shall have the authority, in its sole
         discretion:

                           (i)  To determine, upon review of relevant
                  information in accordance with Section 7(b) of the Plan, the
                  "Fair Market Value" (as defined in said Section 7(b)) of the
                  Shares;

                           (ii) To determine the Employees to whom, and the
                  time or times at which, Options shall be granted and the
                  number of Shares (up to a maximum of 500,000 Shares with
                  respect to which Options may be granted to any individual in
                  any one fiscal year of the Company) subject to purchase upon
                  exercise of each Option (except as expressly set forth above
                  in this Section 4(b)(ii) and such restrictions thereon as may
                  be imposed by applicable tax laws which will have to be
                  observed if the Committee intends that a particular Option
                  qualify as a Tax Qualified Option, there is no limit on the
                  time following the adoption or approval of this Plan within
                  which Options may be granted under the Plan so long as it


                                       5
<PAGE>   6

                  remains in effect, on the number of Options which may be
                  granted to any one Employee or on the aggregate number of
                  Shares subject to purchase thereunder);

                           (iii)  To determine the terms and provisions of each
                  Option (which terms and provisions need not be identical),
                  including, but not limited to, the following;

                                    (A) The exercise price per Share, subject
                           to the provisions of Section 7 of the Plan; and

                                    (B)  Whether Options shall become
                           exercisable over a period of time and when they
                           shall be fully exercisable;

                           (iv)   To accelerate the time as of which any Option
                  may be exercised;

                           (v)    To amend any outstanding Option, subject to 
                  the provisions of Section 19 of the Plan;

                           (vi)   To authorize any person to prepare and execute
                  on behalf of the Company any instrument deemed by the
                  Committee to be necessary or advisable to evidence or
                  effectuate the Plan, any Option granted thereunder or any
                  amendment to the Plan or any Option;

                           (vii)  To interpret the Plan;

                           (viii) To prescribe, amend and rescind, if deemed
                  necessary or appropriate, rules and regulations relating to
                  the Plan, to the extent not inconsistent with the Plan; and

                           (ix)   To make all other determinations the Committee
                  may deem necessary or advisable in connection with the
                  administration of the Plan.

                  (c)  Certain Limitations Applicable to Options Granted With
         Respect to 1995 Authorized Shares and 1997 Authorized Shares.
         Notwithstanding any other provision of the Plan, neither the Committee
         nor the Board shall, with respect to any Option granted under the Plan
         with respect to any 1995 Authorized Shares or 1997 Authorized Shares,
         provide for an "Option Term" (as defined in Section 6 of the Plan) of
         greater than eight (8) years from the date of grant thereof or approve
         any Repricing Transaction.

                  (d)  Effect of Board and Committee Decisions. All decisions,
         determinations and actions of the Board and the Committee in connection
         with the construction, interpretation, administration, application,
         operation and implementation of the Plan shall be final, conclusive and
         binding on the Company, its stockholders and Subsidiaries, all
         Employees and Optionees and the respective legal representatives,
         heirs, successors and assigns of all of the foregoing and all other
         persons claiming under or through any of them.

                                       6
<PAGE>   7

                  (e)  Exculpation and Indemnification. No member of the Board
         or the Committee, and no Employee or other agent acting on behalf of
         the Board or the Committee, shall be personally liable for any
         decision, determination or action made or taken, or failed to be made
         or taken, with respect to this Plan or any Option granted hereunder,
         and the Company shall fully protect each such person in respect of any
         such decision, determination or action and shall indemnify each such
         person against any and all claims, losses, damages, expenses and
         liabilities arising from or in connection with any such decision,
         determination or action.

         5.  ELIGIBILITY. Options may be granted only to Employees who, in the
sole judgment of the Committee, have contributed or will contribute to the
success and growth of the Company. An Employee to whom the Company has
previously granted a stock option pursuant to this Plan or otherwise may, if he
is otherwise eligible, be granted additional Options.

         The existence of this Plan shall not create in any Employee any right
to be granted an Option hereunder, and neither the existence of this Plan nor
the granting of any Options to any Employee hereunder shall confer upon such
Employee any right with respect to continuation of the employment of such
Employee by the Company or any Subsidiary or shall in any way interfere with or
limit the right which such Employee, the Company or any Subsidiary may otherwise
have to terminate such employment at any time with or without cause. Upon the
termination of any Employee's employment with the Company or any Subsidiary,
neither the Company nor any Subsidiary shall have any liability or obligation to
such Employee under this Plan or any Options granted to such Employee hereunder
except to issue the appropriate number of Shares to such Employee upon the
exercise of any Option granted to such Employee under this Plan prior to such
termination of employment, provided that such exercise is duly and timely made
in accordance with the provisions of this Plan and such Option.

         6.  TERM OF OPTIONS. Except as may otherwise be specified by the
Committee in its sole discretion at the time of grant thereof and reflected in
the Option Agreement evidencing such Option, the term at the end of which each
Option shall expire (the "Option Term") shall be ten (10) years (eight (8) years
in the case of Options with respect to 1995 Authorized Shares or 1997 Authorized
Shares) from the date of grant thereof, provided that the Committee, if it
intends that a particular Option qualify as a Tax Qualified Option, will have to
observe such restrictions on the term of such Option as may be imposed by the
applicable tax laws in order for such Option so to qualify. Each Option shall
continue in effect in accordance with its terms notwithstanding that the Plan
may be terminated prior to the expiration of the term of such Option.

         7.       EXERCISE PRICE.

                  (a)  Minimum Price Required. The per Share exercise price for
         the Shares subject to an Option shall be such price as is determined by
         the Committee at the time of grant of an Option and reflected in the
         Option Agreement evidencing the same; provided that in no event shall
         such exercise price per Share be less than the Fair Market Value per
         Share as of the day prior to the date of grant of such Option.

                                       7
<PAGE>   8

                  (b)  Definition of "Fair Market Value". For all purposes under
         the Plan, "Fair Market Value" per Share shall be determined by the
         Committee in its sole discretion; provided that if the Shares are
         included in the NASDAQ National Market System or listed on a stock
         exchange on the date as of which the same is to be determined, the Fair
         Market Value per Share shall be the closing price on such quotation
         system or exchange which is the principal trading market for the Shares
         on the date of determination or, if no sale price was reported for the
         Shares on the date of determination, the closing price on such
         principal trading market for the last trading day prior to the date of
         determination for which a sale price was reported; provided further,
         however, that if the foregoing method of determining Fair Market Value
         is inconsistent with the then existing tax law requirements with
         respect to any Option which the Committee intends to qualify as a Tax
         Qualified Option, then the Fair Market Value per Share shall be
         determined by the Committee in such manner as is required for such Tax
         Qualified Option to qualify as such.

         8.  WITHHOLDING TAXES. Before a stock certificate evidencing the Shares
being acquired through exercise of an Option will be issued to the Optionee,
the Optionee must pay, or make arrangements acceptable to the Company for the
payment of, any and all federal, state and local withholding taxes, whether
domestic or foreign, required to be withheld in connection with the exercise of
an Option.

         9.       FORM OF PAYMENT.

                  (a)  Acceptable Forms of Consideration. Except as may
         otherwise be specified by the Committee in its sole discretion at the
         time of grant thereof and reflected in the Option Agreement evidencing
         such Option, the following forms of consideration will be accepted in
         payment of the exercise price for the Shares to be issued upon
         exercise of an Option and of the taxes required to be withheld in
         connection with such exercise: (i) cash, (ii) personal check, (iii)
         bank cashier's check, (iv) already owned Shares (duly endorsed for
         transfer with signature guaranteed), or (v) any combination of the
         foregoing. Except as may otherwise be specified by the Committee in
         its sole discretion at the time of grant thereof and reflected in the
         Option Agreement evidencing such Option, Shares withheld from the
         Shares to be issued upon exercise of the Option, either alone or in
         any combination with any of the other acceptable forms of
         consideration recited in this Paragraph (a), will also be an accepted
         form of consideration for payment of the taxes required to be withheld
         in connection with the exercise of an Option. In addition to the
         acceptable forms of consideration hereinabove recited in this
         Paragraph (a), the Committee may determine in its sole discretion at
         the time of grant of an Option, and if the Committee so determines,
         shall provide in the Option Agreement evidencing such Option, that one
         or both of the following additional forms of consideration will be
         accepted, either alone or in any combination with any of the other
         acceptable forms of consideration recited in this Paragraph (a), in
         payment of the items specified: (vi) in payment of the exercise price
         for the Shares to be issued upon exercise of the Option, Shares
         withheld from the Shares to be issued upon such exercise, and/or (vii)
         in payment of the exercise price for the Shares to be issued upon
         exercise of an Option and the taxes required to be withheld in
         connection with such exercise, a commitment for the delivery to the
         Company of proceeds from the sale, pursuant to a 


                                       8
<PAGE>   9

         brokerage or similar arrangement approved in advance by the Committee
         in its sole discretion, of Shares to be issued upon exercise of the
         Option. The forms of consideration which will be accepted in payment
         of the exercise price for an Option and related withholding taxes
         shall be specified in the Option Agreement evidencing such Option, the
         person or persons entitled to exercise the Option shall be entitled to
         elect from those so specified the form(s) to be used in effecting
         payment with respect to a particular exercise; provided that any
         election by a Section 16 Person to use already owned Shares or have
         Shares withheld from those issuable upon such exercise shall be
         effective only if made in accordance with the applicable requirements
         of Rule 16b-3; and provided further that a commitment for the delivery
         to the Company of proceeds from the sale, pursuant to a brokerage or
         similar arrangement, of Shares to be issued upon exercise of an Option
         will not be accepted from a Section 16 Person if under Securities Law
         Requirements such a sale would be matched with such exercise to result
         in "short swing" profit liability under Section 16(b) of the Act on
         the part of such Section 16 Person with respect to such transaction.

                  (b)  Withholding Tax Loans. In addition to any one or more of
         the acceptable forms of consideration recited in Paragraph (a) of this
         Section 9 which the Committee may permit in the Option Agreement to be
         used for the payment of withholding taxes, the Committee may determine
         in its discretion at the time of grant of an Option to permit the
         Optionee (but not any Successor) to, and if the Committee so
         determines, shall provide in the Option Agreement evidencing such
         Option that such Optionee may borrow from the Company an amount
         sufficient to pay the taxes required to be withheld in connection with
         the exercise of such an Option, with each such borrowing to be
         evidenced by a promissory note of the Optionee payable to the order of
         the Company. Except as may otherwise be specified by the Committee in
         its sole discretion at the time of grant thereof and reflected in the
         Option Agreement evidencing an Option, each such loan shall be for a
         term of five (5) years at a rate of interest equal to the Company's
         then primary domestic commercial lender's prime or base rate as in
         effect from time to time, with payments of interest on such loan due
         quarterly and payments toward the principal of such loan due, to the
         extent of the net proceeds therefrom, within fifteen (15) days after
         any disposition by the Optionee of any Shares acquired upon exercise of
         any stock option granted by the Company to the Optionee pursuant to
         this Plan or otherwise (excluding any disposition of such Shares by
         gift or to the Company in payment of the exercise price of a stock
         option granted by the Company to the Optionee pursuant to this Plan or
         otherwise and/or any related withholding taxes), provided that the
         entire unpaid principal balance shall be due at the earlier of (i) the
         expiration of the five (5) year term, or (ii) the termination of the
         Optionee's Continuous Employment (other than by reason of Optionee's
         "disability" (as defined in Section 10(d)) or "retirement" (as defined
         in Section 10(e)).

                  (c)  Company Withholding of Taxes. If, upon being notified by
         the Company of the amount of the taxes required to be withheld in
         connection with an exercise of an Option, the Optionee fails promptly
         to pay, or to make arrangements acceptable to the Company for the
         payment of such taxes, the Company shall have the right to elect (but
         shall be under no obligation) to cover such taxes through:

                                       9
<PAGE>   10

                           (i)   withholding Shares from those issuable upon 
                  such exercise, provided that any such election so to withhold
                  Shares with respect to the exercise of an Option by a Section
                  16 Person shall be effective only if made in accordance with
                  the applicable requirements of Rule 16b-3; and/or

                           (ii)  deducting such taxes from any amounts payable
                  in cash to the Optionee by the Company for any reason as of
                  the time of such exercise or any time thereafter.

                  (d)  Valuation of Shares Delivered or Withheld. Where already
         owned Shares, or Shares withheld from those issuable upon such
         exercise, are used in payment of the exercise price and/or related
         withholding taxes, such Shares shall be valued at Fair Market Value as
         of the day immediately preceding the date of exercise and (ii) with
         respect to the payment of withholding taxes, at Fair Market Value as of
         the day immediately preceding the date tax withholding is required to
         be made.

                  (e)  Optionee Certification of Already Owned Shares. Already
         owned Shares which were acquired through a previous exercise of a stock
         option granted to an Optionee by the Company pursuant to this Plan or
         otherwise may be used in payment of the exercise price of an Option
         and/or related withholding taxes only if the previous exercise through
         which such Shares were acquired was made as of a date not less than six
         (6) months prior to the date of the exercise of the Option in
         connection with which such Shares are being tendered as payment. A
         tender of already owned Shares in payment of the exercise price of an
         Option and/or related withholding taxes will not be accepted by the
         Company unless accompanied by a written statement signed by the person
         or persons entitled to exercise such Option certifying that either (i)
         the Shares tendered in payment were acquired other than through the
         exercise of a stock option granted by the Company or (ii) the Shares
         tendered in payment were acquired through the exercise, on such date(s)
         as shall be recited in such statement (which date(s) shall be not less
         than six (6) months prior to the date of tender), of stock option(s)
         granted by the Company.

                  (f)  Delivery of Already Owned Shares. Where the person
         exercising an Option elects to use already owned Shares in full or
         partial payment of the exercise price and/or related withholding taxes,
         the Committee may, in its sole discretion, accept, in lieu of physical
         delivery of the stock certificates evidencing such Shares, such
         constructive delivery of such Shares as may be satisfactory to the
         Committee.

                                      10
<PAGE>   11




         10.      METHOD OF EXERCISE.

                  (a)  Procedure for Exercise; Rights as a Stockholder. Any
         Option granted hereunder shall be exercisable at such times and under
         such conditions as determined by the Committee and as permitted under
         the Plan. An Option may not be exercised for a fraction of a Share. In
         order to exercise an Option, the person or persons entitled to exercise
         it shall deliver to the Company written notice of the number of Shares
         with respect to which the Option is being exercised, accompanied by
         payment in full of the aggregate price for the Shares so to be
         acquired. To constitute an effective exercise of an Option, such notice
         and payment shall be addressed to the attention of the Treasurer of the
         Company and must be received at the principal executive office of the
         Company (i) with respect to an Option that is terminated for
         "Misconduct" (as defined below) pursuant to Paragraph (b) of this
         Section 10 or for "Prohibited Conduct" (as defined in Section 16(a))
         pursuant to Section 16(a), prior to the time of the occurrence of the
         event constituting such Misconduct or Prohibited Conduct or (ii) with
         respect to any other Option, by 5:00 p.m., local time, on the date of
         expiration or termination of the Option. 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 nor any
         other rights as a stockholder shall exist with respect to the Optioned
         Stock notwithstanding the 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 12.

                  Exercise of an Option shall result in a decrease in the number
         of Shares which thereafter shall be available for sale under such
         Option by the number of Shares as to which the Option is exercised,
         including any Shares withheld from the Shares to be issued pursuant to
         such exercise to cover the exercise price and/or related withholding
         taxes.

                  (b)  Termination of Employment. Except as may otherwise be
         specified by the Committee in its sole discretion at the time of grant
         thereof and reflected in the Option Agreement evidencing such Option,
         upon the termination of an Optionee's Continuous Employment (other than
         by reason of the Optionee's death, disability or retirement), he may
         exercise his Option (to the extent that he was entitled to exercise it
         at the time of such termination of employment) until the earlier of (i)
         the date thirty (30) days (or such longer period of time as is
         determined by the Committee in its sole discretion at the time of such
         termination of employment, provided that if the Committee intends that
         a particular Option continue to qualify as a Tax Qualified Option, the
         Committee will have to observe such restrictions as may be imposed by
         applicable tax laws on the post-termination period within which a Tax
         Qualified Option may be exercised if it wishes to ensure that any
         post-termination exercise of such Option is made only within the period
         permitted by such laws) after the effective date of the termination of
         his employment or (ii) the expiration date of such Option, and the
         Option shall terminate on the earlier of such dates; provided, however,
         that if the Optionee is terminated by the Company for Misconduct, then
         such Option shall terminate effective as of the time of the conduct
         constituting such Misconduct. As used in this Plan, "Misconduct" means
         that the Optionee has engaged in Prohibited Conduct,


                                      11
<PAGE>   12

         committed an act of embezzlement, fraud or theft with respect to the
         property or business of the Company or a Subsidiary or deliberately
         disregarded the rules of the Company or a Subsidiary in such a manner
         as to cause material loss, damage or injury to or otherwise endanger
         the property, reputation, employees or business prospects of the
         Company or a Subsidiary. The Committee shall determine whether an
         Optionee's employment was terminated by reason of Misconduct. In
         making such determination, the Committee may, but shall not be
         required to, give the Optionee an opportunity to be heard and to
         present evidence on his behalf.

                  (c)  Death of Optionee. Except as may otherwise be specified
         by the Committee in its sole discretion at the time of grant thereof
         and reflected in the Option Agreement evidencing such Option, upon the
         death of an Optionee:

                           (i)  who is at the time of his death in the employ of
                  the Company or a Subsidiary and who shall have been in
                  Continuous Employment since the date of grant of the Option,
                  the Option may be exercised (to the extent the Optionee would
                  have been entitled to do so had he continued living and
                  terminated employment six (6) months after the date of death)
                  by his Successor until the earlier of (A) the date six (6)
                  months (or, if the Committee intends that a particular Option
                  qualify as a Tax Qualified Option, such lesser period of time
                  within which the applicable tax laws may require that the
                  Option be exercised in order for such Option so to qualify)
                  following the date of the Optionee's death or (B) the
                  expiration date of such Option, and the Option shall
                  terminate on the earlier of such dates; or

                           (ii)  within one (1) month after the termination of
                  Continuous Employment other than termination by the Company or
                  a Subsidiary for Misconduct or due to disability, the Option
                  may be exercised (to the extent the Optionee was entitled to
                  do so at the date of termination of Continuous Employment) by
                  his Successor until the earlier of (A) the date six (6) months
                  following the date of the Optionee's death (or, if the
                  Committee intends that a particular Option qualify as a Tax
                  Qualified Option, such lesser period of time within which the
                  applicable tax laws may require that the Option be exercised
                  in order for such Option so to qualify) or (B) the expiration
                  date of such Option, and the Option shall terminate on the
                  earlier of such dates.

                  (d)  Disability of Optionee. Except as may otherwise be
         specified by the Committee in its sole discretion at the time of grant
         thereof and reflected in the Option Agreement evidencing such Option,
         if an Optionee's Continuous Employment terminates due to optionee
         having become permanently and totally disabled within the meaning of
         Section 23(e)(3) of the Code ("disability"), the Option may be
         exercised (to the extent the Optionee was entitled to do so as of the
         effective date of the termination of Optionee's directorship by reason
         of such disability) until the earlier of (i) the date one (1) year
         after the effective date of such termination of his employment or (ii)
         the expiration date of such Option, and the Option shall terminate on
         the earlier of such dates.

                                      12
<PAGE>   13

                  (e)  Retirement of Optionee. Except as may otherwise be
specified by the Committee in its sole discretion at the time of grant thereof
and reflected in the Option Agreement evidencing such Option, if an Optionee's
Continuous Employment terminates by reason of (A) his retirement at any age
entitling him to benefits under the provisions of any retirement plan of the
Company or any Subsidiary in which such Optionee participates; or (B) retirement
at any time after attaining age 65 (whichever circumstance is applicable
constituting "retirement"), the Option may be exercised (to the extent the
Optionee shall be entitled to do so as of the effective date of the termination
of his employment by reason of such retirement) until the earlier of (i) the
date three (3) months after the effective date of the termination of his
employment or (ii) the expiration date of such Option, and the Option shall
terminate on the earlier of such dates.

         11.  NONTRANSFERABILITY OF OPTIONS. Options may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner by the Optionee
except at death by will or by the laws of descent and distribution and may be
exercised during the life of the Optionee only by the Optionee. No lien,
obligation or liability of an Optionee or a Successor shall attach to or
otherwise encumber the right and interest of such Optionee or Successor in and
to any Options outstanding under the Plan.

         12.      ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.

                  (a)  Adjustments, in general. Subject to the provisions of
         Paragraph (b) of this Section 12 and to any required action by the
         stockholders of the Company, the number of Shares covered by each
         outstanding Option, and the number of Shares which have been authorized
         for issuance under the Plan but as to which no Options have yet been
         granted or which due to the expiration, lapse, cancellation, surrender,
         forfeiture or other termination of a stock option under this Plan or
         the Predecessor Plan are again available for grant, as well as the
         price per Share covered by each such outstanding Option, shall be
         proportionately adjusted for any increase or decrease in the number of
         issued and outstanding Shares resulting from a stock split, reverse
         stock split, stock dividend, combination or reclassification of Shares
         or any other increase or decrease in the aggregate number of issued and
         outstanding Shares effected without receipt of consideration by the
         Company; provided, however, that the issuance of Shares pursuant to the
         conversion or exchange of any securities of the Company convertible
         into or exchangeable for Shares shall not be deemed to have been
         "effected without receipt of consideration." Any fractional Shares
         which would otherwise result from any such adjustments shall be
         eliminated either by deleting all fractional Shares or by appropriate
         rounding to the next higher (fractions of one-half or more) or lower
         (fractions of less than one-half) whole Share. All such adjustments
         shall be made by the Board in its sole discretion. Except as expressly
         provided herein, no issuance by the Company of shares of stock of any
         class, or securities convertible into or exchangeable for shares of
         stock of any class, shall affect, and no adjustment by reason thereof
         shall be made to, the number of or exercise price for Shares subject to
         an Option.

                  In the event of the proposed dissolution or liquidation of the
         Company, all outstanding Options will terminate immediately prior to
         the consummation of such proposed action, unless otherwise provided by
         the Board. The Board may, in the exercise


                                      13
<PAGE>   14

         of its sole discretion in such instances, declare that any Option
         shall terminate as of a date fixed by the Board and give each Optionee
         the right to exercise his Option as to all or any part of the Optioned
         Stock, including Shares as to which the Option would not otherwise
         then be exercisable.

                  Subject to the provisions of Paragraph (b) of this Section 12,
         in the event of a sale of all or substantially all of the assets of the
         Company, or the merger or consolidation of the Company with or into
         another corporation, each outstanding Option shall be assumed or an
         equivalent option shall be substituted by such successor corporation or
         a parent or subsidiary of such successor corporation, unless the Board,
         in the exercise of its sole discretion, determines that, in lieu of
         such assumption or substitution, the Optionee shall have the right to
         exercise the Option as to all or any part of the Optioned Stock,
         including Shares as to which the Option would not otherwise then be
         exercisable. If in the event of a merger, consolidation or sale of
         assets the Board makes an Option fully exercisable in lieu of
         assumption or substitution, the Company shall notify the Optionee that
         the Option shall be fully exercisable for a period of thirty (30) days
         from the date of such notice, and the Option will terminate upon the
         expiration of such period.

                  (b)  Special Adjustments upon Change in Control. In the event
         of a "Change in Control" of the Company (as defined in Paragraph (c) of
         this Section 12), unless otherwise determined by the Board in its sole
         discretion prior to the occurrence of such Change in Control, the
         following acceleration and valuation provisions shall apply:

                           (i)  Any Options outstanding as of the date of such
                  Change in Control that are not yet fully vested on such date
                  shall become fully vested; and

                           (ii) The value of all outstanding Options, measured
                  by the excess of the "Change in Control Price" (as defined in
                  Paragraph (d) of this Section 12) over the exercise price,
                  shall be cashed out. The cash out proceeds shall be paid to
                  the Optionee or, in the event of death of an Optionee prior to
                  payment, to his Successor.

                  (c)  Definition of "Change in Control". For purposes of this
         Section 12, a "Change in Control" means the happening of any of the
         following:

                           (i)  When any "person," as such term is used in
                  Sections 13(d) and 14(d) of the Act (other than the Company, a
                  Subsidiary or a Company or Subsidiary employee benefit plan,
                  including any trustee of such a plan acting as trustee)
                  becomes the "beneficial owner" (as defined in Rule 13d-3
                  promulgated by the Commission under the Act, as adopted and
                  amended from time to time and as interpreted by formal or
                  informal opinions of, and releases published or other
                  interpretive advice provided by, the Staff of the Commission),
                  directly or indirectly, of securities of the Company
                  representing fifty percent (50%) or more of the combined
                  voting power of the Company's then outstanding securities; or

                                      14
<PAGE>   15

                           (ii)  The consummation of a transaction requiring
                  stockholder approval and involving the sale of all or
                  substantially all of the assets of the Company or the merger
                  or consolidation of the Company with or into another
                  corporation.

                  (d)  Definition of "Change in Control Price". For purposes of
         this Section 12, "Change in Control Price" shall be, as determined by
         the Board, (i) the highest closing sale price of a Share, as reported
         by the NASDAQ National Market, any stock exchange on which the Shares
         are listed or any other recognized securities market on which the
         Shares are traded, at any time within the sixty (60) day period
         immediately preceding the date of the Change in Control (the "Sixty-Day
         Period"), or (ii) the highest price paid or offered, as determined by
         the Board, in any bona fide transaction or bona fide offer related to
         the Change in Control, at any time within the Sixty-Day Period.

         13.  TIME OF GRANTING OPTIONS. The date of grant of an Option shall,
for all purposes, be the date on which the Committee makes the determination
granting such Option. Notice of such determination shall be given to each
Employee to whom an Option is so granted within a reasonable time after the
date of such grant.

         14.  OPTION AGREEMENTS. As a condition to the effectiveness of each
grant of an Option under this Plan, the Optionee shall enter into a written
Option Agreement in such form as may be authorized by the Committee from time to
time. Subject to the provisions of Section 20(a), each such Option Agreement
shall contain such provisions as are required by the terms of this Plan and may
contain such additional provisions not inconsistent with the terms of this Plan
as the Committee in its sole discretion may from time to time authorize. Each
Option Agreement evidencing an Option granted to a Section 16 Person shall also
provide for such minimum waiting period from the date of grant before the Option
may be exercised, and such minimum holding period from the date of the
acquisition of Shares upon exercise of an Option for which such Shares must be
held before making any disposition of such Shares, as may be required by Rule
16b-3.

         15.  CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
with respect to an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all applicable
Securities Law Requirements and all other applicable provisions of law,
including, without limitation, any applicable state "blue sky" laws and foreign
(national and provincial) securities laws and the rules and regulations
promulgated under any of such laws, 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 the issuance of Shares
upon exercise of an Option, the Company may require the person exercising such
Option to make such representations and warranties to the Company as may be
required, in the opinion of counsel for the Company, by any of the
aforementioned Securities Law Requirements and other laws, which may include,
without limitation, representations and warranties that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares.

                                      15
<PAGE>   16

         The Company shall not have any liability to any Optionee in respect of
any delay in the sale or issuance of Shares hereunder until the Company is able
to obtain authority from any governmental authority (domestic or foreign) or
self-regulatory organization having jurisdiction thereover, which authority is
deemed by the Company's counsel to be necessary to the lawful sale and issuance
of such Shares, or any failure to sell or issue such Shares as to which such
requisite authority the Company is unable to obtain.

         16.      FOREFEITURE OF OPTIONS AND REALIZED BENEFITS.

                  (a)  Loss of Unexercised Options. If an Optionee holding an
         outstanding Option, without the written consent of the Company as
         authorized by the Committee in its sole discretion, engages in any of
         the following conduct (any such conduct being referred to as
         "Prohibited Conduct") at any time during the period beginning on the
         date the Optionee first entered the employ of the Company or a
         Subsidiary and continuing for so long as any portion of such Option
         remains outstanding and unexercised (the "Grant Period"):

                           (i)  rendering services for any organization or
                  engaging directly or indirectly in any business which, in the
                  sole judgment of the Committee, is or becomes competitive with
                  the Company or a Subsidiary, or where such rendering of
                  services or engaging in business, in the sole judgment of the
                  Committee, is or becomes otherwise prejudicial to or in
                  conflict with the interests of the Company or a Subsidiary;
                  provided that the ownership of a not more than ten percent
                  (10%) equity interest in any organization or business whose
                  equity is listed on a recognized securities exchange or traded
                  over-the-counter shall not constitute Prohibited Conduct
                  within the meaning of this Subparagraph (i);

                           (ii)  disclosing to anyone outside the Company or any
                  Subsidiary, or use in other than the business of the Company
                  or any Subsidiary, any confidential or proprietary information
                  relating to the business of the Company or any Subsidiary,
                  acquired by the Optionee either during or after employment
                  with the Company or a Subsidiary;

                           (iii) except as may otherwise be permitted by any
                  agreement otherwise made by the Company or a Subsidiary with
                  the Optionee, failing to disclose fully and promptly in
                  writing and assign to the Company or to the Subsidiary by
                  which the Optionee is or was employed all right, title and
                  interest in any discovery, invention, process, method,
                  improvement or idea, whether or not patentable or subject to
                  copyright protection and whether or not reduced to tangible
                  form or reduced to practice, made or conceived by such person
                  during employment by the Company or such Subsidiary, relating
                  in any manner to the actual or contemplated business, research
                  or development work of the Company or such Subsidiary or to do
                  anything reasonably necessary to enable the Company or such
                  Subsidiary to secure a patent, copyright or similar protection
                  in the United States of America and/or in foreign countries as
                  the Company or such Subsidiary may elect; or

                                      16
<PAGE>   17

                           (iv)  inducing or attempting to induce any customer
                  or supplier of the Company or a Subsidiary to breach any
                  contract with the Company or a Subsidiary or otherwise
                  terminate its relationship with the Company or a Subsidiary;

         then the Committee shall have the right, upon determining that the
         Optionee has engaged in any Prohibited Conduct at any time during the
         Grant Period (in making such determination, the Committee may, but
         shall not be required to, give the Optionee an opportunity to be heard
         and to present evidence on his behalf), to declare the Option forfeited
         and canceled effective as of the time of the conduct constituting such
         Prohibited Conduct.

                  (b)  Optionee Certification upon Exercise. Each time an
         Optionee exercises an Option, the Optionee shall be deemed to certify
         to the Company that such Optionee did not, without the written consent
         of the Company as authorized by the Committee in its sole discretion,
         engage in any Prohibited Conduct at any time during the period
         beginning on the date the Optionee first entered the employ of the
         Company or a Subsidiary and ending on the date of such exercise (the
         "Pre-Exercise Period").

                  (c)  Loss of Realized Benefits. In the event that the
         Committee determines with respect to a particular exercise of an
         Option that the Optionee engaged in any Prohibited Conduct at any time
         during the Pre-Exercise Period or within one (1) year after such
         exercise (in making such determination, the Committee may, but shall
         not be required to, give the Optionee an opportunity to be heard and
         to present evidence on his behalf), such Optionee shall be liable to
         the Company (i) to the extent such Optionee has, prior to his receipt
         of the "Forfeiture Notice" (as defined below), disposed of the Shares
         acquired through such exercise, for payment to the Company of an
         amount in cash equal to the excess of (A) the net cash proceeds from
         such disposition (or if such Shares were disposed of other than for
         cash, the aggregate Fair Market Value of such Shares as of the date of
         disposition) over (B) that portion of the sum of the cash and the
         aggregate Fair Market Value as of the exercise date of any already
         owned Shares used by the Optionee to pay the exercise price for such
         Shares (such sum being referred to as the "Exercise Payment") which is
         allocable to the Shares disposed of in the proportion that such number
         of Shares bears to the total number of Shares issued pursuant to such
         Option exercise and (ii) to the extent such Optionee still owns at the
         time he receives the Forfeiture Notice the Shares acquired through
         such exercise, at the option of the Committee, either (A) for the
         return of such Shares to the Company in exchange for a cash refund
         from the Company to such Optionee in an amount equal to that portion
         of the Exercise Payment which is allocable to the Shares still owned
         in the proportion that such number of Shares bears to the total number
         of Shares issued pursuant to such Option exercise (such portion being
         referred to as the "Retained Shares Exercise Payment") or (B) for
         payment to the Company of an amount in cash equal to the excess of the
         aggregate Fair Market Value as of the exercise date of the Shares
         still owned over the Retained Shares Exercise Payment. To enforce such
         liability against such Optionee, the Committee shall notify the
         Optionee thereof in writing within three (3) years of the date of the
         affected Option exercise, which notice (the "Forfeiture Notice") shall
         include a statement of the form of payment which the Committee has
         elected to receive from the Optionee with respect to Shares still
         owned by the Optionee. Within ten 


                                      17
<PAGE>   18

         (10) days after receiving the Forfeiture Notice, the Optionee shall
         make full payment of such liability to the Company in cash, or to the
         extent such Optionee still owns Shares acquired through the affected
         exercise and the Committee elects in the Forfeiture Notice to receive
         such Shares, stock certificates evidencing such Shares still owned by
         the Optionee (duly endorsed for transfer with signature guaranteed).
         In the event that the Committee elects to receive, and the Optionee
         returns, Shares, the Company shall make the refund payment required to
         be made to the Optionee with respect to such Shares upon the Company's
         receipt of such Shares as hereinabove required.

                  (d)  Cumulative Rights. The obligation of an Optionee under
         this Section 16 to refrain from Prohibited Conduct is in addition to,
         and does not in any way supersede or diminish, any other obligation of
         such Optionee with respect to such matters which such Optionee may owe
         to the Company, any Subsidiary or any other person under any agreement,
         applicable law or otherwise (a "Similar Obligation"). Any action taken
         by the Company or the Committee to enforce, compromise, settle or waive
         the provisions of this Section 16 with respect to any particular event
         constituting Prohibited Conduct shall not in any way affect the rights
         of the Company, the Committee, any Subsidiary or any person against an
         Optionee with respect to any other event constituting Prohibited
         Conduct or any Similar Obligation, nor shall any action taken or failed
         to be taken by the Company, any Subsidiary or any other person against
         an Optionee to enforce, compromise, settle or waive any Similar
         Obligation have any effect on the rights of the Company and the
         Committee under this Section 16.

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

         18.  EFFECTIVENESS OF PLAN. This Plan was adopted by the Board on, and
shall be effective as of, August 27, 1990, subject to the approval hereof by the
vote of the Company's stockholders required therefor by the Delaware General
Corporation Law and applicable Securities Law Requirements within one (1) year
of the date of adoption by the Board, which approval was obtained at the Annual
Meeting of such stockholders held October 18, 1990. The Board has subsequently
approved increases in the number of Authorized Shares and, with respect to the
increases by the 1995 Authorized Shares and the 1997 Authorized Shares, certain
related amendments to this Plan subject to and which received such required
approval of the Company's stockholders at the Annual Meetings thereof held
August 19, 1992, August 19, 1994, August 31, 1995 and September 10, 1997. The
Plan shall continue in full force and effect until (i) terminated by resolution
of the Board or (ii) both (A) all Options granted under the Plan have been
exercised in full and (B) no Authorized Shares remain available for the granting
of additional Options. The termination of the Plan shall not affect Options
already granted, which Options shall remain in full force and effect in
accordance with their respective terms as if this Plan had not been terminated.

         19.  AMENDMENT OF PLAN AND OUTSTANDING OPTIONS. The Board may, in its
sole discretion, amend the Plan from time to time, provided that any amendment
which Rule 16b-3 or any other Securities Law Requirement requires be approved by
the stockholders of the 


                                      18
<PAGE>   19

Company shall be made only with the approval of such stockholders. Amendments
to the Plan shall apply prospectively to all Options then outstanding under the
Plan, except in the case of any amendment which is adverse to an Optionee, in
which case the amendment shall apply with respect to the outstanding Options
held by the adversely affected Optionee only upon the consent of such Optionee
to such amendment. In exercising its authority under Section 4(b)(v) to amend
outstanding Options, the Committee likewise may make an amendment which
adversely affects the Optionee only upon the consent of such Optionee to such
amendment. Notwithstanding the provisions of this Section 19, the consent of
the Optionee shall not be required with respect to an amendment to the Plan or
to any outstanding Option which is made in order to comply with Securities Law
Requirements or which causes a Tax Qualified Option no longer to qualify as
such.

         20.      GENERAL PROVISIONS.

                  a.  Grants to Foreign Employees. Notwithstanding any other
         provision of this Plan to the contrary but subject to applicable
         Securities Law Requirements and tax laws, to the extent deemed
         necessary or appropriate by the Committee in its sole discretion in
         order to further the purposes of the Plan with respect to Employees who
         are foreign nationals and/or employed outside the United States of
         America, an Option granted to any such Employee may be on terms and
         conditions different from those specified in this Plan in recognition
         of the differences in the laws, tax policies and customs applicable to
         such an Employee, without the necessity of the Plan being amended to
         provide for such different terms and conditions.

                  b.  Nature of Benefits. Benefits realized by an Optionee under
         this Plan or any Option granted hereunder shall not be deemed a part of
         such Optionee's regular, recurring compensation for purposes of the
         termination, indemnity or severance pay law of any country and shall
         not be included in, nor have any effect on, the determination of
         benefits under any other employee benefit plan or similar arrangement
         provided to such Optionee by the Company or a Subsidiary unless
         expressly so provided by such other plan or arrangement, or except
         where the Committee expressly determines in its sole discretion that an
         Option or portion thereof should be so included in order accurately to
         reflect competitive compensation practices or to recognize that an
         Option has been granted in lieu of a portion of competitive annual cash
         compensation.


                  (c)  Determination of Deadlines. If any day on or before which
         action under this Plan or any Option granted hereunder must be taken
         falls on a Saturday, Sunday or Company-recognized holiday, such action
         may be taken on the next succeeding day which is not a Saturday, Sunday
         or Company-recognized holiday; provided, however, that the provisions
         of this Paragraph (c) shall not apply to, and shall not extend the time
         for exercise of, any Option which is terminated for Misconduct pursuant
         to Section 10(b) or for Prohibited Conduct pursuant to Section 16(a).

                  (d)  Governing Law. To the extent that federal laws (such as
         the Act or the Code) or the Delaware General Corporation Law do not
         otherwise control, this Plan and all 


                                      19
<PAGE>   20

         determinations made and actions taken pursuant hereto shall be
         governed by the laws of the State of Ohio and construed accordingly.

                  (e)  Gender and Number. Whenever the context may require, any
         pronouns used herein shall include the corresponding masculine,
         feminine or neuter forms, and the singular form of nouns and pronouns
         shall include the plural and vice versa.

                  (f)  Captions. The captions contained in this Plan are for
         convenience of reference only and do not affect the meaning of any term
         or provision hereof.








                                      20