NBG RADIO NETWORK, INC.

                            1998 STOCK INCENTIVE PLAN


1. Purpose.  The purpose of this Stock  Incentive Plan (the "Plan") is to enable
NBG Radio Network,  Inc., a Nevada  corporation  (the  "Company") to attract and
retain the services of (1)  selected  employees,  officers and  directors of the
Company or of any subsidiary of the Company and (2) selected nonemployee agents,
consultants,  advisors,  persons  involved  in the sale or  distribution  of the
Company's products and independent contractors of the Company or any subsidiary.

2. Shares  Subject to the Plan.  Subject to adjustment as provided  below and in
Section  13,  the shares to be  offered  under the Plan shall  consist of Common
Stock of the Company, and the total number of shares of Common Stock that may be
issued under the Plan shall not exceed 3,000,000 shares. The shares issued under
the Plan may be  authorized  and unissued  shares or  reacquired  shares.  If an
option,  stock  appreciation  right or  performance  unit granted under the Plan
expires,  terminates or is canceled, the unissued shares subject to such option,
stock  appreciation right or performance unit shall again be available under the
Plan.  If shares sold or awarded as a bonus under the Plan are  forfeited to the
Company  or  repurchased  by the  Company,  the  number of shares  forfeited  or
repurchased shall again be available under the Plan.

3. Effective Date and Duration of Plan.

     (a) Effective Date. The Plan shall become effective as of June 12, 1998. No
incentive stock option granted under the Plan shall become exercisable, however,
until the Plan is approved by the affirmative  vote of the holders of a majority
of the shares of Common Stock  represented at a shareholders  meeting at which a
quorum is present  and any such  awards  under the Plan  prior to such  approval
shall  be  conditioned  on  and  subject  to  such  approval.  Subject  to  this
limitation,  options,  stock  appreciation  rights and performance  units may be
granted  and shares may be awarded as bonuses or sold under the Plan at any time
after the effective date and before termination of the Plan.

     (b) Duration.  The Plan shall continue in effect until all shares available
for issuance under the Plan have been issued and all restrictions on such shares
have  lapsed.  The Board of Directors  may suspend or terminate  the Plan at any
time except with  respect to options,  performance  units and shares  subject to
restrictions then outstanding  under the Plan.  Termination shall not affect any
outstanding  options,  any  right of the  Company  to  repurchase  shares or the
forfeitability of shares issued under the Plan.

4. Administration.

     (a) Board of  Directors.  The Plan  shall be  administered  by the Board of
Directors of the Company,  which shall determine and designate from time to time
the  individuals  to

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whom  awards  shall be made,  the amount of the  awards and the other  terms and
conditions of the awards.  Subject to the  provisions of the Plan,  the Board of
Directors may from time to time adopt and amend rules and  regulations  relating
to  administration  of the  Plan,  advance  the  lapse  of any  waiting  period,
accelerate  any exercise  date,  waive or modify any  restriction  applicable to
shares  (except  those   restrictions   imposed  by  law)  and  make  all  other
determinations in the judgment of the Board of Directors  necessary or desirable
for the  administration of the Plan. The  interpretation and construction of the
provisions of the Plan and related agreements by the Board of Directors shall be
final and  conclusive.  The Board of Directors  may correct any defect or supply
any  omission  or  reconcile  any  inconsistency  in the Plan or in any  related
agreement  in the manner and to the extent it shall deem  expedient to carry the
Plan into effect, and it shall be the sole and final judge of such expediency.

     (b) Committee.  The Board of Directors  may, by  resolution,  delegate to a
committee  comprised  solely  of two (2) or  more  Non-Employee  Directors  (the
"Committee") any or all authority for  administration  of the Plan. If authority
is  delegated to a Committee,  all  references  to the Board of Directors in the
Plan shall mean and relate to the Committee except (i) as otherwise  provided by
the Board of Directors  and (ii) that only the Board of  Directors  may amend or
terminate  the Plan as provided in  Sections 3 and 14.  "Non-Employee  Director"
shall mean a Director who:

          (i) Is not  currently an officer of the Company or a parent or
subsidiary of the Company,  or  otherwise  currently  employed  by  the  Company
or a  parent  or subsidiary of the Company;

          (ii) Does not receive  compensation,  either  directly or  indirectly,
from the Company or a parent or subsidiary of the Company, for services rendered
as a  consultant  or in any  capacity  other than as a  Director,  except for an
amount  that does not  exceed the dollar  amount for which  disclosure  would be
required pursuant to Item 404(a) of Regulation S-B.

          (iii) Does not possess an interest in any other  transaction for which
disclosure would be required pursuant to Item 404(a) of Regulation S-B; and

          (iv) Is not engaged in a business  relationship  for which  disclosure
would be required pursuant to Item 404(b) of Regulation S-B.

     5. Types of Awards;  Eligibility.  The Board of Directors may, from time to
time, take the following actions, separately or in combination,  under the Plan:
(i) grant  Incentive  Stock  Options,  as defined in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"),  as provided in Sections 6(a) and
6(b);  (ii) grant options  other than  Incentive  Stock Options  ("Non-Statutory
Stock Options") as provided in Sections 6(a) and 6(c); (iii) award stock bonuses
as provided in Section 7; (iv) sell shares subject to  restrictions  as provided
in Section 8; (v) grant stock appreciation rights as provided in Section 9; (vi)
grant cash bonus rights as provided in Section 10; (vii) grant performance units
as provided in Section 11 and (viii) grant foreign  qualified awards as provided
in Section 12. Any such awards may be made to employees, including employees who
are officers or directors,  and to other individuals  described in Section 1 who
the Board of Directors believes have made or will

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make an important  contribution to the Company or any subsidiary of the Company;
provided,  however,  that only  employees  of the  Company  shall be eligible to
receive  Incentive  Stock Options under the Plan.  The Board of Directors  shall
select the individuals to whom awards shall be made and shall specify the action
taken  with  respect  to each  individual  to  whom an  award  is  made.  At the
discretion of the Board of Directors,  an individual may be given an election to
surrender an award in exchange for the grant of a new award.

6.       Option Grants.

     (a)    General Rules Relating to Options.

          (i) Terms of Grant. The Board of Directors may grant options under the
Plan. With respect to each option grant,  the Board of Directors shall determine
the number of shares subject to the option,  the option price, the period of the
option,  the time or times at which the option  may be  exercised,  whether  the
option is an Incentive Stock Option or a Non-Statutory Stock Option. At the time
of the grant of an option or at any time thereafter,  the Board of Directors may
provide  that an optionee  who  exercised  an option  with  Common  Stock of the
Company shall  automatically  receive a new option to purchase additional shares
equal to the  number  of  shares  surrendered  and may  specify  the  terms  and
conditions of such new options.

          (ii) Exercise of Options. Except as provided in Section 6(a)(iv) or as
determined  by the Board of Directors,  no option  granted under the Plan may be
exercised  unless at the time of such exercise the optionee is employed by or in
the service of the Company or any  subsidiary of the Company and shall have been
so employed or provided such service continuously since the date such option was
granted.  Absence on leave or on account of illness or disability,  as described
in 6(a)(iv)(1),  shall not, however,  be deemed an interruption of employment or
service for this purpose. Unless otherwise determined by the Board of Directors,
vesting of options shall not continue  during an absence on leave  (including an
extended  illness) or on account of  disability.  Except as provided in Sections
6(a)(iv) and 13,  options  granted under the Plan may be exercised  from time to
time over the period  stated in each option in such amounts and at such times as
shall be prescribed  by the Board of Directors,  provided that options shall not
be exercised for fractional shares.  Unless otherwise determined by the Board of
Directors,  if the  optionee  does not  exercise  an option in any one year with
respect to the full  number of shares to which the  optionee is entitled in that
year,  the  optionee's  rights shall be cumulative and the optionee may purchase
those shares in any subsequent year during the term of the option.

          (iii)  Nontransferability.  Each  Incentive  Stock Option and,  unless
otherwise determined by the Board of Directors,  each other option granted under
the  Plan  by its  terms  shall  be  nonassignable  and  nontransferable  by the
optionee, either voluntarily or by operation of law, except (i) to an optionee's
family member (as defined in General Instruction  A.1(a)(5) to Form S-8) by gift
or  domestic  relations  order;  or (ii) by will or by the laws of  descent  and
distribution  of the state or country of the optionee's  domicile at the time of
death.

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<PAGE>

          (iv) Termination of Employment or Service.

               (1) General  Rule.  Unless  otherwise  determined by the Board of
Directors,  in the event the  employment  or  service of the  optionee  with the
Company or a subsidiary terminates for any reason other than because of physical
disability or death as provided in subsections  6(a)(iv)(2)  and (3), the option
may be exercised at any time prior to the  expiration  date of the option or the
expiration of thirty (30) days after the date of such termination,  whichever is
the shorter  period,  but only if and to the extent the optionee was entitled to
exercise the option at the date of such termination.

               (2) Termination  Because of Total  Disability.  Unless  otherwise
determined  by the  Board  of  Directors,  in the  event of the  termination  of
employment or service because of total  disability,  the option may be exercised
at any time prior to the  expiration  date of the option or the expiration of 12
months after the date of such termination,  whichever is the shorter period, but
only if and to the extent the  optionee  was  entitled to exercise the option at
the date of such  termination.  The term  "total  disability"  means a medically
determinable  mental or physical impairment which is expected to result in death
or which has lasted or is expected to last for a continuous  period of 12 months
or more and which  causes  the  optionee  to be  unable,  in the  opinion of the
Company  and two  independent  physicians,  to  perform  his or her duties as an
employee,  director,  officer or  consultant of the Company and to be engaged in
any  substantial  gainful  activity.  Total  disability  shall be deemed to have
occurred on the first day after the Company and the two  independent  physicians
have furnished their opinion of total disability to the Company.

               (3) Termination Because of Death. Unless otherwise  determined by
the Board of Directors,  in the event of the death of an optionee while employed
by or  providing  service  to the  Company  or a  subsidiary,  the option may be
exercised  at any  time  prior  to the  expiration  date  of the  option  or the
expiration  of 12  months  after  the date of death,  whichever  is the  shorter
period,  but only if and to the extent the optionee was entitled to exercise the
option  at the date of death  and only by the  person  or  persons  to whom such
optionee's  rights under the option shall pass by the optionee's  will or by the
laws of descent and distribution of the state or country of domicile at the time
of death.

               (4) Amendment of Exercise Period  Applicable to Termination.  The
Board of  Directors,  at the time of grant or, with respect to an option that is
not an Incentive Stock Option, at any time thereafter, may extend the 30-day and
12-month  exercise  periods  any  length of time not  longer  than the  original
expiration date of the option, and may increase the portion of an option that is
exercisable,  subject to such terms and conditions as the Board of Directors may
determine.

               (5) Failure to Exercise Option.  To the extent that the option of
any deceased optionee or of any optionee whose employment or service  terminates
is not exercised  within the applicable  period,  all further rights to purchase
shares pursuant to such option shall cease and terminate.

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<PAGE>


               (6) Termination for Cause. Notwithstanding any other provision of
this plan to the contrary,  any options  granted under this plan shall terminate
as of the date the  optionee  ceases to be in the  service of the Company if the
optionee was terminated  for "cause" or could have been  terminated for "cause."
If the optionee has an employment or consulting  agreement with the Company, the
term  "cause"  shall  have the  meaning  given  that term in the  employment  or
consulting agreement.  If the optionee does not have an employment or consulting
agreement with the Company,  or if such employment or consulting  agreement does
not define the term  "cause," the term "cause"  shall mean:  (A)  misconduct  or
dishonesty  that materially  adversely  affects the Company,  including  without
limitation (i) an act materially in conflict with the financial interests of the
Company,  (ii) an act that could damage the reputation or customer  relations of
the Company,  (iii) an act that could subject the Company to liability,  (iv) an
act  constituting  sexual  harassment or other  violation of the civil rights of
coworkers,  (v)  failure  to obey any  lawful  instruction  of the  Board or any
officer of the  Company  and (vi)  failure to comply  with,  or perform any duty
required under, the terms of any confidentiality,  inventions or non-competition
agreement the optionee may have with the Company,  or (B) acts  constituting the
unauthorized disclosure of any of the trade secrets or confidential  information
of the Company,  unfair  competition  with the Company or the  inducement of any
customer of the Company to breach any contract  with the  Company.  The right to
exercise any option shall be suspended  automatically during the pendency of any
investigation  by the Board,  or its designee,  and/or any  negotiations  by the
Board, or its designee, and the optionee, regarding any actual or alleged act or
omission by the optionee of the type described in this subsection.

          (v)  Purchase  of  Shares.  Unless the Board of  Directors  determines
otherwise,  shares may be acquired  pursuant to an option granted under the Plan
only upon  receipt by the Company of notice in writing  from the optionee of the
optionee's  intention to exercise,  specifying  the number of shares as to which
the  optionee  desires to exercise the option and the date on which the optionee
desires to complete the transaction, and if required in order to comply with the
Securities Act of 1933, as amended,  containing a representation  that it is the
optionee's present intention to acquire the shares for investment and not with a
view to distribution.  Unless the Board of Directors determines otherwise, on or
before the date specified for  completion of the purchase of shares  pursuant to
an option,  the optionee must have paid the Company the full  purchase  price of
such shares in cash (including, with the consent of the Board of Directors, cash
that may be the proceeds of a loan from the Company (provided that, with respect
to an  Incentive  Stock  Option,  such  loan is  approved  at the time of option
grant)) or, with the consent of the Board of Directors,  in whole or in part, in
Common  Stock of the Company  valued at fair  market  value,  restricted  stock,
performance  units or other  contingent  awards  denominated  in either stock or
cash, promissory notes and other forms of consideration.  The Board of Directors
shall make a good faith  determination  of the fair market value of Common Stock
provided in payment of the purchase price. If the Common Stock of the Company is
not publicly traded on the date the option is exercised,  the Board of Directors
may  consider any  valuation  methods it deems  appropriate  and may, but is not
required to, obtain one or more  independent  appraisals of the Company.  If the
Common  Stock of the  Company  is  publicly  traded  on the date the  option  is
exercised,  the fair  market  value of Common  Stock  provided in payment of the
purchase price shall be the closing price

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<PAGE>

of the Common  Stock as  reported on the OTC  Bulletin  Board,  any  exchange or
NASDAQ on the last trading day preceding  the date the option is  exercised,  or
such other reported value of the Common Stock as shall be specified by the Board
of  Directors.  No shares  shall be issued until full payment for the shares has
been made. With the consent of the Board of Directors  (which, in the case of an
Incentive  Stock Option,  shall be given only at the time of option  grant),  an
optionee  may  request  the  Company  to apply  automatically  the  shares to be
received  upon the  exercise of a portion of a stock  option  (even though stock
certificates  have not yet been  issued)  to  satisfy  the  purchase  price  for
additional  portions of the option.  Each  optionee who has  exercised an option
shall  immediately  upon  notification  of the amount  due,  if any,  pay to the
Company in cash amounts necessary to satisfy any applicable  federal,  state and
local tax  withholding  requirements.  If additional  withholding  is or becomes
required beyond any amount  deposited before delivery of the  certificates,  the
optionee  shall pay such amount to the Company on demand.  If the optionee fails
to pay the amount  demanded,  the  Company may  withhold  that amount from other
amounts  payable by the Company to the optionee,  including  salary,  subject to
applicable  law.  With the consent of the Board of  Directors  an  optionee  may
satisfy this  obligation,  in whole or in part,  by having the Company  withhold
from the shares to be issued upon the exercise  that number of shares that would
satisfy the withholding  amount due or by delivering to the Company Common Stock
to satisfy the withholding amount. Upon the exercise of an option, the number of
shares  reserved for  issuance  under the Plan shall be reduced by the number of
shares issued upon exercise of the option.

     (b) Incentive  Stock Options.  Incentive  Stock Options shall be subject to
the following additional terms and conditions:

          (i)  Limitation  on Amount  of  Grants.  No  employee  may be  granted
Incentive  Stock Options under the Plan if the aggregate  fair market value,  on
the date of grant,  of the Common  Stock with respect to which  Incentive  Stock
Options are  exercisable for the first time by that employee during any calendar
year under the Plan and under all  incentive  stock  option  plans  (within  the
meaning of Section 422 of the Code) of the  Company or any parent or  subsidiary
of the Company exceeds $100,000.

          (ii)  Limitations on Grants to 10 Percent  Shareholders.  An Incentive
Stock Option may be granted under the Plan to an employee  possessing  more than
10 percent of the total  combined  voting  power of all  classes of stock of the
Company or of any parent or  subsidiary  of the Company only if the option price
is at least 110  percent  of the fair  market  value,  as  described  in Section
6(b)(iv),  of the Common  Stock  subject to the option on the date it is granted
and the  option by its terms is not  exercisable  after the  expiration  of five
years from the date it is granted.

          (iii) Duration of Options.  Subject to Sections 6(a)(ii) and 6(b)(ii),
Incentive  Stock Options granted under the Plan shall continue in effect for the
period fixed by the Board of  Directors,  except that no Incentive  Stock Option
shall be  exercisable  after  the  expiration  of 10  years  from the date it is
granted.

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<PAGE>

          (iv) Option  Price.  The option price per share shall be determined by
the Board of  Directors  at the time of grant.  Except as  provided  in  Section
6(b)(ii), the option price shall not be less than 100 percent of the fair market
value of the Common Stock covered by the Incentive  Stock Option at the date the
option is granted.  The Board of Directors shall make a good faith determination
of the fair market  value.  If the Common  Stock of the Company is not  publicly
traded on the date the option is granted,  the Board of  Directors  may consider
any  valuation  methods it deems  appropriate  and may,  but is not required to,
obtain one or more independent appraisals of the Company. If the Common Stock of
the Company is  publicly  traded on the date the option is  exercised,  the fair
market  value  shall be deemed to be the  closing  price of the Common  Stock as
reported on the OTC Bulletin  Board,  any exchange or NASDAQ on the last trading
day preceding  the date the option is granted,  or, if there has been no sale on
that date,  on the last  preceding  date on which a sale  occurred or such other
value of the Common Stock as shall be specified by the Board of Directors.

          (v)  Limitation on Time of Grant.  No Incentive  Stock Option shall be
granted on or after the tenth anniversary of the effective date of the Plan.

          (vi) Conversion of Incentive Stock Options. The Board of Directors may
at any time  without  the consent of the  optionee  convert an  Incentive  Stock
Option to a Non-Statutory Stock Option.

     (c)  Non-Statutory  Stock  Options.  Non-Statutory  Stock  Options shall be
subject to the following  terms and conditions in addition to those set forth in
Section 6(a) above:

          (i) Option  Price.  The option price for  Non-Statutory  Stock Options
shall be  determined  by the Board of  Directors at the time of grant and may be
any amount determined by the Board of Directors.

          (ii) Duration of Options.  Non-Statutory  Stock Options  granted under
the  Plan  shall  continue  in  effect  for the  period  fixed  by the  Board of
Directors.

7. Stock  Bonuses.  The Board of  Directors  may award  shares under the Plan as
stock  bonuses.  Shares  awarded  as a bonus  shall  be  subject  to the  terms,
conditions,   and  restrictions  determined  by  the  Board  of  Directors.  The
restrictions may include restrictions concerning  transferability and forfeiture
of  the  shares  awarded,  together  with  such  other  restrictions  as  may be
determined  by the Board of  Directors.  The Board of Directors  may require the
recipient to sign an agreement as a condition of the award,  but may not require
the recipient to pay any monetary  consideration other than amounts necessary to
satisfy  tax  withholding  requirements.  The  agreement  may contain any terms,
conditions,  restrictions,  representations and warranties required by the Board
of Directors.  The  certificates  representing the shares awarded shall bear any
legends  required  by the  Board of  Directors.  The  Company  may  require  any
recipient  of a stock bonus to pay to the  Company in cash upon  demand  amounts
necessary  to satisfy any  applicable  federal,  state or local tax  withholding
requirements. If the recipient fails to pay the amount demanded, the Company may
withhold that amount from other amounts payable by the Company to the recipient,
including  salary or fees for  services,  subject to  applicable  law.  With the
consent of the Board of Directors,  a recipient may deliver

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Common Stock to the Company to satisfy  this  withholding  obligation.  Upon the
issuance of a stock bonus,  the number of shares reserved for issuance under the
Plan shall be reduced by the number of shares issued.

8. Restricted  Stock. The Board of Directors may issue shares under the Plan for
such  consideration  (including  promissory notes and services) as determined by
the Board of  Directors.  Shares  issued  under the Plan shall be subject to the
terms,  conditions and  restrictions  determined by the Board of Directors.  The
restrictions may include restrictions concerning transferability,  repurchase by
the  Company  and  forfeiture  of the shares  issued,  together  with such other
restrictions  as may be determined  by the Board of Directors.  All Common Stock
issued  pursuant  to this  Section 8 shall be subject  to a purchase  agreement,
which shall be executed by the  Company  and the  prospective  recipient  of the
shares prior to the  delivery of  certificates  representing  such shares to the
recipient.   The  purchase   agreement   may  contain  any  terms,   conditions,
restrictions, representations and warranties required by the Board of Directors.
The certificates  representing the shares shall bear any legends required by the
Board of Directors. The Company may require any purchaser of restricted stock to
pay to the  Company  in cash  upon  demand  amounts  necessary  to  satisfy  any
applicable  federal,  state  or  local  tax  withholding  requirements.  If  the
purchaser fails to pay the amount demanded, the Company may withhold that amount
from other amounts  payable by the Company to the purchaser,  including  salary,
subject  to  applicable  law.  With the  consent  of the Board of  Directors,  a
purchaser  may deliver  Common Stock to the Company to satisfy this  withholding
obligation. Upon the issuance of restricted stock, the number of shares reserved
for issuance under the Plan shall be reduced by the number of shares issued.

9.       Stock Appreciation Rights.

     (a) Grant. The Board of Directors may grant stock appreciation rights under
the Plan, subject to such rules, terms, and conditions as the Board of Directors
prescribes.

     (b) Exercise.

          (i) Each stock  appreciation  right shall  entitle  the  holder,  upon
exercise,  to receive  from the Company in exchange  therefor an amount equal in
value to the  excess of the fair  market  value on the date of  exercise  of one
share of Common  Stock of the Company  over its fair market value on the date of
grant (or, in the case of a stock  appreciation right granted in connection with
an option,  the excess of the fair market  value of one share of Common Stock of
the Company  over the option price per share under the option to which the stock
appreciation  right relates),  multiplied by the number of shares covered by the
stock appreciation right or the option, or portion thereof, that is surrendered.
Payment by the Company upon exercise of a stock  appreciation  right may be made
in Common Stock valued at fair market value,  in cash, or partly in Common Stock
and partly in cash, all as determined by the Board of Directors.

          (ii) A stock  appreciation right shall be exercisable only at the time
or times established by the Board of Directors. If a stock appreciation right is
granted in connection with an option,  the following rules shall apply:  (1) the
stock appreciation right shall be

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<PAGE>

exercisable  only to the  extent  and on the same  conditions  that the  related
option  could  be  exercised;   (2)  the  stock  appreciation  rights  shall  be
exercisable  only when the fair  market  value of the stock  exceeds  the option
price of the related option;  (3) the stock  appreciation  right shall be for no
more than 100 percent of the excess of the fair market value of the stock at the
time of exercise over the option price; (4) the stock appreciation right expires
no later than  expiration  of the  underlying  option;  (5) upon exercise of the
stock  appreciation  right,  the  option or  portion  thereof to which the stock
appreciation right relates terminates;  and (6) upon exercise of the option, the
related stock appreciation right or portion thereof terminates.

          (iii) The Board of Directors may withdraw any stock appreciation right
granted  under  the Plan at any  time and may  impose  any  conditions  upon the
exercise of a stock  appreciation right or adopt rules and regulations from time
to time  affecting the rights of holders of stock  appreciation  rights.  If the
stock  appreciation  right is granted in  conjunction  with an  incentive  stock
option,  no change to the  stock  appreciation  right  shall  give the  optionee
additional benefits under the incentive stock option. Such rules and regulations
may govern the right to exercise  stock  appreciation  rights  granted  prior to
adoption  or  amendment  of  such  rules  and   regulations  as  well  as  stock
appreciation rights granted thereafter.

          (iv) For  purposes  of this  Section 9, the fair  market  value of the
Common Stock shall be determined as of the date the stock  appreciation right is
exercised, under the methods set forth in Section 6(b)(iv).

          (v) No  fractional  shares  shall be issued  upon  exercise of a stock
appreciation right. In lieu thereof,  cash may be paid in an amount equal to the
value of the fraction or, if the Board of Directors shall determine,  the number
of shares may be rounded downward to the next whole share.

          (vi) Each  stock  appreciation  right  granted in  connection  with an
Incentive  Stock  Option,  and  unless  otherwise  determined  by the  Board  of
Directors,  each other stock  appreciation  right  granted under the Plan by its
terms  shall  be  nonassignable  and  nontransferable  by  the  holder,   either
voluntarily or by operation of law, except by will or by the laws of descent and
distribution  of the state or country of the  holder's  domicile  at the time of
death. Each stock  appreciation  right by its terms shall be exercisable  during
the holder's lifetime only by the holder.  However, if the holder is disabled as
described in 6(a)(iv)(2),  a legal representative may exercise the option on the
holder's behalf.

          (vii) Each  participant who has exercised a stock  appreciation  right
shall,  upon  notification of the amount due, pay to the Company in cash amounts
necessary to satisfy any  applicable  federal,  state and local tax  withholding
requirements.  If the participant fails to pay the amount demanded,  the Company
may  withhold  that  amount  from other  amounts  payable by the  Company to the
participant including salary, subject to applicable law. With the consent of the
Board of Directors a  participant  may satisfy this  obligation,  in whole or in
part,  by having the  Company  withhold  from any  shares to be issued  upon the
exercise that number of shares that would satisfy the withholding  amount due or
by delivering Common Stock to the Company to satisfy the withholding amount.

                                       9

<PAGE>


          (viii) Upon the exercise of a stock appreciation right for shares, the
number of shares  reserved for  issuance  under the Plan shall be reduced by the
number of shares issued.  Cash payments of stock  appreciation  rights shall not
reduce the number of shares of Common  Stock  reserved  for  issuance  under the
Plan.

10.    Cash Bonus Rights.

     (a) Grant.  The Board of  Directors  may grant cash bonus  rights under the
Plan in connection  with (i) options granted or previously  granted,  (ii) stock
appreciation rights granted or previously  granted,  (iii) stock bonuses awarded
or previously  awarded and (iv) shares sold or  previously  sold under the Plan.
Cash bonus rights will be subject to rules, terms and conditions as the Board of
Directors may prescribe.  Unless otherwise determined by the Board of Directors,
each cash bonus right granted under the Plan by its terms shall be nonassignable
and  nontransferable  by the holder,  either voluntarily or by operation of law,
except  by will or by the  laws of  descent  and  distribution  of the  state or
country of the  holder's  domicile  at the time of death.  The payment of a cash
bonus  shall not  reduce  the  number of shares  of Common  Stock  reserved  for
issuance under the Plan.

     (b) Cash Bonus  Rights in  Connection  With  Options.  A cash  bonus  right
granted in  connection  with an option will  entitle an optionee to a cash bonus
when the related  option is exercised  (or  terminates  in  connection  with the
exercise  of a stock  appreciation  right  related to the option) in whole or in
part if, in the sole discretion of the Board of Directors,  the bonus right will
result in a tax deduction that the Company has sufficient taxable income to use.
If an optionee purchases shares upon exercise of an option and does not exercise
a related stock  appreciation  right,  the amount of the bonus, if any, shall be
determined  by  multiplying  the  excess of the total fair  market  value of the
shares to be acquired  upon the  exercise  over the total  option  price for the
shares by the applicable bonus percentage.  If the optionee  exercises a related
stock  appreciation  right in connection with the termination of an option,  the
amount of the bonus,  if any, shall be determined by multiplying  the total fair
market  value of the shares and cash  received  pursuant to the  exercise of the
stock  appreciation  right  by  the  applicable  bonus  percentage.   The  bonus
percentage  applicable  to a bonus right,  including a previously  granted bonus
right,  may be changed from time to time at the sole  discretion of the Board of
Directors but shall in no event exceed 75 percent.

     (c) Cash Bonus Rights in  Connection  With Stock Bonus.  A cash bonus right
granted in  connection  with a stock bonus will entitle the  recipient to a cash
bonus payable when the stock bonus is awarded or restrictions,  if any, to which
the stock is subject  lapse.  If bonus stock awarded is subject to  restrictions
and is  repurchased  by the Company or forfeited  by the holder,  the cash bonus
right granted in connection  with the stock bonus shall terminate and may not be
exercised.  The Board of  Directors  shall  determine  the  amount and timing of
payment of a cash bonus.

     (d) Cash Bonus  Rights in  Connection  With Stock  Purchases.  A cash bonus
right  granted in  connection  with the purchase of stock  pursuant to Section 8
will  entitle the  recipient  to a cash bonus when the shares are  purchased  or
restrictions,  if any, to which the stock is subject lapse. Any cash bonus right
granted  in  connection  with  shares  purchased

                                       10
<PAGE>

pursuant to Section 8 shall  terminate and may not be exercised in the event the
shares are  repurchased  by the Company or forfeited  by the holder  pursuant to
applicable  restrictions.  The amount of any cash bonus to be awarded and timing
of payment of a cash bonus shall be determined by the Board of Directors.

     (e) Taxes.  The Company shall withhold from any cash bonus paid pursuant to
Section 10 the amount  necessary to satisfy any  applicable  federal,  state and
local withholding requirements.

11.  Performance  Units.  The Board of  Directors  may grant  performance  units
consisting  of  monetary  units  which  may be earned in whole or in part if the
Company  achieves  certain goals  established  by the Board of Directors  over a
designated  period of time,  but not in any event more than 10 years.  The goals
established by the Board of Directors may include earnings per share,  return on
shareholders' equity, return on invested capital, and such other goals as may be
established by the Board of Directors. In the event that the minimum performance
goal  established by the Board of Directors is not achieved at the conclusion of
a period, no payment shall be made to the participants. In the event the maximum
corporate goal is achieved, 100 percent of the monetary value of the performance
units shall be paid to or vested in the participants. Partial achievement of the
maximum goal may result in a payment or vesting  corresponding  to the degree of
achievement as determined by the Board of Directors.  Payment of an award earned
may be in cash or in Common Stock or in a combination  of both,  and may be made
when  earned,  or vested and  deferred,  as the Board of  Directors  determines.
Deferred awards shall earn interest on the terms and at a rate determined by the
Board of  Directors;  however,  such rate  shall be no less  than the  long-term
federal rate in effect  under  Section  1274(d) of the Internal  Revenue Code of
1986, as amended (as of the date the award is made),  compounded  semi-annually.
Unless  otherwise  determined by the Board of Directors,  each  performance unit
granted under the Plan by its terms shall be nonassignable  and  nontransferable
by the holder,  either  voluntarily or by operation of law, except by will or by
the laws of descent  and  distribution  of the state or country of the  holder's
domicile  at the  time of  death.  Each  participant  who  has  been  awarded  a
performance unit shall,  upon notification of the amount due, pay to the Company
in cash amounts necessary to satisfy any applicable federal, state and local tax
withholding  requirements.  If the participant fails to pay the amount demanded,
the Company may withhold that amount from other  amounts  payable by the Company
to the participant, including salary or fees for services, subject to applicable
law. With the consent of the Board of Directors a  participant  may satisfy this
obligation,  in whole or in part, by having the Company withhold from any shares
to be issued that number of shares that would satisfy the withholding amount due
or by delivering Common Stock to the Company to satisfy the withholding  amount.
The payment of a performance  unit in cash shall not reduce the number of shares
of Common  Stock  reserved  for  issuance  under the Plan.  The number of shares
reserved  for  issuance  under the Plan shall be reduced by the number of shares
issued upon payment of an award.

12.  Foreign  Qualified  Grants.  Awards  under the Plan may be  granted to such
officers  and  employees  of the  Company  and its  subsidiaries  and such other
persons described in Section 1 residing in foreign jurisdictions as the Board of
Directors may determine from time

                                       11

<PAGE>

to time. The Board of Directors may adopt such supplements to the Plan as may be
necessary to comply with the applicable laws of such foreign  jurisdictions  and
to afford participants  favorable treatment under such laws; provided,  however,
that no award shall be granted  under any such  supplement  with terms which are
more beneficial to the participants than the terms permitted by the Plan.

13.      Changes in Capital Structure.

     (a) Stock Splits;  Stock Dividends.  If the outstanding Common Stock of the
Company is hereafter  increased or decreased or changed into or exchanged  for a
different  number or kind of shares or other securities of the Company by reason
of any stock  split,  combination  of  shares or  dividend  payable  in  shares,
recapitalization or reclassification appropriate adjustment shall be made by the
Board of Directors in the number and kind of shares  available  for grants under
the Plan. In addition,  the Board of Directors shall make appropriate adjustment
in the number and kind of shares as to which  outstanding  options,  or portions
thereof  then  unexercised,   shall  be  exercisable,  so  that  the  optionee's
proportionate  interest  before  and  after  the  occurrence  of  the  event  is
maintained.  Notwithstanding the foregoing, the Board of Directors shall have no
obligation to effect any  adjustment  that would or might result in the issuance
of fractional  shares,  and any fractional  shares resulting from any adjustment
may be  disregarded  or provided  for in any manner  determined  by the Board of
Directors.  Any  such  adjustments  made by the  Board  of  Directors  shall  be
conclusive.

     (b) Mergers, Reorganizations, Etc. In the event of a merger, consolidation,
plan of exchange,  acquisition of property or stock, separation,  reorganization
or  liquidation to which the Company or a subsidiary is a party or a sale of all
or substantially all of the Company's assets (each, a "Transaction"),  the Board
of Directors  shall, in its sole discretion and to the extent possible under the
structure  of the  Transaction,  select one of the  following  alternatives  for
treating outstanding options under the Plan:

          (i)  Outstanding  options  shall remain in effect in  accordance  with
their terms.

          (ii)  Outstanding  options  ("old  options")  shall be converted  into
options  ("new  options")  to  purchase  stock  in the  corporation  that is the
surviving or  acquiring  corporation  in the  Transaction.  The amount,  type of
securities  subject  thereto  and  exercise  price of the new  options  shall be
determined  by the Board of Directors  of the  Company,  taking into account the
relative  values of the companies  involved in the  Transaction and the exchange
rate, if any, used in  determining  shares of the  surviving  corporation  to be
issued  to  holders  of shares  of the  Company.  However,  with  respect  to an
incentive stock option, the excess of the fair market value of the stock subject
to the option over the option price before the conversion  shall equal or exceed
such excess after the  conversion,  and the new option shall not give the holder
additional  benefits that were not available under the old option.  The Board of
Directors shall make a good faith  determination of the fair market value of the
stock subject to the old option and the stock subject to the new option.  Unless
otherwise determined by the Board of Directors,  the new options shall be vested
only to the extent that the  vesting  requirements  relating to options  granted
hereunder have been satisfied.

                                       12
<PAGE>


          (iii) The Board of Directors  shall  provide a 30-day  period prior to
the  consummation of the  Transaction  during which  outstanding  options may be
exercised to the extent then exercisable, and upon the expiration of such 30-day
period,  all  unexercised  options  shall  immediately  terminate.  The Board of
Directors may, in its sole discretion,  accelerate the exercisability of options
so that they are exercisable in full during such 30-day period.

     (c)  Dissolution  of the Company.  In the event of the  dissolution  of the
Company, options shall be treated in accordance with Section 13(b)(iii).

     (d) Rights Issued by Another  Corporation.  The Board of Directors may also
grant options,  stock appreciation rights,  performance units, stock bonuses and
cash bonuses and issue restricted stock under the Plan having terms,  conditions
and  provisions  that vary from those  specified in this Plan  provided that any
such  awards  are  granted  in  substitution  for,  or in  connection  with  the
assumption of, existing options,  stock appreciation rights, stock bonuses, cash
bonuses,  restricted stock and performance  units granted,  awarded or issued by
another  corporation  and assumed or otherwise  agreed to be provided for by the
Company pursuant to or by reason of a Transaction.

14.  Amendment of Plan. The Board of Directors may at any time, and from time to
time,  modify  or amend the Plan in such  respects  as it shall  deem  advisable
because  of  changes  in the law  while  the Plan is in  effect or for any other
reason.  Except as provided  in Sections  6(a)(iv),  9, 10 and 13,  however,  no
change in an award already  granted shall be made without the written consent of
the holder of such award. In addition,  administrative  changes to the Plan made
by the Board of Directors  pursuant to Section 4 shall not be deemed a change in
an award.

15. Approvals.  The obligations of the Company under the Plan are subject to the
approval of state and federal  authorities or agencies with  jurisdiction in the
matter.  The Company will use its  reasonable  efforts to take steps required by
state or federal law or applicable regulations,  including rules and regulations
of the  Securities  and Exchange  Commission and any stock exchange on which the
Company's  shares may then be listed,  in  connection  with the grants under the
Plan. The foregoing notwithstanding, the Company shall not be obligated to issue
or deliver  Common  Stock  under the Plan if such  issuance  or  delivery  would
violate  applicable state or federal  securities laws. Unless  registered,  each
certificate  representing  shares of Common Stock (or other  securities)  issued
under the Plan shall bear a legend substantially as follows:

         "The shares  represented by this  certificate  have not been registered
under the  Securities Act of 1933 or any state  securities  laws. The shares may
not be sold,  offered  for sale,  pledged or  hypothecated  in the absence of an
effective  registration  statement for the shares under said Acts and laws or an
opinion of counsel  satisfactory  to the Company that such  registration  is not
required with respect to such sale or offer."

                                       13

<PAGE>

16. Employment and Service Rights.  Nothing in the Plan or any award pursuant to
the Plan shall (i) confer upon any  employee  any right to be  continued  in the
employment  of the Company or any  subsidiary  or  interfere in any way with the
right of the  Company or any  subsidiary  by whom such  employee  is employed to
terminate  such  employee's  employment  at any time,  for any  reason,  with or
without cause, or to decrease such employee's  compensation or benefits, or (ii)
confer  upon any  person  engaged by the  Company  any right to be  retained  or
employed  by  the  Company  or  to  the  continuation,  extension,  renewal,  or
modification  of any  compensation,  contract,  or  arrangement  with  or by the
Company.

17.  Rights as a  Shareholder.  The  recipient of any award under the Plan shall
have no rights as a shareholder  with respect to any Common Stock until the date
of issue to the  recipient of a stock  certificate  for such  shares.  Except as
otherwise  expressly  provided  in the  Plan,  no  adjustment  shall be made for
dividends  or other  rights for which the record date  occurs  prior to the date
such stock certificate is issued.