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                                                                  Exhibit 10.1

                             RMH TELESERVICES, INC.

                            1996 STOCK INCENTIVE PLAN



                  1. Purpose. RMH Teleservices, Inc., a Pennsylvania corporation
(the "Company"), hereby adopts the RMH Teleservices, Inc. 1996 Stock Incentive
Plan (the "Plan"). The Plan is intended to recognize the contributions made to
the Company by employees (including employees who are members of the Board of
Directors) of the Company or any Affiliate, to provide such persons with
additional incentive to devote themselves to the future success of the Company
or an Affiliate, and to improve the ability of the Company or an Affiliate to
attract, retain, and motivate individuals upon whom the Company's sustained
growth and financial success depend, by providing such persons with an
opportunity to acquire or increase their proprietary interest in the Company
through receipt of rights to acquire the Company's Common Stock, no par value
(the "Common Stock"), and through the transfer or issuance of Common Stock. In
addition, the Plan is intended as an additional incentive to directors of the
Company who are not employees of the Company or an Affiliate to serve on the
Board of Directors and to devote themselves to the future success of the Company
by providing them with an opportunity to acquire or increase their proprietary
interest in the Company through the receipt of rights to acquire Common Stock.
Furthermore, the Plan may be used to encourage consultants and advisors of the
Company to further the success of the Company.

                  2. Definitions. Unless the context clearly indicates
otherwise, the following terms shall have the following meanings:

                           (a) "Act" means the Securities Act of 1933.

                           (b) "Affiliate" means a corporation which is a parent
corporation or a subsidiary corporation with respect to the Company within the
meaning of Section 424(e) or (f) of the Code.

                           (c) "Award" shall mean a transfer of Common Stock
made pursuant to the terms of the Plan.

                           (d) "Award Agreement" shall mean the agreement
between the Company and a Grantee with respect to an Award made pursuant to the
Plan.

                           (e) "Board of Directors" means the Board of Directors
of the Company.

                           (f) "Change of Control" shall have the meaning as set
forth in Section 9 of the Plan.

                           (g) "Code" means the Internal Revenue Code of 1986,
as amended.

                           (h) "Committee" shall have the meaning set forth in
Section 3 of the Plan.

                           (i) "Common Stock" shall have the meaning set forth
in Section 1 of the Plan.

                           (j) "Company" means RMH Teleservices, Inc., a
Pennsylvania corporation.
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                           (k) "Disability" shall have the meaning set forth in
Section 22(e)(3) of the Code.

                           (l) "Employee" means an employee of the Company or an
Affiliate.

                           (m) "Exchange Act" means the Securities Exchange Act
of 1934, as amended.

                           (n) "Fair Market Value" shall have the meaning set
forth in Subsection 8(b) of the Plan.

                           (o) "Grantee" shall mean a person to whom an Award
has been granted pursuant to the Plan.

                           (p) "ISO" means an Option granted under the Plan
which is intended to qualify as an "incentive stock option" within the meaning
of Section 422(b) of the Code.

                           (q) "Non-Employee Director" shall mean a member of
the Board of Directors of the Company who is a "non-employee" of the Company
within the meaning of Rule 16b-3.

                           (r) "Non-qualified Stock Option" means an Option
granted under the Plan which is not intended to qualify, or otherwise does not
qualify, as an "incentive stock option" within the meaning of Section 422(b) of
the Code.

                           (s) "Option" means either an ISO or a Non-qualified
Stock Option granted under the Plan.

                           (t) "Optionee" means a person to whom an Option has
been granted under the Plan, which Option has not been exercised and has not
expired or terminated.

                           (u) "Option Document" means the document described in
Section 8 of the Plan, as applicable, which sets forth the terms and conditions
of each grant of Options.

                           (v) "Option Price" means the price at which Shares
may be purchased upon exercise of an Option, as calculated pursuant to
Subsection 8(b) of the Plan.

                           (w) "Rule 16b-3" means Rule 16b-3 promulgated under
the Exchange Act.

                           (x) "SAR" shall have the meaning set forth in Section
11 of the Plan.

                           (y) "Section 16 Officers" means any person who is an
"officer" within the meaning of Rule 16a-1(f) promulgated under the Exchange Act
or any successor rule.

                           (z) "Shares" means the shares of Common Stock of the
Company which are the subject of Options or granted as Awards under the Plan.

                  3. Administration of the Plan. The Board of Directors may
designate a committee or committees composed of two or more of directors, each
of whom is a Non-Employee Director, to operate and administer the Plan with
respect to all or a designated portion of the participants. Any such committee
designated by the Board of Directors, and the Board of Directors itself in its

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administrative capacity with respect to the Plan, is referred to as the
"Committee." The provisions set forth herein, as it pertains to members of the
Committee, may be administered by the Board of Directors.

                           (a) Meetings. The Committee shall hold meetings at
such times and places as it may determine, shall keep minutes of its meetings,
and shall adopt, amend and revoke such rules or procedures as it may deem
proper; provided, however, that it may take action only upon the agreement of a
majority of the whole Committee. Any action which the Committee shall take
through a written instrument signed by a majority of its members shall be as
effective as though it had been taken at a meeting duly called and held.

                           (b) Exculpation. No member of the Board of Directors
shall be personally liable for monetary damages for any action taken or any
failure to take any action in connection with the administration of the Plan or
the granting of Options under the Plan, provided that this Subsection 3(b) shall
not apply to (i) any breach of such member's duty of loyalty to the Company, an
Affiliate, or the Company's shareholders, (ii) acts or omissions not in good
faith or involving intentional misconduct or a knowing violation of law, (iii)
acts or omissions that would result in liability under applicable law, and (iv)
any transaction from which the member derived an improper personal benefit.

                           (c) Indemnification. Service on the Committee shall
constitute service as a member of the Board of Directors of the Company. Each
member of the Committee shall be entitled, without further act on his or her
part, to indemnity from the Company and limitation of liability to the fullest
extent provided by applicable law and by the Company's Articles of Incorporation
and/or By-laws in connection with or arising out of any action, suit or
proceeding with respect to the administration of the Plan or the granting of
Options thereunder in which he or she may be involved by reason of his or her
being or having been a member of the Committee, whether or not he or she
continues to be such member of the Committee at the time of the action, suit or
proceeding.

                           (d) Interpretation. The Committee shall have the
power and authority to interpret the Plan and to adopt rules and regulations for
its administration that are not inconsistent with the express terms of the Plan.
Any such actions by the Committee shall be final, binding and conclusive on all
parties in interest.

                  4. Grants under the Plan. Grants under the Plan may be in the
form of a Non-qualified Stock Option, an ISO or a combination thereof, at the
discretion of the Committee.

                  5. Eligibility. All Employees, members of the Board of
Directors and consultants and advisors to the Company shall be eligible to
receive Options and Awards hereunder. Consultants and advisors shall be eligible
only if they render bona fide services to the Company unrelated to the offer or
sale of securities; provided, however, that the limitation contained in this
sentence shall not apply to the extent that the inapplicability of such
limitation will not disqualify the Common Stock from being eligible for
registration on Form S-8 (or any successor form) under the Act. The Committee,
in its sole discretion, shall determine whether an individual qualifies as an
employee.

                  6. Shares Subject to Plan. The aggregate maximum number of
Shares for which Awards or Options may be granted pursuant to the Plan is nine
hundred fifty thousand (950,000). The number of Shares which may be issued under
the Plan shall be further subject to adjustment in accordance with Section 10.
The Shares shall be issued from authorized and unissued Common Stock or Common
Stock held in or hereafter acquired for the treasury of the Company. If an
Option terminates or expires without having been fully exercised for any reason
or if Shares subject to an Award have been conveyed back to the Company pursuant
to the terms of an Award Agreement, the Shares for

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which the Option was not exercised or the Shares that were conveyed back to the
Company may again be the subject of one or more Options or Awards granted
pursuant to the Plan.

                  7. Term of the Plan. The Plan is effective as of August 20,
1996, the date on which it was adopted by the Board of Directors, subject to the
approval of the Plan within one year after such date by the shareholders in the
manner required by state law. If the Plan is not so approved by the
shareholders, all ISO's granted under the Plan shall be null and void. No ISO
may be granted under the Plan after August 19, 2006.

                  8. Option Documents and Terms. Each Option granted under the
Plan shall be a Non-qualified Stock Option unless the Option shall be
specifically designated at the time of grant to be an ISO for Federal income tax
purposes. If any Option designated an ISO is determined for any reason not to
qualify as an incentive stock option within the meaning of Section 422 of the
Code, such Option shall be treated as a Non-qualified Stock Option for all
purposes under the provisions of the Plan. Options granted pursuant to the Plan
shall be evidenced by the Option Documents in such form as the Committee shall
from time to time approve, which Option Documents shall comply with and be
subject to the following terms and conditions and such other terms and
conditions as the Committee shall from time to time require which are not
inconsistent with the terms of the Plan.

                           (a) Number of Option Shares. Each Option Document
shall state the number of Shares to which it pertains. An Optionee may receive
more than one Option, which may include Options which are intended to be ISO's
and Options which are not intended to be ISO's, but only on the terms and
subject to the conditions and restrictions of the Plan. Notwithstanding anything
herein to the contrary, no Optionee shall be granted Options during one fiscal
year of the Company for more than one hundred thousand (100,000) Shares (such
number to be subject to adjustment in accordance with Section 10).

                           (b) Option Price. Each Option Document shall state
the Option Price which, for a Non-qualified Stock Option, may be less than,
equal to, or greater than the Fair Market Value of the Shares on the date the
Option is granted and, for an ISO, shall be at least 100% of the Fair Market
Value of the Shares on the date the Option is granted as determined by the
Committee in accordance with this Subsection 8(b); provided, however, that if an
ISO is granted to an Optionee who then owns, directly or by attribution under
Section 424(d) of the Code, shares possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or an Affiliate,
then the Option Price shall be at least 110% of the Fair Market Value of the
Shares on the date the Option is granted. If the Common Stock is traded in a
public market, then the Fair Market Value per share shall be, if the Common
Stock is listed on a national securities exchange or included in the NASDAQ
System, the last reported sale price thereof on the relevant date, or, if the
Common Stock is not so listed or included, the mean between the last reported
"bid" and "asked" prices thereof on the relevant date, as reported on NASDAQ or,
if not so reported, as reported by the National Daily Quotation Bureau, Inc. or
as reported in a customary financial reporting service, as applicable and as the
Committee determines. If the Common Stock is not traded in a public market, Fair
Market Value shall be determined in good faith by the Committee.

                           (c) Exercise. No Option shall be deemed to have been
exercised prior to the receipt by the Company of written notice of such exercise
and (unless arrangements satisfactory to the Company have been made for payment
through a broker in accordance with procedures permitted by Regulation P of the
Federal Reserve Board) of payment in full of the Option Price for the Shares to
be purchased. Each such notice shall specify the number of Shares to be
purchased and shall (unless the Shares are covered by a then current
registration statement or a Notification under Regulation A under the Act),
contain the Optionee's acknowledgment in form and substance satisfactory to the
Company that (a) such Shares are being purchased for investment and not for
distribution or resale (other than

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a distribution or resale which, in the opinion of counsel satisfactory to the
Company, may be made without violating the registration provisions of the Act),
(b) the Optionee has been advised and understands that (i) the Shares have not
been registered under the Act and are "restricted securities" within the meaning
of Rule 144 under the Act and are subject to restrictions on transfer and (ii)
the Company is under no obligation to register the Shares under the Act or to
take any action which would make available to the Optionee any exemption from
such registration, (c) such Shares may not be transferred without compliance
with all applicable federal and state securities laws, and (d) an appropriate
legend referring to the foregoing restrictions on transfer and any other
restrictions imposed under the Option Documents may be endorsed on the
certificates. Notwithstanding the foregoing, if the Company determines that
issuance of Shares should be delayed pending (A) registration under federal or
state securities laws, (B) the receipt of an opinion of counsel satisfactory to
the Company that an appropriate exemption from such registration is available,
(C) the listing or inclusion of the Shares on any securities exchange or an
automated quotation system or (D) the consent or approval of any governmental
regulatory body whose consent or approval is necessary in connection with the
issuance of such Shares, the Company may defer exercise of any Option granted
hereunder until any of the events described in this sentence has occurred.

                           (d) Medium of Payment. Subject to the terms of the
applicable Option Document, an Optionee shall pay for Shares (i) in cash, (ii)
by certified or cashier's check payable to the order of the Company, or (iii) by
such other mode of payment as the Committee may approve, including payment
through a broker in accordance with procedures permitted by Regulation P of the
Federal Reserve Board. The Optionee may also exercise the Option in any manner
contemplated by Section 11. Furthermore, the Committee may provide in an Option
Document that payment may be made in whole or in part in shares of the Company's
Common Stock held by the Optionee. If payment is made in whole or in part in
shares of the Company's Common Stock, then the Optionee shall deliver to the
Company certificates registered in the name of such Optionee representing the
shares owned by such Optionee, free of all liens, claims and encumbrances of
every kind and having an aggregate Fair Market Value on the date of delivery
that is at least as great as the Option Price of the Shares (or relevant portion
thereof) with respect to which such Option is to be exercised by the payment in
shares of Common Stock, endorsed in blank or accompanied by stock powers duly
endorsed in blank by the Optionee. In the event that certificates for shares of
the Company's Common Stock delivered to the Company represent a number of shares
in excess of the number of shares required to make payment for the Option Price
of the Shares (or relevant portion thereof) with respect to which such Option is
to be exercised by payment in shares of Common Stock, the stock certificate or
certificates issued to the Optionee shall represent (i) the Shares in respect of
which payment is made, and (ii) such excess number of shares. Notwithstanding
the foregoing, the Committee may impose from time to time such limitations and
prohibitions on the use of shares of the Common Stock to exercise an Option as
it deems appropriate.

                           (e) Termination of Options.

                                    (i) No Option shall be exercisable after the
first to occur of the following:

                                            (A) Expiration of the Option term
specified in the Option Document, which, in the case of an ISO, shall not occur
after (1) ten years from the date of grant, or (2) five years from the date of
grant if the Optionee on the date of grant owns, directly or by attribution
under Section 424(d) of the Code, shares possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company or of
an Affiliate;

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                                            (B) Except to the extent otherwise
provided in an Optionee's Option Document, a finding by the Committee, after
full consideration of the facts presented on behalf of both the Company and the
Optionee, that the Optionee has been engaged in disloyalty to the Company or an
Affiliate, including, without limitation, fraud, embezzlement, theft, commission
of a felony or proven dishonesty in the course of the Optionee's employment or
service, or has disclosed trade secrets or confidential information of the
Company or an Affiliate. In such event, in addition to immediate termination of
the Option, the Optionee shall automatically forfeit all Shares for which the
Company has not yet delivered the share certificates upon refund by the Company
of the Option Price. Notwithstanding anything herein to the contrary, the
Company may withhold delivery of share certificates pending the resolution of
any inquiry that could lead to a finding resulting in a forfeiture;

                                            (C) The date, if any, set by the
Board of Directors as an accelerated expiration date in the event of the
liquidation or dissolution of the Company;

                                            (D) The occurrence of such other
event or events as may be set forth in the Option Document as causing an
accelerated expiration of the Option; or

                                            (E) Except as otherwise set forth in
the Option Document and subject to the foregoing provisions of this Subsection
8(e), three months after the Optionee's employment or service with the Company
or its Affiliates terminates for any reason other than Disability or death or
one year after such termination due to Optionee's Disability or death. With
respect to this Subsection 8(e)(i)(E), the only Options that may be exercised
during the three-month or one-year period, as the case may be, are Options which
were exercisable on the last date of such employment or service and not Options
which, if the Optionee were still employed or rendering service during such
three-month or one-year period, would become exercisable, unless the Option
Document specifically provides to the contrary. The terms of an executive
severance agreement or other agreement between the Company and an Optionee,
approved by the Committee, whether entered into prior or subsequent to the grant
of an Option, which provide for Option exercise dates later than those set forth
in Subsection 8(e)(i) shall be deemed to be Option terms approved by the
Committee and consented to by the Optionee.

                                    (ii) Notwithstanding the foregoing, the
Committee may extend the period during which all or any portion of an Option may
be exercised to a date no later than the Option term specified in the Option
Document pursuant to Subsection 8(e)(i)(A), provided that any change pursuant to
this Subsection 8(e)(ii) which would cause an ISO to become a Non-qualified
Stock Option may be made only with the consent of the Optionee.

                                    (iii) Notwithstanding anything to the
contrary contained in the Plan or an Option Document, an ISO shall be treated as
a Non-qualified Stock Option to the extent such ISO is exercised at any time
after the expiration of the time period permitted under the Code for the
exercise of an ISO.

                           (f) Transfers. No Option granted under the Plan may
be transferred, except by will or by the laws of descent and distribution except
as otherwise set forth in the Option Document or to the extent that the
Committee otherwise determines.

                           (g) Limitation on ISO Grants. To the extent that the
aggregate fair market value of the shares of Common Stock (determined at the
time the ISO is granted) with respect to which ISO's under all incentive stock
option plans of the Company or its Affiliates are exercisable for the first

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time by the Optionee during any calendar year exceeds $100,000, such ISO's
shall, to the extent of such excess, be treated as Non-qualified Stock Options.

                           (h) Other Provisions. Subject to the provisions of
the Plan, the Option Documents shall contain such other provisions including,
without limitation, provisions authorizing the Committee to accelerate the
exercisability of all or any portion of an Option granted pursuant to the Plan,
additional restrictions upon the exercise of the Option or additional
limitations upon the term of the Option, as the Committee shall deem advisable.

                           (i) Amendment. Subject to the provisions of the Plan,
the Committee shall have the right to amend any Option Document or Award
Agreement issued to an Optionee or Award holder, subject to the Optionee's or
Award holder's consent if such amendment is not favorable to the Optionee or
Award holder, or if such amendment has the effect of changing an ISO to a
Non-Qualified Stock Option, except that the consent of the Optionee or Award
holder shall not be required for any amendment made pursuant to Subsection
8(e)(i)(C) or Section 9 of the Plan, as applicable.

                   9. Change of Control. In the event of a Change of Control,
the Committee may take whatever actions it deems necessary or desirable with
respect to any of the Options outstanding which need not be treated identically,
including, without limitation, accelerating (a) the expiration or termination
date in the respective Option Documents to a date no earlier than thirty (30)
days after notice of such acceleration is given to the Optionees, or (b) the
exercisability of the Option. Notwithstanding the foregoing, in the event of a
Change of Control, Options granted pursuant to the Plan will become
automatically exercisable in full but only with respect to those Optionees who,
in the good faith determination of the Board of Directors, are likely to have
their relationship with the Company or any Affiliate of the Company terminated
(including constructive termination through a significant decrease in authority,
responsibility or overall total compensation) as a result of such Change of
Control.

                           A "Change of Control" shall be deemed to have
occurred upon the earliest to occur of the following events:

                  (i) any "person" as such term is used in Sections 13(d) and
14(d) of the Exchange Act (other than the Company, any subsidiary of the
Company, any "person" (as hereinabove defined) acting on behalf of the Company
as underwriter pursuant to an offering who is temporarily holding securities in
connection with such offering, any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, or any "person" (as hereinabove
defined) who, on the date the Plan is effective, shall have been the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act) of or have voting
control over shares of capital stock of the Company possessing more than thirty
percent (30%) of the combined voting power of the Company's then outstanding
securities) is or becomes the "beneficial owner" (as hereinabove defined),
directly or indirectly, of securities of the Company representing thirty percent
(30%) or more of the combined voting power of the Company's then outstanding
securities;

                  (ii) during any period of not more than two consecutive years
(not including any period prior to the date the Plan is effective), individuals
who at the beginning of such period constitute the Board of Directors, and any
new director (other than a director designated by a "person" (as hereinabove
defined) who has entered into an agreement with the Company to effect a
transaction described in clause (i), (iii) or (iv) of this Section 9) whose
election by the Board of Directors or nomination for election by the Company's
shareholders was approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of the period or
whose

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election or nomination for election was previously so approved, cease for any
reason to constitute at least a majority thereof;

                  (iii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation or other legal entity,
other than (1) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than fifty percent (50%) of the
combined voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation or (2) a
merger or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no "person" (as hereinabove defined) (other
than a "person" who, on the date the Plan is effective, shall have been the
"beneficial owner" (as hereinabove defined) of or have voting control over
shares of capital stock of the Company possessing more than thirty percent (30%)
of the combined voting power of the Company's then outstanding securities)
acquires more than thirty percent (30%) of the combined voting power of the
Company's then outstanding securities;

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

                  (v) a "change of control" as hereinafter defined by the Board
of Directors for the express purposes of this Plan has occurred.

                  10. Adjustments on Changes in Capitalization.

                           (a) In the event that the outstanding Shares are
changed by reason of a reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination or exchange of shares and the like
(not including the issuance of Common Stock on the conversion of other
securities of the Company which are outstanding on the date of grant and which
are convertible into Common Stock) or dividends payable in Shares, an equitable
adjustment shall be made by the Committee in the aggregate number of shares
available under the Plan and in the number of Shares and price per Share subject
to outstanding Options. Unless the Committee makes other provisions for the
equitable settlement of outstanding Options, if the Company shall be
reorganized, consolidated, or merged with another corporation or other legal
entity, or if all or substantially all of the assets of the Company shall be
sold or exchanged, an Optionee shall at the time of issuance of the stock under
such corporate event be entitled to receive upon the exercise of his or her
Option the same number and kind of shares of stock or the same amount of
property, cash or securities as he or she would have been entitled to receive
upon the occurrence of any such corporate event as if he or she had been,
immediately prior to such event, the holder of the number of Shares covered by
his or her Option.

                           (b) Any adjustment under this Section 10 in the
number of Shares subject to Options shall apply proportionately to only the
unexercised portion of any Option granted hereunder. If fractions of a Share
would result from any such adjustment, the adjustment shall be revised to the
next lower whole number of Shares.

                           (c) The Committee shall have authority to determine
the adjustments to be made under this Section, and any such determination by the
Committee shall be final, binding and conclusive.

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                  11. Stock Appreciation Rights (SARs).

                           (a) In General. Subject to the terms and conditions
of the Plan, the Committee may, in its sole and absolute discretion, grant to an
Optionee the right to surrender an Option to the Company, in whole or in part,
and to receive in exchange therefor payment by the Company of an amount equal to
the excess of the Fair Market Value of the shares of Common Stock subject to
such Option, or portion thereof, so surrendered (determined in the manner
described in section 8(b) as of the date the SARs are exercised) over the
exercise price to acquire such shares (which right shall be referred to as an
"SAR"). Except as may otherwise be provided in an Option Document, such payment
may be made, as determined by the Committee in accordance with subsection 11(c)
below and set forth in the Option Document, either in shares of Common Stock or
in cash or in any combination thereof.

                           (b) Grant. Each SAR shall relate to a specific Option
granted under the Plan and shall be granted to the Optionee concurrently with
the grant of such Option by inclusion of appropriate provisions in the Option
Document pertaining thereto. The number of SARs granted to an Optionee shall not
exceed the number of shares of Common Stock which such Optionee is entitled to
purchase pursuant to the related Option. The number of SARs held by an Optionee
shall be reduced by (i) the number of SARs exercised under the provisions of the
Option Document pertaining to the related Option, and (ii) the number of shares
of Common Stock purchased pursuant to the exercise of the related Option.

                           (c) Payment. The Committee shall have sole discretion
to determine whether payment in respect of SARs granted to any Optionee shall be
made in shares of Common Stock, or in cash, or in a combination thereof. If
payment is made in Common Stock, the number of shares of Common Stock which
shall be issued pursuant to the exercise of SARs shall be determined by dividing
(i) the total number of SARs being exercised, multiplied by the amount by which
the Fair Market Value (as determined under section 8(b)) of a share of Common
Stock on the exercise date exceeds the exercise price for shares covered by the
related Option, by (ii) the Fair Market Value of a share of Common Stock on the
exercise date of the SARs. No fractional share of Common Stock shall be issued
on exercise of an SAR; cash may be paid by the Company to the individual
exercising an SAR in lieu of any such fractional share. If payment on exercise
of an SAR is to be made in cash, the individual exercising the SAR shall receive
in respect of each share to which such exercise relates an amount of money equal
to the difference between the Fair Market Value of a share of Common Stock on
the exercise date and the exercise price for shares covered by the related
Option.

                           (d) Limitations. SARs shall be exercisable at such
times and under such terms and conditions as the Committee, in its sole and
absolute discretion, shall determine; provided, however, that an SAR may be
exercised only at such times and by such individuals as the related Option under
the Plan and the Option Agreement may be exercised.

                  12. Terms and Conditions of Awards. Awards granted pursuant to
the Plan shall be evidenced by written Award Agreements in such form as the
Committee shall from time to time approve, which Award Agreements shall comply
with and be subject to the following terms and conditions and such other terms
and conditions which the Committee may from time to time require which are not
inconsistent with the terms of the Plan.

                           (a) Number of Shares. Each Award Agreement shall
state the number of shares of Common Stock to which it pertains.

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                           (b) Purchase Price. Each Award Agreement shall
specify the purchase price, if any, which applies to the Award. If the Board
specifies a purchase price, the Grantee shall be required to make payment on or
before the date specified in the Award Agreement. A Grantee shall pay for Shares
(i) in cash, (ii) by certified check payable to the order of the Company, or
(iii) by such other mode of payment as the Committee may approve.

                           (c) Grant. In the case of an Award which provides for
a grant of Shares without any payment by the Grantee, the grant shall take place
on the date specified in the Award Agreement. In the case of an Award which
provides for a payment, the grant shall take place on the date the initial
payment is delivered to the Company, unless the Committee or the Award Agreement
otherwise specifies. Stock certificates evidencing Shares granted pursuant to an
Award shall be issued in the sole name of the Grantee. Notwithstanding the
foregoing, as a precondition to a grant, the Company may require an
acknowledgment by the Grantee as required with respect to Options under Section
8.

                           (d) Conditions. The Committee may specify in an Award
Agreement any conditions under which the Grantee of that Award shall be required
to convey to the Company the Shares covered by the Award. Upon the occurrence of
any such specified condition, the Grantee shall forthwith surrender and deliver
to the Company the certificates evidencing such Shares as well as completely
executed instruments of conveyance. The Committee, in its discretion, may
provide that certificates for Shares transferred pursuant to an Award be held in
escrow by the Company or an officer of the Company until such time as each and
every condition has lapsed and that the Grantee be required, as a condition of
the Award, to deliver to such escrow agent or Company officer stock powers
covering the Award Shares duly endorsed by the Grantee. Unless otherwise
provided in the Award Agreement, distributions made on Shares held in escrow
will be deposited in escrow, to be distributed to the party becoming entitled to
the Shares on which the distribution was made. Stock certificates evidencing
Shares subject to conditions shall bear a legend to the effect that the Common
Stock evidenced thereby is subject to repurchase or conveyance to the Company in
accordance with an Award made under the Plan and that the Shares may not be sold
or otherwise transferred.

                           (e) Lapse of Conditions. Upon termination or lapse of
each and every forfeiture condition, if any, the Company shall cause
certificates without the legend referring to the Company's repurchase right (but
with any other legends that may be appropriate) evidencing the Shares covered by
the Award to be issued to the Grantee upon the Grantee's surrender of the
legended certificates held by him or her to the Company.

                           (f) Rights as Shareholder. Upon payment of the
purchase price, if any, for Shares covered by an Award and compliance with the
acknowledgment requirement of subsection 12(c), the Grantee shall have all of
the rights of a shareholder with respect to the Shares covered thereby,
including the right to vote the Shares and receive all dividends and other
distributions paid or made with respect thereto, except to the extent otherwise
provided by the Committee or in the Award Agreement.

                  13. Amendment of the Plan. The Board of Directors of the
Company may amend the Plan from time to time in such manner as it may deem
advisable. Nevertheless, the Board of Directors of the Company may not change
the class of individuals eligible to receive an ISO or increase the maximum
number of Shares as to which Options may be granted without obtaining approval,
within twelve months before or after such action, by the shareholders in the
manner required by state law. Notwithstanding anything herein to the contrary,
the Committee may, at its sole discretion, amend the Plan and any outstanding
Option or Award to (i) eliminate any provision it determines is no longer

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<PAGE>   11
required to comply with Rule 16b-3 as a result of revisions to Rule 16b-3 which
are generally effective after the date the Plan is effective or (ii) provide the
holder of the Option or Award an exemption from potential liability under
Section 16(b) of the Exchange Act and the rules and regulations thereunder.

                  14. No Commitment to Retain. The grant of an Option or Award
pursuant to the Plan shall not be construed to imply or to constitute evidence
of any agreement, express or implied, on the part of the Company or any
Affiliate to retain the Optionee or Grantee as an employee, consultant or
advisor of the Company or any Affiliate, as a member of the Board of Directors
or in any other capacity.

                  15. Withholding of Taxes. In connection with any event
relating to an Option or Award, the Company shall have the right to (a) require
the recipient to remit or otherwise make available to the Company an amount
sufficient to satisfy any federal, state and/or local withholding tax
requirements prior to the delivery or transfer of any certificate or
certificates for such Shares or (b) take whatever other action it deems
necessary to protect its interests with respect to tax liabilities. The
Company's obligations under the Plan shall be conditioned on the Optionee's or
Grantee's compliance, to the Company's satisfaction, with any withholding
requirement.

                  16. Interpretation. The Plan is intended to enable
transactions under the Plan with respect to directors to satisfy the conditions
of Rule 16b-3; to the extent that any provision of the Plan would cause a
conflict with such conditions or would cause the administration of the Plan as
provided in Section 3 to fail to satisfy the conditions of Rule 16b-3, such
provision shall be deemed null and void to the extent permitted by applicable
law. This section shall not be applicable if no class of the Company's equity
securities is then registered pursuant to Section 12 of the Exchange Act.

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