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                                                                    EXHIBIT 10.1

                        GRANITE BROADCASTING CORPORATION
                                STOCK OPTION PLAN
                      AS AMENDED THROUGH FEBRUARY 23, 1999





         1. PURPOSE. The purpose of this Stock Option Plan (the "Plan"), adopted
by the Board of Directors of Granite Broadcasting Corporation (the "Company") on
April 17, 1990 and amended on May 10, 1990, November 8, 1990, September 20,
1991, April 27, 1993, July 25, 1995, July 24, 1996 and April 29, 1997, is to
provide a means by which certain employees and officers of the Company and its
Affiliates (as defined below) may be given an opportunity to purchase non-voting
common stock of the Company. Options that may be granted under this Plan include
(a) Incentive Stock Options as such term is defined in Section 422A of the
Internal Revenue Code of 1986, as amended (hereinafter the "Code"), and (b)
Nonqualified Stock Options, which would not constitute Incentive Stock Options.
The Plan is intended to advance the interests of the Company by encouraging
stock ownership on the part of certain employees and officers, by enabling the
Company (and its Affiliates) to secure and retain the services of highly
qualified persons, and by providing employees and officers with an additional
incentive to advance the success of the Company (and its Affiliates). For
purposes of this Plan, Affiliate shall mean any parent or subsidiary corporation
of the Company. The term "parent corporation" shall mean any corporation (other
than the Company) in an unbroken chain of corporations ending with the Company
if, on the date of grant of the option in question, each of the corporations
other than the Company owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. The term "subsidiary corporation" shall mean any
corporation in an unbroken chain of corporations beginning with the Company if,
on the date of grant of the option in question, each of the corporations other
than the last corporation in the chain owns stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain. Affiliation shall refer to a group of
Affiliates.

         2. STOCK SUBJECT TO OPTION. Subject to adjustment as provided in
Sections 4(i) and (j) hereof, options may be granted by the Company from time to
time to purchase up to an aggregate of 6,000,000 shares of the Company's
authorized but unissued Class B Nonvoting Common Stock, par value $0.01 per
share (the "Common Stock"). Shares that by reason of the expiration of an option
or otherwise are no longer subject to purchase pursuant to an option granted
under the Plan may be again available for issuance pursuant to options under the
Plan.

         3. PARTICIPANTS. Persons eligible to be granted Incentive Stock Options
or Nonqualified Stock Options under the 


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Plan shall be limited to key employees of the Company (or its Affiliates)
(including employees who are also officers or directors, but not including
directors who are not also employees) who have substantial responsibility in the
direction and management of the Company or an Affiliate, as indicated by the
action of the Stock Option Committee or the Compensation Committee (as such
terms are defined in Section 5) in granting an option to such employee.

         4. TERMS AND CONDITIONS OF OPTIONS. The Stock Option Committee may
grant options from time to time pursuant to the Plan. Such options shall be
evidenced by written stock option agreements signed by the Optionee and by the
President of the Company or by any member of the Stock Option Committee (the
"Stock Option Agreements"). The Stock Option Agreements shall be subject to the
terms and conditions of the Plan, shall specify whether the options are
Incentive Stock Options or Nonqualified Stock Options and shall contain such
other provisions as the Stock Option Committee in its discretion shall deem
appropriate. Shares of Common Stock that may be purchased under an option
granted pursuant to this Plan shall sometimes hereinafter be referred to as
"Option Shares," and an employee of the Company to whom options are granted
shall sometimes hereinafter be referred to as an "Optionee."

                  (A) OPTION PRICE. The option price for each Incentive Stock
         Option share shall not be less than the fair market value of a share of
         the Common Stock on the date the option is granted. The option price
         for each Nonqualified Stock Option share shall be specified by the
         Stock Option Committee at the time such option is granted, and may be
         less than, equal to or greater than the fair market value of the shares
         of Common Stock on the date such option is granted. The option price
         may include amounts that are required to be paid by the Optionee, as a
         down payment of the option price, prior to his or her exercise of the
         option. In its sole discretion, the Stock Option Committee may provide
         that the price at which shares may be so purchased shall be more than
         such fair market value on the date of grant. However, notwithstanding
         the foregoing, the option price for Incentive Stock Options granted to
         any employee owning stock (including any attribution of stock ownership
         under Section 425(d) of the Code) possessing more than 10% of the total
         combined voting power of all classes of stock of the Company or any of
         its Affiliates on the date such option is granted (hereinafter a "10%
         Shareholder"), shall be at least 110% of the fair market value of the
         Common Stock on the date the option is granted. The Stock Option
         Committee shall, in good faith, determine the fair market value of the
         Common Stock on the date the option is granted, and the fair market
         value may be more or less than the book value of the Common Stock.


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                  (B) TERM OF OPTION. Unless otherwise specifically provided in
         an Optionee's Stock Option Agreement, each option granted under this
         Plan shall expire no later than ten years after the date the option is
         granted except under the circumstances described in Sections 4(g),
         4(j)(2), 4(j)(3) and 4(k), options may expire and terminate at an
         earlier date than provided in this paragraph. If an Incentive Stock
         Option is granted to an employee who is a 10% Shareholder, then, for
         purposes of such Incentive Stock Option the word "five" shall be
         substituted for the word "ten" in the immediately preceding sentence.
         The term of Nonqualified Stock Options granted hereunder shall be
         determined by the Stock Option Committee in its discretion.

                  (C) EXERCISE OF OPTION. Except as otherwise specifically
         provided in this Plan, each option will be exercisable according to the
         provisions of an Optionee's Stock Option Agreement. All options
         (whenever granted) of an Optionee shall become immediately exercisable
         upon the (i) death or disability (as defined in Section 4(g)(2) below)
         of such Optionee; and (ii) the occurrence of a "Change of Control"; for
         purposes hereof, a "Change of Control" shall occur on the date on which
         W. Don Cornwell no longer owns, beneficially, in excess of 50% of the
         issued and outstanding Class A Common Stock of the Company.

                  (D) MANNER OF EXERCISE. Shares of Common Stock purchased upon
         exercise of options shall at the time of purchase be paid for in full.
         To the extent that an option is exercisable, options may be exercised
         from time to time by written notice to the Company stating the full
         number of shares with respect to which the option is being exercised,
         accompanied by full payment (or the balance due) of the exercise price,
         for the shares being purchased, by certified or official bank check or
         the equivalent thereof acceptable to the Company. When and if shares of
         the Company's Common Stock are traded on either the New York or
         American Stock Exchanges or in the NASDAQ/National Market System, the
         payment of the exercise price may be in the form of Common Stock, the
         value of which shall be deemed to be the closing price on the last
         trading date prior to date on which the shares are tendered for payment
         of the exercise price. The notice required by this paragraph shall be
         delivered in person to the President of the Company, or shall be sent
         by registered or certified mail, return receipt requested, to the
         President of the Company, in which case delivery shall be deemed made
         on the date such notice is deposited in the mail. The Company shall,
         without charge of any transfer or issue tax to the Optionee (or other
         person entitled to exercise the option), deliver to the Optionee (or to
         such other person) at the principal office of the Company, or such
         other place as shall be mutually agreed upon, a certificate or
         certificates for the shares being purchased; provided, however, that
         the time of 


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         delivery may be postponed by the Company for such period as may be
         required for it with reasonable diligence to comply with any
         requirements of law. Pursuant to Section 6 hereof, the Company may
         require that, at the time of exercise, each Optionee: (i) deliver an
         investment representation in form acceptable to the Company and its
         counsel that the shares are being acquired for investment and not with
         a view to their distribution, and (ii) enter into any applicable
         stockholders' agreement with the Company and other stockholders of the
         Company, as deemed necessary by the Stock Option Committee.

                  (E) LIMITATION ON AMOUNT. No employee shall be granted
         Incentive Stock Options which, when first exercisable during any
         calendar year (combined with all other incentive stock option plans of
         the Company and its Affiliates), will permit such employee to purchase
         stock that has an aggregate fair market value (determined as of the
         time the option is granted) of more than $100,000.

                  (F) NON-ASSIGNABILITY OF OPTION RIGHTS. Options under the Plan
         will not be transferable by an Optionee except by will or the laws of
         descent and distribution. During the lifetime of the Optionee, the
         Option is exercisable only by the Optionee or, in the event of the
         Optionee's incapacity, by his duly authorized legal representative.
         Notwithstanding the foregoing, the Committee may, in its discretion,
         authorize all or a portion of the Option (other than Incentive Stock
         Options) granted to a Optionee to be on terms which permit transfer by
         such Optionee to (i) the spouse, children or grandchildren of such
         Optionee ("Immediate Family Members"), (ii) a trust or trusts for
         exclusive benefit of such Immediate Family Members, or (iii) a
         partnership or limited liability company in which such Immediate Family
         Members are the only partners or members, as applicable; provided, that
         (x) there may be no consideration for any such transfer, (y) the Option
         agreement pursuant to which such Options are granted must be approved
         by the Committee and must expressly provide for transferability in a
         manner consistent with this Section, and (z) subsequent transfers of
         transferred Options shall be prohibited except those occurring by laws
         of descent and distribution. Following transfer, any such Options shall
         continue to be subject to the same terms and conditions as were
         applicable immediately prior to transfer; provided, that for purposes
         of the Plan, the term Optionee shall be deemed to refer to the
         transferee; provided, however, that, the Option shall continue to be
         exercisable and shall terminate in accordance with its terms as if the
         transferor (Non-Employee Director) remained the holder of the Option.
         Options under the Plan may not be pledged, mortgaged, hypothecated or
         otherwise encumbered, and shall not be subject to the claims of
         creditors.


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                  (G) TERMINATION OF EMPLOYMENT.

                           (1) In the event that Optionee's employment by the
                  Company and its Affiliates shall terminate for any reason,
                  with or without cause, and the provisions of Sections 4(g)(2),
                  4(g)(3), 4(j) and 4(k) do not apply, (i) the option for those
                  shares for which such option was exercisable pursuant to this
                  plan immediately prior to such termination of employment shall
                  terminate thirty (30) days following such termination of
                  employment, unless specifically provided otherwise in such
                  Optionee's Stock Option Agreement, and (ii) the option for
                  those shares for which the option was not exercisable
                  immediately prior to such termination of employment shall
                  terminate on the date of termination of employment. In the
                  event that an option terminates pursuant to the preceding
                  sentence, any amounts paid as a down payment on the exercise
                  of such option (as provided in Section 4(a)) shall be returned
                  to the Optionee with respect to shares for which the option
                  was not exercisable on the date of termination of employment
                  and shall not be returned to the Optionee with respect to
                  shares for which the option was exercisable on the date of
                  termination. For purposes of this Section, whether an
                  authorized leave of absence or absence on military or
                  government service shall constitute severance of the
                  employment relationship between the Company (or an Affiliate)
                  and the Optionee shall be determined by the Stock Option
                  Committee in its sole discretion at the time thereof.

                           (2) In the event that Optionee shall die while in the
                  employment of the Company (or an Affiliate) or if Optionee's
                  employment by the Company (or an Affiliate) is terminated
                  because Optionee has become disabled within the meaning of
                  Section 22(e)(3) of the Code, the Optionee, his personal
                  representative, estate or beneficiary shall have the right at
                  any time within twelve months after such date of death or
                  termination due to disability to exercise such Optionee's
                  options. Notwithstanding the foregoing, the provisions of this
                  Section 4(g)(2) shall be subject to the provisions of Sections
                  4(b), 4(j)(3) and 4(k), which may terminate the option
                  earlier.

                           (3) In the event that any termination of employment
                  by an Optionee is due to retirement with the consent of his
                  employer, the Optionee shall have the right to exercise his
                  option at any time within three months after such retirement
                  to the extent the option was exercisable immediately prior to
                  retirement. Notwithstanding the foregoing, the provisions of
                  this Section 4(g)(3) shall be subject to 



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                  the provisions of Sections 4(b), 4(j)(3) and 4(k), which may
                  terminate the option earlier.

                  (H) CHANGES TO CAPITAL STRUCTURE; NEED FOR ADJUSTMENT. The
         existence of outstanding options shall not affect in any way the right
         or power of the Company or its stockholders to make or authorize any or
         all adjustments, recapitalizations, reorganizations or other changes in
         the Company's capital structure or its business, or any merger or
         consolidation of the Company, or any issue of bonds, debentures,
         preferred or prior preference stock ahead of or affecting the Stock or
         the rights thereof, or the dissolution or liquidation of the Company,
         or any sale or transfer of all or any part of its assets or business,
         or any other corporate act or proceeding, whether of a similar
         character or otherwise.

         Except as otherwise expressly provided in Sections 4(i) and 4(j), the
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, shall not affect
or necessitate any adjustment to the number, class or price of shares of stock
then subject to outstanding options.

                  (I) ADJUSTMENT OF OPTIONS ON RECAPITALIZATION. The aggregate
         number of shares of Common Stock for which options may be granted to
         persons participating under the Plan, the number of shares covered by
         each outstanding option, and the exercise price per share for each such
         option shall be proportionately adjusted for any increase or decrease
         in the number of issued shares of Common Stock of the Company resulting
         from the subdivision or consolidation of shares, or the payment of a
         stock dividend after the effective date of this Plan, or other increase
         (excluding any increase due to conversion of any other outstanding
         securities of the Company) or decrease in such shares effected without
         receipt of consideration by the Company, such that each Optionee
         remains entitled upon exercise of his option(s) to the same total
         number and class of shares as he would have received for the same
         aggregate consideration had he exercised his options in full
         immediately prior to the event requiring the adjustment; provided,
         however, that any options to purchase fractional shares resulting from
         any such adjustment shall be eliminated; and provided, further, that
         any such adjustment shall be made in a manner so as not to constitute a
         "modification" as defined in Section 425(h)(3) of the Code.



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                  (J) ADJUSTMENT OF OPTIONS UPON REORGANIZATION.

                           (1) If the Company shall at any time merge or
                  consolidate with or into another corporation and (A) the
                  Company is not the surviving entity, or (B) the Company is the
                  surviving entity and the shareholders of Company Common Stock
                  are required to exchange their shares for property and/or
                  securities, the holder of each option will thereafter receive,
                  upon the exercise thereof, the securities and/or property to
                  which a holder of the number of shares of Common Stock then
                  deliverable upon the exercise of such option would have been
                  entitled upon such merger or consolidation, and the Company
                  shall take such steps in connection with such merger or
                  consolidation as may be necessary to assure that the
                  provisions of this Plan shall thereafter be applicable, as
                  nearly as reasonably may be, in relation to any securities or
                  property thereafter deliverable upon the exercise of such
                  option; provided, however, that, except as provided in the
                  following sentence, no option exercise date shall be
                  accelerated in contemplation of such action. In the event of
                  an Optionee's termination of employment without cause within
                  twelve (12) months after the date of a merger or consolidation
                  described in this paragraph, the Optionee shall have the right
                  to exercise all his then outstanding options, whether or not
                  then otherwise exercisable, within the thirty (30) day period
                  following his termination of employment. For purposes of this
                  paragraph, termination without cause shall mean (a)
                  termination other than for (i) the Optionee's material failure
                  to observe or perform any of the requirements of his position
                  with the Company, or its Affiliate (or successor by merger or
                  consolidation), or (ii) the Optionee's grossly negligent or
                  willful and continued misconduct or action on the part of the
                  Optionee that is damaging or detrimental to the operations of
                  the Company or its Affiliate (or successor by merger or
                  consolidation), or (b) resignation by the Optionee within
                  thirty (30) days after a material diminution in duties or
                  compensation of the Optionee. A sale of all or substantially
                  all of the assets of the Company for a consideration (apart
                  from the assumption of obligations) consisting primarily of
                  securities shall be deemed a merger or consolidation for the
                  foregoing purposes. Notwithstanding the foregoing, the
                  provisions of this Section 4(j)(1) shall be subject to Section
                  4(b).

                           (2) The resulting Affiliation following any
                  reorganization may at any time, in its sole discretion, tender
                  substitute options as it may deem appropriate. However, in no
                  event may the substitute



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                  options entitle an Optionee under the Plan to any fewer shares
                  (or at any greater aggregate price) or any less other property
                  than the Optionee would be entitled to under the immediately
                  preceding paragraph upon an exercise of the options held prior
                  to the substitution of the new option. Any substitution made
                  under this Section 4(j)(2) shall be made in a manner so as not
                  to constitute a "modification" as defined in Section 425(h)(3)
                  of the Code.

                           (3) With respect to options to acquire stock of an
                  Affiliate of Optionee's then present employer, if Optionee's
                  then present employer ceases to be affiliated with the other
                  member(s) of the Affiliation, then the Affiliation shall give
                  the Optionee written notice of such fact within thirty (30)
                  days after the date on which Optionee's employer ceases to be
                  an Affiliate and the option shall expire and terminate thirty
                  (30) days after the receipt of such notice by Optionee.
                  Notwithstanding the foregoing, the provisions of this Section
                  4(j)(3) shall be subject to Section 4(b) and shall be subject
                  to Section 4(k) if the Optionee receives notice under Section
                  4(k) at a time earlier than the notice provided for herein.

                  (K) DISSOLUTION OF ISSUER OF OPTION STOCK. In the event of the
         proposed dissolution or liquidation of the Company, the options granted
         hereunder shall terminate as of a date to be fixed by the Stock Option
         Committee; provided, that, not less than thirty (30) days' prior
         written notice of the date so fixed shall be given to the Optionee, and
         the Optionee shall have the right, during the period of thirty (30)
         days preceding such termination, to exercise his option.
         Notwithstanding the foregoing, the provisions of this Section shall be
         subject to Section 4(b) and shall be subject to Section 4(j)(3) if the
         Optionee receives notice under Section 4(j)(3) at a time earlier than
         the notice provided for herein.

                  (L) SUBSTITUTION OPTIONS. Options may be granted under this
         Plan from time to time in substitution for stock options held by
         employees of other corporations who become employees of the Company or
         an Affiliate as a result of a merger or consolidation of the employing
         corporation with the Company or an Affiliate, or the acquisition by the
         Company or an Affiliate of the assets of the employing corporation, or
         the acquisition by the Company or an Affiliate of at least 50% of the
         issued and outstanding stock of the employing corporation as the result
         of which it becomes an Affiliate of the Company. The terms and
         conditions of the substitute options so granted may vary from the terms
         and conditions set forth in this Plan to such extent as the Stock
         Option Committee at the time of



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         grant may deem appropriate to conform, in whole or in part, to the
         provisions of the stock options in substitution for which they are
         granted, but with respect to stock options which are Incentive Stock
         Options, no such variation shall be such as to affect the status of any
         such substitute option as an "incentive stock option" under Section
         422A of the Code.

                  (M) RIGHTS AS A SHAREHOLDER. The Optionee shall have no rights
         as a shareholder with respect to any shares of Common Stock of the
         Company held under option until the date of exercise of the option with
         respect to such shares. Except as provided in Section 4(h), no
         adjustment shall be made for dividends or other rights for which the
         record date is prior to the date of exercise.

                  (N) TIME OF GRANTING OPTIONS. The grant of an option shall
         occur only when a written option agreement shall have been duly
         executed and delivered by or on behalf of the Company and the employee
         to whom such option shall be granted.

                  (O) STOCK LEGEND. Certificates evidencing shares of the
         Company's Common Stock purchased upon the exercise of Incentive Stock
         Options issued under the Plan shall be endorsed with a legend in
         substantially the following form:

                  The shares evidenced by this certificate may not be sold or
                  transferred prior to                 , 19    , in the absence
                                      -----------------    ----                
                  of a written statement from Granite Broadcasting Corporation 
                  (the "Company") to the effect that the Company is aware of the
                  fact of such sale or transfer.

The blank contained in such legend shall be filled in with the date that is the
later of: (1) one year and one day after the date of exercise of such Incentive
Stock Option or (2) two years and one day after the date of grant of such
Incentive Stock Option. Upon delivery to the Company, at its principal executive
office, of a written statement to the effect that such shares have been sold or
transferred prior to such date, the Company does hereby agree to promptly
deliver to the transfer agent for such shares a written statement to the effect
that the Company is aware of the fact of such sale or transfer. The Company may
also require the inclusion of any additional legend which may be necessary or
appropriate.

         5. ADMINISTRATION.

                  (a) Subject to Section 5(f) hereof, the Plan shall be
         administered by a Stock Option Committee (the "Stock Option Committee")
         consisting of not less than three (3) members of the Board of
         Directors, to be appointed by the Board of 



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         Directors of the Company. The Board of Directors may, from time to
         time, remove members from or add members to the Stock Option Committee.
         Vacancies in the Stock Option Committee, however caused, shall be
         filled by the Board of Directors. The Stock Option Committee shall
         select one of its members as chairman who shall preside at all of its
         meetings, and shall designate a secretary (who may or may not be a
         Stock Option Committee Member) to keep the minutes of the proceedings
         and all records, documents, and data pertaining to the administration
         of the Plan. The Stock Option Committee shall hold meetings at such
         times and places as it may determine. Subject to the provisions of the
         Plan and to policies determined by the Board of Directors, the Stock
         Option Committee may make such rules and regulations for the conduct of
         its business as it shall deem advisable. A majority of the Stock Option
         Committee shall constitute a quorum. All actions of the Stock Option
         Committee shall be taken by a majority of the members present at such
         meeting. Any action may be taken by a written instrument signed by a
         majority of the members, and action so taken shall be fully as
         effective as if it had been taken by a vote of the majority of the
         members at a meeting duly called and held. The Stock Option Committee
         and Compensation Committee (as defined below) members shall be eligible
         to be granted options; provided, that, a Stock Option Committee member
         shall abstain from voting with respect to the grant of any option to
         such Stock Option Committee member.

                  (b) Subject to the express terms and conditions of the Plan,
         including Section 5(f) hereof, the Stock Option Committee shall have
         full power to grant options under the Plan, to construe or interpret
         the Plan, to prescribe, amend and rescind rules and regulations
         relating to it and to make all other determinations necessary or
         advisable for its administration. Any such determinations by a majority
         of the whole Stock Option Committee shall be final and binding.

                  (c) Subject to the provisions of Sections 3, 4 and 5(f)
         hereof, the Stock Option Committee may, from time to time, determine
         which employees of the Company or its Affiliates shall be granted
         options under the Plan, the type of option granted, the number of
         option shares subject to each option, the time or times at which
         options shall be granted and be exercisable, the exercise price
         thereof, and the timing of payment of the exercise price, and the Stock
         Option Committee may grant such options under the Plan.

                  (d) The Stock Option Committee or the Compensation Committee,
         as the case may be, shall report to the Board of Directors the names of
         employees granted options, the number of option shares subject to, and
         the terms and conditions of, each option.



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                  (e) No member of the Board of Directors, the Stock Option
         Committee or the Compensation Committee shall be liable for any action,
         determination or omission of any other member of the Stock Option
         Committee or for any action, determination, or omission on his own
         part, including but not limited to the exercise of any power or
         discretion given to him under the Plan, except those resulting from his
         gross negligence or willful misconduct. For this purpose, no action
         taken in good faith shall constitute gross negligence or willful
         misconduct.

                  (f) Notwithstanding anything herein to the contrary, with
         respect to any participants in the Plan who, by virtue of such person's
         relationship to the Company, are subject to Section 16(a) and 16(b) of
         the Securities Exchange Act of 1934, as amended, in lieu of the Stock
         Option Committee, the Compensation Committee of the Board of Directors
         (the "Compensation Committee") shall govern all decisions as to such
         person's rights to participate, the number of and terms of options
         granted to them, and all respects of the administration of the Plan
         with respect to them and shall have and exercise all such authority
         with respect to such persons as is otherwise granted to the Stock
         Option Committee hereunder.

         6. REQUIREMENTS OF LAW. The Company shall not be required to sell or
issue any shares under any option if the issuance of such shares shall
constitute a violation by the Optionee or the Company of any provision of any
law, statute, or regulation of any governmental authority whether it be Federal
or State. Unless a registration statement is in effect under the Securities Act
of 1933, as amended (the "Act") with respect to the shares of Common Stock
covered by an option, the Company shall not be required to issue shares upon
exercise of any option (i) unless the Stock Option Committee has received
evidence satisfactory to it to the effect that the holder of such option is
acquiring such shares for investment and not with a view to the distribution
thereof or (ii) unless an opinion of counsel to the Company has been received by
the Company, in a form and substance which is deemed acceptable by the Stock
Option Committee, to the effect that a registration statement is not required.
Any determination in this connection by the Stock Option Committee shall be
final, binding and conclusive. In the event the shares issuable on exercise of
an option are not registered under the Act, the Company may imprint the
following legend or any other legend which counsel for the Company considers
necessary or advisable to comply with the Act:

                  "The shares of stock represented by this certificate have not
                  been registered under the Securities Act of 1933 or under the
                  securities laws of any State and may not be sold or
                  transferred except pursuant to an effective registration
                  statement or upon receipt by the 



                                      -11-
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                  Corporation of any opinion of counsel satisfactory to the
                  Corporation, in form and substance satisfactory to the
                  Corporation, that registration is not required for such sale
                  or transfer."

         The Company may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the Act and, in the event any shares are
so registered, the Company may remove any legend on certificates representing
such shares. The Company shall not be obligated to take any affirmative action
in order to cause the exercise of an option or the issuance of shares pursuant
thereto to comply with any law or regulation of any governmental authority.

         7. INTENTION OF PLAN. Incentive Stock Options granted pursuant to this
Plan are intended to qualify as Incentive Stock Options within the meaning of
Section 422A of the Code, and the terms of this Plan and options granted
hereunder shall be so construed; provided, however, that nothing in this Plan
shall be interpreted as a representation, guarantee or other undertaking on the
part of the Company that any options granted pursuant to this Plan are, or will
be, determined to be incentive stock options, within the meaning of the Code.

         8. USE OF PROCEEDS. The proceeds from the sale of Common Stock pursuant
to the exercise of options, including any down payments provided in Section
4(a), will be used for the Company's general corporate purposes.

         9. INDEMNIFICATION. Each member of the Stock Option Committee, the
Compensation Committee and the Board of Directors shall be indemnified and held
harmless by the Company for all loss, liabilities, costs and expenses (including
the amount of judgments and the amount of approved settlements made with a view
to the curtailment of costs of litigation, other than amounts paid to the
Company itself) reasonably incurred by him in connection with or arising out of
any action, suit, or proceeding regarding administration of the Plan in which he
may be involved by reason of his being or having been a member of such committee
or the Board of Directors, whether or not he continues to be a member of such
committee or the Board of Directors at the time of incurring such loss,
liabilities, costs and expenses. Notwithstanding any of the foregoing, no member
of such committee or the Board of Directors shall be entitled to such
indemnification from the Company for any loss, liabilities, costs and expenses
incurred by him (a) in respect of matters as to which he shall be finally
adjudged in any such action, suit or proceeding to have been guilty of gross
negligence or willful misconduct in the performance of his duty as a member of
such committee or the Board of Directors, or (b) in respect of any matter in
which any settlement is effected, to an amount in excess of the amount approved
by the Company on the advice of its legal counsel. Moreover, no right of
indemnification under 



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<PAGE>



the provisions set forth herein shall be available to or enforceable against the
Company by any member of such committee and the Board of Directors unless,
within sixty (60) days after institution of any such action, suit or proceeding,
he shall have offered the Company, in writing, the opportunity to handle and
defend the same at its own expense. The foregoing right of indemnification shall
inure to the benefit of the heirs, executors or administrators of each such
member of such committee and the Board of Directors and shall be in addition to
all other rights to which the member of such committee and the Board of
Directors may be entitled as a matter of law, contract or otherwise.

         10. WITHHOLDING. The Company's obligation to deliver shares upon the
exercise of any option hereunder shall be subject to applicable federal, state
and local tax withholding requirements.

         11. NO OBLIGATION OF EMPLOYMENT. Nothing in this Plan or contained in
an option granted hereunder or in any Stock Option Agreement shall govern the
employment rights and duties between the Optionee and the Company or Affiliate.
Neither this Plan, nor any grant or exercise pursuant thereto, shall constitute
an employment agreement among such parties. The granting of any option hereunder
shall not impose upon the Company or an Affiliate any obligation to employ or
continue to employ any Optionee. The right of the Company to terminate the
employment of any officer or other employee shall not be diminished or affected
by reason of a grant or the existence of an option hereunder.

         12. EFFECTIVE DATE AND TERMINATION.

                  (a) The effective date of the Plan is April 1, 1990; provided,
         that, within one year of that date, the Plan shall have been approved
         by a majority of the holders of the outstanding voting stock of the
         Company.

                  (b) The Plan shall terminate ten years after the effective
         date of the Plan and no options shall be granted pursuant to the Plan
         thereafter. The Board of Directors may terminate the Plan at any time
         prior to ten years after the effective date of the Plan. Termination of
         the Plan shall not alter or impair, without the consent of the
         Optionee, any of the rights or obligations and any option theretofore
         granted under the Plan.

         13. AMENDMENTS. The Board of Directors of the Company may, from time to
time, alter, amend, suspend, or discontinue the Plan, or alter or amend any and
all option agreements granted thereunder; provided, however, that no such action
of the Board of Directors, without the approval of a majority of the holders of
shares of the Company then entitled to vote, may alter the provisions of the
Plan so as to:



                                      -13-
<PAGE>



                  (a) Decrease the minimum option price for Incentive Stock
         Options;

                  (b) Extend the term of the Plan beyond ten years or the
         maximum term of the options granted beyond ten years;

                  (c) Withdraw the administration of the Plan from the Stock
         Option Committee;

                  (d) Change the class of eligible employees, officers and
         directors; or

                  (e) Increase the aggregate number of shares which may be
         issued pursuant to the provisions of the Plan;

         Notwithstanding the foregoing, (i) the Board of Directors may amend the
Plan in any respect in order to qualify the Incentive Stock Options granted
pursuant hereto as Incentive Stock Options as defined in Section 422A of the
Code, (ii) no amendment may be made to an outstanding option agreement to the
detriment of the Optionee without the Optionee's consent, and (iii) no amendment
may be made to this Plan (or any option granted hereunder without the consent of
the Optionee) which would constitute a modification of any Incentive Stock
Option outstanding under Section 425(h) of the Code or which would adversely
affect an outstanding Incentive Stock Option's status as an Incentive Stock
Option under Section 422A of the Code.



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