APPLIED BIOMETRICS, INC.
                             1994 AMENDED STOCK PLAN





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                                TABLE OF CONTENTS

                                                                            PAGE


SECTION 1.  General Purpose of Plan; Definitions...............................3

SECTION 2.  Administration.....................................................5

SECTION 3.  Stock Subject to Plan..............................................6

SECTION 4.  Eligibility........................................................6

SECTION 5.  Stock Options......................................................7

SECTION 6.  Stock Appreciation Rights.........................................10

SECTION 7.  Restricted Stock..................................................11

SECTION 8.  Deferred Stock Awards.............................................13

SECTION 9.  Other Awards......................................................14

SECTION 10.  Transfer, Leave of Absence, etc..................................14

SECTION 11.  Amendments and Termination.......................................15

SECTION 12.  Unfunded Status of Plan..........................................15

SECTION 13.  General Provisions...............................................15

SECTION 14.  Effective Date of Plan...........................................17




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                            APPLIED BIOMETRICS, INC.
                             AMENDED 1994 STOCK PLAN


SECTION 1. General Purpose Of Plan; Definitions.

            The name of this plan is the Applied Biometrics, Inc. Amended 1994
Stock Plan (the "Plan"). The purpose of the Plan is to enable Applied
Biometrics, Inc. (the "Company") and its Subsidiaries to retain and attract
executives and other key employees and non-employee directors who contribute to
the Company's success by their ability, ingenuity and industry, and to enable
such individuals to participate in the long-term success and growth of the
Company by giving them a proprietary interest in the Company.

            For purposes of the Plan, the following terms shall be defined as
set forth below:

            a.          "Agreement" means an agreement by and between the
                        Company and an optionee or recipient of an award under
                        the Plan setting forth the terms and conditions of the
                        option or award.

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

            c.          "Cause" means a felony conviction of a participant or
                        the failure of a participant to contest prosecution for
                        a felony, or a participant's willful misconduct or
                        dishonesty, any of which is directly and materially
                        harmful to the business or reputation of the Company.

            d.          "Code" means the Internal Revenue Code of 1986, as
                        amended from time to time, or any successor statute.

            e.          "Committee" means the Committee referred to in Section 2
                        of the Plan. If at any time no Committee shall be in
                        office, then the functions of the Committee specified in
                        the Plan shall be exercised by the Board, unless the
                        Plan specifically states otherwise.

            f.          "Company" means the Applied Biometrics, Inc., a
                        corporation organized under the laws of the State of
                        Minnesota (or any successor corporation).

            g.          "Deferred Stock" means an award made pursuant to Section
                        8 below of the right to receive Stock at the end of a
                        specified deferral period.

            h.          "Disability" means permanent and total disability as
                        determined by the Committee.

            i.          "Fair Market Value" of Stock on any given date shall be
                        determined by the Committee as follows: (a) if the Stock
                        is listed for trading on one or more national




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                        securities exchanges, or is traded on the Nasdaq Stock
                        Market, the last reported sales price on the principal
                        such exchange or the Nasdaq Stock Market on the date in
                        question, or if such Stock shall not have been traded on
                        such principal exchange on such date, the last reported
                        sales price on such principal exchange or the Nasdaq
                        Stock Market on the first day prior thereto on which
                        such stock was so traded; or (b) if the Stock is not
                        listed for trading on a national securities exchange or
                        the Nasdaq Stock Market, but is traded in the
                        over-the-counter market, including the Nasdaq Small Cap
                        Market, the closing bid price for such Stock on the date
                        in question, or if there is no such bid price for such
                        Stock on such date, the closing bid price on the first
                        day prior thereto on which such price existed; or (c) if
                        neither (a) nor (b) is applicable, by any means fair and
                        reasonable by the Committee, which determination shall
                        be final and binding on all parties.

            j.          "Incentive Stock Option" means any Stock Option intended
                        to be and designated as an "Incentive Stock Option"
                        within the meaning of Section 422 of the Code.

            k.          "Non-Employee Director" means a "Non-Employee Director"
                        within the meaning of Rule 16b-3 under the Securities
                        Exchange Act of 1934.

            l.          "Non-Qualified Stock Option" means any Stock Option that
                        is not an Incentive Stock Option, and is intended to be
                        and is designated as a "Non-Qualified Stock Option."

            m.          "Other Awards" means those awards granted pursuant to
                        Section 9 hereof.

            n.          "Parent Corporation" means any corporation (other than
                        the Company) in an unbroken chain of corporations ending
                        with the Company if each of the corporations (other than
                        the Company) owns stock possessing 50% or more of the
                        total combined voting power of all classes of stock in
                        one of the other corporations in the chain.

            o.          "Restricted Stock" means an award of shares of Stock
                        that are subject to restrictions under Section 7 below.

            p.          "Retirement" means retirement from active employment
                        with the Company and any Subsidiary or Parent
                        Corporation of the Company on or after age 55.

            q.          "Stock" means the Common Stock, $.01 par value per
                        share, of the Company.

            r.          "Stock Appreciation Right" means the right pursuant to
                        an award granted under Section 6 below to surrender to
                        the Company all or a portion of a Stock Option in
                        exchange for an amount equal to the difference between
                        (i) the Fair Market Value, as of the date such Stock
                        Option or such portion thereof is surrendered, of the
                        shares of Stock covered by such Stock Option or such
                        portion thereof, and (ii) the aggregate exercise price
                        of such Stock Option or such portion thereof.



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            s.          "Stock Option" means any option to purchase shares of
                        Stock granted pursuant to Section 5 below.

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

SECTION 2. Administration.

            The Plan shall be administered by the Board of Directors or by a
Committee appointed by the Board of Directors of the Company consisting of at
least two Directors, all of whom shall be Non-Employee Directors, who shall
serve at the pleasure of the Board.

            The Committee shall have the power and authority to grant to
eligible optionees and participants, pursuant to the terms of the Plan: (i)
Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, (iv)
Deferred Stock awards, or (v) Other Awards.

            In particular, the Committee shall have the authority:

            (i)         to select the optionees and participants to whom Stock
                        Options, Stock Appreciation Rights, Restricted Stock,
                        Deferred Stock awards and/or Other Awards may from time
                        to time be granted hereunder;

            (ii)        to determine whether and to what extent Incentive Stock
                        Options, Non-Qualified Stock Options, Stock Appreciation
                        Rights, Restricted Stock, Deferred Stock awards and/or
                        Other Awards, or a combination of the foregoing, are to
                        be granted hereunder;

            (iii)       to determine the number of shares to be covered by each
                        such award granted hereunder;

            (iv)        to determine the terms and conditions, not inconsistent
                        with the terms of the Plan, of any award granted
                        hereunder (including, but not limited to, any
                        restriction on any Stock Option or other award and/or
                        the shares of Stock relating thereto), which authority
                        shall be exclusively vested in the Committee (and not
                        the Board) for purposes of establishing performance
                        criteria used with Restricted Stock and Deferred Stock
                        awards and Other Awards; provided, however, that in the
                        event of a merger or asset sale, the applicable
                        provisions of Sections 5(c) and 7(c) of the Plan shall
                        govern the acceleration of vesting of any Stock Option
                        or awards; and

            (v)         to determine whether, to what extent and under what
                        circumstances Stock and other amounts payable with
                        respect to an award under this Plan shall be deferred
                        either automatically or at the election of the
                        participant.



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            The Committee shall have the authority to adopt, alter and repeal
such administrative rules, guidelines and practices governing the Plan as it
shall, from time to time, deem advisable; to interpret the terms and provisions
of the Plan and any award issued under the Plan (and any agreements relating
thereto); and to otherwise supervise the administration of the Plan. The
Committee may delegate to executive officers of the Company the authority to
exercise the powers specified in (i), (ii), (iii), (iv) and (v) above with
respect to persons who are not either the chief executive officer of the Company
or the four highest paid officers of the Company other than the chief executive
officer.

            All decisions made by the Committee pursuant to the provisions of
the Plan shall be final and binding on all persons, including the Company and
Plan participants.

SECTION 3. Stock Subject To Plan.

            The total number of shares of Stock reserved and available for
distribution under the Plan shall be 300,000. Such shares may consist, in whole
or in part, of authorized and unissued shares.

            Subject to paragraph (b)(iv) of Section 6 below, if any shares that
have been optioned ceased to be subject to Stock Options, or if any shares
subject to any Restricted Stock or Deferred Stock award or Other Award granted
hereunder are forfeited or such award otherwise terminates without a payment
being made to the participant, such shares shall again be available for
distribution in connection with future awards under the Plan.

            In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, other change in corporate
structure affecting the Stock, or spin-off or other distribution of assets to
shareholders, such substitution or adjustment shall be made in the aggregate
number of shares reserved for issuance under the Plan, in the number and option
price of shares subject to outstanding options granted under the Plan, and in
the number of shares subject to Restricted Stock or Deferred Stock awards
granted under the Plan as may be determined to be appropriate by the Committee,
in its sole discretion, provided that the number of shares subject to any award
shall always be a whole number. Such adjusted option price shall also be used to
determine the amount payable by the Company upon the exercise of any Stock
Appreciation Right associated with any Option.

SECTION 4. Eligibility.

            Officers, other key employees of the Company and Subsidiaries and
members of the Board who are responsible for or contribute to the management,
growth and/or profitability of the business of the Company and its Subsidiaries
are eligible to be granted Stock Options, Stock Appreciation Rights, Restricted
Stock or Deferred Stock awards or Other Awards under the Plan. The optionees and
participants under the Plan shall be selected from time to time by the
Committee, in its sole discretion, from among those eligible, and the Committee
shall determine, in its sole discretion, the number of shares covered by each
award.



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SECTION 5. Stock Options.

            Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.

            The Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options. No Incentive Stock
Options shall be granted under the Plan after February 22, 2004.

            The Committee shall have the authority to grant any optionee
Incentive Stock Options, Non-Qualified Stock Options, or both types of options
(in each case with or without Stock Appreciation Rights). To the extent that any
option does not qualify as an Incentive Stock Option, it shall constitute a
separate Non-Qualified Stock Option.

            Anything in the Plan to the contrary notwithstanding, no term of
this Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be so
exercised, so as to disqualify either the Plan or any Incentive Stock Option
under Section 422 of the Code. The preceding sentence shall not preclude any
modification or amendment to an outstanding Incentive Stock Option, whether or
not such modification or amendment results in disqualification of such Option as
an Incentive Stock Option, provided the optionee consents in writing to the
modification or amendment.

            Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable.

            a.          Option Price. The option price per share of Stock
                        purchasable under a Stock Option shall be determined by
                        the Committee at the time of grant. In no event shall
                        the option price per share of Stock purchasable under an
                        Incentive Stock Option or a Non-Qualified Stock Option
                        be less than 100% of the Fair Market Value of the Stock
                        on the date of the option is granted. If an employee
                        owns or is deemed to own (by reason of the attribution
                        rules applicable under Section 424(d) of the Code) more
                        than 10% of the combined voting power of all classes of
                        stock of the Company or any Parent Corporation or
                        Subsidiary and an Incentive Stock Option is granted to
                        such employee, the option price shall be no less than
                        110% of the Fair Market Value of the Stock on the date
                        the option is granted.

            b.          Option Term. The term of each Stock Option shall be
                        fixed by the Committee, but no Incentive Stock Option
                        shall be exercisable more than ten years after the date
                        the option is granted. If an employee owns or is deemed
                        to own (by reason of the attribution rules of Section
                        424(d) of the Code) more than 10% of the combined voting
                        power of all classes of stock of the Company or any
                        Parent Corporation or Subsidiary and an Incentive Stock
                        Option is granted to such employee, the term of such
                        option shall be no more than five years from the date of
                        grant.



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            c.          Exercisability. Stock Options shall be exercisable at
                        such time or times as determined by the Committee at or
                        after grant, subject to the restrictions stated in
                        Section 5(b) above. If the Committee provides, in its
                        discretion, that any option is exercisable only in
                        installments, the Committee may waive such installment
                        exercise provisions at any time. Notwithstanding
                        anything contained in the Plan to the contrary, the
                        Committee may, in its discretion, extend or vary the
                        term of any Stock Option or any installment thereof,
                        whether or not the optionee is then employed by the
                        Company, if such action is deemed to be in the best
                        interests of the Company; provided, however, that in the
                        event of a merger or sale of assets, the provisions of
                        this Section 5(c) shall govern vesting acceleration.
                        Notwithstanding the foregoing, unless the Stock Option
                        Agreement provides otherwise, any Stock Option granted
                        under this Plan shall be exercisable in full, without
                        regard to any installment exercise provisions, for a
                        period specified by the Committee, but not to exceed
                        sixty (60) days prior to or subsequent to the occurrence
                        of any of the following events: (i) dissolution or
                        liquidation of the Company other than in conjunction
                        with a bankruptcy of the Company or any similar
                        occurrence, (ii) any merger, consolidation, acquisition,
                        separation, reorganization, or similar occurrence, where
                        the Company will not be the surviving entity or (iii)
                        the transfer of substantially all of the assets of the
                        Company or 50% or more of the outstanding Stock of the
                        Company. The grant of an option pursuant to the Plan
                        shall not limit in any way 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.

            d.          Method of Exercise. Stock Options may be exercised in
                        whole or in part at any time during the option period by
                        giving written notice of exercise to the Company
                        specifying the number of shares to be purchased. Such
                        notice shall be accompanied by payment in full of the
                        purchase price, either by certified or bank check, or by
                        any other form of legal consideration deemed sufficient
                        by the Committee and consistent with the Plan's purpose
                        and applicable law, including promissory notes or a
                        properly executed exercise notice together with
                        irrevocable instructions to a broker acceptable to the
                        Company to promptly deliver to the Company the amount of
                        sale or loan proceeds to pay the exercise price. As
                        determined by the Committee, in its sole discretion,
                        payment in full or in part may also be made in the form
                        of Stock already owned by the optionee (which in the
                        case of Stock acquired upon the exercise of an option
                        have been owned for more than six months on the date of
                        surrender) or, in the case of the exercise of a
                        Non-Qualified Stock Option, Restricted Stock or Deferred
                        Stock subject to an award hereunder (based, in each
                        case, on the Fair Market Value of the Stock on the date
                        immediately preceding the date the option is exercised,
                        as determined by the Committee), provided, however,
                        that, in the case of an Incentive Stock Option, the
                        right to make a payment in the form of already owned
                        shares may be authorized only at the time the option is
                        granted, and provided further that in the event payment
                        is made in the form of shares of Restricted Stock or a
                        Deferred Stock award, the optionee will receive a


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                        portion of the option shares in the form of, and in an
                        amount equal to, the Restricted Stock or Deferred Stock
                        award tendered as payment by the optionee. No shares of
                        Stock shall be issued until full payment therefor has
                        been made. An optionee shall generally have the rights
                        to dividends and other rights of a shareholder with
                        respect to shares subject to the option when the
                        optionee has given written notice of exercise, has paid
                        in full for such shares.

            e.          Non-transferability of Options. No Stock Option shall be
                        transferable by the optionee otherwise than by will or
                        by the laws of descent and distribution, and all Stock
                        Options shall be exercisable, during the optionee's
                        lifetime, only by the optionee.

            f.          Termination by Death. If an optionee's employment by the
                        Company and any Subsidiary or Parent Corporation
                        terminates by reason of death, the Stock Option may
                        thereafter be immediately exercised, to the extent then
                        exercisable (or on such accelerated basis as the
                        Committee shall determine at or after grant), by the
                        legal representative of the estate or by the legatee of
                        the optionee under the will of the optionee, for a
                        period of three years (or such shorter period as the
                        Committee shall specify at grant) from the date of such
                        death or until the expiration of the stated term of the
                        option, whichever period is shorter. In the event of
                        termination of employment by reason of death, if any
                        Stock Option is exercised after the expiration of the
                        exercise periods that apply for purposes of Section 422
                        of the Code, the option will thereafter be treated as a
                        Non-Qualified Stock Option.

            g.          Termination by Reason of Disability. If an optionee's
                        employment by the Company and any Subsidiary or Parent
                        Corporation terminates by reason of Disability, any
                        Stock Option held by such optionee may thereafter be
                        exercised, to the extent it was exercisable at the time
                        of termination due to Disability (or on such accelerated
                        basis as the Committee shall determine at or after
                        grant), but may not be exercised after three years (or
                        such shorter period as the Committee shall specify at
                        grant) from the date of such termination of employment
                        or the expiration of the stated term of the option,
                        whichever period is the shorter. In the event of
                        termination of employment by reason of Disability, if an
                        Incentive Stock Option is exercised after the expiration
                        of the exercise periods that apply for purposes of
                        Section 422 of the Code, the option will thereafter be
                        treated as a Non-Qualified Stock Option.

            h.          Termination by Reason of Retirement. If an optionee's
                        employment by the Company and any Subsidiary or Parent
                        Corporation terminates by reason of Retirement and the
                        terms of the Stock Option so provide, any Stock Option
                        held by such optionee may thereafter be exercised to the
                        extent it was exercisable at the time of such
                        Retirement, but may not be exercised after three years
                        (or such shorter period as Committee shall specify at
                        grant) from the date of such termination of employment
                        or the expiration of the stated term of the option,
                        whichever period is the shorter. In the event of
                        termination of employment by reason of Retirement, if




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                        an Incentive Stock Option is exercised after the
                        expiration of the exercise periods that apply for
                        purposes of Section 422 of the Code, the option will
                        thereafter be treated as a Non-Qualified Stock Option.

            i.          Other Termination. Unless otherwise determined by the
                        Committee, if an optionee's employment by the Company
                        and any Subsidiary or Parent Corporation terminates for
                        any reason other than death, Disability or Retirement,
                        the Stock Option may be exercised to the extent it was
                        exercisable at such termination for the lesser of three
                        months or the balance of the option's term, except that
                        if the optionee is terminated for Cause by the Company
                        or any Subsidiary or Parent Corporation, the Stock
                        Option shall thereupon terminate.

            j.          Annual Limit on Incentive Stock Options. The aggregate
                        Fair Market Value (determined as of the time the Option
                        is granted) of the Common Stock with respect to which an
                        Incentive Stock Option under this Plan or any other plan
                        of the Company and any Subsidiary or Parent Corporation
                        is exercisable for the first time by an optionee during
                        any calendar year shall not exceed $100,000.

SECTION 6. Stock Appreciation Rights.

            a.          Grant and Exercise. Stock Appreciation Rights may be
                        granted in conjunction with all or part of any Stock
                        Option granted under the Plan. In the case of a
                        Non-Qualified Stock Option, such rights may be granted
                        either at or after the time of the grant of such Option.
                        In the case of an Incentive Stock Option, such rights
                        may be granted only at the time of the grant of the
                        option. Stock Appreciation Rights may not be granted to
                        Non-Employee Directors.

            A Stock Appreciation Right or applicable portion thereof granted
with respect to a given Stock Option shall terminate and no longer be
exercisable upon the termination or exercise of the related Stock Option, except
that a Stock Appreciation Right granted with respect to less than the full
number of shares covered by a related stock Option shall not be reduced until
the exercise or termination of the related Stock Option exceeds the number of
shares not covered by the Stock Appreciation Right.

            A Stock Appreciation Right may be exercised by an optionee, in
accordance with paragraph (b) of this Section 6, by surrendering the applicable
portion of the related Stock Option. Upon such exercise and surrender, the
optionee shall be entitled to receive an amount determined in the manner
prescribed in paragraph (b) of this Section 6. Stock Options which have been so
surrendered, in whole or in part, shall no longer be exercisable to the extent
the related Stock Appreciation Rights have been exercised.

            b.          Terms and Conditions. Stock Appreciation Rights shall be
                        subject to such terms and conditions, not inconsistent
                        with the provisions of the Plan, as shall be determined
                        from time to time by the Committee, including the
                        following:



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                        (i)         Stock Appreciation Rights shall be
                                    exercisable only at such time or times and
                                    to the extent that the Stock Options to
                                    which they relate shall be exercisable in
                                    accordance with the provisions of Section 5
                                    and this Section 6 of the Plan.

                        (ii)        Upon the exercise of a Stock Appreciation
                                    Right, an optionee shall be entitled to
                                    receive up to, but not more than, an amount
                                    in cash or shares of Stock equal in value to
                                    the excess of the Fair Market Value of one
                                    share of Stock over the option price per
                                    share specified in the related option
                                    multiplied by the number of shares in
                                    respect of which the Stock Appreciation
                                    Right shall have been exercised, with the
                                    Committee having the right to determine the
                                    form of payment; provided the Committee may
                                    not require the optionee to receive more
                                    than 50% of the aggregate value of such
                                    Stock Appreciation Rights in shares of
                                    Stock.

                        (iii)       Stock Appreciation Rights shall be
                                    transferable only when and to the extent
                                    that the underlying Stock Option would be
                                    transferable under Section 5 of the Plan.

                        (iv)        Upon the exercise of a Stock Appreciation
                                    Right, the Stock Option or part thereof to
                                    which such Stock Appreciation Right is
                                    related shall be deemed to have been
                                    exercised for the purpose of the limitation
                                    set forth in Section 3 of the Plan on the
                                    number of shares of Stock to be issued under
                                    the Plan and the maximum number of shares to
                                    be awarded to any one person in a fiscal
                                    year, but only to the extent of the number
                                    of shares issued or issuable under the Stock
                                    Appreciation Right at the time of exercise
                                    based on the value of the Stock Appreciation
                                    Right at such time.

                        (v)         A Stock Appreciation Right granted in
                                    connection with an Incentive Stock Option
                                    may be exercised only if and when the market
                                    price of the Stock subject to the Incentive
                                    Stock Option exceeds the exercise price of
                                    such Option.

                        (vi)        Each award shall be confirmed by, and
                                    subject to the terms of, a Stock
                                    Appreciation Rights Agreement executed by
                                    the Company and the participant.

SECTION 7. Restricted Stock.

            a.          Administration. Shares of Restricted Stock may be issued
                        either alone or in addition to other awards granted
                        under the Plan. The Committee shall determine the
                        officers and key employees of the Company and
                        Subsidiaries to whom, and the time or times at which,
                        grants of Restricted Stock will be made, the number of
                        shares to be awarded, the time or times within which
                        such awards may be subject to forfeiture, and all other
                        conditions of the awards. The Committee may also
                        condition the grant of Restricted Stock upon the
                        attainment of specified performance goals. The
                        provisions of Restricted Stock awards need not be the
                        same with respect to each recipient.



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            b.          Awards and Certificates. The prospective recipient of an
                        award of shares of Restricted Stock shall not have any
                        rights with respect to such award, unless and until such
                        recipient has executed an Agreement evidencing the award
                        and has delivered a fully executed copy thereof to the
                        Company, and has otherwise complied with the then
                        applicable terms and conditions.

                        (i)         Each participant shall be issued a stock
                                    certificate in respect of shares of
                                    Restricted Stock awarded under the Plan.
                                    Such certificate shall be registered in the
                                    name of the participant, and shall bear an
                                    appropriate legend referring to the terms,
                                    conditions, and restrictions applicable to
                                    such award, substantially in the following
                                    form:

                                    "The transferability of this certificate and
                                    the shares of stock represented hereby are
                                    subject to the terms and conditions
                                    (including forfeiture) of the Applied
                                    Biometrics, Inc. 1994 Amended Stock Plan and
                                    an Agreement entered into between the
                                    registered owner and Applied Biometrics,
                                    Inc. Copies of such Plan and Agreement are
                                    on file in the offices of Applied
                                    Biometrics, Inc., 501 E. Highway 13,
                                    Burnsville, Minnesota 55337."

                        (ii)        The Committee shall require that the stock
                                    certificates evidencing such shares be held
                                    in custody by the Company until the
                                    restrictions thereon shall have lapsed, and
                                    that, as a condition of any Restricted Stock
                                    award, the participant shall have delivered
                                    a stock power, endorsed in blank, relating
                                    to the Stock covered by such award.

            c.          Restrictions and Conditions. The shares of Restricted
                        Stock awarded pursuant to the Plan shall be subject to
                        the following restrictions and conditions:

                        (i)         Subject to the provisions of this Plan and
                                    the award Agreement, during a period set by
                                    the Committee commencing with the date of
                                    such award (the "Restriction Period"), the
                                    participant shall not be permitted to sell,
                                    transfer, pledge or assign shares of
                                    Restricted Stock awarded under the Plan. In
                                    no event shall the Restriction Period be
                                    less than one (1) year. Within these limits,
                                    the Committee may provide for the lapse of
                                    such restrictions in installments where
                                    deemed appropriate.

                        (ii)        Except as provided in paragraph (c)(i) of
                                    this Section 7, the participant shall have,
                                    with respect to the shares of Restricted
                                    Stock, all of the rights of a shareholder of
                                    the Company, including the right to vote the
                                    shares and the right to receive any cash
                                    dividends. The Committee, in its sole
                                    discretion, may permit or require the
                                    payment of cash dividends to be deferred
                                    and, if the Committee so determines,
                                    reinvested in additional shares of
                                    Restricted Stock (to the extent shares are
                                    available under Section 3 and subject to
                                    paragraph (f) of Section 13). Certificates
                                    for shares of unrestricted Stock shall be
                                    delivered to the grantee promptly after, and
                                    only after, the period of forfeiture shall
                                    have expired without forfeiture in respect
                                    of such shares of Restricted Stock.



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<PAGE>

                        (iii)       Subject to the provisions of the award
                                    Agreement and paragraph (c)(iv) of this
                                    Section 7, upon termination of employment
                                    for any reason during the Restriction
                                    Period, all shares still subject to
                                    restriction shall be forfeited by the
                                    participant.

                        (iv)        In the event of special hardship
                                    circumstances of a participant whose
                                    employment is terminated (other than for
                                    Cause), including death, Disability or
                                    Retirement, or in the event of an
                                    unforeseeable emergency of a participant
                                    still in service, the Committee may, in its
                                    sole discretion, when it finds that a waiver
                                    would be in the best interest of the
                                    Company, waive in whole or in part any or
                                    all remaining restrictions with respect to
                                    such participant's shares of Restricted
                                    Stock.

                        (v)         Notwithstanding the foregoing, all
                                    restrictions with respect to any
                                    participant's shares of Restricted Stock
                                    shall lapse on the date determined by the
                                    Committee, but in no event more than sixty
                                    (60) days prior to or subsequent to the
                                    occurrence of any of the following events:
                                    (i) dissolution or liquidation of the
                                    Company other than in conjunction with a
                                    bankruptcy of the Company or any similar
                                    occurrence, (ii) any merger, consolidation,
                                    acquisition, separation, reorganization, or
                                    similar occurrence, where the Company will
                                    not be the surviving entity or (iii) the
                                    transfer of substantially all of the assets
                                    of the Company or 20% or more of the
                                    outstanding Stock of the Company.

SECTION 8. Deferred Stock Awards.

            a.          Administration. Deferred Stock may be awarded either
                        alone or in addition to other awards granted under the
                        Plan. The Committee shall determine the officers and key
                        employees of the Company and Subsidiaries to whom and
                        the time or times at which Deferred Stock shall be
                        awarded, the number of Shares of Deferred Stock to be
                        awarded to any participant or group of participants, the
                        duration of the period (the "Deferral Period") during
                        which, and the conditions under which, receipt of the
                        Stock will be deferred, and the terms and conditions of
                        the award in addition to those contained in paragraph
                        (b) of this Section 8. The Committee may also condition
                        the grant of Deferred Stock upon the attainment of
                        specified performance goals. The provisions of Deferred
                        Stock awards need not be the same with respect to each
                        recipient.

            b.          Terms and Conditions.

                        (i)         Subject to the provisions of this Plan and
                                    the award agreement, Deferred Stock awards
                                    may not be sold, assigned, transferred,
                                    pledged or otherwise encumbered during the
                                    Deferral Period. In no event shall the
                                    Deferral Period be less than one (1) year.
                                    At the expiration of the Deferral Period (or
                                    Elective Deferral Period, where applicable),
                                    share certificates shall be delivered to the
                                    participant, or his legal representative, in
                                    a number equal to the shares covered by the
                                    Deferred Stock award.



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<PAGE>

                        (ii)        Amounts equal to any dividends declared
                                    during the Deferral Period with respect to
                                    the number of shares covered by a Deferred
                                    Stock award will be paid to the participant
                                    currently or deferred and deemed to be
                                    reinvested in additional Deferred Stock or
                                    otherwise reinvested, all as determined at
                                    the time of the award by the Committee, in
                                    its sole discretion.

                        (iii)       Subject to the provisions of the award
                                    Agreement and paragraph (b)(iv) of this
                                    Section 8, upon termination of employment
                                    for any reason during the Deferral Period
                                    for a given award, the Deferred Stock in
                                    question shall be forfeited by the
                                    participant.

                        (iv)        In the event of special hardship
                                    circumstances of a participant whose
                                    employment is terminated (other than for
                                    Cause) including death, Disability or
                                    Retirement, or in the event of an
                                    unforeseeable emergency of a participant
                                    still in service, the Committee may, in its
                                    sole discretion, when it finds that a waiver
                                    would be in the best interest of the
                                    Company, waive in whole or in part any or
                                    all of the remaining deferral limitations
                                    imposed hereunder with respect to any or all
                                    of the participant's Deferred Stock.

                        (v)         A participant may elect to further defer
                                    receipt of the award for a specified period
                                    or until a specified event (the "Elective
                                    Deferral Period"), subject in each case to
                                    the Committee's approval and to such terms
                                    as are determined by the Committee, all in
                                    its sole discretion. Subject to any
                                    exceptions adopted by the Committee, such
                                    election must generally be made prior to
                                    completion of one half of the Deferral
                                    Period for a Deferred Stock award (or for an
                                    installment of such an award).

                        (vi)        Each award shall be confirmed by, and
                                    subject to the terms of, a Deferred Stock
                                    Agreement executed by the Company and the
                                    participant.

SECTION 9. Other Awards.

            The Committee may from time to time grant Stock, other Stock based
and non-Stock based awards under this Plan including without limitations those
awards pursuant to which shares of Stock are or in the future may be acquired,
awards denominated in Stock units, securities convertible into Stock, phantom
securities and dividend equivalents. The Committee shall determine the terms and
conditions of such Stock, Stock based and non-Stock based awards provided that
such awards shall not be inconsistent with the terms of this Plan.

SECTION 10. Transfer, Leave Of Absence, Etc.

            For purposes of the Plan, the following events shall not be deemed a
termination of employment:



                                       14
<PAGE>

            a.          a transfer of an employee from the Company to a Parent
                        Corporation or Subsidiary, or from a Parent Corporation
                        or Subsidiary to the Company, or from one Subsidiary to
                        another;

            b.          a leave of absence, approved in writing by the
                        Committee, for military service or sickness, or for any
                        other purpose approved by the Company if the period of
                        such leave does not exceed ninety (90) days (or such
                        longer period as the Committee may approve, in its sole
                        discretion); and

            c.          a leave of absence in excess of ninety (90) days,
                        approved in writing by the Committee, but only if the
                        employee's right to reemployment is guaranteed either by
                        a statute or by contract, and provided that, in the case
                        of any leave of absence, the employee returns to work
                        within 30 days after the end of such leave.

SECTION 11. Amendments And Termination.

            The Board may amend, alter, or discontinue the Plan, but no
amendment, alteration, or discontinuation shall be made (i) which would impair
the rights of an optionee or participant under a Stock Option, Stock
Appreciation Right, Restricted Stock, Deferred Stock or other Stock-based award
theretofore granted, without the optionee's or participant's consent, or (ii)
which without the approval of the stockholders of the Company would cause the
Plan to no longer comply with Rule 16b-3 under the Securities Exchange Act of
1934, Section 422 of the Code or any other regulatory requirements.

            The Committee may amend the terms of any award or option theretofore
granted, prospectively or retroactively, to the extent such amendment is
consistent with the terms of this Plan, but no such amendment shall impair the
rights of any holder without his or her consent except to the extent authorized
under the Plan. The Committee may also substitute new Stock Options for
previously granted options, including previously granted options having higher
option prices.

SECTION 12. Unfunded Status Of Plan.

            The Plan is intended to constitute an "unfunded" plan for incentive
and deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained herein shall give any
such participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Stock or payments in lieu of or with respect to awards
hereunder, provided, however, that the existence of such trusts or other
arrangements is consistent with the unfunded status of the Plan.

SECTION 13. General Provisions.

            a.          All certificates for shares of Stock delivered under the
                        Plan pursuant to any Restricted Stock, Deferred Stock or
                        other Stock-based awards shall be subject to



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<PAGE>

                        such stock-transfer orders and other restrictions as the
                        Committee may deem advisable under the rules,
                        regulations, and other requirements of the Securities
                        and Exchange Commission, any stock exchange upon which
                        the Stock is then listed, and any applicable Federal or
                        state securities laws, and the Committee may cause a
                        legend or legends to be put on any such certificates to
                        make appropriate reference to such restrictions.

            b.          Subject to paragraph (d) below, recipients of Restricted
                        Stock, Deferred Stock and other Stock-based awards under
                        the Plan (other than Stock Options) are not required to
                        make any payment or provide consideration other than the
                        rendering of services.

            c.          Nothing contained in this Plan shall prevent the Board
                        of Directors from adopting other or additional
                        compensation arrangements, subject to stockholder
                        approval if such approval is required; and such
                        arrangements may be either generally applicable or
                        applicable only in specific cases. The adoption of the
                        Plan shall not confer upon any employee of the Company
                        or any Subsidiary any right to continued employment with
                        the Company or a Subsidiary, as the case may be, nor
                        shall it interfere in any way with the right of the
                        Company or a Subsidiary to terminate the employment of
                        any of its employees at any time.

            d.          Each participant shall, no later than the date as of
                        which any part of the value of an award first becomes
                        includible as compensation in the gross income of the
                        participant for Federal income tax purposes, pay to the
                        Company, or make arrangements satisfactory to the
                        Committee regarding payment of, any Federal, state, or
                        local taxes of any kind required by law to be withheld
                        with respect to the award. The obligations of the
                        Company under the Plan shall be conditional on such
                        payment or arrangements and the Company and Subsidiaries
                        shall, to the extent permitted by law, have the right to
                        deduct any such taxes from any payment of any kind
                        otherwise due to the participant. With respect to any
                        award under the Plan, if the terms of such award so
                        permit, a participant may elect by written notice to the
                        Company to satisfy part or all of the withholding tax
                        requirements associated with the award by (i)
                        authorizing the Company to retain from the number of
                        shares of Stock that would otherwise be deliverable to
                        the participant, or (ii) delivering to the Company from
                        shares of Stock already owned by the participant, that
                        number of shares having an aggregate Fair Market Value
                        equal to part or all of the tax payable by the
                        participant under this Section 13(d). Any such election
                        shall be in accordance with, and subject to, applicable
                        tax and securities laws, regulations and rulings and in
                        the event shares are withheld, the amount withheld may
                        not exceed the minimum required federal, state and FICA
                        withholding amount.

            e.          At the time of grant, the Committee may provide in
                        connection with any grant made under this Plan that the
                        shares of Stock received as a result of such grant shall
                        be subject to a repurchase right in favor of the Company
                        pursuant to which any participant who, at any time
                        within a specified period after termination of


                                       16
<PAGE>

                        employment with the Company, directly or indirectly
                        competes with, or is employed by a competitor of, the
                        Company, shall be required to offer to the Company any
                        shares that the participant acquired under the Plan,
                        with the price being the then Fair Market Value of the
                        Stock, subject to such other terms and conditions as the
                        Committee may specify at the time of grant.

            f.          The reinvestment of dividends in additional Restricted
                        Stock (or in Deferred Stock or other types of Plan
                        awards) at the time of any dividend payment shall only
                        be permissible if the Committee (or the Company's chief
                        financial officer) certifies in writing that under
                        Section 3 sufficient shares are available for such
                        reinvestment (taking into account then outstanding Stock
                        Options and other Plan awards).


SECTION 14. Effective Date Of Plan.

            The Plan is expressly made subject to the approval by the
shareholders of the Company. If the Plan is not so approved by the shareholders
on or before one year after this Plan's adoption by the Board of Directors, this
Plan shall not come into effect. The offering of the shares hereunder shall be
also subject to the effecting by the Company of any registration or
qualification of the shares under any federal or state law or the obtaining of
the consent or approval of any governmental regulatory body which the Company
shall determine, in its sole discretion, is necessary or desirable as a
condition to or in connection with, the offering or the issue or purchase of the
shares covered thereby. The Company shall make every reasonable effort to effect
such registration or qualification or to obtain such consent or approval.


            Adopted by the Board of Directors: February 22, 1994.
            Ratified and Approved by the Shareholders: June 8, 1994.

            Amended by the Board of Directors: March 12, 1999.

            Amended by the Board of Directors: July 2, 1999.




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