FIRST TEAM SPORTS, INC.

                1994 STOCK OPTION AND INCENTIVE COMPENSATION PLAN
                       (As Amended through June 17, 1997)

     1. Purpose. The purpose of the 1994 Stock Option and Incentive Compensation
Plan (the  "Plan") of First Team Sports,  Inc.  (the  "Company")  is to increase
shareholder  value and to advance the  interests of the Company by  furnishing a
variety of economic incentives  ("Incentives")  designed to attract,  retain and
motivate  employees,  officers,  directors,  consultants  and  advisors  of  the
Company.  Incentives may consist of  opportunities to purchase or receive shares
of Common Stock,  $0.01 par value,  of the Company  ("Common  Stock"),  monetary
payments or both on terms determined under this Plan.

     2. Administration. The Plan shall be administered by the Board of Directors
of the Company (the  "Board"),  or by a Committee  which may be appointed by the
Board from time to time. If the Plan is administered  by the Board,  each member
of the Board shall be a "disinterested  person" as defined in Rule 16b-3, or any
successor  provision,  of the General Rules and  Regulations  of the  Securities
Exchange Act of 1934 (the "1934 Act"), as amended.

     If a Committee  is  appointed  by the Board to  administer  the Plan,  such
Committee shall consist solely of two or more directors of the Company who shall
be  appointed  from time to time and serve at the  pleasure  of the Board.  Each
member of the Committee shall be a "disinterested  person" within the meaning of
Rule 16b-3 of the 1934 Act. The Board may from time to time  appoint  members of
the  Committee  in  substitution  for, or in  addition  to,  members  previously
appointed,  and may fill vacancies,  however caused,  in the Committee.  If such
Committee  is  appointed  by the Board,  the  Committee  shall select one of its
members as its  chairman and shall hold its meetings at such times and places as
it shall deem advisable.  A majority of the Committee's members shall constitute
a quorum.  All action of the  Committee  shall be taken by the  majority  of its
members.  Any action may be taken by a written  instrument signed by majority of
the  members,  and actions so taken shall be fully  effective  as if it had been
made by a majority  vote at a meeting duly called and held.  The  Committee  may
appoint a  secretary,  shall keep minutes of its  meetings,  and shall make such
rules  and  regulations  for  the  conduct  of its  business  as it  shall  deem
advisable.

     The  Board  or the  Committee,  as the  case may be,  shall  have  complete
authority  to award  Incentives  under  the Plan,  to  interpret  the  Plan,  to
prescribe the form and conditions of the respective  agreements  (which may vary
from  participant to participant)  evidencing  each Incentive  awarded under the
Plan,  and to make any  other  determination  which it  believes  necessary  and
advisable  for  the  proper  administration  of the  Plan.  The  Board's  or the
Committee's  decisions  and  matters  relating  to the Plan  shall be final  and
conclusive on the Company and  participants  in the Plan. No member of the Board
or the Committee shall be liable for any action taken or  determination  made in
good faith in connection with the administration of the Plan.
<PAGE>

     3. Participants. The Board or the Committee, as the case may be, shall from
time to time,  at its  discretion  and  without  approval  of the  shareholders,
designate those employees,  directors, officers, consultants and advisors of the
Company or its  subsidiaries  or  affiliates to whom  Incentives  may be granted
under this Plan;  provided,  however,  that consultants or advisors shall not be
eligible to receive  Incentives under the Plan unless such consultant or advisor
renders bona fide services to the Company or its  subsidiaries or affiliates and
such  services are not in  connection  with the offer or sale of securities in a
capital  raising  transaction;  and provided,  further,  that  directors who are
responsible for the  administration of the Plan shall not be eligible to receive
Incentives under the Plan except pursuant to Section 11 hereof and to the extent
otherwise  permitted by Rule 16b-3 of the 1934 Act or any  successor  provision.
Employees,  consultants and advisors may be designated individually or by groups
or categories  (for example,  by pay grade) as the Board or the Committee  deems
appropriate.  Participation  by  officers  and  directors  of the Company or its
subsidiaries  or  affiliates  and any  performance  objectives  relating to such
officers and directors  must be approved by the Board or the  Committee,  as the
case may be. Participation by others and any performance  objectives relating to
others may be approved by groups or categories (for example,  by pay grade), and
the authority to designate participants who are not officers or directors and to
set or modify such  performance  objectives may be delegated to such officers of
the Company as the Board or the Committee may, from time to time and at its sole
discretion, deem appropriate.

     4. Types of Incentives. Incentives under the Plan may be granted in any one
or a  combination  of the  following  forms:  (a)  incentive  stock  options and
non-qualified  stock options (Section 6 and Section 11); (b) stock  appreciation
rights ("SARs")  (Section 7); (c) stock awards (Section 8); (d) restricted stock
(Section 8); (e)  performance  shares  (Section 9); and (f) cash awards (Section
10).

     5. Shares Subject to the Plan.

          5.1.  Number of Shares.  Subject to  adjustment as provided in Section
     12.6,  the number of shares of Common  Stock which may be issued  under the
     Plan shall not exceed Nine Hundred Twenty-five Thousand (925,000) shares of
     Common Stock.

          5.2. Cancellation. To the extent that cash in lieu of all or a portion
     of the shares of Common  Stock is  delivered  upon the  exercise  of an SAR
     pursuant to Section 7.3, such unissued shares that  previously  reduced the
     available  number of shares of Common  Stock may again be issued  under the
     Plan,  either  pursuant to stock options,  SARs or otherwise.  If an SAR is
     granted  with  respect to any stock  option  granted  under this Plan,  the
     Company  shall be deemed,  for purposes of applying the  limitation  on the
     number of shares,  to have  issued  the  greater of the number of shares of
     Common  Stock which it is entitled to issue upon the exercise of the SAR or
     on the exercise of the related option.  In the event that a stock option or
     SAR granted hereunder expires or is terminated or cancelled  unexercised as
     to any shares of Common  Stock,  such shares may again be issued  under the
     Plan either pursuant to stock options, SARs or otherwise. In the event that
     shares of Common  Stock are issued as  restricted  stock or  pursuant  to a
     stock award and  thereafter  are  forfeited  or  reacquired  by the Company
     pursuant to rights  reserved  upon  issuance  thereof,  such  forfeited and
     reacquired  shares  may,  to the extent  permitted  by Rule  16b-3,  or any
     successor  provision,  of the 1934  Act,  again be  issued  under the Plan,
     either as  restricted  stock,  pursuant to stock awards or  otherwise.  The
     Committee may also determine to cancel,  and agree to the  cancellation of,
     stock  options in order to make a  participant  eligible for the grant of a
     stock option at a lower price than the option to be cancelled.
<PAGE>

     6. Stock  Options.  A stock option is a right to purchase  shares of Common
Stock from the Company.  Except as provided in this Section 6, each stock option
granted by the Board or the Committee, as the case may be, under this Plan shall
be subject  to such terms and  conditions,  which may vary from  participant  to
participant,  as the Board or the Committee  may, in its sole  discretion,  deem
appropriate, including but not limited to the extent to which a stock option may
be exercisable  (including the participant's right to exercise such stock option
upon  the  participant's,   death,  disability,  retirement  or  termination  of
employment  or  other  relationship  with the  Company  or its  subsidiaries  or
affiliates), the manner in which the stock option may be exercised, and the form
of agreement that shall evidence the stock option.

          6.1.  Price.  The option  price per share shall be  determined  by the
     Board or the  Committee,  as the case may be,  subject to adjustment  under
     Section 12.6.

          6.2.  Number.  The  number of shares of Common  Stock  subject  to the
     option shall be determined by the Board or the  Committee,  as the case may
     be, subject to adjustment as provided in Section 12.6. The number of shares
     of Common  Stock  subject  to a stock  option  shall be reduced in the same
     proportion that the  participant  exercises an SAR if any SAR is granted to
     the participant in conjunction with or related to the stock option.

          6.3. Duration and Time for Exercise. Subject to earlier termination as
     provided in Section 12.4, the term of each stock option shall be determined
     by the Board or the Committee, as the case may be, but shall not exceed ten
     years and one day from the date of grant.  Each stock  option  shall become
     exercisable at such time or times during its term as shall be determined by
     the  Board  or the  Committee  at the  time  of  grant.  The  Board  or the
     Committee,  as the case may be, may  accelerate the  exercisability  of any
     stock  option.  Subject to the foregoing and with the approval of the Board
     or the  Committee,  all or any part of the  shares  of  Common  Stock  with
     respect to which the right to purchase  has accrued may be purchased by the
     participant at the time of such accrual or at any time or times  thereafter
     during the term of the option.

          6.4. Payment of Option Price. The option price per share shall, in the
     sole discretion of the Board or the Committee,  be payable in United States
     dollars upon exercise of a stock option and may be paid by cash,  certified
     check, bank draft, by the delivery of previously  acquired shares of Common
     Stock in payment of all or any part of the option price, which shares shall
     be valued for this  purpose at the Fair Market Value on the date such stock
     option is  exercised,  or in such other manner and subject to such rules as
     may be  adopted  by the  Board or the  Committee  from  time to  time.  For
     purposes of this Section 6.4,  "previously  acquired  shares" shall include
     shares of Common  Stock that are already  owned by the  participant  at the
     time of exercise.

          6.5. Incentive Stock Options.  Notwithstanding anything in the Plan to
     the contrary,  the following additional provisions shall apply to the grant
     of stock options which are intended to qualify as "incentive stock options"
     (as such term is defined in Section  422 of the  Internal  Revenue  Code of
     1986, and the regulations as amended, or any successor provision):
<PAGE>

               (a) Any incentive  stock option  authorized  under the Plan shall
          contain such terms and conditions,  as the Board or the Committee,  as
          the case may be,  shall  deem  advisable,  but shall in all  events be
          consistent with and contain such restrictions and limitations as shall
          be  necessary  in order to  qualify  the  options as  incentive  stock
          options.

               (b) All incentive  stock options must be granted within ten years
          from the  earlier  of the date on which  this Plan was  adopted by the
          Board or the date this Plan was approved by the shareholders.

               (c) Unless sooner  exercised,  all incentive  stock options shall
          expire  no later  than ten years  after  the date of grant;  provided,
          however,  that incentive  stock options  granted to a participant  who
          owns stock  possessing  more than ten  percent  of the total  combined
          voting   power  of  all  classes  of  stock  of  the  Company  or  its
          subsidiaries or affiliates shall expire no later than five years after
          the date of grant.

               (d) To the  extent  required  to qualify  the stock  option as an
          incentive stock option, the option price per share for incentive stock
          options  shall not be less than the Fair  Market  Value of the  Common
          Stock subject to the option on the date of grant;  provided,  however,
          that the option price per share for incentive stock options granted to
          a participant  who owns stock  possessing more than ten percent of the
          total combined  voting power of all classes of stock of the Company or
          its subsidiaries or affiliates shall not be less than 110% of the Fair
          Market  Value of the Common  Stock  subject to the stock option on the
          date of grant.

          6.6 Rights as a Shareholder. Prior to the issuance of shares of Common
     Stock upon the  exercise of a stock  option,  a  participant  shall have no
     rights as a  shareholder  with  respect to shares  subject to such  option.
     Except as  provided  in  Section  12.6,  no  adjustments  shall be made for
     dividends  or other  cash  distributions  or for other  rights  that have a
     record date preceding the date the participant becomes the holder of record
     of the shares of Common Stock subject to the stock option.

     7. Stock Appreciation Rights. An SAR is a right to receive, without payment
to the  Company,  a number of shares of Common  Stock,  cash or any  combination
thereof,  the amount of which is determined pursuant to the formula set forth in
Section 7.3. An SAR may be granted (a) with respect to any stock option  granted
under this Plan,  either  concurrently with the grant of such stock option or at
such later time as  determined  by the Board or the  Committee (as to all or any
portion  of the shares of Common  Stock  subject  to the stock  option),  or (b)
alone, without reference to any related stock option. Except as provided in this
Section 7, each SAR granted by the Board or the  Committee,  as the case may be,
under this Plan shall be  subject to such terms and  conditions,  which may vary
from participant to participant,  as the Board or the Committee may, in its sole
discretion,  deem appropriate,  including but not limited to the extent to which
an SAR may be exercisable (including the participant's right to exercise the SAR
upon  the  participant's  death,   disability,   retirement  or  termination  of
employment  or  other  relationship  with the  Company  or its  subsidiaries  or
affiliates),  the  manner  in  which  the SAR may be  exercised  and the form of
agreement that shall evidence the SAR.
<PAGE>

          7.1. Number.  Each SAR granted to any participant shall relate to such
     number of shares of Common Stock as shall be determined by the Board or the
     Committee, as the case may be, subject to adjustment as provided in Section
     12.6. In the case of an SAR granted with respect to a stock option  granted
     to the  participant,  the number of shares of Common Stock to which the SAR
     pertains  shall be  reduced  in the same  proportion  that the  participant
     exercises the related stock option.

          7.2. Duration.  Subject to earlier  termination as provided in Section
     12.4,  the  term of each  SAR  shall  be  determined  by the  Board  or the
     Committee,  as the case may be,  but shall not exceed ten years and one day
     from the date of  grant.  Unless  otherwise  provided  by the  Board or the
     Committee, each SAR shall become exercisable at such time or times, to such
     extent and upon such  conditions as the stock  option,  if any, to which it
     relates is exercisable. The Board or the Committee, as the case may be, may
     in its discretion accelerate the exercisability of any SAR.

          7.3. Payment.  Subject to the right of the Board or the Committee,  as
     the case may be, to deliver cash in lieu of shares of Common Stock  (which,
     as it pertains to officers and directors of the Company,  shall comply with
     all  requirements  of the 1934 Act),  the number of shares of Common  Stock
     which shall be issuable  upon the exercise of an SAR shall be determined by
     dividing:

               (a) the  number of shares of Common  Stock as to which the SAR is
          exercised  multiplied by the amount of the appreciation in such shares
          (for this purpose, the "appreciation" shall be the amount by which the
          Fair Market Value of the shares of Common Stock  subject to the SAR on
          the exercise date exceeds (1) in the case of an SAR related to a stock
          option,  the  purchase  price of the shares of Common  Stock under the
          stock  option  or (2) in the  case of an SAR  granted  alone,  without
          reference  to a  related  stock  option,  an  amount  which  shall  be
          determined  by  the  Committee  at  the  time  of  grant,  subject  to
          adjustment under Section 12.6); by

               (b) the  Fair  Market  Value of a share  of  Common  Stock on the
          exercise date.

          In lieu  of  issuing  shares  of  Common  Stock  upon a  participant's
     exercise  of an SAR,  the Board or the  Committee,  as the case may be, may
     elect to pay the  participant  cash equal to the Fair  Market  Value on the
     exercise  date  of  any  or all of the  shares  which  would  otherwise  be
     issuable.  No  fractional  shares  of Common  Stock  shall be issued to the
     participant upon the exercise of an SAR; instead,  the participant shall be
     entitled  to receive a cash  adjustment  equal to the same  fraction of the
     Fair Market  Value of a share of Common  Stock on the  exercise  date or to
     purchase  the  portion  necessary  to make a whole share at its Fair Market
     Value on the date of exercise.
<PAGE>

     8.  Stock  Awards and  Restricted  Stock.  A stock  award  consists  of the
transfer  by the Company to a  participant  of shares of Common  Stock,  without
other payment therefor, as additional  compensation for services to the Company.
A share of restricted stock consists of shares of Common Stock which are sold or
transferred  by the Company to a participant at such price (which price shall be
at least equal to the minimum price  required by applicable law for the issuance
of a share of Common Stock) and subject to  restrictions  on their sale or other
transfer by the participant as determined by the Board or the Committee,  as the
case may be.  Except as provided in this Section 8, the transfer of Common Stock
pursuant to stock awards and the transfer and sale of restricted  stock shall be
subject  to such  terms  and  conditions,  which may vary  from  participant  to
participant,  as the Board or the Committee  may, in its sole  discretion,  deem
appropriate,  including the form of agreement,  if any, that shall  evidence the
stock award or restricted stock.

          8.1. Number of Shares.  The number of shares to be transferred or sold
     by the Company to a participant  pursuant to a stock award or as restricted
     stock shall be  determined by the Board or the  Committee,  as the case may
     be.

          8.2. Sale Price. The Board or the Committee, as the case may be, shall
     determine the price,  if any, at which shares of restricted  stock shall be
     sold  to a  participant,  which  may  vary  from  time to  time  and  among
     participants and which may be below the Fair Market Value of such shares of
     Common Stock at the date of sale.

          8.3. Restrictions.  All shares of restricted stock transferred or sold
     hereunder,  including any additional shares of Common Stock received by the
     participant  as the result of any dividend paid on the shares of restricted
     stock  or  as  the  result  of  any  stock  split,  stock  distribution  or
     combination of shares that affects such restricted stock,  shall be subject
     to such restrictions as the Board or the Committee, as the case may be, may
     determine,  which  may  vary  from  time to time  and  among  participants,
     including, without limitation, any or all of the following:

               (a) a prohibition against the sale, transfer,  pledge, assignment
          or  other   encumbrance  of  the  shares  of  restricted  stock,  such
          prohibition  to  lapse  at such  time or  times  as the  Board  or the
          Committee,  as the case may be, shall determine  (whether in annual or
          more frequent installments,  upon the participant's death, disability,
          retirement or termination of employment or other relationship with the
          Company or its subsidiaries or affiliates, or otherwise);

               (b) a requirement that the participant forfeit or, in the case of
          shares sold to the  participant,  resell back to the Company at his or
          her cost,  all or a part of such shares in the event of termination of
          his or her  employment or other  relationship  with the Company or its
          subsidiaries or affiliates  during any period in which such shares are
          subject to restrictions;

               (c) such other  conditions  or  restrictions  as the Board or the
          Committee, as the case may be, may deem advisable.
<PAGE>

          8.4. Escrow. In order to enforce the restrictions imposed by the Board
     or the  Committee,  as the  case  may be,  pursuant  to  Section  8.3,  the
     participant  receiving  restricted stock shall enter into an agreement with
     the Company setting forth the conditions of the grant. Shares of restricted
     stock shall be registered  in the name of the  participant  and  deposited,
     together with a stock power endorsed in blank, with the Company.  Each such
     certificate shall bear a legend in substantially the following form:

          The transferability of this certificate and the shares of Common Stock
     represented  by it are  subject  to the  terms  and  conditions  (including
     conditions of forfeiture)  contained in the 1994 Stock Option and Incentive
     Compensation  Plan of First  Team  Sports,  Inc.  (the  "Company"),  and an
     agreement entered into between the registered owner and the Company. A copy
     of the Plan and the  agreement is on file in the office of the secretary of
     the Company.

          8.5. End of  Restrictions.  Subject to Section 12.3, at the end of any
     time  period  during  which the shares of  restricted  stock are subject to
     forfeiture and restrictions on transfer, such shares will be delivered free
     of all  restrictions  to the  participant  or to  the  participant's  legal
     representative, beneficiary or heir.

          8.6. Rights as Shareholder. Subject to the terms and conditions of the
     Plan, each participant receiving restricted stock shall have all the rights
     of a shareholder with respect to shares of stock during any period in which
     such  shares are  subject  to  forfeiture  and  restrictions  on  transfer,
     including without limitation, the right to vote such shares. Dividends paid
     in cash or  property  other than  Common  Stock  with  respect to shares of
     restricted stock shall be paid to the participant currently.

          8.7 Modification of Restrictions.  The Board or the Committee,  as the
     case may be,  may, in its sole  discretion,  modify the manner in which the
     prohibition on the sale or other transfer of the shares of restricted stock
     awarded to the participant may lapse, subject to such limitations as may be
     imposed by the Rule 16b-3, or any successor provision, of the 1934 Act. Any
     such  modification  shall apply only to those  shares of Common Stock which
     are restricted as of the effective date of the  modification,  and shall be
     reflected, if deemed appropriate by the Board or the Committee, as the case
     may be,  in an  amendment  to any  agreement  with  respect  to which  such
     modification applies.

     9. Performance Shares. A performance share consists of an award which shall
be paid in cash or  shares  of  Common  Stock,  as  described  below.  Except as
provided in this Section 9, each grant of performance shares by the Board or the
Committee, as the case may be, under the Plan shall be subject to such terms and
conditions,  which may vary from participant to participant, as the Board or the
Committee may, in its sole discretion, deem appropriate, including the number of
performance shares granted to the participant, the valuation of such performance
shares,  the extent to which such performance  shares may become payable or will
expire (including the payment or expiration of such performance  shares upon the
participant's death, disability,  retirement, termination of employment or other
relationship  with the Company or its subsidiaries or affiliates),  and the form
of agreement that shall evidence the grant of performance shares.
<PAGE>

          9.1. Performance Objectives.  Each grant of performance shares will be
     subject to  performance  objectives for the Company or one of its operating
     units, which performance objectives must be achieved by the end of a period
     specified  in  the  agreement   evidencing  such  grant.  Such  performance
     objectives  may include  business or financial  objectives  relating to the
     Company or one of its operating units, whether or not related to any equity
     security of the Company, and shall be set forth in the agreement evidencing
     the grant of the performance  shares.  When  establishing  such performance
     objectives,  the Board or the Committee,  as the case may be, or such other
     individual to whom such authority has been delegated  pursuant to Section 3
     of the Plan, may consider the  recommendations of management of the Company
     or its  subsidiaries  or  affiliates.  If such  performance  objectives are
     achieved,  each participant will be paid in shares of Common Stock, cash or
     any combination thereof as determined by the Board or the Committee, as the
     case may be, and  subject to such rules as the Board or the  Committee  may
     adopt from time to time. If such  performance  objectives are not met, each
     grant of performance  shares may provide for lesser  payments in accordance
     with  formulas  established  in  the  agreement  evidencing  the  grant  of
     performance shares.

          9.2. No Rights as  Shareholder.  The grant of performance  shares to a
     participant   shall  not  create  any  rights  in  such  participant  as  a
     shareholder  of the  Company,  until the payment of shares of Common  Stock
     with respect to such grant.

          9.3. No Adjustments. No adjustment shall be made in performance shares
     granted  on  account of cash  dividends  which may be paid or other  rights
     which may be issued to the holders of Common  Stock prior to the end of any
     period for which performance objectives were established.

          9.4 Amendment of Performance  Objectives.  The Board or the Committee,
     as the case may be,  may, at any time  during the period  specified  in the
     agreement evidencing the grant of the performance shares,  suspend,  modify
     or terminate the grant of such performance shares or adjust the performance
     objectives  relating to such performance  shares upon the occurrence of any
     extraordinary  event  which  substantially   affects  the  Company  or  its
     subsidiaries  or  affiliates,  including,  but not  limited  to, a  merger,
     consolidation,  exchange, divestiture (including a spin-off) reorganization
     or liquidation  of the Company or its subsidiary or affiliate,  or the sale
     by the Company or its subsidiary or affiliate of  substantially  all of its
     assets and the consequent discontinuance of its business.

     10. Cash Awards.  A cash award  consists of a monetary  payment made by the
Company to a participant as additional  compensation  for his or her services to
the  Company or its  subsidiaries  or  affiliates.  Payment of a cash award will
normally  depend on achievement  of performance  objectives by the Company or by
the participant.  Such performance  objectives may include business or financial
objectives relating to the Company or one of its operating units, whether or not
related to any equity security of the Company,  and may be adjusted by the Board
or the Committee,  as the case may be, upon the occurrence of any  extraordinary
event which substantially affects the Company or its subsidiaries or affiliates.
The amount of any monetary payment constituting a cash award shall be determined
by the Board of the Committee, as the case may be, in its sole discretion.  Cash
awards may be subject to such terms and conditions,  which may vary from time to
time and among participants,  as the Board or the Committee, as the case may be,
deems appropriate.
<PAGE>

     11. Options to Non-Employee Directors.

          11.1 Upon Joining Board.  Each person who, after the date this Plan is
     adopted by the Board of  Directors,  is elected or appointed  for the first
     time as a director of the Company and who is not an employee  of, or a paid
     consultant  or advisor to, the Company or any  subsidiary of the Company (a
     "Non-Employee  Director") shall, as of the date of such initial election or
     appointment  to the Board,  automatically  be granted an option to purchase
     7,500 shares of the Common Stock at an option price per share equal to 100%
     of the fair market value of the Common  Stock on the date of such  election
     or appointment.  Such option shall be immediately exercisable to the extent
     of twenty  percent  (1,500 shares) of the total number of shares subject to
     such option, and shall be exercisable to the extent of an additional twenty
     percent  (1,500  shares) on each of the first,  second,  third,  and fourth
     anniversaries of the date of grant.

          11.2 Upon Re-election to Board. Each Non-Employee  Director who, after
     the date this Plan is adopted by the Board of Directors, is re-elected as a
     director of the Company or whose term of office  continues  after a meeting
     of  shareholders  at which  directors are elected shall,  as of the date of
     such re-election or shareholder meeting, automatically be granted an option
     to purchase 3,000 shares of Common Stock at an option price per share equal
     to 100% of the fair  market  value of the Common  Stock on the date of such
     re-election or shareholder meeting;  provided that a Non-Employee  Director
     who receives an option pursuant to Section 11.1 above shall not be entitled
     to  receive  an option  pursuant  to this  Section  11.2 until at least ten
     months after such  Non-Employee  Director's  initial election to the Board.
     Options  granted  pursuant  to  this  Section  11.2  shall  be  immediately
     exercisable in full.

          11.3  General.  No  director  shall  receive  more than one  option to
     purchase  3,000 shares  pursuant to this Section 11 in any one fiscal year.
     No director shall receive an option under this Section if and to the extent
     such  director  receives an option  pursuant to Section 19 of the Company's
     1987 Stock Option Plan, as amended, in connection with the same election or
     re-election to the Board.  All options granted  pursuant to this Section 11
     shall be  designated as  non-qualified  options and shall be subject to the
     same terms and provisions as are then in effect with respect to granting of
     non-qualified options to officers and employees of the Company, except that
     the  option  shall  expire on the  earlier  of (i) three  months  after the
     optionee  ceases to be a director  (except by disability or death) and (ii)
     ten (10) years after the date of grant.  Notwithstanding the foregoing,  in
     the  event  disability  or death or a  Non-Employee  Director,  any  option
     granted to such  Non-Employee  Director may be exercised at any time within
     twelve months of the disability or death of such  Non-Employee  Director or
     on the date on which the option, by its terms expire, whichever is earlier.
     For  purposes  of this  Section  11,  a  director's  receipt  of an  annual
     retainer,  per meeting fees, and/or expense  reimbursement  shall not cause
     such  director  to be  deemed to be a paid  advisor  or  consultant  to the
     Company  for  purposes  of   determining   whether   such   director  is  a
     "Non-Employee Director."

     12. General.

          12.1. Effective Date. The Plan will become effective upon its adoption
     by the Board, subject to approval by the shareholders of the Company within
     twelve months  following such adoption.  If the Plan is not approved by the
     shareholders  within twelve months after the date of the Plan's adoption by
     the  Board,  the Plan  shall  not be  effective  for any  purpose,  and all
     Incentives awarded under the Plan shall be revoked.
<PAGE>

          12.2.  Duration.  The Plan shall remain in effect until all Incentives
     granted under the Plan have either been satisfied by the issuance of shares
     of Common  Stock or the payment of cash or have been  terminated  under the
     terms of the Plan and all restrictions imposed on shares of Common Stock in
     connection  with their issuance  under the Plan have lapsed.  No Incentives
     may be granted under the Plan after the tenth  anniversary  of the date the
     Plan is adopted by the Board.

          12.3.   Nontransferability  of  Incentives.   No  stock  option,  SAR,
     restricted  stock  award or  performance  share  award may be  transferred,
     pledged  or  assigned  by  the  participant  except,  in the  event  of the
     participant's  death,  by will or the laws of descent and  distribution  or
     pursuant to a qualified domestic relations order as defined by the Internal
     Revenue Code of 1986,  as amended,  or Title I of the  Employee  Retirement
     Income Security Act of 1974, as amended, or the regulations thereunder, and
     the Company shall not be required to recognize any attempted  assignment of
     such  rights  by any  participant.  During  a  participant's  lifetime,  an
     Incentive  may  be  exercised  only  by  the  participant  or by his or her
     guardian or legal representative.

          12.4.  Effect of Termination of Employment or Death. In the event that
     a  participant  ceases to be an  employee,  consultant  or  advisor  of the
     Company or its subsidiaries or affiliates for any reason,  including death,
     any Incentives  awarded to the participant may be exercised or shall expire
     at such times as may be  determined by the Board or the  Committee,  as the
     case may be, and as set forth in the agreement evidencing the Incentive.

          12.5. Additional Condition.  Notwithstanding  anything in this Plan to
     the  contrary:  (a) the Company may, if it shall  determine it necessary or
     desirable  for any  reason,  at the time of award of any  Incentive  or the
     issuance of any shares of Common Stock pursuant to any  Incentive,  require
     the recipient of the Incentive, as a condition to the receipt thereof or to
     the receipt of shares of Common Stock issued pursuant  thereto,  to deliver
     to the Company a written representation of present intention to acquire the
     Incentive or the shares of Common Stock issued pursuant  thereto for his or
     her own account for investment and not for distribution;  and (b) if at any
     time the  Company  further  determines,  in its sole  discretion,  that the
     listing,  registration  or  qualification  (or  any  updating  of any  such
     document) of any Incentive or the shares of Common Stock issuable  pursuant
     thereto is  necessary  on any  securities  exchange or under any federal or
     state  securities  or blue sky law,  or that the consent or approval of any
     governmental  regulatory  body is necessary or desirable as a condition of,
     or in connection with the award of any Incentive, the issuance of shares of
     Common Stock pursuant thereto,  or the removal of any restrictions  imposed
     on such  shares,  such  Incentive  shall not be awarded  or such  shares of
     Common Stock shall not be issued or such restrictions shall not be removed,
     as the case may be, in whole or in part, unless such listing, registration,
     qualification,  consent or  approval  shall have been  effected or obtained
     free of any conditions not acceptable to the Company.

          12.6.   Adjustment.   Unless  otherwise   provided  in  the  agreement
     evidencing  the  grant  of the  Incentive,  in the  event  of a sale by the
     Company  of   substantially   all  of  its   assets   and  the   consequent
     discontinuance of its business, or in the event of a merger, consolidation,
     exchange,   reorganization,   reclassification,   extraordinary   dividend,
     divestiture   (including  a  spin-off)  or   liquidation   of  the  Company
     (collective  referred to as a "transaction") after which the Company is not
     the surviving  corporation,  the Board may, in connection  with the Board's
     adoption of the plan for such transaction, in its sole discretion,  provide
     for one or more of the following:

               (a)  The  equitable  acceleration  of the  exercisability  of any
          outstanding  stock option or SAR, the termination of any  restrictions
          on restricted stock awards, or the adjustment of any performance share
          objectives;
<PAGE>

               (b) The complete termination of this Plan and the cancellation of
          outstanding  stock options or SARs which are not exercised  prior to a
          date  specified by the Board (which date shall give the  participant a
          reasonable  period of time in which to exercise  the options  prior to
          the  effective  date  of the  transaction),  the  cancellation  of any
          restricted stock awards for which the restrictions have not lapsed, or
          the  cancellation  of any  performance  share  awards  for  which  the
          performance objectives have not yet been achieved;

               (c) The  continuance  of the Plan with respect to the exercise of
          stock options or SARs, the lapse of restrictions  on restricted  stock
          awards or the achievement of any performance  share  objectives  which
          were  outstanding  as of the date of adoption by the Board of the plan
          for the transaction,  and to provide participants the right to receive
          an equivalent number of shares of stock of the corporation  succeeding
          the  Company  or other  securities  to which the  shareholders  of the
          Company may be entitled by reason of such transaction.

               The grant of any  Incentive  under this Plan shall not in any way
          limit  the  right  or  power  of  the  Company  to  make  adjustments,
          reclassifications,  reorganizations  or  changes  of  its  capital  or
          business  structure  or  to  merge,  exchange  or  consolidate  or  to
          dissolve,  liquidate, sell or transfer all or any part of its business
          or assets.

               In the event of an  increase  or decrease in the number of shares
          of Common Stock resulting from any  recapitalization,  stock dividend,
          stock  split,  combination  of  shares or other  change in the  Common
          Stock,  the number of shares of Common Stock then subject to the Plan,
          including shares subject to  restrictions,  options or the achievement
          of performance  share  objectives,  shall be adjusted in proportion to
          the change in outstanding  shares of Common Stock. In the event of any
          such  adjustments,  the purchase price of any option,  the performance
          objectives  for any grant of  performance  shares,  and the  shares of
          Common Stock issuable  pursuant to any Incentive  shall be adjusted as
          and to the  extent  appropriate,  in the  discretion  of the  Board or
          Committee,  to  provide  participants  with the same  relative  rights
          before and after such  adjustment.  Additional  shares of Common Stock
          which may be credited to such Incentives pursuant to this Section 12.6
          shall be subject to the same  terms and  conditions  that apply to the
          shares with respect to which the adjustment relates.

          12.7.  Incentive  Agreements.  The  terms of each  Incentive  shall be
     stated in an agreement approved by the Board or the Committee,  as the case
     may be. The Board or the Committee may, in its sole discretion,  also enter
     into  agreements  with   participants  to  reclassify  or  convert  certain
     outstanding  options,  within  the terms of the Plan,  as  incentive  stock
     options  or as  non-qualified  stock  options,  or to  eliminate  SARs with
     respect  to all or part of such  options  and any other  previously  issued
     options.
<PAGE>

          12.8. Withholding.

               (a) The  Company  shall  have  the  right  to  withhold  from any
          payments  made under the Plan or to collect as a condition of payment,
          any federal,  state or local taxes required by law to be withheld upon
          the exercise of a stock option, the settlement of an SAR, the grant of
          a stock award,  the lapse of restrictions on a restricted stock award,
          the payment of any performance share award, or the payment of any cash
          award.  At any  time  when a  participant  is  required  to pay to the
          Company an amount required to be withheld under applicable  income tax
          laws  in  connection  with a  distribution  of  Common  Stock  or upon
          exercise  of an  option  or SAR,  the  participant  may  satisfy  this
          obligation  in whole or in part by electing (the  "Election")  to have
          the Company  withhold  from the  distribution  shares of Common  Stock
          having a value up to the amount required to be withheld.  The value of
          the shares to be withheld  shall be based on the Fair Market  Value of
          the  Common  Stock on the date that the  amount of tax to be  withheld
          shall be determined ("Tax Date").

               (b) Each Election  must be made prior to the Tax Date.  The Board
          or the Committee,  as the case may be, may disapprove of any Election,
          may suspend or terminate the right to make Elections, may provide that
          the  right to make  Elections  shall  not apply  with  respect  to any
          Incentive  and may adopt such rules  relating to Elections as it shall
          deem appropriate. A participant's Election shall be irrevocable.

               (c) If a  participant  is an officer or  director  of the Company
          within the  meaning of  Section 16 of the 1934 Act,  or any  successor
          provision,  then an Election must comply with all of the  requirements
          of the 1934 Act.

          12.9.  No  Continued  Employment  or Right  to  Corporate  Assets.  No
     participant  under the Plan  shall  have any  right,  because of his or her
     participation, to continue in the employ of the Company or its subsidiaries
     or affiliates for any period of time or to any right to continue his or her
     present or any other rate of  compensation.  Nothing  contained in the Plan
     shall be construed as giving an employee, consultant or advisor, his or her
     beneficiaries  or any other  person any equity or  interests of any kind in
     the assets of the  Company or  creating a trust of any kind or a  fiduciary
     relationship  of any  kind  between  the  Company  or its  subsidiaries  or
     affiliates and any such person.

          12.10.  Deferral  Permitted.  Payment of cash or  distribution  of any
     shares  of  Common  Stock to which a  participant  is  entitled  under  any
     Incentive  shall  be made as  provided  in the  agreement  evidencing  such
     Incentive. Payment of cash may be deferred at the option of the participant
     if provided in the  Incentive and subject to such rules as the Board or the
     Committee may, in its discretion, adopt from time to time.

          12.11.  Amendment of the Plan. The Board may amend or discontinue  the
     Plan at any time.  However,  no such  amendment  or  discontinuance  shall,
     subject to adjustment  under Section  12.6,  change or impair,  without the
     consent of the recipient, an Incentive previously granted.  Notwithstanding
     the foregoing, no such amendment shall: (a) materially increase the maximum
     number of shares of Common  Stock  which may be issued to all  participants
     under the Plan, (b) materially increase the benefits that may be granted or
     that  accrue to  participants  under the Plan,  (c)  materially  modify the
     requirements  as to  eligibility  for  participation  in the  Plan,  or (d)
     decrease the price at which stock options,  SARs or other Incentives may be
     granted,  unless such  amendment  is approved  by the  shareholders  of the
     Company.
<PAGE>

          12.12.  Immediate  Acceleration  of  Incentives.  Notwithstanding  any
     provision  in  this  Plan  or  in  any  Incentive  to  the  contrary,   the
     restrictions  on  all  shares  of  restricted   stock  awards  shall  lapse
     immediately,  all  outstanding  options  and SARs will  become  exercisable
     immediately, and all performance share objectives shall be deemed to be met
     and payment made  immediately,  if, subsequent to the date that the Plan is
     approved by the Board, any of the following events occur:

               (a) Any person or group of persons,  other than the  shareholders
          of record of the  Company  as of the date this Plan is  adopted by the
          Board,  becomes  the  beneficial  owner  of 25% or more of any  equity
          security  of  the  Company  entitled  to  vote  for  the  election  of
          directors;

               (b)  A  change  in  the  composition  of  the  Board  within  any
          consecutive two-year period such that the "Continuing Directors" cease
          to constitute a majority of the Board. For purposes of this event, the
          "Continuing  Directors"  shall  mean  those  members  of the Board who
          either:  (i) were directors at the beginning of such two-year  period,
          or (ii) were elected by, or on nominations or  recommendations  of, at
          least two-thirds of the then-existing Board members;

               (c) The consummation of a merger or consolidation (whether or not
          the  Company  is the  surviving  corporation),  other than a merger or
          consolidation in which the holders of the Company's stock  immediately
          prior thereto hold immediately thereafter securities representing more
          than 70% of the combined voting power of the voting  securities of the
          merged or consolidated entity; or

               (d) The consummation of a sale or all or substantially all of the
          Company's assets or a plan of complete liquidation of the Company.

          For purposes of this Section 12.12,  beneficial  ownership by a person
     or group of persons shall be determined in accordance  with  Regulation 13D
     (or any similar  successor  regulation)  promulgated  by the Securities and
     Exchange Commission  pursuant to the 1934 Act. Beneficial  ownership of 25%
     or more of an equity security may be established by any reasonable  method,
     but shall be  presumed  conclusively  as to any person who files a Schedule
     13D report with the  Securities  and Exchange  Commission  reporting  such,
     ownership. If the restrictions and forfeitability periods are eliminated by
     reason of  provision  (a),  the  limitations  of this Plan shall not become
     applicable  again  should the person cease to own 25% or more of any equity
     security of the Company.
<PAGE>

          A participant  shall not be entitled to the immediate  acceleration of
     an Incentive as provided in this Section 12.12 if such acceleration  would,
     with  respect to the  participant,  constitute  a  "parachute  payment" for
     purposes of Internal Revenue Code Section 280G, or any successor provision.
     The participant  shall have the right to designate those  Incentives  which
     would be reduced or eliminated so that the  participant  will not receive a
     "parachute payment."

          Prior to one of the events  described  in (a),  (b) or (c) above,  the
     participant  shall have no rights under this Section  12.12,  and the Board
     shall have the power and right,  within its sole  discretion,  to  rescind,
     modify or amend this Section 12.12 without any consent of the  participant.
     In all other cases, and  notwithstanding the authority granted to the Board
     or  the  Committee,   as  the  case  may  be,  to  exercise  discretion  in
     interpreting,  administering, amending or terminating this Plan neither the
     Board nor the Committee  shall,  following  one of the events  described in
     (a),  (b) or (c)  above,  have the  power to  exercise  such  authority  or
     otherwise take any action which is inconsistent with the provisions of this
     Section 12.12.

          12.13  Definition of Fair Market Value.  For purposes of the Plan, the
     "Fair Market Value" of the Company's Common Stock as of any applicable date
     shall mean:  (a) if the  Company's  Common  Stock is reported in the Nasdaq
     National Market or is listed upon an established exchange or exchanges, the
     reported  closing price of such stock in such Nasdaq  National Market or on
     such stock  exchange or exchanges on the date the  Incentive is granted or,
     if no sale of such stock  shall  have  occurred  on that date,  on the next
     preceding  day on which  there  was a sale of stock;  (b) if the  Company's
     Common  Stock is not so  reported in the Nasdaq  National  Market or listed
     upon an  exchange,  the  average of the closing  "bid" and  "asked"  prices
     quoted on the Nasdaq Small-Cap Market on the date the Incentive is granted,
     or if there are no such quoted  "bid" and "asked"  prices on such date,  on
     the next  preceding  date for  which  there  are  such  quotes;  (c) if the
     Company's Common Stock is not listed or traded on any securities  exchange,
     the Nasdaq National Market or the Nasdaq  Small-Cap  Market,  the per share
     value  determined  by a market maker of the  Company's  Common Stock on the
     date the Incentive is granted or, if there is no such market maker, the per
     share  value  determined  by the  Board  or  the  Committee,  in  its  sole
     discretion,  by applying  principles of valuation  with respect to all such
     Incentives.