
<PAGE>
                     1985 STOCK OPTION PLAN

                               OF

                 ROBERT HALF INTERNATIONAL INC.


       (As Amended and Restated Effective September 26, 1997)



          1.   PURPOSE OF THE PLAN

          The purpose of the 1985 Stock Option Plan (the "Plan") of Robert 
Half International Inc. (the "Company") are to:

          (a)  Furnish incentive to individuals chosen to receive options 
because they are considered capable of responding by improving operations and 
increasing profits;

          (b)  Encourage selected employees to accept or continue employment 
with the Company or its Affiliates; and

          (c)  Increase the interest of selected employees in the Company's 
welfare through their participation in the growth in value of the common 
stock, $0.001 par value, of the Company ("Common Stock").

          To accomplish the foregoing objectives, this Plan provides a means 
whereby employees may receive options to purchase Commons Stock, stock 
appreciation rights described in Section 8 ("SARs"), and limited stock 
appreciation rights as described in Section 9 ("Limited Rights").  Options 
granted under this Plan ("Options") will be either nonqualified options 
("NQOs") subject to federal income taxation upon exercise or incentive stock 
options ("ISOs") not subject to immediate federal income taxation upon 
exercise.

          2.   ELIGIBLE PERSONS

          Every person who at the date of grant is an employee of the Company 
or of any Affiliate of the Company is eligible to receive NQOs, ISOs, SARs, 
or Limited Rights under this Plan; provided, however, that an ISO may not be 
granted under this Plan to any person who owns, directly or indirectly, stock 
of the

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Company constituting more than ten percent of the total combined voting power 
of the Company's outstanding stock, or the stock of any Affiliate of the 
Company, unless the exercise price of the ISO at the time the option is 
granted is at least 110 percent of the fair market value of the stock subject 
to the option, and the option is exercisable for no more than five years 
after the date of the grant, as set forth in Section 6.2.  The term 
"Affiliate," as used in this Plan, means a parent or subsidiary corporation, 
as defined in the applicable provisions (currently Section 425) of the 
Internal Revenue Code of 1986, as amended (the "Code"). The term "employee" 
shall have the meaning ascribed for purposes of Section 3401(c) of the Code 
and the Treasury Regulations promulgated thereunder and shall include an 
officer or a director who is also an employee.

          3.   STOCK SUBJECT TO THIS PLAN

          The total number of shares of stock that may be (i) issued upon the 
exercise of Options and (ii) covered by options cancelled or surrendered upon 
the exercise of SARs or Limited Rights, is 12,600,000 shares of Common Stock.  
The shares covered by the portion of any grant that expires unexercised under 
this Plan shall become available again for grants under this Plan. All shares 
issued under this Plan or covered by options surrendered upon the exercise of 
SARs or Limited Rights, however, shall be counted against the 8,400,000 share 
limitation.  The number of shares reserved for purchase under this Plan or 
covered by options that may be cancelled or surrendered upon the exercise of 
SARs or Limited Rights is subject to adjustment in accordance with the 
provisions for adjustment in this Plan.

          4.   ADMINISTRATION

          This Plan shall be administered by the Board of Directors of the 
Company (the "Board") or by a committee appointed by the Board which shall 
not have less than two Board members (in either case, the "Administrator").  
No Option, SAR, or Limited Right shall be granted to a director of the 
Company except (i) by the Board when a majority of the members of the Board, 
and a majority of the directors acting in the matter, are disinterested 
persons, or (ii) by the Administrator when the Administrator is composed of 
three or more persons having full authority to act in the matter and each 
member of the Administrator is a disinterested person.  No Option, SAR, or 
Limited Rights shall be granted to an officer of the Company

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except (i) by the Board, or (ii) by the Administrator when the Administrator 
is composed solely of three or more directors, or is composed of three or 
more persons having full authority to act in the matter and each member of 
the Administrator is a disinterested person.  "Disinterested person," for 
this purpose, shall have the same meaning as in Rule 16b-3 or any successor 
("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the 
"Exchange Act").  The Administrator may delegate nondiscretionary 
administrative duties to such employees of the Company as it deems proper.  
Subject to the provisions of this Plan, the Administrator shall have the 
authority to select the persons to receive Options, SARs, or Limited Rights 
under this Plan, to fix the number of shares that each optionee may purchase 
or that are subject to a SAR or Limited Right, to set the terms and 
conditions of each Option (including whether each Option should be a NQO or 
an ISO), SAR, and Limited Right, and to determine all other matters relating 
to this Plan.  No member of the Administrator shall be liable for any act or 
omission on such member's own part, including but not limited to the exercise 
of any power or discretion given to such member under this Plan, except for 
those acts or omissions resulting from such member's own gross negligence or 
willful misconduct.  All questions of interpretation, implementation, and 
application of this Plan shall be determined by the Administrator.  Such 
determinations shall be final and binding on all persons.

          5.   GRANTING OF RIGHTS

          5.1  TEN YEAR LIMITATION.  No Options, SARs, or Limited Rights 
shall be granted under this Plan after ten years from the date of adoption of 
this Plan by the Board of Directors.

          5.2  WRITTEN AGREEMENT; EFFECT.  Each Option, SAR, or Limited Right 
shall be evidenced by a written agreement, in form satisfactory to the 
Company, executed by the Company and the person to whom such Option, SAR, or 
Limited Right is granted.  If the agreement relates to an ISO or NQO, the 
agreement shall specify whether each option it evidences is a NQO or an ISO. 
SARs or Limited Rights may be included in the stock option agreement or may 
be evidenced by a separate written agreement satisfactory to the Company, 
executed by the Company and the person to whom such SAR or Limited Right is 
granted.  Failure of the grantee to execute an agreement shall not void or 
invalidate the grant of an Option, SAR, or Limited Right; the Option, SAR or 
Limited Right maybe not be exercised, however, until the 

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agreement is executed.

          5.3  ANNUAL $100,000 LIMITATION.  In no event shall an ISO be 
granted prior to January 1, 1987 pursuant to the Plan which would cause the 
grantee to be in receipt during any calendar year of ISOs covering Common 
Stock of the Company having an aggregate fair market value, determined for 
each Option as of the grant date, in excess of $100,000 (plus any unused 
limit carryover to such year as permitted by applicable provisions of the 
Code, currently set forth in Section 422A(d)(4) of the Code). The rule set 
forth in the preceding sentence shall not apply to ISOs granted on or after 
January 1, 1987 pursuant to the Plan ("Post-86 ISO"); the aggregate fair 
market value (determined at the time a Post-86 ISO is granted) of the stock 
with respect to which all Post-86 ISOs become exercisable for the first time 
by the optionee ("vest") during any calendar year (under all incentive stock 
option plans of the Company and its affiliates) shall not exceed $100,000.  
In applying the preceding sentence, Post-86 ISOs having the lowest exercise 
price shall vest before Post-ISOs with higher exercise prices, regardless of 
the grant date, unless the option agreements, or the Administrator, 
specifically provide a different order of vesting.

          5.4  ADVANCE APPROVALS.  The Administrator may approve the grant of 
Options, SARs, or Limited Rights under this Plan to persons who are expected 
to become employees of the Company, but are not employees at the date of 
approval.  In such cases, the Option, SAR, or Limited Right shall be deemed 
granted (and the exercise price determined with reference to the fair market 
value of the underlying stock), without further approval, on the date the 
grantee becomes an employee and must satisfy all requirements of this Plan 
for Options, SARs or Limited Rights granted on that date.

          6.   TERMS AND CONDITIONS OF OPTIONS

          Each Option shall be designated as an ISO or a NQO and shall be 
subject to the terms and conditions set forth in Section 6.1.  NQOs shall be 
also subject to the terms and conditions set forth in Section 6.2, but not 
those set forth in Section 6.3. ISOs shall also be subject to the terms and 
conditions set forth in Section 6.3, but not those set forth in Section 6.2.

          6.1  TERMS AND CONDITIONS TO WHICH ALL OPTIONS ARE SUBJECT.  All 
Options shall be subject to the following terms and

<PAGE>

conditions:

               6.1.1     CHANGES IN CAPITAL STRUCTURE.  Subject to Section 
6.1.2, if the stock of the Company is changed by reason of a stock split, 
reverse stock split, stock dividend, or recapitalization, or converted into 
or exchanged for other securities as a result of a merger, consolidation or 
reorganization, appropriate adjustments shall be made in (A) the number and 
class of shares of stock subject to this Plan and each Option outstanding 
under this Plan, and (B) the exercise price of each outstanding Option; 
provided, however, that the Company shall not be required to issue fractional 
shares as a result of any such adjustment.  Each such adjustment shall be 
determined by the Administrator in its sole discretion, which determination 
shall be final and binding on all persons.

               6.1.2      CORPORATE TRANSACTIONS.  New option rights may be 
substituted for the Options granted under this Plan, or the Company's 
obligations as to Options outstanding under this Plan may be assumed, by an 
employer corporation other than the Company, or by a parent or subsidiary of 
such employer corporation, in connection with any merger, consolidation, 
acquisition, separation, reorganization, liquidation or like occurrence in 
which the Company is involved, in such manner that the then outstanding 
Options which are ISOs will continue to be "incentive stock options" within 
the meaning of Section 422A of the Code to the full extent permitted thereby. 
 Notwithstanding the foregoing or the provisions of Section 6.1.1, if such 
employer corporation, or parent or subsidiary of such employer corporation, 
does not substitute new option rights for, and substantially equivalent to, 
the Options granted hereunder, or assume the Options granted hereunder, or if 
the Board determines, in its sole discretion, that Options outstanding under 
this Plan should not then continue to be outstanding, the Options granted 
hereunder shall terminate (A) upon dissolution or liquidation of the Company, 
or similar occurrence, or (B) upon any merger, consolidation, acquisition, 
separation, or similar occurrence, where the Company will not in economic 
substance be the surviving corporation; provided, however, that each optionee 
shall be mailed notice at least 15 days prior to such dissolution, 
liquidation, merger, consolidation, acquisition, separation, or similar 
occurrence, and shall have at least 10 days after the mailing of such notice 
to exercise any unexpired option rights granted hereunder to the extent such 
Options are then exercisable.

<PAGE>

               6.1.3     TIME OF OPTION EXERCISE.  Subject to Section 6.3.3, 
Options shall be immediately exercisable, and shall be exercisable in whole 
or in part.

               6.1.4     OPTION GRANT DATE.  Except in the case of advance 
approvals described in Section 5.4, the date of grant of an Option under this 
Plan shall be the date as of which the Administrator approves the grant.

               6.1.5     NONASSIGNABILITY OF OPTION RIGHTS.  No Option shall 
be assignable or otherwise transferable by the optionee except by will or by 
the laws of descent and distribution.  During the life of the optionee, an 
Option shall be exercisable only by the optionee or the optionee's guardian 
or legal representative in the event of disability of the optionee.

               6.1.6     PAYMENT.  Except as provided below, payment in full, 
in cash, shall be made for all stock purchased at the time written notice of 
exercise of an Option is given to the Company, and proceeds of any payment 
shall constitute general funds of the Company.  At the time an Option is 
granted or exercised the Administrator, in the exercise of its absolute 
discretion, may authorize any one or more of the following additional methods 
of payment:

               (A)  Acceptance of the optionee's full recourse promissory 
note for the aggregate exercise price of the shares as to which the Option is 
being exercised, payable on such terms and bearing such interest rate as 
determined by the Administrator, which promissory note may be either secured 
or unsecured in such manner as the Administrator shall approve (including, 
without limitation, by a security interest in the shares of the Company);

               (B)  Delivery by the optionee of Common Stock already owned by 
the optionee for all or part of the aggregate exercise price of the shares as 
to which the Option is being exercised, provided the value (determined as set 
forth in Section 6.3.1) of such Common Stock is equal on the date of exercise 
to the aggregate exercise price of the shares as to which the Option is being 
exercised, or such portion thereof as the optionee is authorized to pay by 
delivery of such stock; provided, however, that if an optionee has exercised 
any portion of any Option granted by the Company by delivery of Common Stock, 
the optionee may not, within six months following such exercise, exercise any 
Option granted under this Plan by delivery of Common Stock; and 

<PAGE>

               (C)  Any other property other than cash, so long as such 
property constitutes valid consideration under applicable law for the shares 
as to which the Option is being exercised and is surrendered in good form for 
transfer.

               6.1.7     TERMINATION OF EMPLOYMENT.  Option rights granted to 
an optionee under this Plan, to the extent such rights have not then expired 
or been exercised, shall terminate (i) three months, in the case of an 
optionee who immediately prior to Employment Termination is not an officer or 
director of the Company and with respect to an ISO granted to any optionee, 
and (ii) seven months, in the case of an optionee who immediately prior to 
Employment Termination is an officer or director of the Company with respect 
to any NQO granted to any such optionee, after the optionee ceases, for any 
reason and with or without cause, to be an employee of the Company or any 
Affiliate of the Company (in either case, "Employment Termination"), and 
shall not be exercisable on or after said date, except that if the Employment 
Termination is due to the disability or death of the optionee, the optionee, 
or the optionee's personal representative or any other person who acquires 
the option rights from the optionee by will or the applicable laws of descent 
and distribution, may within twelve months after the Employment Termination, 
exercise the rights to the extent they were exercisable on the date of the 
Employment Termination.  A transfer of an optionee from the Company to BF 
Enterprises, Inc. ("BFE") shall not be deemed an Employment Termination, but 
rather an Employment Termination with respect to such optionee shall be 
deemed for all purposes under this Plan to occur upon termination, for any 
reason and with or without cause, of such optionee's employment with BFE or 
any Affiliate of BFE; and the options held by such optionee shall expire in 
accordance with this Section three months after such Employment Termination, 
unless at the time thereof such Optionee is an officer or director of the 
Company, in which case such options shall expire seven months after such 
Employment Termination; and provided, further that an Employment Termination 
shall not be deemed to occur with respect to such optionee if, in the 
determination of the Board of Directors, it shall be in the best interests of 
the Company to have such optionee's employment be deemed to continue for so 
long as such optionee remains an officer, director or consultant of BFE.

               6.1.8     REPURCHASE OF STOCK.  At the option of the 
Administrator, the stock to be delivered pursuant to the

<PAGE>

exercise of any Option may be subject to a right of repurchase in favor of 
the Company with respect to any employee whose employment with the Company is 
terminated.  Such right of repurchase shall be at the Option exercise price 
and shall expire at such times as may be set by the Administrator in the 
exercise of the Administrator's discretion, which times may include a Change 
in Control as defined in Section 8.1.  Unless otherwise established by the 
Administrator with respect to any individual or group, the right of 
repurchase shall expire with respect to 20% of the shares subject to the 
Option on the grant date (which date shall constitute the "Vesting Base Date" 
unless the Administrator otherwise determines) and with respect to an 
additional 20% of such shares on each of the four anniversary dates next 
following the grant date.  The Company may, at any time before or following 
acquisition of shares by such employee pursuant to the Plan, waive in whole 
or in part the Company's right of repurchase as set forth in the stock 
purchase agreement executed by an employee with respect to shares acquired by 
such employee.

               6.1.9     WITHHOLDING AND EMPLOYMENT TAXES.  At the time of 
exercise of an Option (or, as the case may be, a SAR or a Limited Right), the 
optionee shall remit to the Company in cash all applicable federal, state and 
local withholding and employment taxes.

               (a)  The Administrator may, in the exercise of the 
Administrator's sole discretion, permit an optionee to pay some or all of 
such taxes by means of a promissory note on such terms as the Administrator 
deems appropriate.

               (b)  If and to the extent authorized by the Administrator in 
its sole discretion, an optionee may make an election, by means of a form of 
election to be prescribed by the Administrator, to have shares of Common 
Stock which are acquired upon exercise of the Option withheld by the Company 
or to tender other shares of Common Stock or other securities of the Company 
owned by the optionee to the Company at the time the amount of such taxes is 
determined to pay the amount of such tax obligations.

               6.1.10    OTHER PROVISIONS.  Each Option may contain such 
other terms, provisions, and conditions not inconsistent with this Plan as 
may be determined by the Administrator, and each ISO granted under this Plan 
shall include

<PAGE>

such provisions and conditions as are necessary to qualify the option as an 
"incentive stock option" within the meaning of Section 422A of the Code.

          6.2  TERMS AND CONDITIONS TO WHICH ONLY NQOS ARE SUBJECT.  Options 
are granted under this Plan which are designated as NQOs shall be subject to 
the following terms and conditions:

               6.2.1     EXERCISE PRICE.  The exercise price of a NQO shall 
be determined by the Administrator, but shall not be less than 85% of the 
Fair Market Value per share on the day of the grant.

               6.2.2     OPTION TERM.  Each NQO granted under this Plan shall 
expire ten years and two days from the date of its grant or such earlier date 
as may be set by the Administrator on the date of its grant.

               6.2.3     WITHHOLDING AND EMPLOYMENT TAXES.  At the time of 
exercise of an NQO, the optionee shall remit to the Company in cash all 
applicable federal and state withholding and employment taxes.  The 
Administrator may, in the exercise of the Administrator's discretion, permit 
an optionee to pay some or all of such taxes by means of a promissory note on 
such terms as the Administrator deems appropriate.

          6.3  TERMS AND CONDITIONS TO WHICH ONLY ISOS ARE SUBJECT.  Options 
granted under this Plan which are designated as ISOs shall be subject to the 
following terms and conditions:

               6.3.1     EXERCISE PRICE.  The exercise price of an ISO, which 
shall be approved by the Board of Directors, shall be determined in 
accordance with the applicable provisions of the Code and shall in no event 
be less than the fair market value (determined as described in this Section 
6.3.1) of the stock covered by the ISO at the time the ISO is granted, except 
that the exercise price of an ISO granted to any person who owns, directly or 
indirectly, (or is treated as owning by reason of attribution rules, 
currently set forth in Code Section 425) stock of the Company constituting 
more than ten percent of the total combined voting power of the Company's 
outstanding stock, or the stock of any Affiliate of the Company, shall in no 
event be less than 110 percent of such fair market value.

<PAGE>

               For purposes of the Plan, the fair market value of Common 
Stock shall be determined as follows:

               (a)  If the Common Stock is listed on any established stock 
exchange or a national market system, including without limitation the 
National Market System of the National Association of Securities Dealers 
Automated Quotation System ("NASDAQ"), its fair market value shall be the 
closing sales price or the mean between the high bid and low asked prices if 
no sales were reported, as quoted on such system or exchange (or the largest 
such exchange) for the date the value is to be determined (or if there are no 
sales or bid and asked price quotations for such date, then for the last 
preceding business day on which there were sales or bid and asked price 
quotations), as reported in THE WALL STREET JOURNAL or similar publication.

               (b)  If the Common Stock is regularly quoted by a recognized 
securities dealer, its fair market value shall be (i) the mean between the 
closing high bid and low asked quotations for the stock on the date the value 
is to be determined (or if there are no quoted prices for such date, then for 
the last preceding business day on which there were quoted prices) as quoted 
on NASDAQ or any similar system of automated dissemination of quotations of 
securities prices then in common use, as reported in THE WALL STREET JOURNAL 
or similar publication, or (ii) if not quoted as described in clause (i), the 
mean between the high bid and low asked quotations for the stock as reported 
by the National Quotation Bureau Incorporated if at least two securities 
dealers have inserted both bid and asked quotations for the security on at 
least five trading days of the 20 trading days preceding the date the value 
is to be determined; provided, however, that if the stock is quoted on a 
national securities or central market system, in lieu of a market or 
quotation system described above, the fair market value shall be determined 
in the manner set forth in clause (i) if bid and asked quotations are 
reported but actual transactions are not, and in the manner set forth in 
paragraph (a) if actual transactions are reported.

               (c)  In the absence of an established market for the Common 
Stock, the fair market value thereof shall be determined in good faith by the 
Administrator, with reference to the Company's net worth, prospective earning 
power, dividend-paying capacity, and other relevant factors, including the 
goodwill of the Company, the economic outlook in the Company's industry, the 
Company's position in the industry and its

<PAGE>

management, and the values of stock of other corporations in the same or 
similar line of business.

               6.3.2     EXPIRATION.  Unless an earlier expiration date is 
specified by the Administrator at the time of grant, each ISO granted under 
this Plan shall expire ten years from the date of its grant, except that an 
ISO granted to any person who owns, directly or indirectly,  (or is treated 
as owning by reason of applicable attribution rules, currently set forth in 
Code Section 425) stock of the Company constituting more than ten percent of 
the total combined voting power of the Company's outstanding stock, or the 
stock of any Affiliate of the Company, shall expire five years from the date 
of its grant.

               6.3.3     EXERCISE OF AN INCENTIVE STOCK OPTION BY AN OPTIONEE 
WHO HOLDS ANOTHER INCENTIVE STOCK OPTION.  An ISO granted prior to January 1, 
1987 under the Plan shall not be exercisable while the optionee holds a 
previously granted incentive stock option to purchase stock in the Company, a 
parent or subsidiary corporation of the Company, or a corporation which is a 
predecessor of any of the foregoing, for such purposes, an ISO shall be 
treated as outstanding until such option is exercised in full or expires by 
reason of lapse of time, within the meaning of Section 422A(c)(7) of the 
Code.  Post-1986 ISOs shall not be subject to the limitation imposed by the 
preceding sentence.

               6.3.4     DISQUALIFYING DISPOSITIONS.  If stock acquired by 
exercise of an ISO granted pursuant to this Plan is disposed of within two 
years from the date of grant to the ISO or within one year after the transfer 
of the stock to the optionee, the holder of the stock immediately prior to 
the disposition shall promptly notify the Company in writing of the date and 
terms of the disposition and shall provide such other information regarding 
the disposition as the Company may require.  Such holder shall pay to the 
Company any withholding and employment taxes which the Company in its sole 
discretion deems applicable to such disposition.  Any disposition not in 
accordance with this Section 6.3.4 shall be void and of no effect.  The 
Company may instruct its stock transfer agent by appropriate means, including 
placement of legends or stock certificates, not to transfer stock acquired by 
exercise of an ISO unless it has been advised by the Company that the 
requirements of this Section 6.3.4 have been satisfied.

               6.3.5     WITHHOLDING AND EMPLOYMENT TAXES.  At such time or 
times as the Administrator determines, at or following the time of exercise 
of an ISO, the optionee shall remit to the Company in cash all federal and 
state withholding and employment taxes which the Administrator in its sole 
discretion deems applicable to the exercise of an ISO or the disposition of 
shares acquired by such exercise.  The Administrator may, in the exercise of 
the Administrator's sole discretion, permit an optionee to pay some or all of 
such taxes by means of a promissory note on such terms as the Administrator 
deems appropriate.

          7.   MANNER OF EXERCISE

          An optionee wishing to exercise an Option shall give written notice 
to the Company at its principal executive office, to the attention of the 
Secretary of the Company, accompanied by an executed stock purchase agreement 
in form and substance satisfactory to the Company and by payment of the 
exercise price as provided in Section 6.1.6.  The date the Company receives 
written notice of an exercise hereunder accompanied by payment of the 
exercise price will be considered as the date such Option was exercised.  
Promptly after receipt of written notice of exercise of an option, the 
Company shall, without stock issue or transfer taxes to the optionee or other 
person entitled to exercise the Option, deliver to the optionee or such other 
person a certificate or certificates for the requisite number of shares of 
stock.  An optionee or transferee of an Option shall not have any privileges 
as shareholder with respect to any stock covered by the Option until the date 
of issuance of the stock certificate.

          8.   DEFINITIONS RELATING TO SARs AND LIMITED RIGHTS

          For purposes of this Plan, the following items shall have the 
following meanings.

          8.1  CHANGE IN CONTROL.  The term "Change in Control" shall mean 
any of the following events:

               (a)  the Company is provided a copy of a Schedule 13D filed 
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange 
Act") indicating that any person or group (as such terms are defined in 
Section 13(d)(3) of the Exchange Act) that does not on the date of this Plan 
is adopted by the Board hold more than five percent of the outstanding shares 
of

<PAGE>

the Company entitled to vote for the election of directors has become the 
holder of more than 40 percent of the outstanding shares of the Company 
entitled to vote for the election of directors;

               (b)  as a result of or in connection with any cash tender 
offer, merger, or other business combination, sale of assets or contested 
election, or combination of the foregoing, the persons who were directors of 
the Company just prior to such event shall cease to constitute a majority of 
the Board;

               (c)  the Company's stockholders approve a definitive agreement 
providing for a transaction in which the Company will cease to be an 
independent publicly-owned corporation;

               (d)  the stockholders of the Company approve a definitive 
agreement (i) to merge or consolidate the Company with or into another 
corporation in which the holders of the Common Stock immediately before such 
merger or reorganization will not, immediately following such merger or 
reorganization, hold as a group on a fully-diluted basis both the ability to 
elect at least a majority of the directors of the surviving corporation and 
at least a majority in value of the surviving corporation's outstanding 
equity securities, or (ii) to sell or otherwise dispose of all or 
substantially all of the assets of the Company; or

               (e)  an Offer is made.

          8.2  FMV PER SHARE.  The term "FMV per Share" shall mean, for the 
day or period with respect to which the FMV per share is being determined, 
the fair market value of the Common Stock determined in accordance with the 
provisions of Section 6.3.1.

          8.3  LIMITED RIGHT HOLDER.  The term "Limited Right Holder" shall 
mean a person to whom a Limited Right is granted pursuant to the Plan.

          8.4  LIMITED RIGHT SPREAD.  The term "Limited Right Spread" shall 
mean an amount (rounded to the nearest whole dollar) equal to the product 
computed by multiplying (a) the excess of (i) the greater of the highest FMV 
per Share on any day during the 60 day period prior to the date of exercise 
of the

<PAGE>

Limited Right and the highest price per Share of Common Stock paid or 
proposed to be paid in connection with any Change in Control over (ii) the 
exercise price per share of Common Stock at which the Related Right is 
exercisable, or in the case of a Limited Right granted without reference to a 
Related Right, such other price as the Administrator establishes at the time 
the Limited Right is granted, by (b) the number of shares of Common Stock 
with respect to which a Limited Right is being exercised. If the 
consideration paid or proposed to be paid for Common Stock in connection with 
a Change in Control shall consist, in whole or in part, of consideration 
other than cash, the Administrator shall take such action, as in its judgment 
it deems appropriate, to establish the cash value of such consideration, but 
such valuation shall not be less than the value, if any, attributed to such 
consideration by any other party to the transaction constituting the Change 
in Control.

          8.5  OFFER.  The term "Offer" shall mean a tender offer or exchange 
offer for shares of the Company's Common Stock other than one made by the 
Company or by a person or group, as such terms are defined in Section 
13(d)(3) of the Exchange Act, that on the date this Plan is adopted by the 
Board holds more than five percent of the outstanding shares of the Company 
entitled to vote for the election of directors where the offeror acquires 
more than 40 percent of the outstanding shares of Common Stock.

          8.6  RELATED RIGHT.  The term "Related Right" shall mean an option 
with respect to which a SAR or Limited Right is granted.

          8.7  SAR HOLDER.  The term "SAR Holder" shall mean a person holding 
an option to acquire shares of Common Stock to whom a SAR is granted pursuant 
to this Plan.

          8.8  SAR SPREAD.  The term "SAR Spread" shall mean an amount 
(rounded to the nearest whole dollar) equal to the product computed by 
multiplying (a) the excess of (i) if the SAR may only be exercised during the 
Window Period under Section 9.5 below, then the highest FMV per Share on any 
day during the Window Period, and if exercise of the SAR is not so limited 
under Section 9.5 below, then the FMV per Share on the date the SAR is 
exercised, over (ii) the exercise price per share of common stock at which 
the Related Right is exercisable, or in the case of a SAR granted without 
reference to a Related Right, such other price as the Administrator 
establishes at the time the SAR is 

<PAGE>

granted, by (b) the number of shares of Common Stock with respect to which a 
SAR is being exercised.

          8.9  WINDOW PERIOD.  The term "Window Period" shall mean the 
periods specified in Rule 16b-3(e)(3)(iii), or any successor rule, within 
which a SAR must be exercised in order to be exempt from the operation of 
Section 16(b) of the Exchange Act by virtue of paragraph (e) of Rule 16b-3 or 
any successor provision.  This period is, as of the date of this Plan, 
between the third and twelfth business days following release by the Company 
of quarterly or annual summary statements of sales and earnings.

          9.   STOCK APPRECIATION RIGHTS

          9.1  GRANT OF SAR.  The Administrator may, in the exercise of the 
Administrator's discretion, grant SARs to eligible employees.  A SAR may be 
granted either (i) with respect to shares of Common Stock subject to a 
Related Right held by the SAR Holder, whether or not the Related Right is an 
Option granted pursuant to this Plan, or (ii) without reference to any 
Related Right.  If a Related Right is an ISO, a SAR granted with respect to 
such Related Right may be granted only at the time of grant of the related 
ISO, but if the Related Right is a non-qualified option, the SAR may be 
granted either simultaneously with the grant of the related non-qualified 
option, or may be granted at any time during the term of such related 
non-qualified option, whether or not the option is a NQO granted pursuant to 
this Plan, or a previously or subsequently granted non-qualified option not 
granted pursuant to this Plan, and whether or not the option is granted 
pursuant to a "plan" within the meaning of Rule 16b-3. Notwithstanding any 
other provision of the Plan, the Administrator shall have sole discretion to 
specify a maximum limitation on the amount of the SAR Spread, to determine 
the time at which any SAR otherwise exercisable may be exercised, to 
determine whether upon exercise of a SAR the SAR Holder may receive cash or 
stock as provided in Section 9.8 and 9.9 below or may elect to receive either 
cash or stock, to establish a price other than the exercise price of shares 
subject to a Related Right as a basis for determining the amount of the SAR 
Spread, and to grant any SAR subject to such additional terms and conditions 
as are consistent with the provisions of this Plan.

          9.2  CHANGES IN CAPITAL STRUCTURE.  If, by virtue of any event 
described in Section 6.1.1, an adjustment is made to a

<PAGE>

Related Right held by a SAR Holder, then the number of shares covered by the 
SAR shall also be adjusted accordingly.

          9.3  CORPORATE TRANSACTIONS.  New SARs may be substituted for the 
SARs granted under this Plan, or the Company's obligations as to options 
outstanding under this Plan may be assumed, by an employer corporation other 
than the Company, or by a parent or subsidiary of such employer corporation, 
in connection with any merger, consolidation, acquisition, separation, 
reorganization, liquidation or like occurrence in which the Company is 
involved.  Notwithstanding the foregoing or the provisions of Section 9.2, if 
such employer corporation, or parent or subsidiary of such employer 
corporation, does not substitute new SARs for, and substantially equivalent 
to, the SARs granted hereunder, or assume the SARs granted hereunder, or if 
the Board determines, in its sole discretion, that SARs outstanding under 
this Plan should not then continue to be outstanding, the SARs granted 
hereunder shall terminate (A) upon dissolution or liquidation of the Company, 
or similar occurrence, or (B) upon any merger, consolidation, acquisition, 
separation, or similar occurrence, where the Company, will not in economic 
substance be the surviving corporation; provided, however, that each SAR 
Holder shall be mailed notice at least 15 days prior to such dissolution, 
liquidation, merger, consolidation, acquisition, separation, or similar 
occurrence, and shall have at least 10 days after the mailing of such notice 
to exercise any unexpired SARs granted hereunder to the extent such SARs are 
then exercisable.

          9.4  SAR GRANT DATE.  Except in the case of advance approvals 
described in Section 5.4, the date of grant of a SAR under this Plan shall be 
the date as of which the Administrator approves the grant.

          9.5  TIME OF SAR EXERCISE.  A SAR shall generally be immediately 
exercisable and shall be exercisable in whole or in part.  Any election by a 
SAR Holder to receive cash in full or partial settlement of a SAR, as well as 
any exercise by the SAR Holder of a SAR for such cash, shall be made only 
during the Window Period.  Where a SAR is granted with respect to a Related 
Right, unless written agreement pursuant to which the SAR is granted 
otherwise provides, the SAR may be exercised only to the extent to which 
shares covered by the Related Right are not at the time of exercise subject 
to a right of repurchase as described in Section 6.1.9.  A SAR may not be 
exercised under any

<PAGE>

circumstances until the expiration of six months following the date of grant 
of the SAR, except in the event of the death or permanent disability of the 
SAR Holder.

          9.6  EFFECT ON RELATED RIGHT; TERMINATION OF SAR.  If a SAR granted 
with respect to a Related Right is exercised, the Related Right shall cease 
to be exercisable and shall be cancelled to the extent of the number of 
shares with respect to which the SAR was exercised.  The Company and the SAR 
Holder shall take such actions and execute such documents as may be necessary 
or appropriate to reflect such cancellation.  Upon the exercise or 
termination of a Related Right, SARs granted with respect thereto shall 
terminate to the extent of the number of shares as to which the Related Right 
was exercised or terminated. Upon the death or permanent disability of the 
SAR Holder, the SAR shall be exercisable only by the SAR Holder's personal 
representative or any other person who acquires the SAR Holder's right by 
will or the applicable laws of descent and distribution and, in the case of a 
SAR granted with respect to a Related Right, only to the extent to which the 
Related Right is then exercisable.

          9.7  NONASSIGNABILITY OF SARS.  No SAR granted under this Plan 
shall be assignable or otherwise transferable by the SAR Holder except by 
will or by the laws of descent and distribution.  During the life of the SAR 
Holder, a SAR shall be exercisable only by the SAR Holder or the SAR Holder's 
guardian or legal representative.

          9.8  MANNER OF EXERCISE; ELECTION TO RECEIVE CASH OR STOCK.  A SAR 
Holder wishing to exercise a SAR shall (i) give written notice to the Company 
at its principal executive office, to the attention of the Secretary of the 
Company, specifying the number of shares of Common Stock with respect to 
which the SAR Holder is exercising the SAR and if under the terms of the SAR 
the SAR Holder may elect to receive either cash, stock, or a combination of 
cash and stock upon exercise of the SAR, stating the manner in which the SAR 
Holder has elected to receive payment upon exercise;  (ii) deliver to the 
Company such written representations, warranties, and covenants as the 
Company may reasonably require;  and (iii) if so requested by the Company, 
deliver to the Secretary of the Company any written agreement that the 
Company may reasonably require relating to the SAR being exercised or 
pertaining to the Related Right.  The date the Company receives all of the 
instruments referred to in the 

<PAGE>

preceding sentence shall be considered as the date upon which the SAR was 
exercised.  A SAR Holder who receives stock upon exercise of a SAR shall not 
have any privileges as a stockholder with respect to any such shares of stock 
until the date of issuance of a stock certificate.

          9.9  EXERCISE OF SARS; MARKET PRICE.  Upon the exercise of a SAR, 
the SAR Holder shall be entitled to receive one of the following kinds of 
payments:

          (a)  that number of whole shares of Common Stock equal to the 
number computed by dividing the SAR Spread by the highest FMV per Share 
during the Window Period in which the SAR was exercised and an amount of cash 
equal to the highest FMV per Share during the Window Period in which the SAR 
was exercised multiplied by the fraction (if any) of a share of Common Stock 
not so issued (such payment to be in lieu of issuance of fractional shares); 
or

          (b)  an amount in cash equal to the SAR Spread; or

          (c)  a combination of cash and whole shares of Common Stock (the 
combined value of which, however, shall not exceed the SAR Spread) in the 
respective amounts specified in the SAR Holder's notice of exercise.

Notwithstanding any other provision of this Section 9, if the terms of a SAR 
entitle the SAR Holder to elect upon exercise of the SAR whether to receive 
cash in full or partial settlement of the SAR, then the Administrator shall 
have sole discretion to consent to or disapprove such election ("Cash 
Election").  Such consent or disapproval may be given at any time after the 
Cash Election to which it relates.  If the Administrator shall disapprove a 
Cash Election, the exercise of the SAR with respect to which the Cash 
Election was made shall be of no effect but shall be without prejudice to the 
right of the SAR Holder to exercise the SAR in the future in accordance with 
its terms.  The Administrator shall have no such discretion with respect to 
the exercise of a Limited Right pursuant to Section 10 of the Plan.

          9.10 Withholding and Employment Taxes.  At the time of exercise of 
a SAR, the SAR Holder shall remit to the Company in cash all applicable 
federal, state and local withholding and employment taxes, and the 
Administrator may, in its sole discretion, reduce the amount paid to a SAR 
Holder upon exercise

<PAGE>

of the SAR by such amount.  The Administrator may, in the exercise of its 
sole discretion, permit a SAR Holder to pay some or all of such taxes (i) by 
means of a promissory note on such terms as the Administrator deems 
appropriate;  or (ii) in accordance with the applicable provision of Section 
6.1.9.

          10.  LIMITED RIGHTS

          10.1 GRANT OF LIMITED RIGHT.  The Administrator may, in the 
exercise of the Administrator's discretion, grant Limited Rights to eligible 
employees.  A Limited Right may be granted with respect to shares of Common 
Stock subject to a Related Right held by the Limited Right Holder, whether or 
not the Related Right is an Option granted pursuant to this Plan, or may be 
granted without reference to any Related Right.  If a Related Right is an 
ISO, a Limited Right granted with respect to such Related Right may be 
granted only at the time of grant of the related ISO, but if the Related 
Right is a non-qualified option, the Limited Right may be granted either 
simultaneously with the grant of the related non-qualified option, or at any 
time during the term of such related non-qualified option, whether or not the 
option is a NQO granted pursuant to this Plan or a previously or subsequently 
granted non-qualified option not granted pursuant to this Plan, and whether 
or not the option is granted pursuant to a "plan" within the meaning of Rule 
16b-3.  The Administrator shall have sole discretion to grant any Limited 
Right subject to such additional terms and conditions as are consistent with 
the provisions of this Plan.

          10.2 CHANGES IN CAPITAL STRUCTURE.  If, by virtue of any event 
described in Section 6.1.1, an adjustment is made to a Related Right held by 
a Limited Right Holder, then the number of shares covered by the Limited 
Right covering the Related Right shall also be adjusted accordingly.

          10.3 TIME OF LIMITED RIGHT EXERCISE.  Each outstanding Limited 
Right shall become immediately exercisable only upon the occurrence of a 
Change in Control, unless the Change in Control is approved by the Board as 
provided in Section 10.4 below, whether or not the then-outstanding Related 
Right, if any, is then exercisable.  The Company shall promptly notify each 
Limited Right Holder of the occurrence of any Change in Control.  Limited 
Rights may not be exercised under any circumstances until the expiration of 
six months following the date of grant of the Limited Right.  In the event of 
the occurrence of any of the

<PAGE>

events specified in clauses (a) through (d) of Section 8.1 above, each 
outstanding Limited Right will be exercisable for a period of 60 days 
following the date of occurrence of such event, and in the event of an Offer, 
each outstanding Limited Right will be exercisable for a 60 day period 
following the date of expiration of the Offer;  provided, however, that if 
the event constituting the Change in Control occurs prior to the expiration 
of six months from the date of grant of a Limited Right, then such Limited 
Right shall be exercisable for a period of 60 days following expiration of 
such six month period.  Where a Limited Right is granted with respect to a 
Related Right, unless the written agreement pursuant to which the Limited 
Right is granted otherwise provides, the Limited Right may be exercised only 
to the extent to which shares covered by the Related Right are not at the 
time of exercise subject to a right of repurchase as described in Section 
6.1.8.  A Limited Right shall remain exercisable during the exercise periods 
described above in this Section 10.3 in the event of an Employment 
Termination of the Limited Right Holder after a Change in Control during such 
exercise period.  Notwithstanding the above, upon an Employment Termination 
of the Limited Right Holder before the occurrence of any Change in Control, 
the Limited Right shall expire immediately.  Upon the death or permanent 
disability of the Limited Right Holder, the Limited Right shall be 
exercisable only by the Limited Right Holder's personal representative or any 
other person who acquires the Limited Right Holder's right by will or the 
applicable laws of descent and distribution.

          10.4 LIMITATIONS ON RIGHT TO EXERCISE LIMITED RIGHTS. 
Notwithstanding Section 10.3, no Limited Right shall be exercisable with 
respect to an event constituting a Change in Control under Section 8.1 (b) 
through (e) in the event the Board approves such event prior to the 
occurrence of such event, and no Limited Right shall be exercisable with 
respect to an event constituting a Change in Control under Section 8.1 (a) if 
the Board approves such event prior to such time following such event as the 
persons who were directors just prior to such event cease to constitute a 
majority of the Board.

          10.5 EFFECT ON RELATED RIGHT; TERMINATION OF LIMITED RIGHT.  If a 
Limited Right granted with respect to a Related Right is exercised, the 
Related Right shall cease to be exercisable and shall be cancelled to the 
extent of the number of shares with respect to which the Limited Right was 
exercised. The Company and the Limited Right Holder shall take such actions 

<PAGE>

and execute such documents as may be necessary or appropriate to reflect such 
cancellation.  Upon the exercise or termination of a Related Right, Limited 
Rights granted with respect thereto shall terminate to the extent of the 
number of shares as to which the Related Right was exercised or terminated.

          10.6 NONASSIGNABILITY OF LIMITED RIGHTS.  No Limited Right granted 
under this Plan shall be assignable or otherwise transferable by the Limited 
Right Holder except by will or by the laws of descent and distribution.  
During the life of the Limited Right Holder, a Limited Right shall be 
exercisable only by the Limited Right Holder or the Limited Right Holder's 
guardian or legal representative.

          10.7 EXERCISE OF LIMITED RIGHTS; PAYMENT, MARKET PRICE. Upon the 
exercise of a Limited Right, the Company shall pay to the Limited Right 
Holder an amount in cash representing the Limited Right Spread.

          10.8 WITHHOLDING AND EMPLOYMENT TAXES.  At the time of exercise of 
a Limited Right, the Limited Right Holder shall remit to the Company in cash 
all applicable federal, state and local withholding and employment taxes, and 
the Administrator may, in its sole discretion, reduce the amount paid to a 
Limited Right Holder upon exercise of the Limited Right by such amount.  The 
Administrator may, in the exercise of its sole discretion, permit an optionee 
to pay some or all of such taxes (i) by means of a promissory note on such 
terms as the Administrator deems appropriate;  or (ii) in accordance with the 
applicable provisions of Section 6.1.9.

          11.  EMPLOYMENT RELATIONSHIP

          Nothing in this Plan or any option granted hereunder shall 
interfere with or limit in any way the right of the Company or of any of its 
Affiliates to terminate any optionee's employment or status as a director at 
any time, nor confer upon any optionee any right to continue in the employ 
of, or as a director of, the Company or any of its Affiliates.

          12.  EXISTING OPTIONS TO BE GOVERNED BY PLAN

          At the option of the Administrator, any unexercised outstanding 
option granted by the Company prior to the date of this Plan to any employee 
or director to acquire shares of Common

<PAGE>

Stock may be deemed granted pursuant to this Plan, and any transactions with 
respect to such option occurring after the date this Plan is approved by the 
Board may be deemed to occur pursuant to this Plan and be governed by the 
provisions of this Plan.  At the option of the Administrator, the date of 
grant of any such option may be the date as of which the optionee first 
received the right to acquire the Common Stock subject to the option, and the 
exercise price may be the exercise price specified on the date of grant.  The 
optionee and the Company shall execute such documents and take such actions 
as may be necessary to implement the provisions of this Section.

          13.  AMENDMENT, SUSPENSION, OR TERMINATION OF THIS PLAN

          The Board or the Administrator may at any time amend, alter, 
suspend, or discontinue this Plan, except to the extent that stockholder 
approval is required by applicable law or Rule 16b-3;  provided, however, no 
amendment, alteration, suspension, or discontinuation shall be made that 
would impair the rights of any grantee under any option, SAR, or Limited 
Right theretofore granted, without the grantee's consent.  The Board shall 
have the power to make such changes in this Plan and in the regulations and 
administrative provisions hereunder or in any outstanding option, SAR, or 
Limited Right as in the opinion of counsel for the Company may be necessary 
or appropriate from time to time to enable any option granted pursuant to 
this Plan to qualify as an incentive stock option under Section 422A of the 
Code, subject in all events to the consent of the holder of such Option.

          14.  INDEMNIFICATION OF ADMINISTRATOR

          The Company shall indemnify each present and future member of the 
group constituting the Administrator against, and each member of the group 
constituting the Administrator shall be entitled without further act on his 
part to indemnify from the Company for all expenses (including the amount of 
judgments and the amount of approved settlements made with a view to the 
curtailment of costs and litigation, other than amounts paid to the Company 
itself) reasonably incurred by such person in connection with or arising out 
of any action, suit, or proceeding to the full extent permitted by the laws 
of the State of Delaware and by the Bylaws of the Company.

<PAGE>

          15.  EFFECTIVE DATE OF THIS PLAN

          This Plan shall become effective upon adoption by the Board;  
provided, however, that if this Plan is not approved within 12 months after 
its adoption by the Board, by unanimous written consent of the stockholders 
of the Company or by the stockholders of the Company voting at a validly 
called stockholders meeting by a majority (or such greater number as may be 
required by law or applicable governmental regulations or orders) of the 
shares entitled to vote, then any options exercised pursuant to this Plan 
shall constitute NQOs and not ISOs, regardless of their status on the date of 
grant.  Options, SARs, and Limited Rights may be granted and exercised under 
this Plan only after there has been compliance with all applicable federal 
and state securities laws.
