<PAGE>

                                                                Exhibit 10(c)

                             BOSTON ACOUSTICS, INC.

                           (MASSACHUSETTS CORPORATION)

                                 1997 STOCK PLAN

         1. Purpose. The purpose of this plan (the "Plan") is to secure for
Boston Acoustics, Inc. (the "Company") and its shareholders the benefits arising
from capital stock ownership by employees, officers and directors and
consultants of the Company and its parent and subsidiary corporations who are
expected to contribute to the Company's future growth and success. This Plan is
intended to provide incentives: (i) to employees, officers, directors and
consultants of the Company by providing them with opportunities to purchase
shares of the Company's Common Stock, $0.01 par value ("Common Stock"), pursuant
to options granted hereunder ("Options") and (ii) to directors of the Company by
providing them with the opportunity to purchase shares of Common Stock directly
from the Company ("Purchases"). Except where the context otherwise requires, the
term "Company" shall include the parent and all present and future subsidiaries
of the Company as defined in Sections 424(e) and 424(f) of the Internal Revenue
Code of 1986, as amended or replaced from time to time (the "Code"). Those
provisions of the Plan which make express reference to Section 422 shall apply
only to ISOs (as that term is defined in the Plan).

         2. Administration and Types of Options.

                  (a) Administration. Except as otherwise provided in Section
         24, the Plan shall be administered by a compensation committee (the
         "Committee") of not less than two directors of the Company appointed by
         the Board of Directors of the Company (the "Board") each of whom is not
         an employee of the Company and who qualifies as a "disinterested
         person" within the meaning of Rule 16b-3(c)(2)(i) promulgated under the
         Securities Exchange Act of 1934, as amended (the "Act"). Subject to
         ratification of the grant or authorization of each Option by the Board
         (if so required by applicable state law), and subject to the terms of
         the Plan, the Committee, shall have the authority to (i) determine the
         employees of the Company (from among the class of employees eligible
         under Section 3 to receive ISOs (as such term is defined below)) to
         whom ISOs may be granted, and to determine (from among the class of
         individuals and entities eligible under Section 3 to receive
         Non-Qualified Options(as such term is defined below)) to whom
         Non-Qualified Options may be granted; (ii) determine the time or times
         at which Options may be granted; (iii) determine the option price of
         shares subject to each Option, which price shall not be less than the
         minimum price specified in Section 6(a); (iv) determine whether each
         Option granted shall be an ISO or a Non-Qualified Option; (v) determine
         (subject to Section 8) the time or times when each Option shall become
         exercisable and the duration of the exercise period; (vi) determine
         whether restrictions such as repurchase options are to be imposed on
         shares subject to Options and the nature of such restrictions, if any,
         and (vii) interpret the Plan and prescribe and rescind rules and
         regulations relating to it. If the Committee determines to issue a
         Non-Qualified Option, it shall take whatever actions it deems
         necessary, under Section 422 of the 


<PAGE>

         Code and the regulations promulgated thereunder, to ensure that such
         Option is not treated as an ISO. The interpretation and construction by
         the Committee of any provisions of the Plan or of any Option granted
         under it shall be final unless otherwise determined by the Board. The
         Committee may from time to time adopt such rules and regulations for
         carrying out the Plan as it may deem best. No member of the Board or
         the Committee shall be liable for any action or determination made in
         good faith with respect to the Plan or any Option or any Purchase
         granted under it.

                  (b) Compensation Committee. The Committee may select one of
         its members as its chairman, and shall hold meetings at such times and
         places as it may determine. Acts by a majority of the Committee, or
         acts reduced to or approved in writing by a majority of the members of
         the Committee, shall be valid acts of the Committee.

                  (c) Applicability of Rule 16b-3. Those provisions of the Plan
         which make express reference to Rule 16b-3 shall apply only to such
         persons as are required to file reports under Section 16(a) of the
         Exchange Act (a "Reporting Person").

                  (d) Types of Options. Options granted pursuant to the Plan may
         be either incentive stock options ("ISOs") meeting the requirements of
         Section 422 of the Code or non-qualified stock options ("Non-Qualified
         Options") which are not intended to meet the requirements of Section
         422 of the Code.

         3. Eligibility.

                  (a) Options. ISOs may be granted to any employee of the
         Company. Those officers and directors of the Company who are not
         employees of the Company may not be granted ISOs under the Plan.
         Non-Qualified Options may be granted to any director, officer, employee
         or consultant of the Company. The Committee may take into consideration
         a recipient's individual circumstances in determining whether to grant
         an ISO or a Non-Qualified Option. Granting an Option to any individual
         or entity shall neither entitle that individual or entity to, nor
         disqualify him, her or it from, participation in any other grant of an
         Option.

                  (b) Purchases. Eligibility for Purchases under the Plan shall
         be determined in accordance with Section 24 of the Plan.

         4. Stock Subject to Plan.

                  (a) Options. Subject to adjustment as provided in Section 15
         below, the maximum number of shares of Common Stock of the Company
         which may be issued and sold pursuant to Options issued under the Plan
         is 300,000 shares. The shares may be authorized, but unissued, or
         reacquired Common Stock. If an Option granted under the Plan shall
         expire or terminate for any reason without having been exercised 



                                       2
<PAGE>

         in full, the unpurchased shares subject to such Option shall again be
         available for subsequent Option grants under the Plan. No shares issued
         upon exercise of any Option shall be returned to the Plan nor become
         available under the Plan for future distribution.

                  (b) Purchases. Subject to adjustment as provided in Section 15
         below, the maximum number of shares of Common Stock of the Company
         which may be issued and sold under Section 24 of the Plan is 20,000
         shares. The shares may be authorized, but unissued, or reacquired
         Common Stock. No shares issued and sold under Section 24 of the Plan
         shall be returned to the Plan nor become available under the Plan for
         future distribution.

         5. Forms of Option Agreements. As a condition to the grant of an Option
under the Plan, each recipient of an Option shall execute an option agreement in
such form not inconsistent with the Plan as may be approved by the Committee.
Such option agreements may differ among recipients.

         6. Exercise Price.

                  (a) General. The price per share of stock deliverable upon the
         exercise of an Option shall be determined by the Committee, but it
         shall not be less than the par value per share of the stock; provided,
         that in the case of an ISO, the exercise price shall not be less than
         100% of the fair market value of such stock, as determined by the
         Committee, at the time of grant of such Option, or less than 110% of
         such fair market value in the case of Options described in Section
         11(b).

                  (b) Fair Market Value. If, at the time an Option is granted
         under the Plan or Common Stock is delivered to the Company, the
         Company's Common Stock is publicly traded, the "fair market value"
         shall be determined as of the last business day for which the prices or
         quotes discussed in this sentence are available prior to the date such
         Option is granted or Common Stock is delivered to the Company and shall
         mean (i) the last reported sale price (on that date) of the Common
         Stock on the principal national securities exchange on which the Common
         Stock is traded, if the Common Stock is then traded on a national
         securities exchange; or (ii) the last reported sale price (on that
         date) of the Common Stock on the NASDAQ National Market System, if the
         Common Stock is not then traded on a national securities exchange; or
         (iii) the closing bid price (or average of bid prices) last quoted (on
         that date) by an established quotation service for over-the-counter
         securities, if the Common Stock is not reported on the NASDAQ National
         Market System. However, if the Common Stock is not publicly traded at
         the time an Option is granted or the Common Stock is delivered, the
         "fair market value" shall be deemed to be the fair market value of the
         Common Stock as determined by the Committee after it takes into
         consideration all factors which it deems appropriate.

                                       3
<PAGE>

                  (c) Payment of Exercise Price. Payment of the exercise price
         of Options granted under the Plan may be made (i) by delivery of cash
         or a check to the order of the Company in an amount equal to the
         exercise price of such Options, (ii) if authorized by the applicable
         option agreement or at the discretion of the Committee, by delivery to
         the Company of shares of Common Stock of the Company beneficially owned
         by the optionee for more than six months and which the optionee may
         freely transfer having a fair market value equal in amount to the
         exercise price of the options being exercised, (ii) by any other means
         (including, without limitation, by delivery of a promissory note of the
         optionee payable on such terms as are specified by the Committee) which
         the Committee determines are consistent with the purpose of the Plan
         and with then applicable laws and regulations (including, without
         limitation, the provisions of Rule 16b-3, to the extent that the Common
         Stock is registered under the Exchange Act, and Regulation T
         promulgated by the Federal Reserve Board) or (iii) by any combination
         of such methods of payment. The fair market value of any shares of the
         Company's Common Stock or other non-cash consideration which may be
         delivered upon exercise of an Option shall be determined by the
         Committee.

         7. Option Period. Each Option and all rights thereunder shall expire on
such date as shall be set forth in the applicable option agreement, except that,
in the case of an ISO, such date shall not be later than ten years after the
date on which the Option is granted and, in all cases, Options shall be subject
to earlier termination as provided in the Plan.

         8. Exercise of Options. Each Option granted under the Plan shall be
exercisable either in full or in installments at such time or times and during
such period as shall be set forth in the agreement evidencing such option,
subject to the provisions of the Plan. Notwithstanding the foregoing, Options
granted under the Plan to the Reporting Persons shall not be exercisable in any
part until at least six months after the date of grant.

         9. Nontransferability.

                  (a) Nontransferability of Options. ISOs and Non-Qualified
         Options granted to Reporting Persons shall not be assignable or
         transferable by the person to whom they are granted, either voluntarily
         or by operation of law, except by will or the laws of descent and
         distribution, and, during the life of the optionee, shall be
         exercisable only by the optionee; provided, that Non-Qualified Options
         held by Reporting Persons may be transferred pursuant to a qualified
         domestic relations order (as defined in Rule 16b-3). Non-Qualified
         Options held by persons other than Reporting Persons shall be subject
         to restrictions on transferability in the Plan or provided in the
         applicable option agreement.

                  (b) Nontransferability of Rights Under Purchase Elections. Any
         right under a Purchase Election shall not be assignable or transferable
         by the director who made such Purchase Election, either voluntarily or
         by operation of law, except by will or the laws of descent and
         distribution or pursuant to a qualified domestic relations 



                                       4
<PAGE>

         order (as defined in Rule 16b-3).

         10. Effect on Option of Termination of Employment or Other
Relationship. Except as provided in Section 11(d) with respect to ISOs, and
subject to the provisions of the Plan, the Committee shall determine the period
of time during which an optionee may exercise an Option following (i) the
termination of the optionee's employment or other relationship with the Company
or (ii) the death or disability of the optionee. Such periods shall be set forth
in the agreement evidencing such Option.

         11. ISOs. Options granted under the Plan which are intended to be ISOs
shall be subject to the following additional terms and conditions:

                  (a) Express Designation. All  under the Plan
         shall, at the time of grant, be specifically designated as such in the
         option agreement covering such ISOs.

                  (b) 10% Shareholder. If any employee to whom an ISO is to be
         granted under the Plan is, at the time of the grant of such Option, the
         owner of stock possessing more than 10% of the total combined voting
         power of all classes of stock of the Company (after taking into account
         the attribution of stock ownership rules of Section 424(d) of the
         Code), then the following special provisions shall be applicable to the
         ISO granted to such individual:

                           (i)      the purchase price per share of the Common
                                    Stock subject to such ISO shall not be less
                                    than 110% of the fair market value of one
                                    share of Common Stock at the time of grant;
                                    and

                           (ii)     the exercise period of such ISO shall not
                                    exceed five years from the date of grant.

                  (c) Dollar Limitation. For so long as the Code shall so
         provide, Options granted to any employee under the Plan (and any other
         stock option plans of the Company) which are intended to constitute
         ISOs shall not constitute ISOs to the extent that such options, in the
         aggregate, become exercisable for the first time in any one calendar
         year for shares of Common Stock with an aggregate fair market value
         (determined as of the respective date or dates of grant) of more than
         $100,000.

                  (d) Termination of Employment, Death or Disability. No ISO may
         be exercised unless, at the time of such exercise, the optionee is, and
         has been continuously since the date of grant of his or her Option,
         employed by the Company, except that:

                           (i)      an ISO may be exercised within the period of
                                    three months after the date the optionee
                                    ceases to be an employee of the 



                                       5
<PAGE>

                                    Company (or within such lesser period as may
                                    be specified in the applicable option
                                    agreement); provided that the agreement with
                                    respect to such Option may designate a
                                    longer exercise period and that the exercise
                                    after such three-month period shall be
                                    treated as the exercise of a Non-Qualified
                                    Option under the Plan;

                           (ii)     if the optionee dies while in the employ of
                                    the Company, or within three months after
                                    the optionee ceases to be such an employee,
                                    the ISO may be exercised by the person to
                                    whom it is transferred by will or the laws
                                    of descent and distribution within the
                                    period of one year after the date of death
                                    (or within such lesser period as may be
                                    specified in the applicable option
                                    agreement); and

                           (iii)    if the optionee becomes disabled (within the
                                    meaning of Section 22(e)(3) of the Code or
                                    any successor provision thereto) while in
                                    the employ of the Company, the ISO may be
                                    exercised within the period of one year
                                    after the date the optionee ceases to be
                                    such an employee because of such disability
                                    (or within such lesser period as may be
                                    specified in the applicable option
                                    agreement).

         For all purposes of the Plan and any Option granted hereunder,
"employment" shall be defined in accordance with the provisions of Section
1.421-7(h) of the Income Tax Regulations (or any successor regulations).
Notwithstanding the foregoing provisions, no ISO may be exercised after its
expiration date.

         12. Additional Option Provisions

                  (a) Additional Option Provisions. The Committee may, in its
         sole discretion, include additional provisions in Option agreements
         covering options granted under the Plan, including without limitation
         restrictions on transfer, repurchase rights, commitments to pay cash
         bonuses, to make, arrange for or guaranty loans or to transfer other
         property to optionees upon exercise of Options, or such other
         provisions as shall be determined by the Committee; provided that such
         additional provisions shall not be inconsistent with any other term or
         condition of the Plan and such additional provisions shall not cause
         any ISO granted under the Plan to fail to qualify as an ISO within the
         meaning of Section 422 of the Code.

                  (b) Option Acceleration, Extension, Etc. The Committee may, in
         its sole discretion, (i) accelerate the date or dates on which all or
         any particular Option or Options granted under the Plan may be
         exercised or (ii) extend the dates during which all, or any particular,
         Option or Options granted under the Plan may be exercised; 



                                       6
<PAGE>

         provided that no such extension shall be permitted if it would cause
         the Plan to fail, to comply with Section 422 of the Code or with Rule
         16b-3 as then in effect, to the extent that the Common Stock is
         registered under the Exchange Act.

         13. General Restrictions.

                  (a) Investment Representations. The Company may require any
         person to whom an Option is granted or shares are to be sold hereunder,
         as a condition of exercising such Option or purchasing shares pursuant
         to Section 24, to give written assurances in substance and form
         satisfactory to the Company to the effect that such person is acquiring
         the Common Stock for his or her own account for investment and not with
         any present intention of selling or otherwise distributing the same,
         and to such other effect as the Company deems necessary or appropriate
         in order to comply with federal and applicable state securities laws,
         or with covenants or representations made by the Company in connection
         with any public offering of its Common Stock.

                  (b) Compliance with Securities Laws. Each Option shall be
         subject to the requirement that if, at any time, counsel to the Company
         shall determine that the listing, registration or qualification of the
         shares subject to such Option upon any securities exchange or under any
         state or federal law, or the consent or approval of any governmental or
         regulatory body, or that the disclosure of non-public information or
         the satisfaction of any other condition is necessary as a condition of,
         or in connection with, the issuance or purchase of shares thereunder,
         such Option may not be exercised, in whole or in part, unless such
         listing, registration, qualification, consent or approval, or
         satisfaction of such condition shall have been effected or obtained on
         conditions acceptable to the Committee. Nothing herein shall be deemed
         to require the Company to apply for or to obtain such listing,
         registration or qualification, or to satisfy such condition.

         14. Rights as a Shareholder. Neither a holder of an Option nor a
director having made a Purchase Election shall have any rights as a shareholder
with respect to any shares covered by the Option or Purchase Election
(including, without limitation, any rights to receive dividends or non-cash
distributions with respect to shares subject thereto) until the date of issue of
a stock certificate to him or her for such shares. No adjustment shall be made
for dividends or other rights for which the record date is prior to the date
such stock certificate is issued.

         15. Adjustment Provisions for Recapitalizations and Related
Transactions.

                  (a) Adjustments Relating to Options. If, through or as a
         result of any merger, consolidation, sale of all or substantially all
         of the assets of the Company, reorganization, recapitalization,
         reclassification, stock dividend, stock split, reverse stock split or
         other similar transaction, (i) the outstanding shares of Common Stock
         are increased, decreased or exchanged for a different number or kind of
         shares or 


                                       7
<PAGE>

         other securities of the Company, or (ii) additional shares or new or 
         different shares or other securities of the Company or other 
         non-cash assets are distributed with respect to such shares of 
         Common Stock or other securities, an appropriate and proportionate 
         adjustment may be made in (x) the maximum number and kind of shares 
         reserved for issuance pursuant to Options issued under the Plan, (y) 
         the number and kind of shares or other securities subject to any 
         then outstanding Options under the Plan, and (z) the price for each 
         share subject to any then outstanding Options, without changing the 
         aggregate purchase price as to which such Options remain 
         exercisable. Notwithstanding the foregoing, no adjustment shall be 
         made pursuant to this Section 15 to the extent such adjustment would 
         cause any ISO issued under the Plan to fail to comply with Section 
         422 of the Code or the Plan to fail to comply with Rule 16b-3 as 
         then in effect, to the extent that the Common Stock is registered 
         under the Exchange Act.

                  (b) Committee Authority to Make Adjustments. Any adjustments
         under Section 15(a) will be made by the Committee, whose determination
         as to what adjustments, if any, will be made and the extent thereof
         will be final, binding and conclusive. No fractional shares will be
         issued under the Plan on account of any such adjustments.

                  (c) Adjustments Relating to Purchasers. If, through or as a
         result of any merger, consolidation, sale of all or substantially all
         of the assets of the Company, reorganization, recapitalization,
         reclassification, stock dividend, stock split, reverse stock split or
         other similar transaction, (i) the outstanding shares of Common Stock
         are increased, decreased or exchanged for a different number or kind of
         shares or other securities of the Company, or (ii) additional shares or
         new or different shares or other securities of the Company or other
         non-cash assets are distributed with respect to such shares of Common
         Stock or other securities, an appropriate and proportionate adjustment
         may be made in (x) the maximum number and kind of shares reserved for
         issuance pursuant to Section 24 of the Plan, (y) the number and kind of
         shares or other securities subject to any then outstanding Purchase
         Elections, and (z) the price for each share subject to any then
         outstanding Purchase Election, without changing the aggregate purchase
         price as to such Purchases which have not yet occurred. Notwithstanding
         the foregoing, no adjustment shall be made pursuant to this Section
         15(c) to the extent such adjustment would cause any ISO issued under
         the Plan to fail to comply with Section 422 of the Code or the Plan to
         fail to comply with Rule 16b-3 as then in effect, to the extent that
         the Common Stock is registered under the Exchange Act.

                  (d) Board Authority to Make Adjustments. Any adjustment under
         Section 15(c) will be made by the Board, whose determination as to what
         adjustments, if any, will be made and the extent thereof will be final,
         binding and conclusive. No fractional shares will be issued under the
         Plan on account of any such adjustments.


                                       8
<PAGE>

         16. Merger, Consolidation, Asset Sale, Liquidation, etc.

                  (a) Options. In the event of a consolidation or merger or sale
         of all or substantially all of the assets of the Company in which
         outstanding shares of Common Stock are exchanged for securities, cash
         or other property of any other corporation or business entity or in the
         event of a liquidation of the Company, the Committee, or the board of
         directors of any corporation assuming the obligations of the Company
         may in its discretion, take any one or more of the following actions,
         as to outstanding Options: (i) provide that such Options shall be
         assumed, or equivalent options shall be substituted, by the acquiring
         or succeeding corporation (or an affiliate thereof), provided that any
         such options substituted for ISOs shall meet the requirements of
         Section 424(a) of the Code, (ii) upon written notice to the optionees,
         provide that all unexercised Options will terminate immediately prior
         to the consummation of such transaction unless exercised by the
         optionee within a specified period following the date of such notice,
         (iii) in the event of a merger under the terms of which holders of the
         Common Stock of the Company will receive upon consummation thereof a
         cash payment for each share surrendered in the merger (the "Merger
         Price"), make or provide for a cash payment to the optionees equal to
         the difference between (A) the Merger Price times the number of shares
         of Common Stock subject to such outstanding Options (to the extent then
         exercisable at prices not in excess of the Merger Price) and (B) the
         aggregate exercise price of all such outstanding Options in exchange
         for the termination of such options, and (iv) provide that all or any
         outstanding Options shall become exercisable in full immediately prior
         to such event; provided that notwithstanding anything to the contrary
         in this Section 16(a), any action taken by the Committee hereunder
         shall be in compliance with Rule 16b-3 as in effect at the time of such
         action and the conditions thereof necessary to maintain qualification
         of the Plan under Rule 16b-3, to the extent that the Common Stock is
         registered under the Exchange Act. In the case of any Option which by
         the terms of the grant thereof (or the agreement or instrument
         governing such grant) or pursuant to a decision by the Committee under
         this Section 16(a) provides for such option becoming exercisable in
         full upon a Change in Control or otherwise under this Section 16, such
         option shall be deemed vested on the day immediately prior to the day
         on which such Change in Control occurs and such optionee shall be given
         prior written notice of such Change in Control sufficient to permit
         such optionee to exercise such Options. For purposes of this Plan, a
         "Change in Control" occurs if the Company (i) ceases operations; (ii)
         merges or consolidates with another entity and is not the surviving
         entity; (iii) sells or otherwise transfers all or substantially all of
         its operating assets; or (iv) if more than 50% of the capital stock of
         the Company is transferred in a single transaction or in a series of
         related transactions other than a public offering of stock of the
         Company to a single person, entity or group of persons acting in
         concert.

                  (b) Substitute Options. The Company may grant Options under
         the Plan in substitution for options held by employees of another
         corporation who become employees of the Company, or of a subsidiary of
         the Company, as the result of a 



                                       9
<PAGE>

         merger or consolidation of the employing corporation with the Company
         or a subsidiary of the Company, or as a result of the acquisition by
         the Company, or one of its subsidiaries, of property or stock of the
         employing corporation. The Company may direct that substitute Options
         be granted on such terms and conditions as the Committee considers
         appropriate in the circumstances.

                  (c) Purchases. In the event of a consolidation or merger or
         sale of all or substantially all of the assets of the Company in which
         outstanding shares of Common Stock are exchanged for securities, cash
         or other property of any other corporation or business entity or in the
         event of a liquidation of the Company, any election to Purchase shares
         of Common Stock pursuant to Section 24 of the Plan shall automatically
         be cancelled and any Fee Deductions shall be paid to the appropriate
         directors promptly, together with interest on such Fee Deductions,
         calculated in accordance with Section 24(e) of the Plan.

         17. No Special Employment Rights. Nothing contained in the Plan or in
any Option shall confer upon any optionee any right with respect to the
continuation of his or her employment by the Company or interfere in any way
with the right of the Company at any time to terminate such employment or to
increase or decrease the compensation of the optionee.

         18. Other Employee Benefits. Except as to plans which by their terms
include such amounts as compensation, the amount of any compensation deemed to
be received by an employee as a result of the exercise of an Option or the sale
of shares received upon such exercise will not constitute compensation with
respect to which any other employee benefits of such employee are determined,
including, without limitation, benefits under any bonus, pension,
profit-sharing, life insurance or salary continuation plan, except as otherwise
specifically determined by the Committee or required by law.

         19. Amendment of the Plan.

                  (a) The Board of Directors may at any time, and from time to
         time, modify or amend the Plan in any respect, except that if at any
         time the approval of the shareholders of the Company is required under
         Section 422 of the Code or any successor provision with respect to
         ISOs, or under Rule 16b-3 as then in effect, to the extent that the
         Common Stock is registered under the Exchange Act, the Board of
         Directors may not effect such modification or amendment without such
         approval.

                  (b) The termination or any modification or amendment of the
         Plan shall not, without the consent of an optionee, affect his or her
         rights under an Option previously granted to him or her. With the
         consent of the optionee affected, the Board of Directors may amend
         outstanding option agreements in a manner not inconsistent with the
         Plan. The Board of Directors shall have the right to amend or modify
         (i) the terms and provisions of the Plan and of any outstanding ISOs
         granted 



                                       10
<PAGE>

         under the Plan to the extent necessary to qualify any or all such
         Options for such favorable federal income tax treatment (including
         deferral of taxation upon exercise) as may be afforded incentive stock
         options under Section 422 of the Code and (ii) the terms and provisions
         of the Plan and of any outstanding option to the extent necessary to
         ensure the qualification of the Plan under Rule 16b-3 as then in
         effect, to the extent that the Common Stock is registered under the
         Exchange Act.

         20. Withholding.

                  (a) The Company shall have the right to deduct from payments
         of any kind otherwise due to the optionee any federal, state or local
         taxes of any kind required by law to be withheld with respect to any
         shares issued upon exercise of Options under the Plan. Subject to the
         prior approval of the Company, which may be withheld by the Company in
         its sole discretion, the optionee may elect to satisfy such
         obligations, in whole or in part, (i) by causing the Company to
         withhold shares of Common Stock otherwise issuable pursuant to the
         exercise of an option or (ii) by delivering to the Company shares of
         Common Stock already owned by the optionee. The shares so delivered or
         withheld shall have a fair market value equal to such withholding
         obligation. The fair market value of the shares used to satisfy such
         withholding obligation shall be determined by the Company as of the
         date that the amount of tax to be withheld is to be determined. Such
         determination of the fair market value shall be made in accordance with
         Section 6(b). An optionee who has made an election pursuant to this
         Section 20(a) may only satisfy his or her withholding obligation with
         shares of Common Stock which are not subject to any repurchase,
         forfeiture, unfulfilled vesting or other similar requirements.

                  (b) Notwithstanding the foregoing, in the case of a Reporting
         Person, no election to use shares for the payment of withholding taxes
         shall be effective unless made in compliance with any applicable
         requirements of Rule 16b-3 as then in effect.

         21. Cancellation and New Grant of Options, etc. The Board of Directors
shall have the authority to effect, at any time and from time to time, with the
consent of the affected optionees, (i) the cancellation of any or all
outstanding Options under the Plan or the Company's 1986 Incentive Stock Option
Plan and the grant in substitution therefor of new Options under the Plan
covering the same or different numbers of shares of Common Stock and having an
exercise price per share which may be lower or higher than the exercise price
per share of the cancelled Options or (ii) the amendment of the terms of any and
all outstanding Options under the Plan to provide an exercise price per share
which is higher or lower than the then current exercise price per share of such
outstanding Options.

         22. Effective Date and Duration of the Plan.

                  (a) Effective Date. The Plan shall become effective when
         adopted by the Board of Directors, but no ISO granted under the Plan
         shall become exercisable unless 



                                       11
<PAGE>

         and until the Plan shall have been approved by the Company's
         shareholders. If such shareholder approval is not obtained within
         twelve months after the date of the Board's adoption of the Plan, no
         Options previously granted under the Plan shall be deemed to be ISOs
         and no ISOs shall be granted thereafter. Amendments to the Plan not
         requiring shareholder approval shall become effective when adopted by
         the Board of Directors; amendments requiring shareholder approval (as
         provided in Section 19) shall become effective when adopted by the
         Board of Directors, but no ISO granted after the date of such amendment
         shall become exercisable (to the extent that such amendment to the Plan
         was required to enable the Company to grant such ISO to a particular
         optionee) unless and until such amendment shall have been approved by
         the Company's shareholders. If such shareholder approval is not
         obtained within twelve months of the Board's adoption of such
         amendment, any ISOs granted on or after the date of such amendment
         shall terminate to the extent that such amendment to the Plan was
         required to enable the Company to grant such Option to a particular
         optionee. Subject to this limitation, Options may be granted under the
         Plan at any time after the effective date and before the date fixed for
         termination of the Plan.

                  (b) Termination. Unless sooner terminated in accordance with
         Section 16, the Plan shall terminate, with respect to ISOs, upon the
         earlier of (i) the close of business on the day next preceding the
         tenth anniversary of the date of its adoption by the Board of
         Directors, or (ii) the date on which all shares available for issuance
         pursuant to Options issued under the Plan shall have been issued
         pursuant to the exercise or cancellation of Options granted under the
         Plan. Unless sooner terminated in accordance with Section 16, the Plan
         shall terminate with respect to Non-Qualified Options on the date
         specified in (ii) above and with respect to Purchases on the date on
         which all shares available for issuance pursuant to Section 24 of the
         Plan shall have been issued. If the date of termination is determined
         under (i) above, then Options outstanding on such date shall continue
         to have force and effect in accordance with the provisions of the
         instruments evidencing such Options.

         23. Provision for Foreign Participants. The Board of Directors may,
without amending the Plan, modify awards or options granted to participants who
are foreign nationals or employed outside the United States to recognize
differences in laws, rules, regulations or customs of such foreign jurisdictions
with respect to tax, securities, currency, employee benefit or other matters.

         24. Purchases of Stock by Directors Who are not Officers or Employees.

                  (a) The Company will issue shares of Common Stock on the last
         day of the fiscal year (the "Purchase Date") to any director of the
         Company who is not an officer or an employee of the Company (an
         "Eligible Director") and has made a then effective Purchase Election
         pursuant Section 24(b).

                  (b) An Eligible Director may elect to purchase shares (a 
         "Purchase Election") by 

                                       12
<PAGE>

         submitting an election form to the Vice President-Finance on or before
         the 20th of August in the fiscal year in which he or she intends to
         participate. On such election form, a director shall (i) state the
         percentage to be deducted from the fee earned by such Eligible Director
         for service as a director of the Company (a "Fee"), (ii) authorize the
         purchase of Common Stock for him or her in accordance with the terms of
         the Plan, (iii) agree to hold any shares of Common Stock purchased
         pursuant to this Section 24 for at least six months from the date of
         acquisition and (iv) consent to the placement of a stop order on the
         books of the Company with regard to such shares for a period of at
         least six months from the date of acquisition.

                  (c) Unless an Eligible Director files a new election form
         which either changes the rate of deduction from his or her Fee or
         indicates his or her withdrawal from the Plan, his or her deductions
         and purchases will continue at the same rate, provided he or she
         remains an Eligible Director. During a fiscal year, an Eligible
         Director may change the rate of deduction from his or her Fee or
         withdraw from the Plan at any time prior to the last Saturday in
         September. Any change or withdrawal indicated on a new election form
         received by the Vice President-Finance on or after the last Saturday in
         September will be effective as of the first day of the following fiscal
         year.

                  (d) On the date on which cash payments of Fees are made, or
         would have been made (the "Deduction Date"), the Company will deduct
         from cash payments of Fees to each Eligible Director such amount
         indicated on his or her then effective Purchase Election, if any (a
         "Fee Deduction"). Any Fee Deduction made pursuant to this Section 24
         will be held in the general funds of the Company. The maximum amount an
         Eligible Director may have deducted in a fiscal year is $8,500.

                  (e) All Fee Deductions shall accrue interest at the prime rate
         reported in the Wall Street Journal at the Deduction Date from the
         Deduction Date through the last day of the Company's fiscal year.

                  (f) Each Eligible Director who has elected to participate
         pursuant to a then effective Purchase Election and is a director of the
         Company as of the last day of the fiscal year shall acquire from the
         Company such whole number of shares of Common Stock which his or her
         Fee Deductions during the fiscal year and interest accrued thereon will
         purchase at the Purchase Price (as such term is defined below). Any
         balance of the Fee Deductions and interest accrued thereon will be
         refunded to the Eligible Director promptly.

                  (g) The purchase price (the "Purchase Price") of Common Stock
         to be issued to any Eligible Director pursuant to this Section 24 shall
         be the fair market value of the Common Stock on the Purchase Date.
         "Fair market value" shall mean (i) the last reported sale price of the
         Common Stock on the Purchase Date on the principal national securities
         exchange on which the Common Stock is traded, if the 



                                       13
<PAGE>

         Common Stock is then traded on a national securities exchange; or (ii)
         the last reported sale price on the Purchase Date of the Common Stock
         on the NASDAQ National Market System, if the Common Stock is not then
         traded on a national securities exchange; or (iii) the closing bid
         price (or average of bid prices) last quoted on the Purchase Date by an
         established quotation service for over-the-counter securities, if the
         Common Stock is not reported on the NASDAQ National Market System. If
         no prices or quotes discussed in the preceding sentence are available
         on the Purchase Date, such quotes or prices shall be determined as of
         the last business day for which such prices or quotes are available
         prior to the Purchase Date. However, if the Common Stock is not
         publicly traded at the Purchase Date, the "fair market value" shall be
         deemed to be the fair market value of the Common Stock as determined by
         the Board of Directors after it takes into consideration all factors
         which it deems appropriate.

                  (h) Purchases pursuant to this Section 24 shall be generally
         administered by the Board of Directors. The provisions of this Section
         24 are to be construed as a "formula plan" as defined by Rule 16b-3. As
         such, the provision of Section 24 shall not be amended more than once
         every six (6) months, other than to comply with changes in the Code,
         the Employee Retirement Income Security Act, or the rules thereunder.

                                         Adopted by the Board of Directors on
                                         May 28, 1997



                                       14