FIRST TEAM SPORTS, INC.

                1994 STOCK OPTION AND INCENTIVE COMPENSATION PLAN
                        (As Amended Through May 27, 1998)


         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.


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         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 One Million Three Hundred Twenty-five
         Thousand (1,325,000) 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

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         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.

         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.


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                  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):

                           (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.


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         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.

                  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

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                  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.

         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

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         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.

                  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.


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                  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.

                  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.


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                  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.

         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.


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                  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.

                  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.


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                  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:


<PAGE>

                           (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;

                           (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.


<PAGE>

                  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.

                  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.



<PAGE>


                  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.

                  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.