<PAGE>
 
                       NEW ENGLAND BUSINESS SERVICE, INC.
                  NEBS 1997 KEY EMPLOYEE AND ELIGIBLE DIRECTOR
                STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
                -----------------------------------------------
                                        
                               TABLE OF CONTENTS
                               -----------------
                                        
<TABLE> 
<CAPTION> 

<S>                                                                    <C> 
1.  PURPOSE AND GENERAL MATTERS.......................................   1
    ---------------------------

     (a)  Purpose.....................................................   1
     (b)  General Matters.............................................   2

2.  ADMINISTRATION....................................................   2
------------------

3.  STOCK.............................................................   3
---------

     (a)  Shares Reserved under the Plan..............................   3
     (b) Status of Shares in Terminated or Surrendered Options........   4
     (c) Adjustment of Shares Reserved under the Plan.................   4

4.  ELIGIBILITY.......................................................   5
---------------

     (a)  Employees...................................................   5
     (b)  Eligible Directors..........................................   5

5.  TERMS AND CONDITIONS OF OPTIONS...................................   6
-----------------------------------

     (a) Number of Shares and Maximum Fair Market Value...............   6
     (b) Option Price.................................................   6
     (c) Expiration of Options........................................   7
     (d) Exercise.....................................................   7
     (e) Waiting Period...............................................   7
     (f) Termination of Employment or Eligible Director Status........   8
     (g) Assignability of Options and Stock Appreciation Rights.......  10
     (h) Stockholder Rights...........................................  11
     (i) Securities Law Compliance and Other Conditions...............  11
     (j) Non-Incentive Stock Options..................................  11

6.   STOCK APPRECIATION RIGHTS........................................  12
------------------------------

     (a) In General...................................................  12
     (b) Committee's Power to Include Appreciation Rights in Option 
         Grant........................................................  12
     (c) Form of Appreciation Distributions...........................  13
     (d) Tax Withholding Required.....................................  13
     (e) Committee's Power to Limit Annual Amount of Appreciation
         Distributions................................................  12
</TABLE> 

                                      -i-
<PAGE>
 
<TABLE> 

<S>                                                                   <C> 
7.   REPLACEMENT OPTIONS.............................................  14   
------------------------

8.   REORGANIZATION..................................................  14
-------------------

9.   AMENDMENT.......................................................  14
--------------

10.  EFFECTIVE DATE AND TERM OF PLAN.................................  15
------------------------------------

     (a)  Effective Date.............................................  17
     (b)  Term of Plan...............................................  17

11.  CHANGE IN CONTROL...............................................  17
----------------------


</TABLE> 

                                      -ii-
<PAGE>
 
                                                                   Exhibit 10(X)
 
                       NEW ENGLAND BUSINESS SERVICE, INC.

                  NEBS 1997 KEY EMPLOYEE AND ELIGIBLE DIRECTOR
                STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN

                    (Including Amendment and Restatement of
   the NEBS 1990 Key Employee Stock Option and Stock Appreciation Rights Plan
     and the NEBS 1994 Key Employee and Eligible Director Stock Option and
                        Stock Appreciation Rights Plan)

                                 July 25, 1997

     The NEBS 1997 Key Employee and Eligible Director Stock Option and Stock
Appreciation Rights Plan (the "Plan") amends and restates:  (a) the NEBS 1990
Key Employee Stock Option and Stock Appreciation Rights Plan (the "1990 Plan"),
and (b) the NEBS 1994 Key Employee and Eligible Director Stock Option and Stock
Appreciation Rights Plan (the "1994 Plan").  All shares reserved but not
allocated for options under the 1990 Plan and the 1994 Plan are available for
issuance under the Plan.  Any option granted under the 1990 Plan or the 1994
Plan may be amended by the Committee (as defined below) in accordance with the
terms of the Plan.

1.  Purpose and General Matters
    ---------------------------    
     (a) Purpose.  The purpose of the Plan is to provide a means whereby New
         -------                                                                
England Business Service, Inc. (the "Company"), by granting options to purchase
stock in the Company and stock appreciation rights in connection with certain of
such options, can attract and retain persons of ability as key employees of the
Company or any subsidiary (as defined below) of the Company and as non-employee
directors of the Company.  It is also the purpose of the Plan
<PAGE>
 
to provide a performance incentive to option holders and to encourage stock
ownership in the Company by such key employees and non-employee directors.

     (b) General Matters.  It is intended that options granted under the
         ---------------                                                    
Plan shall constitute either "incentive stock options," within the meaning of
Section 422 of the Internal Revenue Code of 1986, as from time to time amended
(the "Code"), or "non-incentive stock options," as determined by the Committee
appointed pursuant to Section 2 of the Plan in its sole discretion and indicated
on each form of option agreement (the "Option Agreement"), and the terms of the
Plan and Option Agreements shall be construed accordingly; provided, however,
that non-employee directors shall be granted non-incentive stock options only.
Except as otherwise provided herein, the words parent and subsidiary shall be
interpreted in accordance with Section 422 and Section 424 of the Code.

2.  Administration
    --------------    

     The Plan shall be administered and interpreted by a committee (the
"Committee") appointed by (and serving at the pleasure of) the Company's Board
of Directors (the "Board").  The Committee shall consist of not less than two
members of the Board, each of whom while serving as such shall be a person who
in the opinion of counsel to the Company is (i) a "Non-Employee Director," as
such term is used in Rule 16b-3 promulgated under the Securities Exchange Act of
1934, as amended (the "Act"), and (ii) an "Outside Director," as such term is
used in regulation 1.162-27(e)(3) under Section 162(m) of the Code.  The acts of
a majority of the Committee members present at any meeting at which a quorum

                                      -2-
<PAGE>
 
is present, and any acts approved in writing by all members without a meeting,
shall constitute acts of the Committee.

     Subject to the provisions of the Plan, the Committee shall determine with
respect to options granted to employees of the Company or any subsidiary:

     (a) the employees to whom options shall be granted;

     (b) the number of shares to be optioned to each employee;

     (c) whether any option granted hereunder to an employee shall be an
incentive stock option or a non-incentive stock option;

     (d) whether or not any option granted hereunder to an employee shall
contain stock appreciation rights (as provided in Section 6 below); and

     (e) the terms and conditions of each agreement between the Company and the
employee to whom the Company has granted any option under the Plan.

     Consistent with the foregoing, the Committee shall have full authority to
administer the Plan, including authority to interpret and construe any
provisions of the Plan and to adopt rules and regulations for administering the
Plan, as it may deem necessary.  Decisions of the Committee shall be final and
binding on all persons who have an interest in the Plan.

     No members of the Committee or of the Board shall be held liable for any
action or determination made in good faith with respect to the Plan or any
option or stock appreciation right granted hereunder.

3. Stock
   -----    

   (a) Shares Reserved under the Plan.  Subject to the provisions of
       ------------------------------                                   
clause (c) below, the stock which shall be the subject of the options and
appreciation

                                      -3-
<PAGE>
 
rights granted under the Plan shall be shares of the Company's
Common Stock, par value $1 per share (the "Stock"), and the total number of
shares of Stock as to which options may be granted under the Plan shall not
exceed 1,474,559.

     (b) Status of Shares in Terminated or Surrendered Options.  If any
         -----------------------------------------------------             
outstanding option under the Plan (including any options issued under the 1990
Plan or the 1994 Plan) expires or is terminated for any reason, or is
surrendered pursuant to Section 6 below, then the shares of Stock allocable to
the unexercised or surrendered portion of such option, less any shares
distributed in payment of stock appreciation rights upon such surrender, shall
be added to the remaining number of shares as to which future options may be
granted under the Plan.

     (c) Adjustment of Shares Reserved under the Plan. If the Company shall
         --------------------------------------------
combine or split the Stock or shall declare thereon any dividend payable in
shares of Stock, or shall reclassify or take any other action of a similar
nature affecting the Stock, then the number and class of shares of Stock which
may thereafter be optioned (in the aggregate and to any participant) shall be
adjusted accordingly, and, in the case of each option outstanding at the time of
any such action, the number and class of shares which may thereafter be
purchased pursuant to such option and the option price per share (and any stock
appreciation right related thereto) shall be adjusted to such extent as may be
determined by the Board, upon recommendation of the Committee, to be necessary
to maintain unimpaired and unenlarged the rights of the holder of such option,
and any such determination shall be conclusive and binding upon

                                      -4-
<PAGE>
 
such holder. After any such adjustment, the term "Stock" shall be deemed to mean
the Stock as so adjusted.

4.  Eligibility
    -----------    
     (a) Employees.  All employees of the Company or of any subsidiary
         ---------                                                        
("Employees") shall be eligible to participate in the Plan and to receive grants
of stock options ("Employee Options") hereunder, except that no Employee shall
be granted an incentive stock option if, at the time the option is granted, such
Employee owns stock of the Company which, taking into account the attribution
rules of Section 424(d) of the Code, possesses more than ten per cent (10%) of
the total combined voting power of all classes of the Company's stock then
outstanding.  Officers and directors of the Company or of any subsidiary who are
full-time Employees and who otherwise meet the foregoing terms of eligibility
shall be eligible to participate in the Plan and to receive grants of Employee
Options hereunder.

     (b) Eligible Directors.  "Eligible Directors" shall mean directors of
         ------------------                                                   
the Company who are directors on the date of grant and who are not Employees.
All options granted under the Plan to Eligible Directors shall be non-incentive
stock options within the meaning of Section 422 of the Code.

     Each Eligible Director who is such on the 10th day following the date on
which each Annual Meeting of the Stockholders of the Company (the "Annual
Meeting") is held during the term of the Plan shall on such 10th day be granted
a stock option (a "Director Option") to purchase 1,000 shares of Stock; provided

                                      -5-
<PAGE>
 
that the first such grant to each Eligible Director shall be of an option to
purchase 3,000 shares of Stock.

     The date of grant of a Director Option under the Plan to an Eligible
Director shall be the applicable day referred to immediately above.

5.  Terms and Conditions of Options
    -------------------------------    

     (a) Number of Shares and Maximum Fair Market Value.  Each Option
         ----------------------------------------------                  
Agreement shall state the total number of shares to which it pertains.  The
maximum number of shares of Stock with respect to which Employee Options may be
granted under the Plan to any Employee during any single calendar year shall be
100,000 shares.  The aggregate fair market value (determined at the time the
option is granted) of the Stock with respect to which incentive stock options
become exercisable for the first time by an individual during any calendar year
(under all the plans of his or her employer corporation and its parent and
subsidiary corporations) shall not exceed $100,000.

     (b) Option Price.  Each Option Agreement shall state a single option
         ------------                                                        
price applicable to all of the shares to which it pertains. The option price per
share shall be the fair market value (the "Fair Market Value") of a share of
Stock on the day the option is granted. For purposes of determining the option
price (and for all other valuation purposes under the Plan) the Fair Market
Value of a share of Stock shall be the last sales price per share of the Stock
as reported on the New York Stock Exchange prior to the date on which such
option is granted (or on or prior to the date as to which such other valuation
is made), or, if the Stock is not then listed on the New York Stock Exchange or
if no price has been

                                      -6-
<PAGE>
 
so reported within one week prior to the date of such issuance (or within one
week prior to such other valuation date), such market value shall be as
determined by a principal market maker for the Stock designated by the
Committee.

     (c) Expiration of Options.  Each Option Agreement shall state the date
         ---------------------                                                 
on which it shall expire, which (i) shall be ten (10) years from the date of
grant in the case of Director Options; (ii) shall not be more than ten (10)
years from the date of grant for Employee Options; and (iii) shall otherwise be
as determined by the Committee.

     (d) Exercise.  Any option may be exercised by the holder thereof (or
         --------                                                            
his personal representative if exercised pursuant to clause (iii) of subsection
(f) below) or any transferee permitted by clause (g) below by giving notice in
writing of such exercise to the Chief Financial Officer of the Company during
the period that it is exercisable.  The option price for the number of shares
for which the option is exercised shall be due and payable at the time of such
exercise.  It shall be payable in United States dollars and may be paid in cash
or by certified check, bank cashier's check, the surrendering of shares of the
Company's Stock (which shall be valued at its Fair Market Value on the date of
surrender in accordance with Section 5(b) of the Plan) or any other means
approved by the Chief Financial Officer. The time of exercise of any option
shall be the time at which such notice of exercise and payment are received by
the Chief Financial Officer.

     (e) Waiting Period.  Each Director Option shall not be exercisable in
         --------------                                                       
whole or in part until one (1) year after its date of grant.  The Committee may,
in

                                      -7-
<PAGE>
 
its discretion, provide that an Employee Option may not be exercised in whole or
in part for any period or periods of time specified by the Committee. Except as
so provided, any option may be exercised in whole at any time or in part from
time to time during its term, provided that no option may be exercised for less
than ten (10) shares unless the issue of a lesser number is sufficient to
exhaust the option. Notwithstanding anything to the contrary in the Plan or in
any Option Agreement (but subject to the provisions of Section 11 below), the
right to purchase all of the remaining shares under each option granted under
the Plan that is outstanding on the date of occurrence of a Change in Control
(as defined in Section 11 below) of the Company shall vest and become
exercisable immediately upon the occurrence of such Change in Control.

     (f) Termination of Employment or Eligible Director Status.
         -----------------------------------------------------     

     (i) Except after a Change in Control, each Employee Option held by an
Employee whose employment terminates other than by reason of retirement or death
shall expire upon such cessation of employment.  Each Employee Option held by an
Employee whose employment terminates upon or following a Change in Control shall
remain exercisable for a period of time as provided in clause (v) below.

     (ii) Subject to clause (iii) of this sub-section (f) and Section 8 below,
if an Employee retires holding an unexpired incentive stock option, such option
shall be exercisable by him or her during the remainder of the term thereof or
during the three (3) months following retirement, whichever period is shorter,
and only as to not more than the number of shares as to which it was exercisable

                                      -8-
<PAGE>
 
immediately prior to retirement.  If an Employee retires holding an unexpired
non-incentive stock option, such option shall be exercisable by him or her
during the remainder of the term thereof or for two (2) years following
retirement, whichever period is shorter, and only as to not more than the number
of shares as to which it was exercisable immediately prior to retirement.

     (iii)  Subject to Section 8 below, if an optionee dies holding an unexpired
Employee or Director Option, such option shall be exercisable by his or her
personal representative as to not more than the number of shares as to which it
was exercisable immediately prior to such optionee's death, during, and only
during, the period beginning with such death and ending with the earlier of the
first anniversary of such death or the expiration date of the option.

     (iv) Subject to clause (iii) of this sub-section (f) and Section 8 below,
if an Eligible Director ceases to serve as a director of the Company for any
reason other than death while holding an unexpired Director Option, such option
shall be exercisable by him or her during the remainder of the term thereof or
for two (2) years following the date that he or she ceases to serve as a
director of the Company, whichever period is shorter, and only as to not more
than the number of shares as to which it was exercisable immediately prior to
such date of cessation of service as a director.

     (v)  Subject to clause (iii) of this sub-section (f) and Section 8 below,
if an Employee's employment terminates upon or within six months following a
Change in Control, any unexpired Employee Option held by such Employee at the
time of his or her termination shall remain exercisable for the remainder of the

                                      -9-
<PAGE>
 
term thereof, or for three months following such termination, whichever period
is shorter.

     (g) Assignability of Options and Stock Appreciation Rights.  No
         ------------------------------------------------------         
incentive stock option (or stock appreciation right related thereto) shall be
assignable or transferable except by will or by the laws of descent and
distribution as provided in clause (iii) of sub-section (f) above.  During the
lifetime of an optionee, any incentive stock option (and stock appreciation
rights related thereto) granted to him or her shall be exercisable only by the
optionee; provided that such option (and related stock appreciation rights)
shall be exercisable on behalf of the optionee by his or her legal
representative if the optionee is mentally incompetent.

     Notwithstanding the foregoing, Director Options shall be transferable
(subject to any terms and conditions imposed by the Committee) by the optionee,
either directly or in trust, to one or more members of the optionee's immediate
family, or to a family partnership or other entity for the exclusive benefit of
one or more members of the optionee's immediate family.  The Committee may grant
employees non-incentive stock options and related stock appreciation rights
transferable (subject to any terms and conditions imposed by the Committee) by
the optionee, either directly or in trust, to one or more members of the
optionee's immediate family, or to a family partnership or other entity for the
exclusive benefit of one or more members of the optionee's immediate family.
Following any transfer permitted pursuant to this paragraph, of which the
optionee has notified the Committee in writing, such option or stock
appreciation right may be

                                      -10-
<PAGE>
 
exercised by the transferee(s), subject to all terms and conditions of the
Option Agreement. For these purposes, the members of the optionee's immediate
family include only the optionee's: (i) spouse and lineal descendants of spouse;
(ii) lineal descendants and spouses of lineal descendants; (iii) lineal
ancestors and spouses of lineal ancestors; and (iv) siblings, and spouses and
children of such siblings.

     (h) Stockholder Rights.  No person shall have any rights as a
         ------------------                                           
stockholder with respect to the shares of Stock subject to any option granted
under the Plan until he or she shall have been issued a stock certificate for
such shares.

     (i) Securities Law Compliance and Other Conditions.  The Committee may
         ----------------------------------------------                        
include in each Option Agreement such requirements as it may deem necessary or
advisable to assure compliance with all applicable state and federal securities
laws and regulations. Any Option Agreement may contain such other provisions
(not inconsistent with the express provisions of the Plan) as the Committee
shall deem advisable.

     (j) Non-Incentive Stock Options.  Notwithstanding any other provisions
         ---------------------------                                           
of this Plan, the Committee may grant options which in one or more respects do
not meet the requirements for incentive stock options established by Section 422
of the Code.  The Committee shall indicate in each Option Agreement whether an
incentive stock option within the meaning of Section 422 of the Code or a non-
incentive stock option is thereby granted.  Except as to Director Options and as
otherwise provided in this Plan, the Committee, in its sole discretion, shall

                                      -11-
<PAGE>
 
establish the terms and conditions for each non-incentive stock option which it
grants.  Such terms and conditions may, but need not, include some or all of the
provisions of this Plan with respect to incentive stock options.  If the
Committee grants an option which in all respects meets the requirements for
incentive stock options it may nonetheless designate such option a non-incentive
stock option in the Option Agreement.  No shares of Stock or other compensation
shall be delivered pursuant to the exercise of a non-incentive stock option
(whether by the optionee or a transferee) unless arrangements satisfactory to
the Company's Chief Financial Officer have been made for any required federal,
state or local income tax or other withholdings.

6.  Stock Appreciation Rights
    -------------------------    

     (a) In General.  A stock appreciation right is a right granted to the
         ----------                                                           
holder of an Employee Option granted under this Plan to receive, pursuant to the
terms of the right, an amount payable in shares of Stock, or, at the election of
the Committee, cash or a combination of cash and shares of Stock, in each case
equal to the increase in the value of the shares covered by the option to which
the stock appreciation right is related, all as more particularly set forth
below in this Section 6.

     (b) Committee's Power to Include Appreciation Rights in Option Grant.
         ----------------------------------------------------------------     
Any Employee Option Agreement may provide that the option holder is entitled to
receive, with respect to all or a stated percentage of the shares of Stock
purchasable thereunder from time to time (or any portion thereof) and subject to
the surrender of the option to purchase such shares, an appreciation
distribution

                                      -12-
<PAGE>
 
by the Company in an amount equal to the difference between the Fair Market
Value, on the date of such surrender, of the shares of Stock as to which such
option is surrendered and the aggregate option price for such shares. Such
surrender shall be deemed to have occurred as of the date the Chief Financial
Officer of the Company receives written notice of such surrender.

     (c) Form of Appreciation Distributions.  If the option is so
         ----------------------------------                          
surrendered, in whole or in part, the appreciation distribution to which the
option holder is entitled shall be made in the form of shares of Stock, provided
that the Committee shall be entitled, in its sole discretion, to discharge the
Company's obligation by the payment of cash, or partly by the payment of cash
and partly by the delivery of shares of Stock, so long as the total value of
such payment is equal to the aggregate value of the shares of Stock which the
surrendering optionee is entitled to receive.

     (d) Tax Withholding Required.  No shares of Stock shall be delivered or
         ------------------------                                               
cash payment made in discharge of a stock appreciation right unless arrangements
satisfactory to the Company's Chief Financial Officer have been made for any
required federal, state or local income tax or other withholdings.

     (e) Committee's Power to Limit Annual Amount of Appreciation Distributions.
         ----------------------------------------------------------------------
Notwithstanding any other provision of the Plan, the Committee may, from time to
time, determine the maximum amount of cash or Stock which may be delivered upon
exercise of stock appreciation rights in any year. The Committee may further
determine that, if the amount to be received by an option holder exercising any
such rights is reduced in any year by reason of this

                                      -13-
<PAGE>
 
limitation, all or a portion of the amount not delivered may be delivered in a
later year or years.

7.  Replacement Options
    -------------------    

     The Committee may permit the voluntary surrender of all or a portion of any
Employee Option granted under this Plan conditioned upon the granting to the
option holder of a new Employee Option issued under the Plan for the same or a
different number of shares.  The new option (which may contain stock
appreciation rights) shall be exercisable at such price, during such period and
in accordance with such other terms and conditions as the Committee may
determine, consistent with the provisions of this Plan, without regard to the
price, period of exercise, or other terms or conditions of the option
surrendered.

8.  Reorganization
    --------------    

     In case of any one or more reclassifications, changes, or exchanges of
outstanding shares of the Company's Stock (other than as provided in sub-section
(c) of Section 3), or consolidations of the Company with, or mergers of the
Company into, other corporations, or other recapitalizations or reorganizations
(other than consolidations with a subsidiary in which the Company is the
continuing corporation and which do not result in any reclassifications, change
or exchange of outstanding shares of the Company's Stock), or in case of any one
or more sales or conveyances to another corporation of the property of the
Company as an entirety, or substantially as an entirety (any and all of which
are hereinafter in this section called

                                      -14-
<PAGE>
 
"Reorganizations"), the holder of each option then or thereafter outstanding
shall have the right, upon any subsequent exercise thereof, to acquire the same
kind and amount of securities and property which such holder would then hold if
such holder had exercised such option immediately before the first of such
Reorganizations and continued to hold all securities and property which came to
such holder as a result of that and subsequent Reorganizations, less all
securities and property surrendered or canceled pursuant to any of same (the
rights provided by Section 3(c) and this Section 8 being continuing and
cumulative) except that, notwithstanding any provision of clause (ii), (iii),
(iv) or (v) of subsection (f) of Section 5 to the contrary, the Board shall have
the right, upon no less than thirty (30) days' notice to the holder of each
outstanding option, to terminate the period in which all outstanding options may
be exercised at the time of such Reorganization. Such notice shall be effective
when mailed to such option holder by certified or registered mail addressed to
him or her at the holder's address of record or when delivered in hand to such
option holder. In such event all outstanding options, other than options as to
which one of the events referred to in Sections 5(f)(ii), (iii) or (iv) has
occurred, may be exercised, in whole or in part, and all outstanding options as
to which one of the events referred to in Sections 5(f)(ii), (iii) or (iv) has
occurred may be exercised, but only to the extent therein permitted, and only at
any time prior to such Reorganization. A liquidation shall be deemed a
Reorganization for the foregoing purposes.

                                      -15-
<PAGE>
 
9.  Amendment
    ---------    

     The Board may alter, amend, suspend or terminate the Plan at any time and
from time to time and may alter and amend all Option Agreements granted
hereunder, except that any such action requiring shareholder approval under Rule
16b-3 of the Securities and Exchange Act of 1934, the Code or any regulation
thereunder, or the rules of the New York Stock Exchange or any stock exchange on
which the Stock is traded will be subject to shareholder approval or
ratification.  No amendment of the Plan or of any Option Agreement may, without
the consent of the holder of an outstanding option granted under the Plan,
adversely affect the rights of such holder under such option.

                                      -16-
<PAGE>
 
10.  Effective Date and Term of Plan
     -------------------------------    

     (a) Effective Date.  The Plan shall become effective on the date of its
         --------------                                                         
approval by the Board (the "Effective Date"), but before any options granted
under the Plan shall become exercisable, the Plan must be approved by the
holders of at least a majority of the Company's outstanding voting stock
represented and voting at a duly held meeting at which a quorum is present,
provided the shares voting for approval also constitute at least a majority of
the required quorum.  If such stockholder approval is not obtained, then any
options previously granted under the Plan shall terminate and no further options
shall be granted.  Subject to such limitation, the Committee may grant Employee
Options under the Plan at any time after the Effective Date and before the date
fixed herein for termination of the Plan and Director Options shall be granted
as provided under the Plan.

     (b) Term of Plan.  The Plan shall terminate on the 10th anniversary of
         ------------                                                          
the Effective Date.  Any options outstanding under the Plan at the time of its
termination shall continue to have force and effect in accordance with the
provisions set forth in the Option Agreements evidencing such options.

11.  Change in Control
     -----------------    

     For the purpose of this Plan a "Change in Control" shall mean:

     (a) The acquisition by any individual, entity or group (within the meaning
of Sections 13(d)(3) or 14(d)(2) of the Act) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Act) of 35%

                                      -17-
<PAGE>
 
or more of either (i) the then outstanding shares of the Stock or (ii) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of the directors (the "Outstanding
Company Voting Securities"); provided, however, that the following acquisitions
shall not constitute a Change in Control: (A) any acquisition directly from the
Company (excluding an acquisition by virtue of the exercise of a conversion
privilege); (B) any acquisition by the Company or by any corporation controlled
by the Company; (C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company; or (D) any acquisition by any corporation pursuant to a
consolidation or merger, if, following such consolidation or merger, the
conditions described in clauses (i), (ii), and (iii) of subsection (c) of this
Section are satisfied; or

     (b) Individuals who, as of the effective date of the Plan determined
pursuant to Section 10(a) above, constitute the Board (the "Incumbent Board")
ceasing for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to such effective
date whose election, or nomination for election by the Company's shareholders,
was approved by a vote or resolution of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Act) or other actual
or threatened

                                      -18-
<PAGE>
 
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or

     (c) Adoption by the Board of a resolution approving an agreement of
consolidation of the Company with or merger of the Company into another
corporation or business entity in each case, unless, following such
consolidation or merger, (i) more than 60% of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
consolidation or merger and/or the combined voting power of the then outstanding
voting securities of such corporation or business entity entitled to vote
generally in the election of directors (or other persons having the general
power to direct the affairs of such entity) is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Stock and Outstanding Company
Voting Securities immediately prior to such consolidation or

                                      -19-
<PAGE>
 
merger in substantially the same proportions as their ownership, immediately
prior to such consolidation or merger, of the Stock and/or Outstanding Company
Voting Securities, as the case may be, (ii) no Person (excluding the Company,
any employee benefit plan (or related trust) of the Company or such corporation
or other business entity resulting from such consolidation or merger and any
Person beneficially owning, immediately prior to such consolidation or merger,
directly or indirectly, 35% or more of the Stock and/or Outstanding Company
Voting Securities, as the case may be) beneficially owns, directly or
indirectly, 35% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such consolidation or merger or the
combined voting power of the then outstanding voting securities of such
corporation or business entity entitled to vote generally in the election of its
directors (or other persons having the general power to direct the affairs of
such entity) and (iii) at least a majority of the members of the board of
directors (or other group of persons having the general power to direct the
affairs of the corporation or other business entity) resulting from such
consolidation or merger were members of the Incumbent Board at the time of the
execution of the initial agreement providing for such consolidation or merger;
provided that any right to purchase shares of Stock which shall vest by reason
of the action of the Board pursuant to this subsection (c) shall be divested,
with respect to any shares not already purchased by the optionee or his or her
personal representative or transferee, upon (A) the rejection of such agreement
of consolidation or merger by the stockholders of the Company or (B) its
abandonment by either party thereto in accordance with its terms; or

     (d) Adoption by the requisite majority of the whole Board, or by the
holders of such majority of stock of the Company as is required by law or by the
Certificate of Incorporation or By-Laws of the Company as then in effect, of a
resolution or consent authorizing (i) the dissolution of the Company or (ii) the
sale or other disposition of all or substantially all of the assets of
the Company, other than to a corporation or other business entity with respect
to which, following such sale or other disposition, (A) more than 60% of,
respectively, the then outstanding shares of common stock of such corporation
and/or the combined voting power of the outstanding voting securities of such
corporation

                                      -20-
<PAGE>
 
or other entity entitled to vote generally in the election of its directors (or
other persons having the general power to direct its affairs) is then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Stock and Outstanding Company Voting Securities immediately prior to such sale
or other disposition in substantially the same proportions as their ownership,
immediately prior to such sale or other disposition, of the Stock and/or
Outstanding Company Voting Securities, as the case may be, (B) no Person
(excluding the Company and any employee benefit plan (or related trust) of the
Company or such corporation or other business entity and any Person beneficially
owning, immediately prior to such sale or other disposition, directly or
indirectly, 35% or more of the Stock and/or Outstanding Company Voting
Securities, as the case may be) beneficially owns, directly or indirectly, 35%
or more of, respectively, the then outstanding shares of common stock of such
corporation and/or the combined voting power of the then outstanding voting
securities of such corporation or other business entity entitled to vote
generally in the election of directors (or other persons having the general
power to direct its affairs) and (C) at least a majority of the members of the
board of directors (or other group of persons having the general power to direct
the affairs of such corporation or other entity) were members of the Incumbent
Board at the time of the execution of the initial agreement or action of the
Board providing for such sale or other disposition of assets of the Company;
provided that any right to purchase shares of Stock which shall vest by reason
of the action of the Board or the stockholders pursuant to this

                                      -21-
<PAGE>
 
subsection (d) shall be divested, with respect to any shares not already
purchased by the optionee or his or her personal representative or transferee,
upon the abandonment by the Company of such dissolution, or such sale or other
disposition of assets, as the case may be.

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