1996 STOCK INCENTIVE PLAN

                                       OF

                               TELEPAD CORPORATION

                  1.  PURPOSES  OF THE  PLAN.  This  stock  incentive  plan (the
"Plan")  is  designed  to  provide  an  incentive  to key  employees  (including
directors and officers who are key employees)  and to consultants  and directors
who are not  employees  of  TELEPAD  CORPORATION,  a Delaware  corporation  (the
"Company"),  or any of its  Subsidiaries  (as defined in  Paragraph  20), and to
offer an additional  inducement  in obtaining the services of such persons.  The
Plan provides for the grant of "incentive  stock  options"  ("ISOs")  within the
meaning of Section 422 of the  Internal  Revenue  Code of 1986,  as amended (the
"Code"),  nonqualified  stock options which do not qualify as ISOs ("NQSOs") and
stock  of the  Company  which  may be  subject  to  restrictions  (collectively,
"Awards"). The Company makes no representation or warranty,  express or implied,
as to the  qualification  of any option as an "incentive stock option" under the
Code.

                  2. STOCK  SUBJECT TO THE PLAN.  Subject to the  provisions  of
Paragraph 13, the aggregate  number of shares of Class A Common Stock,  $.01 par
value per share, of the Company ("Class A Common Stock") for which Awards may be
granted under the Plan shall not exceed 1,200,000. Such shares of Class A Common
Stock may, in the  discretion  of the Board of  Directors  of the  Company  (the
"Board of  Directors"),  consist  either in whole or in part of  authorized  but
unissued  shares of Class A Common  Stock or shares of Class A Common Stock held
in the treasury of the Company.  Subject to the  provisions of Paragraph 14, any
shares  of Class A Common  Stock  subject  to an  option  which  for any  reason
expires, is canceled or is terminated unexercised or which ceases for any reason
to be exercisable or a restricted stock Award which for any reason is forfeited,
shall again become  available  for the  granting of Awards  under the Plan.  The
Company  shall  at all  times  during  the  term of the  Plan  reserve  and keep
available such number of shares of Class A Common Stock as will be sufficient to
satisfy the requirements of the Plan.

                  3.  ADMINISTRATION OF THE PLAN. The Plan shall be administered
by a  committee  of the  Board of  Directors  consisting  of not  less  than two
directors  (the  "Committee").  Each  member  of the  Committee  shall  be (a) a
"disinterested  person" within the meaning of Rule 16b-3  promulgated  under the
Securities  Exchange  Act of 1934,  as amended (as the same may be in effect and
interpreted  from time to time,  "Rule 16b-3") until such time as the amendments
to Rule 16b-3 adopted by the Securities  Exchange  Commission on May 30, 1996 in
Release No.  34-37260  become  effective with respect to the Plan (the "New Rule
Date")  and (b) from and  after the New Rule  Date,  a  "non-employee  director"
within the  meaning of Rule 16b-3.  A majority  of the members of the  Committee
shall constitute a quorum, and the acts of a majority of the members

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present at any  meeting at which a quorum is present,  and any acts  approved in
writing by all members without a meeting, shall be the acts of the Committee.

                  Subject to the express  provisions of the Plan,  the Committee
shall have the authority, in its sole discretion,  with respect to Awards to key
employees or consultants  to determine:  the key employees and  consultants  who
shall be  granted  Awards;  the type of Award to be  granted;  the times when an
Award  shall be  granted;  the  number of  shares of Class A Common  Stock to be
subject to each  Award;  the term of each  option;  the date each  option  shall
become exercisable;  whether an option shall be exercisable in whole, in part or
in installments and, if in installments,  the number of shares of Class A Common
Stock to be subject  to each  installment,  whether  the  installments  shall be
cumulative,  the date each installment shall become  exercisable and the term of
each  installment;  whether to accelerate  the date of exercise of any option or
installment;  whether  shares of Class A Common  Stock  may be  issued  upon the
exercise  of an  option  as  partly  paid and,  if so,  the  dates  when  future
installments  of the  exercise  price  shall  become due and the amounts of such
installments;  the  exercise  price of each  option;  the form of payment of the
exercise  price;  whether to restrict the sale or other  disposition  of a stock
Award or the shares of Class A Common  Stock  acquired  upon the  exercise of an
option  and,  if so,  whether  and  under  what  conditions  to  waive  any such
restriction;  whether and under what  conditions  to subject all or a portion of
the grant or exercise of an option or the vesting of a stock Award or the shares
acquired  pursuant to the  exercise of an option to the  fulfillment  of certain
restrictions  or  contingencies  as  specified  in the  contract  referred to in
Paragraph 12 hereof (the "Contract"), including without limitation, restrictions
or  contingencies  relating to entering  into a covenant not to compete with the
Company,  any of its  Subsidiaries  or a Parent (as defined in Paragraph 20), to
financial  objectives for the Company,  any of its  Subsidiaries or a Parent,  a
division of any of the foregoing,  a product line or other  category,  and/or to
the period of continued  employment of the Award holder with the Company, any of
its  Subsidiaries  or a Parent,  and to determine  whether such  restrictions or
contingencies  have been met; whether an Award holder is Disabled (as defined in
Paragraph  20);  and with respect to all Awards,  subject  prior to the New Rule
Date to the  limitations  with respect to formula  plans under Rule 16b-3 in the
case of Non-Employee Director Options (as defined in Paragraph 20): to determine
the amount,  if any,  necessary  to satisfy the  obligation  of the  Company,  a
Subsidiary or Parent to withhold taxes or other  amounts;  the fair market value
of a share of Class A Common Stock; to construe the respective Contracts and the
Plan;  with the  consent  of the  Award  holder,  to  cancel or modify an Award,
PROVIDED,  that the  modified  provision is permitted to be included in an Award
granted under the Plan on the date of the modification,  and FURTHER,  PROVIDED,
that in the case of a modification  (within the meaning of Section 424(h) of the
Code) of an ISO, such Award as modified  would be permitted to be granted on the
date of such modification  under the terms of the Plan; to prescribe,  amend and
rescind rules and regulations  relating to the Plan; from and after the New Rule
Date, to approve any provision  which under Rule 16b-3  requires the approval of
the  Board  of  Directors,   a  committee  of  non-employee   directors  or  the
stockholders to be exempt (unless otherwise  specifically  provided herein); and
to make all other  determinations  necessary or advisable for  administering the
Plan. Any controversy or claim arising out of or relating to the Plan, any Award
granted under the Plan or any Contract shall be determined

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unilaterally by the Committee in its sole discretion.  The determinations of the
Committee on the matters referred to in this Paragraph 3 shall be conclusive and
binding on the parties.  No member or former  member of the  Committee  shall be
liable for any action,  failure to act or determination  made in good faith with
respect to the Plan or any option hereunder.

                  4. OPTION ELIGIBILITY;  GRANTS. The Committee may from time to
time, in its sole  discretion,  consistent with the purposes of the Plan,  grant
Employee Options to key employees  (including officers and directors who are key
employees) of, and Consultant  Options to consultants  to, the Company or any of
its  Subsidiaries.  Such  options  granted  shall cover such number of shares of
Class A Common Stock as the Committee may determine, in its sole discretion,  as
set forth in the applicable Contract; PROVIDED, HOWEVER, that the maximum number
of shares  subject to  Employee  Options  that may be granted to any  individual
during any calendar year under the Plan (the "162(m)  Maximum") shall be 300,000
shares;  and FURTHER,  PROVIDED,  that the aggregate market value (determined at
the time the option is granted in accordance  with Paragraph 5) of the shares of
Class A Common Stock for which any  eligible  employee may be granted ISOs under
the Plan or any other plan of the Company, or of a Parent or a Subsidiary of the
Company,  which are  exercisable  for the first time by such optionee during any
calendar year shall not exceed $100,000. Such ISO limitation shall be applied by
taking  ISOs into  account in the order in which they were  granted.  Any option
granted in excess of such ISO  limitation  amount  shall be treated as a NQSO to
the extent of such excess.

                  Every  individual  who,  on the date the Plan is  approved  by
stockholders,  is a Non- Employee Director (as defined in Paragraph 20) shall be
granted on such date a Non-Employee Director Option to purchase 90,000 shares of
Class A Common  Stock.  Thereafter,  on the date an  individual  first becomes a
Non-Employee  Director,  he shall be granted an option to purchase 90,000 shares
of Class A Common Stock. In the event the remaining  shares  available for grant
under the Plan are not sufficient to grant the Non-Employee  Director Options to
each such Non- Employee  Director at any time,  the number of shares  subject to
the  Non-Employee  Director  Options to be granted at such time shall be reduced
proportionately.  Each  Non-Employee  Director  Option (i) shall be  immediately
exercisable as to one-third of the number of shares subject thereto,  (ii) shall
become  exercisable  as to an additional  one-third of the shares upon the first
Annual Meeting of the Company  following the completion of the year in which the
grant was made,  provided  that the  Non-Employee  Director  holding such Option
continues  as a director  of the  Company  upon the  completion  of such  Annual
Meeting, and (iii) shall become exercisable as to an additional one-third of the
shares upon the second Annual Meeting of the Company following the completion of
the year in which the grant was made,  provided that the  Non-Employee  Director
holding such Option  continues as a director of the Company upon the  completion
of such Annual Meeting. The Committee shall not have any discretion with respect
to the selection of directors to receive  Non-Employee  Director  Options or the
amount, the price or the timing with respect thereto.


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                  5. EXERCISE PRICE. The exercise price of the shares of Class A
Common  Stock  under  each  Employee  Option  and  Consultant  Option  shall  be
determined  by the  Committee,  in its  sole  discretion,  as set  forth  in the
applicable Contract;  PROVIDED, HOWEVER, that the exercise price of an ISO shall
not be less than the fair market  value of the Class A Common  Stock  subject to
such option on the date of grant; and FURTHER, PROVIDED, that if, at the time an
ISO is granted,  the optionee owns (or is deemed to own under Section  424(d) of
the Code) stock  possessing  more than 10% of the total combined voting power of
all classes of stock of the Company,  of any of its Subsidiaries or of a Parent,
the  exercise  price of such ISO shall not be less than 110% of the fair  market
value of the Class A Common Stock subject to such ISO on the date of grant.  The
exercise  price of the shares of Class A Common  Stock  under each  Non-Employee
Director  Option  shall be equal to the fair market  value of the Class A Common
Stock  subject  to  such  option  on the  date  of  grant.  Notwithstanding  the
foregoing,  in no event may the  exercise  price of any  option  granted  before
September 29, 1997 be less than the fair market value of the  underlying  shares
on the date of grant or $3.5088 per share, whichever is greater.

                  The fair  market  value of a share of Class A Common  Stock on
any day shall be (a) if the  principal  market for the Class A Common Stock is a
national securities exchange, the average of the highest and lowest sales prices
per share of Class A Common Stock on such day as reported by such exchange or on
a composite tape reflecting  transactions on such exchange, (b) if the principal
market for the Class A Common  Stock is not a national  securities  exchange and
the Class A Common Stock is quoted on The Nasdaq Stock  Market  ("Nasdaq"),  and
(i) if actual sales price  information  is available with respect to the Class A
Common  Stock,  the average of the highest and lowest  sales prices per share of
Class A Common Stock on such day on Nasdaq,  or (ii) if such  information is not
available,  the average of the highest bid and lowest  asked prices per share of
Class A Common Stock on such day on Nasdaq,  or (c) if the principal  market for
the Class A Common Stock is not a national  securities  exchange and the Class A
Common Stock is not quoted on Nasdaq,  the average of the highest bid and lowest
asked  prices per share of Class A Common  Stock on such day as  reported on the
OTC Bulletin Board Service or by National  Quotation  Bureau,  Incorporated or a
comparable service; PROVIDED,  HOWEVER, that if clauses (a), (b) and (c) of this
Paragraph are all inapplicable,  or if no trades have been made or no quotes are
available  for such day, the fair market value of the Class A Common Stock shall
be determined by the Board of Directors y any method  consistent with applicable
regulations adopted by the Treasury Department relating to stock options.

                  6.  TERM.  The term of each  Employee  Option  and  Consultant
Option granted  pursuant to the Plan shall be such term as is established by the
Committee,  in its sole  discretion,  as set forth in the  applicable  Contract;
PROVIDED,  HOWEVER, that the term of each ISO granted pursuant to the Plan shall
be for a period  not  exceeding  10 years  from the date of grant  thereof;  and
FURTHER, PROVIDED, that if, at the time an ISO is granted, the optionee owns (or
is deemed to own under Section  424(d) of the Code) stock  possessing  more than
10% of the total  combined  voting power of all classes of stock of the Company,
of any of its  Subsidiaries  or of a Parent,  the term of the ISO shall be for a
period not exceeding five years from the date of grant.

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Employee Options and Consultant Options shall be subject to earlier  termination
as hereinafter provided. Subject to earlier termination as hereinafter provided,
each Non-Employee Director Option shall be for a term of six years commencing on
the date of grant.

                  7. EXERCISE.  An option (or any part or installment  thereof),
to the extent then  exercisable,  shall be exercised by giving written notice to
the Company at its principal  office  stating  which option is being  exercised,
specifying  the number of shares of Class A Common Stock as to which such option
is being exercised and accompanied by payment in full of the aggregate  exercise
price therefor (or the amount due on exercise if the Contract with respect to an
Employee Option permits installment  payments) (a) in cash or by certified check
or (b) in  the  case  of an  Employee  Option  or a  Consultant  Option,  if the
applicable  Contract permits,  with previously acquired shares of Class A Common
Stock having an aggregate fair market value on the date of exercise  (determined
in accordance  with  Paragraph 5) equal to the aggregate  exercise  price of all
options being  exercised,  or with any  combination of cash,  certified check or
shares of Class A Common  Stock  having  such value.  The  Company  shall not be
required to issue any shares of Class A Common Stock pursuant to any such option
until all required payments, including any required withholding, have been made.

                  The Committee may, in its sole  discretion,  permit payment of
the  exercise  price of an option by  delivery  by the  optionee  of a  properly
executed  notice,  together  with a copy of his  irrevocable  instructions  to a
broker acceptable to the Committee to deliver promptly to the Company the amount
of sale or loan proceeds  sufficient to pay such exercise  price.  In connection
therewith, the Company may enter into agreements for coordinated procedures with
one or more brokerage firms.

                  A person  entitled  to receive  Class A Common  Stock upon the
exercise of an option shall not have the rights of a stockholder with respect to
such  shares  of Class A Common  Stock  until  the date of  issuance  of a stock
certificate for such shares or in the case of uncertificated shares, an entry is
made on the books of the  Company's  transfer  agent  representing  such shares;
PROVIDED,  HOWEVER, that until such stock certificate is issued or book entry is
made, any optionee using  previously  acquired shares of Class A Common Stock in
payment  of an option  exercise  price  shall  continue  to have the rights of a
stockholder with respect to such previously acquired shares.

                  In no case may a fraction  of a share of Class A Common  Stock
be purchased or issued under the Plan.

                  8.  TERMINATION  OF  RELATIONSHIP.  Except as may otherwise be
expressly provided in the applicable Contract,  any holder of an Employee Option
or  Consultant  Option  whose  relationship  with the  Company,  its  Parent and
Subsidiaries as an employee or a consultant has terminated for any reason (other
than as a result of the death or  Disability  of the optionee) may exercise such
option, to the extent  exercisable on the date of such termination,  at any time
within three months after the date of termination,  but not thereafter and in no
event after

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the date the option would  otherwise have expired;  PROVIDED,  HOWEVER,  that if
such  relationship  is terminated  either (a) for Cause (as defined in Paragraph
20),  or (b) without the consent of the  Company,  such option  shall  terminate
immediately.

                  For the purposes of the Plan, an employment relationship shall
be  deemed  to  exist  between  an  individual  and  the  Company,  any  of  its
Subsidiaries  or a Parent if, at the time of the  determination,  the individual
was an employee of such  corporation for purposes of Section 422(a) of the Code.
As a result,  an individual on military,  sick leave or other bona fide leave of
absence  shall  continue to be  considered  an employee for purposes of the Plan
during  such leave if the  period of the leave  does not exceed 90 days,  or, if
longer, so long as the individual's right to reemployment with the Company,  any
of its Subsidiaries or a Parent is guaranteed  either by statute or by contract.
If  the  period  of  leave  exceeds  90  days  and  the  individual's  right  to
reemployment  is not  guaranteed  by  statute  or by  contract,  the  employment
relationship shall be deemed to have terminated on the 91st day of such leave.

                  Except  as  may   otherwise  be  expressly   provided  in  the
applicable  Contract,  Employee Options and Consultant Options granted under the
Plan shall not be affected  by any change in the status of the  optionee so long
as the optionee continues to be an employee of, or a consultant to, the Company,
or any of the Subsidiaries or a Parent (regardless of having changed from one to
the other or having been transferred from one corporation to another).

                  The holder of a Non-Employee  Director Option who ceases to be
a director of the Company for any reason (other than as a result of his death or
Disability) may exercise such option,  to the extent  exercisable on the date of
such termination, at any time within three months after the date of termination,
but not  thereafter  and in no event after the date the option  would  otherwise
have expired;  PROVIDED,  HOWEVER,  that if such  relationship is terminated for
Cause,  such option  shall  terminate  immediately.  The  Non-Employee  Director
Option,  however,  shall not be affected by the optionee becoming an employee of
the Company, any of its Subsidiaries or a Parent.

                  Nothing  in the Plan or in any option  granted  under the Plan
shall  confer on any  optionee  any right to  continue in the employ of, or as a
consultant  to,  the  Company,  any of its  Subsidiaries  or a  Parent,  or as a
director of the Company,  or interfere in any way with any right of the Company,
any of its Subsidiaries or a Parent to terminate the optionee's  relationship at
any time for any reason whatsoever without liability to the Company,  any of its
Subsidiaries or a Parent.

                  9. DEATH OR DISABILITY OF AN OPTIONEE. Except as may otherwise
be expressly provided in the applicable Contract,  if an optionee dies (a) while
he is an employee of, or consultant to, the Company,  any of its Subsidiaries or
a Parent,  (b) within three months after the  termination  of such  relationship
(unless such termination was for Cause or without the consent of the Company) or
(c) within one year following the termination of such  relationship by reason of
his Disability,  his Employee Option or Consultant  Option may be exercised,  to
the extent exercisable on the date of his death, by his Legal Representative (as
defined in Paragraph 20)

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at any time  within one year after  death,  but not  thereafter  and in no event
after the date the option would otherwise have expired.

                  Except  as  may   otherwise  be  expressly   provided  in  the
applicable  Contract,  any  optionee  whose  relationship  as an employee of, or
consultant to, the Company, its Parent and Subsidiaries has terminated by reason
of such  optionee's  Disability  may exercise his Employee  Option or Consultant
Option,  to the extent  exercisable upon the effective date of such termination,
at any time within one year after such date,  but not thereafter and in no event
after the date the option would otherwise have expired.

                  The holder of a Non-Employee  Director Option who ceases to be
a director of the Company as a result of his death or  Disability  may  exercise
such option, to the extent  exercisable on the date of such termination,  at any
time within one year after the date of termination, but not thereafter and in no
event after the date the option would otherwise have expired. In the case of the
death of the optionee, the option may be exercised by his Legal Representative.

                  10. STOCK  AWARDS.  The  Committee  may from time, in its sole
discretion,  consistent  with the purposes of the Plan,  grant shares of Class A
Common Stock to key  employees  (including  officers and  directors  who are key
employees) of, or consultants to, the Company or any of its Subsidiaries,  which
maybe  subject to such  contingencies  and  restrictions  as the  Committee  may
determine,  as set  forth  in the  Contract.  Prior  to  the  occurrence  of any
specified  contingency,  the shares shall be considered outstanding shares owned
by the Award holder,  who shall,  subject to the  contingencies and restrictions
set forth in the Award,  have all rights of a stockholder of record with respect
to such shares,  including the right to vote and to receive distributions.  Upon
the  occurrence  of any such  contingency,  the Award  holder may be required to
forfeit all or a portion of such shares back to the  Company.  The shares  shall
vest in the Award holder when all of the restrictions and  contingencies  lapse.
Accordingly,  the Committee may require that such shares be held by the Company,
together with a stock power duly  endorsed in blank by the Award  holder,  until
the shares vest in the Award holder.

                  11.   COMPLIANCE  WITH  SECURITIES  LAWS.  The  Committee  may
require,  in its sole  discretion,  as a condition to the exercise of any option
that either (a) a  Registration  Statement  under the Securities Act of 1933, as
amended  (the  "Securities  Act"),  with respect to the shares of Class A Common
Stock to be issued upon such exercise shall be effective and current at the time
of exercise,  or (b) there is an exemption  from  registration  under the Securi
ties Act for the  issuance  of the  shares  of Class A Common  Stock  upon  such
exercise. Nothing herein shall be construed as requiring the Company to register
shares  subject  to  any  option  under  the  Securities  Act  or  to  keep  any
Registration Statement effective or current.

                  The  Committee  may  require,  in its  sole  discretion,  as a
condition  to the  receipt of an Award or the  exercise  of any option  that the
Award holder execute and deliver to the Company

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his representations and warranties, in form, substance and scope satisfactory to
the  Committee,  which the Committee  determines  are necessary or convenient to
facilitate the perfection of an exemption from the registration  requirements of
the Securities Act, applicable state securities laws or other legal requirement,
including  without  limitation that (a) the shares of Class A Common Stock to be
received  under the Award or issued  upon the  exercise  of the option are being
acquired by the Award holder for his own account,  for  investment  only and not
with a view to the resale or distribution thereof, and (b) any subsequent resale
or  distribution  of shares of Class A Common Stock by such Award holder will be
made only pursuant to (i) a  Registration  Statement  under the  Securities  Act
which is  effective  and  current  with  respect to the shares of Class A Common
Stock  being  sold,  or  (ii)  a  specific   exemption  from  the   registration
requirements of the Securities  Act, but in claiming such  exemption,  the Award
holder shall prior to any offer of sale or sale of such shares of Class A Common
Stock  provide  the  Company  with  a  favorable   written  opinion  of  counsel
satisfactory to the Company,  in form,  substance and scope  satisfactory to the
Company,  as to the  applicability  of such  exemption to the  proposed  sale or
distribution.

                  In addition, if at any time the Committee shall determine,  in
its sole discretion,  that the listing or qualification of the shares of Class A
Common Stock subject to any Award or option on any securities  exchange,  Nasdaq
or under any  applicable  law, or the  consent or  approval of any  governmental
agency or  regulatory  body,  is necessary or desirable as a condition to, or in
connection  with,  the  granting of an Award or the issuing of shares of Class A
Common Stock  thereunder,  such Award may not be granted and such option may not
be exercised in whole or in part unless such listing, qualification,  consent or
approval  shall  have been  effected  or  obtained  free of any  conditions  not
acceptable to the Committee.

                  12.  AWARD  CONTRACTS.  Each Award  shall be  evidenced  by an
appropriate  Contract  which shall be duly executed by the Company and the Award
holder, and shall contain such terms, provisions and conditions not inconsistent
herewith  as may be  determined  by the  Committee.  The terms of each Award and
Contract need not be identical.

                  13.   ADJUSTMENTS  UPON  CHANGES  IN  CLASS  A  COMMON  STOCK.
Notwithstanding  any  other  provision  of the  Plan,  in the  event  of a stock
dividend,  recapitalization,  merger  in  which  the  Company  is the  surviving
corporation,  spin-off, split-up,  combination or exchange of shares or the like
which  results  in a change  in the  number  or kind of shares of Class A Common
Stock which is outstanding immediately prior to such event, the aggregate number
and kind of shares subject to the Plan, the aggregate  number and kind of shares
subject to each  outstanding  option and the  exercise  price  thereof,  and the
number and kind of shares  subject  to future  grants of  Non-Employee  Director
Options and the 162(m) Maximum shall be  appropriately  adjusted by the Board of
Directors,  whose  determination shall be conclusive and binding on all parties.
Such adjustment may provide for the elimination of fractional shares which might
otherwise be subject to options without payment therefor.


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                  In the  event of (a) the  liquidation  or  dissolution  of the
Company,  or (b) a merger in which the Company is not the surviving  corporation
or a  consolidation,  any outstanding  options or unvested stock shall terminate
upon the earliest of any such event,  unless other provision is made therefor in
the transaction.

                  14.  AMENDMENTS  AND  TERMINATION  OF THE  PLAN.  The Plan was
adopted by the Board of Directors on July 10, 1996.  No ISO may be granted under
the Plan after July 9, 2006. The Board of Directors, without further approval of
the  Company's  stockholders,  may at any time suspend or terminate the Plan, in
whole or in part,  or amend it from time to time in such respects as it may deem
advisable,  including,  without limitation, in order that ISOs granted hereunder
meet the  requirements  for "incentive  stock options" under the Code, to comply
with the provisions of Rule 16b-3,  Section 162(m) of the Code, or any change in
applicable  law,  regulations,  rulings  or  interpretations  of  administrative
agencies;  PROVIDED,  HOWEVER,  that no amendment shall be effective without the
requisite  prior or subsequent  stockholder  approval  which would (a) except as
contemplated  in Paragraph 12,  increase the maximum number of shares of Class A
Common  Stock for  which  Awards  may be  granted  under the Plan or the  162(m)
Maximum,  (b)  prior to the New Rule  Date,  materially  increase  the  benefits
accruing  to  participants   under  the  Plan  or  (c)  change  the  eligibility
requirements to receive Awards hereunder.  Notwithstanding the foregoing,  prior
to the New Rule Date,  the  provisions  regarding the selection of directors for
participation  in, and the  amount,  the price or the  timing  of,  Non-Employee
Director  Options  shall not be amended  more than once every six months,  other
than to  comport  with  changes  in the Code,  the  Employee  Retirement  Income
Security Act or the rules thereunder. No termination, suspension or amendment of
the Plan shall, without the consent of the holder of an existing and outstanding
Award affected thereby, adversely affect his rights under such option. The power
of the Committee to construe and  administer  any Awards  granted under the Plan
prior to the termination or suspension of the Plan  nevertheless  shall continue
after such termination or during such suspension.

                  15.  NON-TRANSFERABILITY.  No  option  granted  under the Plan
shall  be  transferable  otherwise  than  by will or the  laws  of  descent  and
distribution, and options may be exercised, during the lifetime of the optionee,
only by the optionee or his Legal  Representatives.  Except as may  otherwise be
expressly provided in the Contract, stock Awards which have not vested shall not
be transferable  otherwise than by will or the laws of descent and distribution.
Except to the extent  provided above,  Awards may not be assigned,  transferred,
pledged,  hypothecated or disposed of in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar process,
and  any  such  attempted  assignment,   transfer,   pledge,   hypothecation  or
disposition shall be null and void AB INITIO and of no force or effect.

                  16. WITHHOLDING TAXES. The Company, a Subsidiary or Parent may
withhold (a) cash, (b) subject to any  limitations  under Rule 16b-3,  shares of
Class A Common  Stock to be issued  under a stock  Award or upon  exercise of an
option having an aggregate fair market value on the relevant date (determined in
accordance with Paragraph 5), or (c) any combination thereof, in an amount equal
to the amount which the Committee determines is

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necessary to satisfy the  obligation  of the Company,  a Subsidiary or Parent to
withhold  Federal,  state and local  income taxes or other  amounts  incurred by
reason of the grant,  vesting or  disposition  of an Award,  the  exercise of an
option,  or the  disposition of the  underlying  shares of Class A Common Stock.
Alternatively,  the Company  may  require the holder to pay to the Company  such
amount, in cash, promptly upon demand.

                  17. LEGENDS; PAYMENT OF EXPENSES. The Company may endorse such
legend or  legends  upon the  certificates  for  shares of Class A Common  Stock
issued under a stock Award or upon  exercise of an option under the Plan and may
issue such "stop transfer" instructions to its transfer agent in respect of such
shares as it determines,  in its  discretion,  to be necessary or appropriate to
(a) prevent a violation of, or to perfect an exemption  from,  the  registration
requirements of the Securities Act and any applicable state securities laws, (b)
implement the  provisions  of the Plan or any agreement  between the Company and
the Award  holder with  respect to such shares of Class A Common  Stock,  or (c)
permit the Company to determine the occurrence of a "disqualifying disposition,"
as  described  in  Section  421(b) of the Code,  of the shares of Class A Common
Stock issued or transferred upon the exercise of an ISO granted under the Plan.

                  The Company  shall pay all issuance  taxes with respect to the
issuance  of  shares  of Class A Common  Stock  under a stock  Award or upon the
exercise of an option  granted  under the Plan, as well as all fees and expenses
incurred by the Company in connection with such issuance.

                  18.  USE OF  PROCEEDS.  The cash  proceeds  received  upon the
exercise of an option under the Plan shall be added to the general  funds of the
Company  and used for such  corporate  purposes  as the Board of  Directors  may
determine.

                  19.  SUBSTITUTIONS  AND  ASSUMPTIONS  OF  AWARDS  OF CER  TAIN
CONSTITUENT CORPORATIONS. Anything in this Plan to the contrary notwithstanding,
the Board of  Directors  may,  without  further  approval  by the  stockholders,
substitute  new Awards for prior  options or  restricted  stock of a Constituent
Corporation  (as  defined  in  Paragraph  20) or  assume  the prior  options  or
restricted stock of such Constituent Corporation.

                  20. DEFINITIONS. For purposes of the Plan, the following terms
shall be defined as set forth below:

                    (a) Cause. The term "Cause" shall mean (i) in the case of an
employee or consultant, if there is a written employment or consulting agreement
between the Award holder and the Company,  any of its  Subsidiaries  or a Parent
which defines  termination of such  relationship for cause,  cause as defined in
such  agreement,  and (ii) in all other  cases,  cause as defined by  applicable
state law.


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<PAGE>




                    (b)   Constituent   Corporation.   The   term   "Constituent
Corporation"  shall mean any corporation which engages with the Company,  any of
its  Subsidiaries  or a Parent in a transaction  to which Section  424(a) of the
Code applies (or would apply if the option assumed or substituted  were an ISO),
or any Parent or any Subsidiary of such corporation.

                    (c) Consultant  Option.  The term "Consultant  Option" shall
mean a NQSO granted  pursuant to the Plan to a person who, at the time of grant,
is a consultant to the Company or a Subsidiary of the Company,  and at such time
is not an employee of the Company or any of its Subsidiaries.

                    (d) Disability. The term "Disability" shall mean a permanent
and total disability within the meaning of Section 22(e)(3) of the Code.

                    (e) Employee Option.  The term "Employee  Option" shall mean
an option  granted  pursuant  to the Plan to an  individual  who, at the time of
grant, is a key employee of the Company or any of its Subsidiaries.

                    (f) Legal  Representative.  The term "Legal  Representative"
shall  mean  the  executor,  administrator  or other  person  who at the time is
entitled by law to exercise the rights of a deceased or  incapacitated  optionee
with respect to an option granted under the Plan.

                    (g) Non-Employee Director. The term "Non-Employee  Director"
shall mean a person who is a director of the Company,  but is not an employee of
the Company, any of its Subsidiaries or a Parent.

                    (h)  Non-Employee  Director Option.  The term  "Non-Employee
Director Option" shall mean a NQSO granted pursuant to the Plan to a person who,
at the time of the grant, is a Non-Employee Director.

                    (i) Parent. The term "Parent" shall have the same definition
as "parent corporation" in Section 424(e) of the Code.

                    (j) Subsidiary.  The term  "Subsidiary"  shall have the same
definition as "subsidiary corporation" in Section 424(f) of the Code.

                  21.  GOVERNING  LAW;  CONSTRUCTION.  The Plan,  the Awards and
Contracts  hereunder and all related matters shall be governed by, and construed
in  accordance  with,  the laws of the  State of  Delaware,  without  regard  to
conflict of law provisions.

                  Neither  the  Plan nor any  Contract  shall  be  construed  or
interpreted  with any  presumption  against the Company by reason of the Company
causing the Plan or Contract to be drafted. Whenever from the context it appears
appropriate, any term stated in either the singular or

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<PAGE>



plural  shall  include  the  singular  and  plural,  and any term  stated in the
masculine,  feminine or neuter gender shall include the masculine,  feminine and
neuter.

                  22.  PARTIAL   INVALIDITY.   The  invalidity,   illegality  or
unenforceability  of any provision in the Plan,  any Award or Contract shall not
affect the validity,  legality or enforceability of any other provision,  all of
which shall be valid,  legal and enforceable to the fullest extent  permitted by
applicable law.

                  23.  STOCKHOLDER  APPROVAL.  The  Plan  shall  be  subject  to
approval by a majority of the votes  present in person or by proxy and  entitled
to vote hereon at the next duly held meeting of the  Company's  stockholders  at
which a quorum is present.  No options granted hereunder may be exercised and no
stock  Award  granted  hereunder  may  vest  prior to such  approval;  PROVIDED,
HOWEVER,  that the date of grant of any Award shall be determined as if the Plan
had not been subject to such approval.  Notwithstanding  the  foregoing,  if the
Plan is not approved by a vote of the  stockholders  of the Company on or before
July 9, 1997, the Plan and any Awards granted hereunder shall terminate.


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