EXHIBIT 10.2


                                CORVU CORPORATION
                           2005 EQUITY INCENTIVE PLAN


                                   SECTION 1.
                                   DEFINITIONS
                                   -----------

      As used herein,  the  following  terms shall have the  meanings  indicated
      below:

      (a)   "ADMINISTRATOR" shall mean the Board of Directors of the Company, or
            a Committee appointed by the Board, as the case may be.

      (b)   "AFFILIATE" shall mean a Parent or Subsidiary of the Company.

      (c)   "AWARD"  shall  mean any grant of an Option  or a  Restricted  Stock
            Award.

      (d)   "COMMITTEE"  shall mean a  Committee  of two or more  directors  who
            shall be appointed by and serve at the pleasure of the Board. If the
            Company's  securities are  registered  pursuant to Section 12 of the
            Securities  Exchange Act of 1934,  as amended,  then,  to the extent
            necessary  for  compliance   with  Rule  16b-3,   or  any  successor
            provision,  each  of  the  members  of  the  Committee  shall  be  a
            "non-employee  director."  Solely for purposes of this Section 1(d),
            "non-employee  director" shall have the same meaning as set forth in
            Rule 16b-3, or any successor  provision,  as then in effect,  of the
            General Rules and Regulations  under the Securities  Exchange Act of
            1934, as amended.  Further,  to the extent  necessary for compliance
            with the  limitations  set forth in Internal  Revenue  Code  Section
            162(m),  each of the members of the  Committee  shall be an "outside
            director"  within  the  meaning  of  Code  Section  162(m)  and  the
            regulations issued thereunder.

      (e)   The "COMPANY" shall mean CorVu Corporation, a Minnesota corporation.

      (f)   "FAIR  MARKET  VALUE" as of any date shall mean (i) if such stock is
            listed on the Nasdaq National Market,  Nasdaq SmallCap Market, or an
            established stock exchange,  the price of such stock at the close of
            the regular trading session of such market or exchange on such date,
            as  reported by The Wall Street  Journal or a  comparable  reporting
            service, or, if no sale of such ------------------------ stock shall
            have occurred on such date, on the next preceding day on which there
            was a sale of  stock;  (ii) if such  stock is not so  listed  on the
            Nasdaq National Market,  Nasdaq SmallCap  Market,  or an established
            stock exchange,  the average of the closing "bid" and "asked" prices
            quoted by the OTC Bulletin Board, the National  Quotation Bureau, or
            any  comparable  reporting  service on such date or, if there are no
            quoted "bid" and "asked"  prices on such date, on the next preceding
            date for which there are such quotes;  or (iii) if such stock is not
            publicly  traded as of such date,  the per share value as determined
            by the Board,  or the Committee,  in its sole discretion by applying
            principles of valuation with respect to the Company's Common Stock.


<PAGE>

      (g)   The  "INTERNAL  REVENUE  CODE" OR  "CODE"  shall  mean the  Internal
            Revenue Code of 1986, as amended from time to time.

      (h)   "OPTION"  means an  incentive  stock  option or  nonqualified  stock
            option granted pursuant to the Plan.

      (i)   "PARENT"  shall  mean  any  corporation  which  owns,   directly  or
            indirectly in an unbroken chain,  fifty percent (50%) or more of the
            total voting power of the Company's outstanding stock.

      (j)   The  "PARTICIPANT"  means  (i) an  employee  of the  Company  or any
            Affiliate  to  whom an  incentive  stock  option  has  been  granted
            pursuant to Section 9, (ii) a consultant  or advisor to or director,
            employee  or  officer  of the  Company  or any  Affiliate  to whom a
            nonqualified  stock option has been granted  pursuant to Section 10,
            or (iii) a  consultant  or  advisor  to, or  director,  employee  or
            officer of the Company or any  Affiliate to whom a Restricted  Stock
            Award has been granted pursuant to Section 11.

      (k)   The "PLAN" means the CorVu  Corporation  2005 Equity Incentive Plan,
            as amended from time to time, including the form of Option and Award
            Agreements as they may be modified by the Administrator from time to
            time.

      (l)   "RESTRICTED  STOCK AWARD" shall mean any grant of restricted  shares
            of Stock of the Company pursuant to Section 11 hereof.

      (m)   "STOCK," "OPTION STOCK" or "COMMON STOCK" shall mean Common Stock of
            the  Company  (subject to  adjustment  as  described  in Section 13)
            reserved for Options and  Restricted  Stock Awards  pursuant to this
            Plan.

      (n)   A  "SUBSIDIARY"  shall mean any  corporation  of which fifty percent
            (50%) or more of the  total  voting  power of  outstanding  stock is
            owned, directly or indirectly in an unbroken chain, by the Company.


                                   SECTION 2.
                                    PURPOSE

      The  purpose of the Plan is to promote  the success of the Company and its
Affiliates by facilitating  the employment and retention of competent  personnel
and by furnishing incentive to officers, directors, employees,  consultants, and
advisors upon whose efforts the success of the Company and its Subsidiaries will
depend to a large degree.

      It is the  intention  of the  Company  to carry out the Plan  through  the
granting of Options which will qualify as "incentive  stock  options"  under the
provisions  of  Section  422 of the  Internal  Revenue  Code,  or any  successor
provision,  pursuant to Section 9 of this Plan,  through the granting of options
that are  "nonqualified"  stock options pursuant to Section 10 of this Plan, and
through the granting of Restricted  Stock Awards  pursuant to Section 11 of this
Plan. The grant of all Options and Restricted  Stock Awards shall, to the extent
required,  comply with Section 16(b) of the Securities Exchange Act of 1934, the
Internal  Revenue Code, or any other  applicable law or regulation.  In no event
shall  any  Options  become  exercisable  or  the  risks  of  forfeiture  on any
Restricted  Stock  Awards  lapse  prior to the date this Plan is approved by the
shareholders  of the  Company.  If  shareholder  approval  of  this  Plan is not
obtained  within  twelve (12) months after the adoption of the Plan by the Board
of Directors, any Options or Restricted Stock Awards previously granted shall be
revoked.


<PAGE>

                                   SECTION 3.
                             EFFECTIVE DATE OF PLAN
                             ----------------------

      The Plan shall be  effective  as of the date of  adoption  by the Board of
Directors of the Company, subject to approval by the shareholders of the Company
as required in Section 2.


                                   SECTION 4.
                                 ADMINISTRATION
                                 --------------

      The Plan shall be  administered  by the Board of  Directors of the Company
(hereinafter  referred  to as  the  "Board")  or by a  Committee  which  may  be
appointed by the Board from time to time to  administer  the Plan  (collectively
referred to as the  "Administrator").  Except as otherwise  provided herein, the
Administrator  shall have all of the powers vested in it under the provisions of
the Plan, including but not limited to exclusive authority (where applicable and
within  the  limitations  described  in the  Plan)  to  determine,  in its  sole
discretion,  whether an Award shall be granted, the individuals to whom, and the
time or times at which, Awards shall be granted, the number of shares subject to
each Award,  the option price, and any other terms and conditions of each Award.
The  Administrator  shall  have  full  power and  authority  to  administer  and
interpret  the Plan, to make and amend rules,  regulations  and  guidelines  for
administering  the Plan, to prescribe the form and  conditions of the respective
agreements   evidencing   each  Award  (which  may  vary  from   Participant  to
Participant)   evidencing   each   option   or  award  and  to  make  all  other
determinations  necessary or advisable for the  administration  of the Plan. The
Administrator's   interpretation   of  the  Plan,  and  all  actions  taken  and
determinations  made by the  Administrator  pursuant  to the power  vested in it
hereunder, shall be conclusive and binding on all parties concerned.

      No member of the Board or the  Committee  shall be liable  for any  action
taken or determination  made in good faith in connection with the administration
of the Plan. In the event the Board appoints a Committee as provided  hereunder,
any action of the Committee with respect to the administration of the Plan shall
be taken pursuant to a majority vote of the Committee members or pursuant to the
written resolution of all Committee members.


                                   SECTION 5.
                                  PARTICIPANTS
                                  ------------

      The  Administrator  shall from time to time, at its discretion and without
approval of the  shareholders,  designate  those employees of the Company or any
Affiliate to whom incentive stock options shall be granted pursuant to Section 9
of the Plan; those employees,  officers, directors,  consultants and advisors of
the Company or of any  Affiliate to whom  nonqualified  stock  options  shall be
granted  pursuant  to Section  10 of the Plan;  and those  employees,  officers,
directors,  consultants  and  advisors of the Company or any  Affiliate  to whom
Restricted  Stock  Awards  shall be granted  pursuant to Section 11 of the Plan;
provided, however, that consultants or advisors shall not be eligible to receive
Options or Restricted  Stock Awards  hereunder unless such consultant or advisor
renders bona fide services to the Company or Affiliate and such services are not
in  connection  with  the  offer  or sale of  securities  in a  capital  raising
transaction  and do not directly or indirectly  promote or maintain a market for
the Company's  securities.  The  Administrator may grant additional Awards under
this Plan to some or all  Participants  then holding  Awards or may grant Awards
solely or  partially  to new  Participants.  In  designating  Participants,  the
Administrator shall also determine the number of shares of Stock subject to each
Award. The  Administrator  may from time to time designate  individuals as being
ineligible to participate in the Plan.


<PAGE>

                                   SECTION 6.
                                      STOCK
                                      -----

      The Stock to be issued  under this Plan shall  consist of  authorized  but
unissued  shares  of Stock.  5,000,000  shares of Stock  shall be  reserved  and
available for Awards under the Plan; provided, however, that the total number of
shares of Stock  reserved  for  Awards  under  this  Plan  shall be  subject  to
adjustment as provided in Section 13 of the Plan;  and provided,  further,  that
all shares of Stock reserved and available  under the Plan shall  constitute the
maximum aggregate number of shares of Stock that may be issued through incentive
stock options.  In the event that (i) any outstanding Option or Restricted Stock
Award under the Plan expires for any reason,  (ii) any portion of an outstanding
Option is  terminated  prior to  exercise,  or (iii) any portion of a Restricted
Stock  Award  expires  or is  terminated  prior to the  lapsing  of any risks of
forfeiture  on such  Award,  the shares of Stock  allocable  to the  unexercised
portion of the Option or to the forfeited portion of such Restricted Stock Award
shall continue to be reserved for Options and Restricted  Stock Awards under the
Plan and may be optioned or awarded hereunder.


                                   SECTION 7.
                                DURATION OF PLAN
                                ----------------

      Incentive  stock options may be granted  pursuant to the Plan from time to
time  during a period of ten (10) years from the  effective  date of the Plan as
defined in Section 3. Nonqualified stock options and restricted stock awards may
be granted  pursuant to the Plan from time to time after the  effective  date of
the Plan and until the Plan is  discontinued  or  terminated  by the Board.  Any
incentive stock option granted during such ten-year period and any  nonqualified
stock option or restricted  stock award granted prior to the  termination of the
Plan by the Board shall remain in full force and effect until the  expiration of
the option or award as specified in the written stock option or restricted stock
award  agreement  and shall remain  subject to the terms and  conditions of this
Plan.


                                   SECTION 8.
                                     PAYMENT
                                     -------

      Participants  may pay for shares of Stock upon exercise of Options granted
pursuant to this Plan with cash, personal check, certified check or, if approved
by the  Administrator  in its sole  discretion,  previously-owned  shares of the
Company's  Common Stock valued at such Stock's then Fair Market  Value,  or such
other  form  of  payment  as  may  be  authorized  by  the  Administrator.   The
Administrator may, in its sole discretion,  limit the forms of payment available
to the  Participant  and may  exercise  such  discretion  any time  prior to the
termination of the option granted to the Participant or upon any exercise of the
option  by  the  Participant.  "Previously-owned  shares"  means  shares  of the
Company's  Common  Stock  which the  Participant  has owned for at least six (6)
months  prior to the exercise of the stock  option,  or for such other period of
time as may be required by generally accepted accounting principles.


<PAGE>

         With respect to payment in the form of Common Stock of the Company, the
Administrator may require advance approval or adopt such rules as it deems
necessary to assure compliance with Rule 16b-3, or any successor provision, as
then in effect, of the General Rules and Regulations under the Securities
Exchange Act of 1934, if applicable.


                                   SECTION 9.
                 TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS
                 -----------------------------------------------

      Each incentive  stock option  granted  pursuant to this Section 9 shall be
evidenced  by  a  written   incentive   stock  option   agreement  (the  "Option
Agreement").  The Option Agreement shall be in such form as may be approved from
time to time by the  Administrator and may vary from Participant to Participant;
provided,  however, that each Participant and each Option Agreement shall comply
with and be subject to the following terms and conditions:

      (a)   Number of Shares and Option Price.  The Option Agreement shall state
            the total number of shares  covered by the  incentive  stock option.
            Except  as  permitted  by  Code  Section  424(d),  or any  successor
            provision,  or  under  the  laws  of  any  other  applicable  law or
            regulation,  the option  price per share  shall not be less than one
            hundred  percent  (100%) of the per share Fair  Market  Value of the
            Common  Stock on the  date  the  Administrator  grants  the  option;
            provided,  however, that if a Participant owns stock possessing more
            than ten percent  (10%) of the total  combined  voting  power of all
            classes of stock of the Company or of its Parent or any  Subsidiary,
            the option price per share of an incentive  stock option  granted to
            such  Participant  shall not be less than one  hundred  ten  percent
            (110%) of the per share Fair Market Value of the Common Stock on the
            date of the grant of the incentive stock option.  The  Administrator
            shall have full authority and discretion in establishing  the option
            price and shall be fully protected in so doing.

      (b)   Term and  Exercisability of Incentive Stock Option.  The term during
            which  any  incentive  stock  option  granted  under the Plan may be
            exercised  shall be established  in each case by the  Administrator.
            Except  as  permitted  by  Code  Section  424(d),  or any  successor
            provision, or by the laws of any other applicable law or regulation,
            in no event shall any incentive stock option be exercisable during a
            term of more  than  ten  (10)  years  after  the date on which it is
            granted;  provided,  however,  that  if  a  Participant  owns  stock
            possessing  more than ten percent (10%) of the total combined voting
            power of all classes of stock of the Company or of its Parent or any
            Subsidiary,  the incentive stock option granted to such  Participant
            shall be  exercisable  during a term of not more than five (5) years
            after the date on which it is granted.  The Option  Agreement  shall
            state when the incentive stock option becomes  exercisable and shall
            also  state  the  maximum  term  during  which  the  option  may  be
            exercised.  In the event an incentive  stock  option is  exercisable
            immediately, the manner of exercise of the option in the event it is
            not exercised in full  immediately  shall be specified in the Option
            Agreement.  The Administrator  may accelerate the  exercisability of
            any  incentive   stock  option  granted   hereunder   which  is  not
            immediately exercisable as of the date of grant.


<PAGE>

      (c)   Withholding.  The  Company or its  Affiliate  shall be  entitled  to
            withhold and deduct from future wages of the Participant all legally
            required  amounts  necessary to satisfy any and all  withholding and
            employment-related  taxes attributable to the Participant's exercise
            of an incentive  stock option or a  "disqualifying  disposition"  of
            shares acquired through the exercise of an incentive stock option as
            defined in Code  Section  421(b).  In the event the  Participant  is
            required  under the Option  Agreement  to pay the  Company,  or make
            arrangements satisfactory to the Company respecting payment of, such
            withholding and employment-related  taxes, the Administrator may, in
            its  discretion  and pursuant to such rules as it may adopt,  permit
            the Participant to satisfy such obligation,  in whole or in part, by
            electing  to have  the  Company  withhold  shares  of  Common  Stock
            otherwise issuable to the Participant as a result of the exercise of
            the  incentive  stock option having a Fair Market Value equal to the
            minimum  required tax  withholding,  based on the minimum  statutory
            withholding  rates for  federal  and state tax  purposes,  including
            payroll  taxes,  that  are  applicable  to the  supplemental  income
            resulting  from such  exercise.  In no event may the  Company or any
            Affiliate  withhold  shares  having a Fair Market Value in excess of
            such statutory  minimum required tax withholding.  The Participant's
            election to have shares  withheld for this purpose  shall be made on
            or before the date the  incentive  stock option is exercised  or, if
            later,  the date that the amount of tax to be withheld is determined
            under  applicable  tax law. Such  election  shall be approved by the
            Board and otherwise comply with such rules as the Board may adopt to
            assure  compliance with Rule 16b-3, or any successor  provision,  as
            then in  effect,  of the  General  Rules and  Regulations  under the
            Securities Exchange Act of 1934, if applicable.

      (d)   Other Provisions. The Option Agreement authorized under this Section
            9 shall  contain such other  provisions as the  Administrator  shall
            deem  advisable.  Any  such  Option  Agreement  shall  contain  such
            limitations  and  restrictions  upon the  exercise  of the Option as
            shall be necessary to ensure that such Option will be  considered an
            "incentive  stock  option" as defined in Section 422 of the Internal
            Revenue Code or to conform to any change therein.


                                   SECTION 10.
               TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTIONS
               --------------------------------------------------

      Each  nonqualified  stock option granted pursuant to this Section 10 shall
be  evidenced by a written  nonqualified  stock  option  agreement  (the "Option
Agreement").  The Option Agreement shall be in such form as may be approved from
time to time by the  Administrator and may vary from Participant to Participant;
provided,  however, that each Participant and each Option Agreement shall comply
with and be subject to the following terms and conditions:

      (a)   Number of Shares and Option Price.  The Option Agreement shall state
            the total number of shares covered by the nonqualified stock option.
            Unless otherwise  determined by the Administrator,  the option price
            per share shall be one hundred  percent (100%) of the per share Fair
            Market  Value of the  Common  Stock  on the  date the  Administrator
            grants the option; provided,  however, that the option price may not
            be less than eighty-five  percent (85%) of the per share Fair Market
            Value of the Common Stock on the date of grant.


<PAGE>

      (b)   Term and  Exercisability  of  Nonqualified  Stock  Option.  The term
            during which any  nonqualified  stock option  granted under the Plan
            may  be  exercised   shall  be  established  in  each  case  by  the
            Administrator.   The   Option   Agreement   shall   state  when  the
            nonqualified  stock option becomes  exercisable and shall also state
            the maximum  term during which the option may be  exercised.  In the
            event a nonqualified  stock option is exercisable  immediately,  the
            manner of exercise of the option in the event it is not exercised in
            full  immediately  shall be specified in the Option  Agreement.  The
            Administrator may accelerate the  exercisability of any nonqualified
            stock option granted hereunder which is not immediately  exercisable
            as of the date of grant.

      (c)   Withholding.  The  Company or its  Affiliate  shall be  entitled  to
            withhold and deduct from future wages of the Participant all legally
            required  amounts  necessary to satisfy any and all  withholding and
            employment-related  taxes attributable to the Participant's exercise
            of a  nonqualified  stock option.  In the event the  Participant  is
            required under the Option Agreement to pay the Company or Affiliate,
            or  make  arrangements  satisfactory  to the  Company  or  Affiliate
            respecting  payment  of,  such  withholding  and  employment-related
            taxes, the Administrator may, in its discretion and pursuant to such
            rules as it may  adopt,  permit  the  Participant  to  satisfy  such
            obligation,  in  whole  or in  part,  by  delivering  shares  of the
            Company's  Common  Stock  or by  electing  to have  the  Company  or
            Affiliate  withhold shares of Common Stock otherwise issuable to the
            Participant  as a result of the exercise of the  nonqualified  stock
            option having a Fair Market Value equal to the minimum  required tax
            withholding,  based on the minimum  statutory  withholding rates for
            federal and state tax purposes,  including  payroll taxes,  that are
            applicable to the supplemental  income resulting from such exercise.
            In no event may the Company or any Affiliate  withhold shares having
            a Fair Market Value in excess of such statutory minimum required tax
            withholding.  The Participant's election to have shares withheld for
            this  purpose  shall be made on or before the date the  nonqualified
            stock option is exercised or, if later,  the date that the amount of
            tax to be withheld is  determined  under  applicable  tax law.  Such
            election shall be approved by the Administrator and otherwise comply
            with such rules as the  Administrator may adopt to assure compliance
            with Rule 16b-3, or any successor  provision,  as then in effect, of
            the General Rules and Regulations under the Securities  Exchange Act
            of 1934, if applicable.

      (d)   Other Provisions. The Option Agreement authorized under this Section
            10 shall contain such other  provisions as the  Administrator  shall
            deem advisable.


<PAGE>

                                   SECTION 11.
                             RESTRICTED STOCK AWARDS
                             -----------------------

      Each Restricted  Stock Award granted  pursuant to this Section 11 shall be
evidenced  by a  written  restricted  stock  agreement  (the  "Restricted  Stock
Agreement").  The  Restricted  Stock  Agreement  shall be in such form as may be
approved from time to time by the Administrator and may vary from Participant to
Participant;  provided, however, that each Participant and each Restricted Stock
Agreement  shall  comply  with  and  be  subject  to  the  following  terms  and
conditions:

      (a)   Number of Shares.  The Restricted  Stock  Agreement  shall state the
            total  number of shares of Stock  covered  by the  Restricted  Stock
            Award.

      (b)   Risks of Forfeiture.  The Restricted Stock Agreement shall set forth
            the risks of forfeiture,  if any, which shall apply to the shares of
            Stock covered by the Restricted  Stock Award,  and shall specify the
            manner  in  which  such  risks  of  forfeiture   shall  lapse.   The
            Administrator  may,  in its sole  discretion,  modify  the manner in
            which such risks of forfeiture  shall lapse but only with respect to
            those shares of Stock which are  restricted as of the effective date
            of the modification.

      (c)   Issuance of Restricted  Shares. The Company shall cause to be issued
            a  stock  certificate  representing  such  shares  of  Stock  in the
            Participant's  name,  and  shall  deliver  such  certificate  to the
            Participant;  provided,  however,  that the  Company  shall  place a
            legend on such  certificate  describing  the risks of forfeiture and
            other  transfer   restrictions   set  forth  in  the   Participant's
            Restricted  Stock Agreement and providing for the  cancellation  and
            return of such  certificate  if the  shares of Stock  subject to the
            Restricted Stock Award are forfeited.

      (d)   Rights as Shareholder.  Until the risks of forfeiture have lapsed or
            the  shares  subject  to  such  Restricted  Stock  Award  have  been
            forfeited,  the Participant  shall be entitled to vote the shares of
            Stock  represented by such stock  certificates and shall receive all
            dividends attributable to such shares, but the Participant shall not
            have any other rights as a shareholder with respect to such shares.

      (e)   Withholding Taxes. The Company or its Affiliate shall be entitled to
            withhold and deduct from future wages of the Participant all legally
            required  amounts  necessary to satisfy any and all  withholding and
            employment-related   taxes   attributable   to   the   Participant's
            Restricted  Stock Award.  In the event the  Participant  is required
            under the  Restricted  Stock  Agreement  to pay the  Company  or its
            Affiliate,  or make  arrangements  satisfactory  to the  Company  or
            Affiliate    respecting    payment   of,   such    withholding   and
            employment-related  taxes, the Administrator  may, in its discretion
            and pursuant to such rules as it may adopt,  permit the  Participant
            to satisfy  such  obligations,  in whole or in part,  by  delivering
            shares of Common Stock,  including shares of Stock received pursuant
            to a Restricted  Stock Award on which the risks of  forfeiture  have
            lapsed.  Such  shares  shall have a Fair  Market  Value equal to the
            minimum  required tax  withholding,  based on the minimum  statutory
            withholding  rates for  federal  and state tax  purposes,  including
            payroll  taxes,  that  are  applicable  to the  supplemental  income
            resulting  from  the  lapsing  of the  risks of  forfeiture  on such
            restricted  stock.  In no event may the  Participant  deliver shares
            having a Fair  Market  Value in  excess  of such  statutory  minimum
            required  tax  withholding.  The  Participant's  election to deliver
            shares of Common Stock for this  purpose  shall be made on or before
            the date that the amount of tax to be withheld is  determined  under
            applicable   tax  law.  Such  election  shall  be  approved  by  the
            Administrator   and   otherwise   comply  with  such  rules  as  the
            Administrator may adopt to assure compliance with Rule 16b-3, or any
            successor  provision,  as then in effect,  of the General  Rules and
            Regulations   under  the   Securities   Exchange  Act  of  1934,  if
            applicable.


<PAGE>

      (f)   Nontransferability. No Restricted Stock Award shall be transferable,
            in whole or in part,  by the  Participant,  other than by will or by
            the laws of descent and distribution, prior to the date the risks of
            forfeiture  described in the Restricted Stock Agreement have lapsed.
            If the  Participant  shall  attempt any  transfer of any  Restricted
            Stock Award granted under the Plan prior to such date, such transfer
            shall be void and the Restricted Stock Award shall terminate.

      (g)   Other  Provisions.  The Restricted Stock Agreement  authorized under
            this  Section  11  shall  contain  such  other   provisions  as  the
            Administrator shall deem advisable.


                                   SECTION 12.
                               TRANSFER OF OPTIONS
                               -------------------

      No incentive stock option shall be  transferable,  in whole or in part, by
the Participant  other than by will or by the laws of descent and  distribution.
During the Participant's  lifetime,  the incentive stock option may be exercised
only by the  Participant.  If the Participant  shall attempt any transfer of any
incentive stock option granted under the Plan during the Participant's lifetime,
such transfer  shall be void and the incentive  stock option,  to the extent not
fully exercised, shall terminate.

      No  nonqualified  stock  option  shall  be  transferred,  except  that the
Administrator  may, in its sole  discretion,  permit the Participant to transfer
any  or all  nonqualified  stock  options  to any  member  of the  Participant's
"immediate  family" as such term is defined in Rule 16a-1(e)  promulgated  under
the Securities  Exchange Act of 1934, or any successor  provision,  or to one or
more trusts whose  beneficiaries  are members of such  Participant's  "immediate
family" or  partnerships  in which such family  members  are the only  partners;
provided, however, that the Participant cannot receive any consideration for the
transfer and such  transferred  nonqualified  stock option shall  continue to be
subject to the same terms and conditions as were applicable to such nonqualified
stock option immediately prior to its transfer.


                                   SECTION 13.
             RECAPITALIZATION, SALE, MERGER, EXCHANGE OR LIQUIDATION
             -------------------------------------------------------

      If,  following  adoption of this Plan, the Company  effects an increase or
decrease in the number of shares of Common Stock  resulting  from a stock split,
reverse stock split,  stock  dividend,  combination or  reclassification  of the
Common Stock,  or any other  increase or decrease in the number of issued shares
of Common Stock effected without receipt of  consideration  by the Company,  the
number of shares of Option Stock  reserved under Section 6 hereof and the number
of shares of Option  Stock  covered by each  outstanding  Option and  Restricted
Stock Award, and the price per share thereof, shall be appropriately adjusted by
the Board to reflect such change.  Additional shares which may become covered by
the Award pursuant to such adjustment shall be subject to the same  restrictions
as are applicable to the shares with respect to which the adjustment relates.


<PAGE>

      Unless otherwise provided in the Option or Restricted Stock Agreement,  in
the event of an acquisition of the Company through the sale of substantially all
of the Company's  assets and the  consequent  discontinuance  of its business or
through a merger,  consolidation,  exchange,  reorganization,  reclassification,
extraordinary  dividend,   divestiture  (including  a  spin-off),   liquidation,
recapitalization,   stock  split,  stock  dividend  or  otherwise  (collectively
referred  to as a  "transaction"),  the Board may provide for one or more of the
following:

      (a)   the equitable  acceleration of the exercisability of any outstanding
            Options and the lapsing of the risks of forfeiture on any Restricted
            Stock Awards;

      (b)   the  complete   termination  of  this  Plan,  the   cancellation  of
            outstanding  Options not exercised  prior to a date specified by the
            Board (which date shall give  Participants  a  reasonable  period of
            time in which to exercise the Options prior to the  effectiveness of
            such  transaction),  and the  cancellation  of any Restricted  Stock
            Awards for which the risks of forfeiture have not lapsed;

      (c)   that Participants  holding outstanding  Options shall receive,  with
            respect to each share of Stock  subject to such  Options,  as of the
            effective date of any such  transaction,  cash in an amount equal to
            the  excess  of the  Fair  Market  Value  of such  Stock on the date
            immediately  preceding the effective date of such  transaction  over
            the option price per share of such Options;  provided that the Board
            may, in lieu of such cash payment,  distribute to such  Participants
            shares of Stock of the Company or shares of stock of any corporation
            succeeding  the Company by reason of such  transaction,  such shares
            having a value equal to the cash payment herein;

      (d)   that Participants holding outstanding  Restricted Stock Awards shall
            receive, with respect to each share of Stock subject to such Awards,
            as of the effective date of any such transaction,  cash in an amount
            equal to the Fair Market Value of such Stock on the date immediately
            preceding the effective date of such transaction;  provided that the
            Board  may,  in  lieu  of  such  cash  payment,  distribute  to such
            Participants  shares of Stock of the  Company  or shares of stock of
            any   corporation   succeeding   the   Company  by  reason  of  such
            transaction,  such shares  having a value equal to the cash  payment
            herein;

      (e)   the  continuance of the Plan with respect to the exercise of Options
            which were  outstanding  as of the date of  adoption by the Board of
            such plan for such  transaction and provide to Participants  holding
            such Options the right to exercise their respective Options as to an
            economically equivalent number of shares of stock of the corporation
            succeeding the Company by reason of such transaction; and

      (f)   the continuance of the Plan with respect to Restricted  Stock Awards
            for which the risks of forfeiture  have not lapsed as of the date of
            adoption by the Board of such plan for such  transaction and provide
            to  Participants  holding  such  Awards  the  right  to  receive  an
            economically equivalent number of shares of stock of the corporation
            succeeding the Company by reason of such transaction.


<PAGE>

The Board may restrict the rights of or the  applicability of this Section 13 to
the extent necessary to comply with Section 16(b) of the Securities Exchange Act
of 1934,  the Internal  Revenue Code or any other  applicable law or regulation.
The grant of an Option or Restricted  Stock Award pursuant to the Plan shall not
limit  in any way  the  right  or  power  of the  Company  to make  adjustments,
reclassifications,  reorganizations  or  changes  of  its  capital  or  business
structure or to merge, exchange or consolidate or to dissolve,  liquidate,  sell
or transfer all or any part of its business or assets.

                                   SECTION 14.
                               INVESTMENT PURPOSE
                               ------------------

      No shares of Common Stock shall be issued  pursuant to the Plan unless and
until there has been compliance,  in the opinion of Company's counsel,  with all
applicable legal requirements,  including without limitation,  those relating to
securities laws and stock exchange listing  requirements.  As a condition to the
issuance of Stock to Participant,  the Administrator may require  Participant to
(i) represent that the shares of Stock are being acquired for investment and not
resale and to make such other  representations  as the Administrator  shall deem
necessary  or  appropriate  to qualify  the  issuance  of the shares of Stock as
exempt from the Securities Act of 1933 and any other applicable securities laws,
and (ii) represent that Participant  shall not dispose of the shares of Stock in
violation of the Securities Act of 1933 or any other applicable  securities laws
or any company policies then in effect.

      As a further condition to the grant of any stock option or the issuance of
Stock to Participant, Participant agrees to the following:

      (a)   In the  event  the  Company  advises  Participant  that it  plans an
            underwritten  public offering of its Common Stock in compliance with
            the Securities Act of 1933, as amended,  and the underwriter(s) seek
            to impose restrictions under which certain shareholders may not sell
            or contract to sell or grant any option to buy or otherwise  dispose
            of part or all of their stock  purchase  rights of the Common  Stock
            underlying Awards,  Participant will not, for a period not to exceed
            180 days from the  prospectus,  sell or contract to sell or grant an
            option  to  buy  or  otherwise  dispose  of  any  Award  granted  to
            Participant  pursuant to the Plan or any of the underlying shares of
            Common Stock without the prior written consent of the underwriter(s)
            or its representative(s).

      (b)   In the event the Company makes any public offering of its securities
            and determines in its sole discretion that it is necessary to reduce
            the number of issued but unexercised  stock purchase rights so as to
            comply with any state's  securities or Blue Sky law limitations with
            respect  thereto,  the Board of Directors of the Company  shall have
            the right (i) to accelerate the exercisability of any Option and the
            date on which  such  Option  must be  exercised,  provided  that the
            Company gives Participant prior written notice of such acceleration,
            and (ii) to cancel  any  Options  or  portions  thereof,  in reverse
            chronological order based on the date or dates on which such Options
            or portions thereof would have become  exercisable  according to the
            original  vesting  schedule  set forth in the related  stock  option
            agreements,   which  Participant  does  not  exercise  prior  to  or
            contemporaneously with such public offering.


<PAGE>

      (c)   In the event of a  transaction  (as  defined  in  Section  13 of the
            Plan),  Participant  will comply with Rule 145 of the Securities Act
            of 1933 and any other  restrictions  imposed under other  applicable
            legal or accounting  principles if Participant is an "affiliate" (as
            defined in such applicable  legal and accounting  principles) at the
            time of the transaction,  and Participant will execute any documents
            necessary to ensure compliance with such rules.

The Company reserves the right to place a legend on any stock certificate issued
upon the  exercise  of an Option or upon the grant of a  Restricted  Stock Award
pursuant to the Plan to assure compliance with this Section 14.

                                   SECTION 15.
                             RIGHTS AS A SHAREHOLDER
                             -----------------------

      A Participant (or the Participant's successor or successors) shall have no
rights as a shareholder with respect to any shares covered by an incentive stock
option or  nonqualified  stock  option until the date of the issuance of a stock
certificate  evidencing such shares.  No adjustment  shall be made for dividends
(ordinary or  extraordinary,  whether in cash,  securities  or other  property),
distributions  or other  rights for which the  record  date is prior to the date
such stock  certificate  is actually  issued  (except as  otherwise  provided in
Section 13 of the Plan).


                                   SECTION 16.
                              AMENDMENT OF THE PLAN
                              ---------------------

      The Board may from time to time,  insofar as permitted by law,  suspend or
discontinue  the Plan or revise or amend it in any respect;  provided,  however,
that no such revision or amendment, except as is authorized in Section 13, shall
impair the terms and conditions of any Award which is outstanding on the date of
such revision or amendment to the material detriment of the Participant  without
the consent of the Participant.  Notwithstanding the foregoing, no such revision
or amendment  shall (i) increase the number of shares subject to the Plan except
as provided in Section 13 hereof,  (ii) change the  designation  of the class of
employees eligible to receive Awards,  (iii) decrease the price at which Options
may  be  granted,   or  (iv)  materially   increase  the  benefits  accruing  to
Participants  under the Plan,  without the approval of the  shareholders  of the
Company if such approval is required for compliance with the requirements of any
applicable  law or  regulation.  Furthermore,  the  Plan may  not,  without  the
approval of the shareholders, be amended in any manner that will cause incentive
stock  options to fail to meet the  requirements  of Section 422 of the Internal
Revenue Code.


<PAGE>

                                   SECTION 17.
                        NO OBLIGATION TO EXERCISE OPTION
                        --------------------------------

      The granting of an Option shall impose no obligation  upon the Participant
to exercise such Option.  Further, the granting of an Option or Restricted Stock
Award  hereunder  shall  not  impose  upon  the  Company  or any  Affiliate  any
obligation to retain the Participant in its employ for any period.