EXHIBIT 10.12
                            ILLUMINET HOLDINGS, INC.
                           1997 EQUITY INCENTIVE PLAN


                                    SECTION 1

                              PURPOSE AND DURATION

         1.1 Effective Date.  This Plan permits the grant of Nonqualified  Stock
Options,  Incentive Stock Options, SARs, Restricted Stock, Performance Units and
Performance  Shares. This Plan shall be effective on the date of its adoption by
the Company's Board of Directors.

         1.2 Purpose of this Plan.  This Plan is intended to attract,  motivate,
and retain (a) employees of the Company and its Affiliates,  (b) consultants who
provide significant services to the Company and its Affiliates,  and (c) members
of the Board of  Directors  of the  Company  who are  employees  of neither  the
Company nor any Affiliate.  This Plan also is designed to further the growth and
financial success of the Company and its Affiliates by aligning the interests of
the Participants,  through the ownership of Shares and through other incentives,
with the interests of the Company's stockholders.

                                    SECTION 2

                                   DEFINITIONS

         The  following  words and  phrases  shall have the  following  meanings
unless a different meaning is plainly required by the context:

         "1934 Act"  means the  Securities  Exchange  Act of 1934,  as  amended.
Reference to a specific  section of the 1934 Act or regulation  thereunder shall
include such section or regulation,  any valid regulation promulgated under such
section,  and any comparable  provision of any future  legislation or regulation
amending, supplementing or superseding such section or regulation.

         "Affiliate" means any corporation or any other entity  (including,  but
not limited to, partnerships and joint ventures)  controlling,  controlled by or
under common control with the Company.

         "Affiliated  SAR"  means an SAR that is granted  in  connection  with a
related  Option,  and that  automatically  will be deemed to be exercised at the
same time that the related Option is exercised.



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         "Award" means, individually or collectively, a grant under this Plan of
Nonqualified  Stock Options,  Incentive Stock Options,  SARs,  Restricted Stock,
Performance Units or Performance Shares.

         "Award  Agreement" means the written  agreement setting forth the terms
and provisions applicable to each Award granted under this Plan.

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

         "Board  Member"  means any  individual  who is a member of the Board of
Directors of the Company.

         "Change in  Control"  shall have the  meaning  assigned to such term in
Section 12.2.

         "Code" means the Internal  Revenue Code of 1986, as amended.  Reference
to a specific  section of the Code or regulation  thereunder  shall include such
section or regulation,  any valid regulation promulgated under such section, and
any  comparable  provision of any future  legislation  or  regulation  amending,
supplementing or superseding such section or regulation.

         "Committee"  means the  committee  appointed by the Board  (pursuant to
Section 3.1) to administer this Plan.

         "Company" means Illuminet Holdings,  Inc., a Delaware corporation,  and
any successor thereto. With respect to the definitions of the Performance Goals,
the  Committee  in its  sole  discretion  may  determine  that  "Company"  means
Illuminet Holdings, Inc., and its consolidated subsidiaries.

         "Consultant"  means any  consultant,  independent  contractor  or other
person who provides significant  services to the Company or its Affiliates,  but
who is neither an Employee nor a Board Member.

         "Disability"  means a permanent and total disability within the meaning
of Code  section  22(e)(3),  provided  that in the  case of  Awards  other  than
Incentive  Stock  Options,  the Committee in its sole  discretion  may determine
whether a permanent and total  disability  exists in accordance with uniform and
non-discriminatory standards adopted by the Committee from time to time.

         "Earnings  Per Share" means as to any Fiscal Year,  the  Company's  Net
Income or a business unit's Pro Forma Net Income,  divided by a weighted average
number of Shares outstanding and dilutive equivalent Shares deemed outstanding.

         "Employee"  means  any  employee  of the  Company  or of an  Affiliate,
whether such employee is so employed at the time this Plan is adopted or becomes
so employed subsequent to the adoption of this Plan.


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         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended. Reference to a specific section of ERISA or regulation thereunder shall
include such section or regulation,  any valid regulation promulgated under such
section,  and any comparable  provision of any future  legislation or regulation
amending, supplementing or superseding such section or regulation.

         "Exercise Price" means the price at which a Share may be purchased by a
Participant pursuant to the exercise of an Option.

         "Fair Market Value" means,  as of any given date,  the mean between the
highest  and lowest  reported  sales  prices of the Shares on the New York Stock
Exchange  Composite  Tape or,  if not  listed  on such  exchange,  on any  other
national  securities  exchange  on which the  Shares are listed or on the Nasdaq
Stock Market. If there is no regular public trading market for such Shares,  the
Fair Market Value of the Shares  shall be  determined  by the  Committee in good
faith.  Notwithstanding the preceding,  for federal,  state and local income tax
reporting  purposes,  fair market value shall be determined by the Committee (or
its delegate) in accordance with uniform and nondiscriminatory standards adopted
by it from time to time.

         "Fiscal Year" means the fiscal year of the Company.

         "Freestanding  SAR"  means a SAR that is granted  independently  of any
Option.

         "Grant Date" means,  with respect to an Award,  the date that the Award
was granted.

         "Incentive  Stock Option"  means an Option to purchase  Shares which is
designated as an Incentive Stock Option and is intended to meet the requirements
of section 422 of the Code.

         "Individual  MBOs"  means  as  to  a  Participant,  the  objective  and
measurable goals set by a "management by objectives" process and approved by the
Committee (in its sole discretion).

         "Net Income" means as to any Fiscal Year, the income after taxes of the
Company for the Fiscal Year  determined in accordance  with  generally  accepted
accounting  principles;  provided,  however,  that the Committee shall determine
whether  any  significant  item(s)  shall  be  included  or  excluded  from  the
calculation of Net Income with respect to one or more  Participants  and, if the
Committee intends an Award to qualify as "performance-based  compensation" under
Section 162(m) of the Code, the Committee shall make such determination prior to
the latest date permissible under Section 162(m) of the Code.

         "Nonemployee  Board Member" means a Board Member who is not an employee
of the Company or of any Affiliate.

         "Nonqualified Stock Option" means an Option to purchase Shares which is
not an Incentive Stock Option.


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         "Option" means an Incentive Stock Option or a Nonqualified Stock Option

         "Participant" means an Employee, Consultant or Nonemployee Board Member
who has an outstanding Award.

         "Performance  Goals" means the goal(s) (or combined goal(s)) determined
by the Committee (in its sole discretion) to be applicable to a Participant with
respect to an Award.  As  determined by the  Committee,  the  Performance  Goals
applicable to an Award may provide for a targeted level or levels of achievement
using predetermined  measurements,  including,  for example,  one or more of the
following measures: (a) Earnings Per Share, (b) Individual MBOs, (c) Net Income,
(d) Pro  Forma Net  Income,  (e)  Return on  Designated  Assets,  (f)  Return on
Revenues,  and (g)  Satisfaction  MBOs.  The  Performance  Goals may differ from
Participant to Participant and from Award to Award.

         "Performance  Period"  shall have the meaning  assigned to such term in
Section 8.3.

         "Performance Share" means an Award granted to a Participant pursuant to
Section 8.

         "Performance Unit" means an Award granted to a Participant  pursuant to
Section 8.

         "Period of  Restriction"  means the period during which the transfer of
Shares of  Restricted  Stock are subject to  restrictions  and,  therefore,  the
Shares are subject to a substantial  risk of forfeiture.  As provided in Section
7, such  restrictions  may be based on the passage of time,  the  achievement of
target levels of  performance or the occurrence of other events as determined by
the Committee in its sole discretion.

         "Plan" means the Illuminet Holdings,  Inc., 1997 Equity Incentive Plan,
as set forth in this instrument and as hereafter amended from time to time.

          "Pro Forma Net Income"  means as to any  business  unit for any Fiscal
Year,  the portion of  Company's  Net Income  allocable to such  business  unit;
provided,  however,  that the Committee  shall determine the basis on which such
allocation shall be made.

         "Restricted Stock" means an Award granted to a Participant  pursuant to
Section 7.

         "Retirement"  means,  in the  case of an  Employee,  a  Termination  of
Service  by reason  of the  Employee's  retirement  pursuant  to any  retirement
program  instituted  by the Company or any  Affiliate  employer or as  otherwise
agreed to by the Employer or the applicable Affiliate employer.  With respect to
a  Consultant,  no  Termination  of Service  shall be deemed to be on account of
"Retirement".  With respect to a Nonemployee  Board Member,  "Retirement"  means
termination of service on the Board at or after age sixty-five (65).



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          "Return on Designated Assets" means as to any Fiscal Year, (a) the Pro
Forma Net Income of a business  unit,  divided by the average of  beginning  and
ending  business unit designated  assets,  or (b) the Net Income of the Company,
divided by the average of beginning and ending designated corporate assets.

         "Return on Revenues" means as to any Fiscal Year, the percentage  equal
to the Company's Net Income or the business unit's Pro Forma Net Income, divided
by the Company's or the business unit's annual revenue.

         "Rule 16b-3" means Rule 16b-3  promulgated  under the 1934 Act, and any
future regulation amending, supplementing or superseding such regulation.

          "Satisfaction  MBOs" means as to any  Participant,  the  objective and
measurable  individual  goals set by a "management  by  objectives"  process and
approved by the Committee, which goals relate to the satisfaction of external or
internal requirements.

         "Section 16 Person" means a person who, with respect to the Shares,  is
subject to section 16 of the 1934 Act.

         "Shares" means the shares of common stock of the Company.

         "Stock Appreciation Right" or "SAR" means an Award, granted alone or in
connection  with a related  Option,  that is  designated  as a SAR  pursuant  to
Section 6.

         "Subsidiary" means any corporation in an unbroken chain of corporations
beginning  with the  Company  if each of the  corporations  other  than the last
corporation in the unbroken chain then owns stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

         "Tandem SAR" means an SAR that is granted in connection  with a related
Option,  the exercise of which shall require forfeiture of the right to purchase
an equal  number  of  Shares  under  the  related  Option  (and  when a Share is
purchased under the Option, the SAR shall be canceled to the same extent).

         "Termination  of  Service"  means  (a) in the  case of an  Employee,  a
cessation  of the  employee-employer  relationship  between an employee  and the
Company  or an  Affiliate  for any  reason,  including,  but not  limited  to, a
cessation  by  resignation,  discharge,  death,  Disability,  Retirement  or the
disaffiliation of an Affiliate,  but excluding any such cessation where there is
a simultaneous  reemployment by the Company or an Affiliate, and (b) in the case
of a Board Member or Consultant, a cessation of the service relationship between
a Board Member or  Consultant  and the Company or an  Affiliate  for any reason,
including,  but not limited to, a cessation by  resignation,  discharge,  death,
Disability, (Retirement, with respect to a Board


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Member) or the disaffiliation of an Affiliate,  but excluding any such cessation
where there is a simultaneous  reengagement of the Board Member or Consultant by
the Company or an Affiliate.



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                                    SECTION 3

                                 ADMINISTRATION

         3.1 The Committee.  This Plan shall be  administered  by the Committee.
The Committee shall consist of not less than two (2) Board Members,  all of whom
are Nonemployee  Board Members.  The members of the Committee shall be appointed
from  time to time  by,  and  shall  serve  at the  pleasure  of,  the  Board of
Directors.

         3.2 Authority of the  Committee.  It shall be the duty of the Committee
to administer this Plan in accordance  with its provisions.  The Committee shall
have all powers and discretion  necessary or appropriate to administer this Plan
and to control its  operation,  including,  but not limited to, the power to (a)
determine which  Participants  shall be granted Awards,  (b) prescribe the terms
and conditions of the Awards,  (c) interpret this Plan and the Awards, (d) adopt
rules for the administration, interpretation and application of this Plan as are
consistent therewith, and (e) interpret, amend or revoke any such rules.

         3.3 Delegation by the Committee.  The Committee, in its sole discretion
and on such terms and conditions as it may provide, may delegate all or any part
of its  authority  and powers  under  this Plan to one or more Board  Members or
officers of the Company; provided,  however, that the Committee may not delegate
its  authority  and  powers  in any  way  which  would  jeopardize  this  Plan's
qualification under Rule 16b-3.

         3.4 Decisions  Binding.  All  determinations  and decisions made by the
Committee,  the Board and any delegate of the Committee  pursuant to Section 3.3
shall be final,  conclusive,  and binding on all persons, and shall be given the
maximum deference permitted by law.

                                    SECTION 4

                           SHARES SUBJECT TO THIS PLAN

         4.1 Number of Shares. Subject to adjustment as provided in Section 4.3,
the total number of Shares  available for grant under this Plan shall not exceed
1,000,000.  Shares granted under this Plan may be either authorized but unissued
Shares or treasury Shares, or any combination thereof.

         4.2 Lapsed  Awards.  If an Award is settled  in cash,  or is  canceled,
terminates,  expires  or  lapses  for any  reason  (with  the  exception  of the
termination  of a  Tandem  SAR  upon  exercise  of the  related  Option,  or the
termination of a related Option upon exercise of the corresponding  Tandem SAR),
any Shares subject to such Award thereafter shall be available to be the subject
of an Award.



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         4.3  Adjustments in Awards and Authorized  Shares.  In the event of any
merger,    reorganization,    consolidation,    recapitalization,    separation,
liquidation,  stock dividend, stock split, Share combination, or other change in
the corporate structure of the Company affecting the Shares, the Committee shall
adjust the number and class of Shares  which may be  delivered  under this Plan,
the number,  class and price of Shares  subject to outstanding  Awards,  and the
numerical  limits of Sections  4.1, 5.1, 6.1, 7.1 and 8.1, in such manner as the
Committee  (in  its  sole  discretion)   shall  determine  to  be  advisable  or
appropriate   to  prevent  the   dilution   or   diminution   of  such   Awards.
Notwithstanding the preceding,  the number of Shares subject to any Award always
shall be a whole number.

         4.4  Repurchase  Option.  The  Committee  may, in its sole  discretion,
include in the terms of any Award  Agreement,  that the  Company  shall have the
option to repurchase  Shares of any Participant  acquired  pursuant to any Award
granted under the Plan upon the Termination of Service of such  Participant upon
such terms as the Committee shall state in the Award.

         4.5 Buy-Out Provision. The Committee may at any time offer on behalf of
the  Company to buy out,  for a payment in cash or Shares,  an Award  previously
granted,  based on such  terms  and  conditions  as the  Committee,  in its sole
discretion, shall establish and communicate to the Participants at the time such
offer is made.

          4.6  Restrictions on Share  Transferability.  The Committee may impose
such restrictions on any Shares acquired pursuant to the exercise of an Award as
it may deem advisable or appropriate in its sole discretion,  including, but not
limited to,  restrictions  related to applicable  Federal  securities  laws, the
requirements of any national securities exchange or system upon which Shares are
then listed or traded, and any blue sky or state securities laws.

                                    SECTION 5

                                  STOCK OPTIONS

         5.1 Grant of Options. Subject to the terms and provisions of this Plan,
Options  may be  granted  to  Participants  at any time and from time to time as
determined by the Committee in its sole discretion.  The Committee,  in its sole
discretion,  shall  determine  the  number of  Shares  subject  to each  Option;
provided,  however, that during any Fiscal Year, no Participant shall be granted
Options  covering more than 100,000  Shares.  The Committee may grant  Incentive
Stock Options, Nonqualified Stock Options, or any combination thereof.

         5.2  Award  Agreement.  Each  Option  shall  be  evidenced  by an Award
Agreement  that shall specify the Exercise  Price,  the  expiration  date of the
Option,  the number of Shares to which the Option  pertains,  any  conditions to
exercise of the Option and such other terms and conditions as the Committee,  in
its sole  discretion,  shall  determine.  The Award Agreement also shall specify
whether the Option is intended to be an Incentive Stock Option or a Nonqualified
Stock Option.



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         5.3 Exercise Price.  Subject to the provisions of this Section 5.3, the
Exercise  Price for each Option shall be determined by the Committee in its sole
discretion.

                  5.3.1   Nonqualified   Stock   Options.   In  the  case  of  a
         Nonqualified Stock Option, the Exercise Price may be less than the Fair
         Market Value of a Share on the Grant Date.

                  5.3.2  Incentive  Stock  Options.  In the case of an Incentive
         Stock  Option,  the  Exercise  Price shall be not less than one hundred
         percent  (100%) of the Fair Market  Value of a Share on the Grant Date;
         provided,  however,  that if on the Grant Date, the Employee  (together
         with  persons  whose stock  ownership  is  attributed  to the  Employee
         pursuant to section 424(d) of the Code) owns stock possessing more than
         10% of the total  combined  voting power of all classes of stock of the
         Company or any of its  Subsidiaries,  the  Exercise  Price shall be not
         less than one hundred ten percent  (110%) of the Fair Market Value of a
         Share on the Grant Date.

                  5.3.3 Substitute  Options.  Notwithstanding  the provisions of
         Sections 5.3.1 and 5.3.2, in the event that the Company or an Affiliate
         consummates  a  transaction  described  in  section  424(a) of the Code
         (e.g.,   the  acquisition  of  property  or  stock  from  an  unrelated
         corporation),  persons  who  become  Participants  on  account  of such
         transaction may be granted Options in substitution  for options granted
         by such former  employer or recipient of services.  If such  substitute
         Options  are  granted,  the  Committee,  in  its  sole  discretion  and
         consistent  with section  424(a) of the Code,  may determine  that such
         substitute  Options shall have an exercise  price less than one hundred
         (100%) of the Fair Market Value of the Shares on the Grant Date.

                  5.4       Expiration of Options.

                  5.4.1  Expiration  Dates.  Except as  provided  in Section 5.7
         regarding Incentive Stock Options, each Option shall terminate upon the
         earlier of the first to occur of the following events:

                           (a) The  date(s)  for  termination  of the Option set
                  forth in the Award Agreement; or

                           (b) The  expiration  of ten (10) years from the Grant
                  Date.

                  5.4.2 Committee  Discretion.  Subject to the limits of Section
         5.4.1, the Committee, in its sole discretion, (a) shall provide in each
         Award Agreement when each Option expires and becomes unexercisable, and
         (b) may,  after an Option is granted,  extend the  maximum  term of the
         Option (subject to Section 5.7 regarding Incentive Stock Options).

         5.5 Exercisability of Options. Options granted under this Plan shall be
exercisable at such times and be subject to such  restrictions and conditions as
the Committee shall determine in


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its sole  discretion.  After an Option is granted,  the  Committee,  in its sole
discretion,  may accelerate the  exercisability  of the Option. If the Committee
provides that any Option is exercisable only in installments,  the Committee may
at any time waive such  installment  exercise  provisions,  in whole or in part,
based on such factors as the Committee may determine.

         5.6 Payment.  Options shall be exercised by the Participant's  delivery
of a  written  notice  of  exercise  to the  Secretary  of the  Company  (or its
designee),  setting  forth the number of Shares with respect to which the Option
is to be exercised, accompanied by full payment for the Shares.

         Upon the exercise of any Option, the Exercise Price shall be payable to
the  Company  in full in cash or its  equivalent.  The  Committee,  in its  sole
discretion, also may permit exercise (a) by tendering previously acquired Shares
having an aggregate Fair Market Value at the time of exercise equal to the total
Exercise  Price,  or (b) by any other  means  which the  Committee,  in its sole
discretion,  determines (i) to provide legal  consideration for the Shares,  and
(ii) to be consistent with the purposes of this Plan.

         As soon as  practicable  after  receipt  of a written  notification  of
exercise and full payment for the Shares purchased, the Company shall deliver to
the Participant (or the Participant's  designated  broker),  Share  certificates
(which may be in book entry form) representing such Shares.

         5.7      Certain Additional Provisions for Incentive Stock Options.

                  5.7.1   Exercisability.   The  aggregate   Fair  Market  Value
         (determined  on the Grant  Date(s)) of the Shares with respect to which
         Incentive  Stock  Options  are  exercisable  for the first  time by any
         Employee  during any calendar  year (under all plans of the Company and
         its Subsidiaries) shall not exceed $100,000.

                  5.7.2 Termination of Service. No Incentive Stock Option may be
         exercised   more  than  three  (3)  months   after  the   Participant's
         Termination  of Service for any reason other than  Disability or death,
         unless (a) the Participant dies during such three-month period, and (b)
         the  Award  Agreement  or the  Committee  permits  later  exercise.  No
         Incentive  Stock Option may be  exercised  more than one (1) year after
         the  Participant's  termination of employment on account of Disability,
         unless (a) the Participant  dies during such one-year  period,  and (b)
         the Award Agreement or the Committee permits later exercise.

                  5.7.3 Company and Subsidiaries  Only.  Incentive Stock Options
         may be granted  only to persons who are  employees  of the Company or a
         Subsidiary on the Grant Date.

                  5.7.4  Expiration.  No Incentive Stock Option may be exercised
         after the  expiration of ten (10) years from the Grant Date;  provided,
         however,  that if the Option is granted to an  Employee  who,  together
         with persons whose stock ownership is attributed to the


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         Employee  pursuant to section 424(d) of the Code, owns stock possessing
         more than 10% of the total  combined  voting  power of all  classes  of
         stock of the Company or any of its Subsidiaries,  the Option may not be
         exercised after the expiration of five (5) years from the Grant Date.

                                    SECTION 6

                            STOCK APPRECIATION RIGHTS

         6.1 Grant of SARs. Subject to the terms and conditions of this Plan, an
SAR may be granted to Participants at any time and from time to time as shall be
determined by the  Committee,  in its sole  discretion.  The Committee may grant
Affiliated SARs, Freestanding SARs, Tandem SARs, or any combination thereof.

                  6.1.1  Number of Shares.  The  Committee  shall have  complete
         discretion to determine the number of SARs granted to any  Participant,
         provided that during any Fiscal Year, no  Participant  shall be granted
         SARs covering more than 100,000 Shares.

                  6.1.2 Exercise Price and Other Terms.  The Committee,  subject
         to the  provisions  of this Plan,  shall have  complete  discretion  to
         determine  the terms and  conditions  of SARs granted  under this Plan;
         provided,  however, that the exercise price of a Freestanding SAR shall
         be not less than one hundred percent (100%) of the Fair Market Value of
         a Share on the Grant Date.  The exercise  price of Tandem or Affiliated
         SARs shall equal the Exercise Price of the related Option.

         6.2  Exercise of Tandem SARs.  Tandem SARs may be exercised  for all or
part of the Shares subject to the related Option upon the surrender of the right
to exercise the equivalent  portion of the related  Option.  A Tandem SAR may be
exercised  only with respect to the Shares for which its related  Option is then
exercisable.  With  respect  to a  Tandem  SAR  granted  in  connection  with an
Incentive  Stock  Option:  (a) the  Tandem  SAR shall  expire no later  than the
expiration of the underlying Incentive Stock Option; (b) the value of the payout
with  respect to the Tandem  SAR shall be for no more than one  hundred  percent
(100%) of the difference between the Exercise Price of the underlying  Incentive
Stock Option and the Fair Market Value of the Shares  subject to the  underlying
Incentive  Stock  Option at the time the  Tandem SAR is  exercised;  and (c) the
Tandem SAR shall be  exercisable  only when the Fair Market  Value of the Shares
subject  to the  Incentive  Stock  Option  exceeds  the  Exercise  Price  of the
Incentive Stock Option.

         6.3 Exercise of Affiliated  SARs. An Affiliated  SAR shall be deemed to
be exercised upon the exercise of the related Option.  The deemed exercise of an
Affiliated SAR shall not necessitate a reduction in the number of Shares subject
to the related Option.

         6.4  Exercise  of  Freestanding   SARs.   Freestanding  SARs  shall  be
exercisable  on  such  terms  and  conditions  as the  Committee,  in  its  sole
discretion, shall determine.


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         6.5 SAR  Agreement.  Each  SAR  grant  shall be  evidenced  by an Award
Agreement  that shall  specify  the  exercise  price,  the term of the SAR,  the
conditions of exercise, and such other terms and conditions as the Committee, in
its sole discretion, shall determine.

         6.6  Expiration  of SARs.  An SAR granted  under this Plan shall expire
upon the date determined by the Committee, in its sole discretion,  as set forth
in the Award Agreement.  Notwithstanding the foregoing, the terms and provisions
of Section 5.4 also shall apply to SARs.

         6.7 Payment of SAR Amount. Upon exercise of an SAR, a Participant shall
be  entitled to receive  payment  from the  Company in an amount  determined  by
multiplying:

                  (a) The positive difference between the Fair Market Value of a
         Share on the date of exercise over the exercise price; by

                  (b) The  number of  Shares  with  respect  to which the SAR is
         exercised.

         At the sole discretion of the Committee,  the payment upon SAR exercise
may be in cash, in Shares of equivalent value, or in any combination thereof.

                                    SECTION 7

                                RESTRICTED STOCK

         7.1 Grant of Restricted  Stock.  Subject to the terms and provisions of
this Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted  Stock to Participants in such amounts as the Committee,  in its sole
discretion,  shall  determine.  The  Committee,  in its sole  discretion,  shall
determine  the  number of Shares to be granted  to each  Participant;  provided,
however,  that during any Fiscal Year,  no  Participant  shall receive more than
100,000 Shares of Restricted Stock.

         7.2 Restricted Stock Agreement. Each Award of Restricted Stock shall be
evidenced by an Award  Agreement  that shall specify the Period of  Restriction,
the  number of Shares  granted,  and such  other  terms  and  conditions  as the
Committee, in its sole discretion, shall determine. Unless the Committee, in its
sole discretion,  determines otherwise, Shares of Restricted Stock shall be held
by the  Company  as  escrow  agent  until  the end of the  applicable  Period of
Restriction.

         7.3  Transferability.  Except as otherwise determined by the Committee,
in its sole discretion, Shares of Restricted Stock may not be sold, transferred,
gifted,  bequeathed,  pledged, assigned, or otherwise alienated or hypothecated,
voluntarily  or  involuntarily,  until  the  end of  the  applicable  Period  of
Restriction.



                                      -12-

<PAGE>



         7.4 Other  Restrictions.  The Committee,  in its sole  discretion,  may
impose  such other  restrictions  on Shares of  Restricted  Stock as it may deem
advisable or appropriate in accordance with this Section 7.4.

                  7.4.1 General Restrictions. The Committee may set restrictions
         based  upon (a) the  achievement  of  specific  performance  objectives
         (Company-wide,  divisional or  individual),  (b) applicable  Federal or
         state  securities  laws,  or (c)  any  other  basis  determined  by the
         Committee in its sole discretion.

                  7.4.2 Section 162(m) Performance Restrictions. For purposes of
         qualifying   grants   of   Restricted   Stock   as   "performance-based
         compensation"  under section 162(m) of the Code, the Committee,  in its
         sole  discretion,  may set  restrictions  based upon the achievement of
         Performance  Goals. The Performance Goals shall be set by the Committee
         on or before the latest date permissible to enable the Restricted Stock
         to qualify as "performance-based  compensation" under section 162(m) of
         the Code.  In  granting  Restricted  Stock that is  intended to qualify
         under Code section  162(m),  the Committee  shall follow any procedures
         determined  by it in its  sole  discretion  from  time  to  time  to be
         necessary,  advisable or  appropriate  to ensure  qualification  of the
         Restricted  Stock under Code section 162(m) (e.g.,  in determining  the
         Performance Goals).

                  7.4.3  Legend  on  Certificates.  The  Committee,  in its sole
         discretion,  may legend the certificates  representing Restricted Stock
         to give  appropriate  notice of such  restrictions.  For  example,  the
         Committee  may  determine  that some or all  certificates  representing
         Shares of Restricted Stock shall bear the following legend:

                  "THE SALE OR OTHER TRANSFER OF THE SHARES OF STOCK REPRESENTED
                  BY THIS CERTIFICATE,  WHETHER  VOLUNTARY,  INVOLUNTARY,  OR BY
                  OPERATION  OF LAW,  IS  SUBJECT  TO  CERTAIN  RESTRICTIONS  ON
                  TRANSFER AS SET FORTH IN THE ILLUMINET  HOLDINGS,  INC.,  1997
                  EQUITY INCENTIVE PLAN, AND IN A RESTRICTED STOCK AGREEMENT.  A
                  COPY OF THIS PLAN AND SUCH  RESTRICTED  STOCK AGREEMENT MAY BE
                  OBTAINED FROM THE SECRETARY OF ILLUMINET HOLDINGS, INC."

         7.5  Removal of  Restrictions.  Except as  otherwise  provided  in this
Section 7, Shares of  Restricted  Stock covered by each  Restricted  Stock grant
made under this Plan shall be released from escrow as soon as practicable  after
the end of the applicable  Period of  Restriction.  The  Committee,  in its sole
discretion,  may accelerate the time at which any  restrictions  shall lapse and
remove any restrictions.  After the end of the applicable Period of Restriction,
the  Participant  shall be entitled to have any legend or legends  under Section
7.4.3 removed from his or her Share certificate,  and the Shares shall be freely
transferable by the Participant.



                                      -13-

<PAGE>



         7.6  Voting  Rights.  During the  Period of  Restriction,  Participants
holding  Shares of Restricted  Stock granted  hereunder may exercise full voting
rights with  respect to those  Shares,  unless the  applicable  Award  Agreement
provides otherwise.

         7.7   Dividends   and  Other   Distributions.   During  the  Period  of
Restriction,  Participants  holding Shares of Restricted Stock shall be entitled
to receive  all  dividends  and other  distributions  paid with  respect to such
Shares unless otherwise provided in the applicable Award Agreement.  If any such
dividends or  distributions  are paid in Shares,  the Shares shall be subject to
the same  restrictions on  transferability  and  forfeitability as the Shares of
Restricted Stock with respect to which they were paid.

         7.8 Return of Restricted Stock to Company. On the date set forth in the
applicable Award Agreement, the Restricted Stock for which restrictions have not
lapsed shall revert to the Company and  thereafter  shall be available for grant
under this Plan.

                                    SECTION 8

                    PERFORMANCE UNITS AND PERFORMANCE SHARES

         8.1  Grant  of   Performance   Units/Shares.   Performance   Units  and
Performance  Shares may be granted to  Participants at any time and from time to
time, as shall be  determined  by the  Committee,  in its sole  discretion.  The
Committee   shall  have  complete   discretion  in  determining  the  number  of
Performance Units and Performance Shares granted to each Participant;  provided,
however,  that  during  any  Fiscal  Year,  (a)  no  Participant  shall  receive
Performance  Units having an initial  value  greater than  $250,000,  and (b) no
Participant shall receive more than 100,000 Performance Shares.

         8.2 Value of Performance Units/Shares. Each Performance Unit shall have
an initial  value that is  established  by the  Committee on or before the Grant
Date.  Each  Performance  Share  shall have an initial  value  equal to the Fair
Market Value of a Share on the Grant Date.

         8.3  Performance  Objectives and Other Terms.  The Committee  shall set
performance  objectives in its sole discretion which, depending on the extent to
which they are met, will determine the number or value of  Performance  Units or
Performance Shares, or both, that will be paid out to the Participants. The time
period during which the  performance  objectives must be met shall be called the
"Performance  Period".  Each Award of Performance  Units or  Performance  Shares
shall be  evidenced by an Award  Agreement  that shall  specify the  Performance
Period,  and such  other  terms and  conditions  as the  Committee,  in its sole
discretion, shall determine.

                  8.3.1 General  Performance  Objectives.  The Committee may set
         performance  objectives based upon (a) the achievement of Company-wide,
         divisional or individual


                                      -14-

<PAGE>



         goals,  (b)  applicable  Federal or state  securities  laws, or (c) any
         other basis determined by the Committee in its discretion.

                  8.3.2 Section 162(m) Performance  Objectives.  For purposes of
         qualifying  grants  of  Performance  Units  or  Performance  Shares  as
         "performance-based  compensation" under section 162(m) of the Code, the
         Committee,  in its sole discretion,  may determine that the performance
         objectives  applicable to Performance  Units or Performance  Shares, as
         the case may be,  shall be  based  on the  achievement  of  Performance
         Goals. The Performance Goals shall be set by the Committee on or before
         the  latest  date  permissible  to  enable  the  Performance  Units  or
         Performance   Shares,   as   the   case   may   be,   to   qualify   as
         "performance-based  compensation"  under section 162(m) of the Code. In
         granting  Performance Units or Performance Shares which are intended to
         qualify  under Code  section  162(m),  the  Committee  shall follow any
         procedures  determined  by it from  time to  time  to be  necessary  or
         appropriate  in its sole  discretion  to  ensure  qualification  of the
         Performance Units or Performance Shares, as the case may be, under Code
         section 162(m) (e.g., in determining the Performance Goals).

         8.4  Earning  of   Performance   Units/Shares.   After  the  applicable
Performance  Period has ended,  the holder of  Performance  Units or Performance
Shares shall be entitled to receive a payout of the number of Performance  Units
or Performance  Shares,  as the case may be, earned by the Participant  over the
Performance  Period,  to be  determined as a function of the extent to which the
corresponding  performance  objectives have been achieved.  After the grant of a
Performance Unit or Performance  Share,  the Committee,  in its sole discretion,
may reduce or waive any  performance  objectives  for such  Performance  Unit or
Performance Share.

         8.5 Form and Timing of Payment of Performance Units/Shares.  Payment of
earned  Performance  Units  or  Performance  Shares  shall  be  made  as soon as
practicable after the end of the applicable  Performance  Period. The Committee,
in its sole discretion,  may pay earned  Performance Units or Performance Shares
in the form of cash, in Shares (which have an aggregate  Fair Market Value equal
to the value of the earned Performance Units or Performance  Shares, as the case
may be, at the end of the applicable  Performance Period), or in any combination
thereof.

         8.6  Cancellation  of Performance  Units/Shares.  On the earlier of the
date set  forth in the  Award  Agreement  or the  Participant's  Termination  of
Service  (other  than by death,  Disability  or,  with  respect to an  Employee,
Retirement),  all unearned or unvested  Performance Units or Performance  Shares
shall be forfeited to the Company,  and thereafter  shall be available for grant
under this Plan.  In the event of a  Participant's  death,  Disability  or, with
respect to an Employee,  Retirement,  prior to the end of a Performance  Period,
the Committee  shall reduce his or her Performance  Units or Performance  Shares
proportionately based on the date of such Termination of Service.





                                      -15-

<PAGE>

                                    SECTION 9

                                  MISCELLANEOUS

         9.1 Deferrals.  The  Committee,  in its sole  discretion,  may permit a
Participant  to defer  receipt of the payment of cash or the  delivery of Shares
that  would  otherwise  be due to such  Participant  under  an  Award.  Any such
deferral  election  shall be subject to such  rules and  procedures  as shall be
determined by the Committee in its sole discretion.

         9.2 No Effect on  Employment  or  Service.  Nothing  in this Plan shall
interfere  with or limit in any way the right of the  Company to  terminate  any
Participant's  employment  or service at any time,  with or without  cause.  For
purposes  of this Plan,  transfer of  employment  of a  Participant  between the
Company and any of its Affiliates (or between  Affiliates) shall not be deemed a
Termination of Service.  Employment or secure  relationship with the Company and
its  Affiliates is on an at-will  basis only,  unless  otherwise  provided by an
applicable  employment  or service  agreement  between the  Participant  and the
Company or its Affiliate, as the case may be.

         9.3  Participation.  No Participant shall have the right to be selected
to receive an Award under this Plan, or, having been so selected, to be selected
to receive a future Award.

         9.4 Indemnification.  Each person who is or shall have been a member of
the Committee,  or of the Board,  shall be indemnified  and held harmless by the
Company  against and from (a) any loss,  cost,  liability or expense  (including
attorneys'  fees) that may be imposed upon or reasonably  incurred by him or her
in connection  with or resulting from any claim,  action,  suit or proceeding to
which he or she may be a party or in which he or she may be  involved  by reason
of any action  taken or  failure to act under this Plan or any Award  Agreement,
and (b) from any and all amounts paid by him or her in settlement thereof,  with
the Company's prior written  approval,  or paid by him or her in satisfaction of
any judgment in any such claim,  action,  suit or proceeding against him or her;
provided,  however, that he or she shall give the Company an opportunity, at its
own expense, to handle and defend the same before he or she undertakes to handle
and defend it on his or her own behalf.  The foregoing right of  indemnification
shall not be  exclusive  of any other  rights of  indemnification  to which such
persons may be entitled  under the Company's  Certificate  of  Incorporation  or
Bylaws,  by contract,  as a matter of law or otherwise,  or under any power that
the Company may have to indemnify them or hold them harmless.

         9.5  Successors.  All  obligations of the Company under this Plan, with
respect to Awards  granted  hereunder,  shall be binding on any successor to the
Company,  whether the  existence of such  successor is the result of a direct or
indirect purchase,  merger,  consolidation or otherwise, of all or substantially
all of the business or assets of the Company.

         9.6  Beneficiary  Designations.   If  permitted  by  the  Committee,  a
Participant  under this Plan may name a beneficiary or beneficiaries to whom any
vested but unpaid Award shall be paid in the event of the  Participant's  death.
Each such designation shall revoke all prior designations by the Participant and
shall be effective only if given in a form and manner acceptable to the


                                      -16-

<PAGE>



Committee. In the absence of any such designation, any vested benefits remaining
unpaid at the Participant's death shall be paid to the Participant's estate and,
subject to the terms of this Plan and of the  applicable  Award  Agreement,  any
unexercised  vested Award may be exercised by the  administrator  or executor of
the Participant's estate.

         9.7  Transferability  of Awards.  Except as provided  otherwise  in the
Award  Agreement,  Awards  granted  under  this  Plan may be sold,  transferred,
pledged, assigned, or otherwise alienated or hypothecated.

         9.8 No Rights as Stockholder.  Except to the limited extent provided in
Sections 7.6 and 7.7, no Participant  (nor any  beneficiary  thereof) shall have
any of the rights or privileges of a stockholder  of the Company with respect to
any Shares issuable pursuant to an Award (or the exercise  thereof),  unless and
until certificates  representing such Shares shall have been issued, recorded on
the records of the Company or its transfer  agents or registrars,  and delivered
to the Participant (or his or her beneficiary).

                                   SECTION 10

                      AMENDMENT, TERMINATION, AND DURATION

         10.1  Amendment,  Suspension,  or  Termination.  The Board, in its sole
discretion,  may amend or terminate this Plan, or any part thereof,  at any time
and for any reason; provided, however, that if and to the extent required by law
or to maintain  this Plan's  qualification  under Rule 16b-3,  the Code,  or the
rules of any national  securities  exchange (if applicable),  any such amendment
shall  be  subject  to  stockholder  approval.  The  amendment,   suspension  or
termination  of this Plan shall not,  without  the  consent of the  Participant,
alter or impair any rights or obligations under any Award theretofore granted to
such  Participant.  No Award may be granted  during any period of  suspension or
after termination of this Plan.

         10.2  Duration of this Plan.  This Plan shall  become  effective on the
date specified herein,  and subject to Section 10.1 (regarding the Board's right
to amend or terminate this Plan), shall remain in effect  thereafter;  provided,
however,  that without further stockholder  approval,  no Incentive Stock Option
may be granted under this Plan after the tenth anniversary of the effective date
of this Plan.

                                   SECTION 11

                                 TAX WITHHOLDING

         11.1 Withholding  Requirements.  Prior to the delivery of any Shares or
cash pursuant to an Award (or the exercise thereof),  the Company shall have the
power  and  the  right  to  deduct  or  withhold  from  any  amounts  due to the
Participant from the Company,  or require a Participant to remit to the Company,
an amount sufficient to satisfy Federal, state and local taxes (including


                                      -17-

<PAGE>



the Participant's FICA obligation)  required to be withheld with respect to such
Award (or the exercise thereof).

         11.2 Withholding  Arrangements.  The Committee,  in its sole discretion
and pursuant to such  procedures as it may specify from time to time, may permit
a Participant to satisfy such tax withholding  obligation,  in whole or in part,
by (a) electing to have the Company withhold  otherwise  deliverable  Shares, or
(b) delivering to the Company Shares then owned by the Participant having a Fair
Market  Value  equal to the amount  required to be  withheld.  The amount of the
withholding requirement shall be deemed to include any amount that the Committee
agrees may be withheld at the time any such election is made,  not to exceed the
amount  determined by using the maximum federal,  state or local marginal income
tax rates  applicable to the  Participant  with respect to the Award on the date
that the amount of tax to be withheld is to be determined. The Fair Market Value
of the Shares to be withheld or  delivered  shall be  determined  as of the date
that the taxes are required to be withheld.

                                   SECTION 12

                                CHANGE IN CONTROL

         12.1  Change in  Control.  In the event of a Change in  Control  of the
Company,  all Awards granted under this Plan that then are  outstanding  and not
then  exercisable  or are  subject  to  restrictions,  shall,  unless  otherwise
provided for in the Award  Agreements  applicable  thereto,  become  immediately
exercisable,  and all restrictions  shall be removed,  as of the first date that
the Change in Control has been deemed to have occurred, and shall remain as such
for the remaining life of the Award as provided herein and within the provisions
of the related Award Agreements.  Notwithstanding the preceding sentence, in the
event that the Committee is advised by the Company's  independent  auditors that
the effect of the  preceding  sentence  would be to preclude  the ability of the
Company to account  for an  acquisition  or merger  transaction  as a pooling of
interests,  the Committee may declare the preceding sentence to be inoperable to
such  extent  as  the  Committee,  in  its  sole  discretion,  deems  advisable.
Notwithstanding  the  preceding  sentence,  in the event that the  Committee  is
advised by the Company's  independent  auditors that the effect of the preceding
sentence  would be to  preclude  the  ability of the  Company  to account  for a
transaction  as a pooling of interests,  the Committee may declare the preceding
sentence  to be  inoperable  to  such  extent  as the  Committee,  in  its  sole
discretion, deems advisable.

         12.2  Definition.  For  purposes  of Section  12.1  above,  a Change in
Control of the Company  shall be deemed to have occurred if the  conditions  set
forth in any one or more of the following shall have been satisfied, unless such
condition  shall  have  received  prior  approval  of a  majority  vote  of  the
Continuing Directors,  as defined below,  indicating that Section 12.1 shall not
apply thereto:

         (a) any "person",  as such term is used in Sections  13(d) and 14(d) of
         the 1934 Act (other than the  Company,  any trustee or other  fiduciary
         holding securities under an employee benefit plan of the Company or any
         corporation owned, directly or indirectly,


                                      -18-

<PAGE>



         by  the  stockholders  of  the  Company  in   substantially   the  same
         proportions as their ownership of stock of the Company),  is or becomes
         the "beneficial  owner" (as defined in Rule 13(d)(3) under the Exchange
         Act), directly or indirectly, of securities of the Company representing
         thirty  percent  (30%)  or more of the  combined  voting  power  of the
         Company's then outstanding securities;

         (b) during  any period of two  consecutive  years  (not  including  any
         period  prior  to  the  Effective  Date  of  this  Plan),   individuals
         ("Existing  Directors") who at the beginning of such period  constitute
         the  Board  of  Directors,  and  any new  board  member  (an  "Approved
         Director")  (other than a board member  designated  by a person who has
         entered  into an  agreement  with the  Company to effect a  transaction
         described  in paragraph  (a),  (b) or (c) of this  Section  12.2) whose
         election by the Board of  Directors or  nomination  for election by the
         Company's  shareholders  was  approved by a vote of a least  two-thirds
         (2/3) of the board  members  then still in office who either were board
         members at the beginning of the period or whose  election or nomination
         for election  previously was so approved  (Existing  Directors together
         with Approved Directors constituting "Continuing Directors"), cease for
         any reason to constitute at least a majority of the Board of Directors;
         or

         (c) the  stockholders of the Company approve a merger or  consolidation
         of the  Company  with any  other  person,  other  than (i) a merger  or
         consolidation  which  would  result  in the  voting  securities  of the
         Company  outstanding  immediately prior thereto continuing to represent
         (either by  remaining  outstanding  or by being  converted  into voting
         securities  for the surviving  entity) more than fifty percent (50%) of
         the combined  voting power of the voting  securities  of the Company or
         such  surviving  entity  outstanding  immediately  after such merger or
         consolidation,  or (ii) a merger in which no  "person"  (as  defined in
         Section  12.2(a))  acquires  more  than  thirty  percent  (30%)  of the
         combined voting power of the Company's then outstanding securities; or

         (d)  the  stockholders  of  the  Company  approve  a plan  of  complete
         liquidation  of the Company or an agreement for the sale or disposition
         by the Company of all or substantially  all of the Company's assets (or
         any transaction having a similar effect).

                                   SECTION 13

                               LEGAL CONSTRUCTION

         13.1  Gender  and  Number.  Except  where  otherwise  indicated  by the
context,  any masculine  term used herein also shall  include the feminine,  the
plural shall include the singular, and the singular shall include the plural.

         13.2  Severability.  In the event any  provision  of this Plan shall be
held illegal or invalid for any reason,  the illegality or invalidity  shall not
affect the  remaining  parts of this Plan,  and this Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.



                                      -19-

<PAGE>


         13.3  Requirements  of Law.  The grant of Awards  and the  issuance  of
Shares  under  this Plan  shall be subject  to all  applicable  laws,  rules and
regulations,  and to such  approvals  by any  governmental  agencies or national
securities exchanges as may be required from time to time.

         13.4  Securities  Law  Compliance.  With respect to Section 16 Persons,
Awards under this Plan are intended to comply with all applicable  conditions of
Rule 16b-3. To the extent any provision of this Plan,  Award Agreement or action
by the  Committee  fails to so comply,  it shall be deemed null and void, to the
extent  permitted by law and deemed advisable or appropriate by the Committee in
its sole discretion.

         13.5  Governing  Law.  This  Plan  and all  Award  Agreements  shall be
construed in  accordance  with and governed by the laws of the State of Delaware
(excluding its conflict of laws provisions).

         13.6  Captions.   Captions  are  provided  herein  for  convenience  of
reference  only,  and  shall  not  serve  as  a  basis  for   interpretation  or
construction of this Plan.


                                                    Adopted October 29, 1997


                                      -20-

<PAGE>