
<PAGE>



                                     EXHIBIT 10.1
                            EAGLE HARDWARE & GARDEN, INC.
                                1991 STOCK OPTION PLAN


                                         II-9

<PAGE>


                            EAGLE HARDWARE & GARDEN, INC.

                                1991 STOCK OPTION PLAN

     This Stock Option Plan (the "Plan") provides for the grant of options to
acquire shares of Common Stock, without par value (the "Common Stock"), of Eagle
Hardware & Garden, Inc., a Washington corporation (the "Company"). Stock options
granted under this Plan that qualify under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), are referred to in this Plan as
"Incentive Stock Options." Incentive Stock Options and stock options that do not
qualify under Section 422 of the Code ("Non-Qualified Stock Options") granted
under this Plan are referred to as "Options."

          1.   PURPOSES.

          The purposes of this Plan are to retain the services of valued key
employees and consultants of the Company, and such other persons as the Plan
Administrator shall select in accordance with Section 3 below, to encourage such
persons to acquire a greater proprietary interest in the Company, thereby
strengthening their incentive to achieve the objectives of the shareholders of
the Company, and to serve as an aid and inducement in the hiring of new
employees, consultants and other persons selected by the Plan Administrator.

          2.   ADMINISTRATION.

          This Plan shall be administered by the Board of Directors of the
Company (the "Board"), except that the Board may, in its discretion, establish a
committee composed of members of the Board or other persons to administer this
Plan, which committee (the "Committee") may be an executive, compensation or
other committee, including a separate committee especially created for this
purpose. The Committee shall have such of the powers and authority vested in the
Board hereunder as the Board may delegate to it (including the power and
authority to interpret any provision of this Plan or of any Option). The members
of any such Committee shall serve at the discretion of the Board. The Board,
and/or the Committee if one has been established by the Board, are referred to
in this Plan as the "Plan Administrator." Following registration of any of the
Company's securities under Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), no person shall serve as a member of the Plan
Administrator if his or her service would disqualify this Plan from eligibility
under Securities and Exchange Commission Rule 16b-3, as amended from time to
time, or any successor rule or regulatory requirements; PROVIDED, that the

          Plan Administrator shall consist of at least the minimum number of
persons required by Securities and Exchange Commission Rule 16b-3, as amended,
or any successor rule or regulatory requirements.


                                        II-10

<PAGE>


          Subject to the provisions of this Plan, and with a view to effecting
its purpose, the Plan Administrator shall have sole authority, in its absolute
discretion, to (a) construe and interpret this Plan; (b) define the terms used
in this Plan; (c) prescribe, amend and rescind rules and regulations relating to
this Plan; (d) correct any defect, supply any omission or reconcile any
inconsistency in this Plan; (e) determine the individuals to whom Options shall
be granted under this Plan and whether the Option is an Incentive Stock Option
or a NonQualified Stock Option; (f) determine the time or times at which Options
shall be granted under this Plan; (g) determine the number of shares of Common
Stock subject to each Option, the exercise price of each Option, the duration of
each Option and the times at which each Option shall become exercisable; (h)
determine all other terms and conditions of Options; and (i) make all other
determinations necessary or advisable for the administration of this Plan. All
decisions, determinations and interpretations made by the Plan Administrator
shall be binding and conclusive on all participants in this Plan and on their
legal representatives, heirs and beneficiaries.

          3.   ELIGIBILITY.

          Incentive Stock Options may be granted to any individual who, at the
time the Option is granted, is an employee of the Company or any Related
Corporation (as defined below), including employees who are directors of the
Company ("Employees"). Non-Qualified Stock Options may be granted to Employees
and to such other persons other than directors who are not Employees as the Plan
Administrator shall select. Options may be granted in substitution for
outstanding Options of another corporation in connection with the merger,
consolidation, acquisition of property or stock or other reorganization between
such other corporation and the Company or any subsidiary of the Company. Options
also may be granted in exchange for outstanding Options. Any person to whom an
Option is granted under this Plan is referred to as an "Optionee."

          As used in this Plan, the term "Related Corporation," when referring
to a subsidiary corporation, shall mean any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if, at the time
of the granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock of one of the
other corporations in such chain. When referring to a parent corporation, the
term "Related Corporation" shall mean any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company if, at the time of
granting of the Option, each of the corporations other than the Company owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock of one of the other corporations in such chain.


                                        II-11

<PAGE>


          4.   STOCK.

          Subject to approval of the Plan by shareholders of the Company,
options to purchase a maximum of 700,000 shares of the Company's authorized but
unissued, or required, common stock may be issued pursuant to the Plan LESS any
shares issuable upon the exercise of Options granted pursuant to the Company's
Directors' Nonqualified Stock Option Plan; PROVIDED, that any shares of Common
Stock received or withheld by the Company as payment for shares of Common Stock
purchased upon exercise of Options pursuant to Section 5(i) below shall be added
to the number of such shares as to which Options may be granted. The number of
shares with respect to which Options may be granted hereunder is subject to
adjustment as set forth in Section 5(m) below. In the event that any outstanding
Option expires or is terminated for any reason, the shares of Common Stock
allocable to the unexercised portion of such Option may again be subject to an
option to the same Optionee or to a different person eligible under Section 3 of
this Plan.

          5.   TERMS AND CONDITIONS OF OPTIONS.

          Each Option granted under this Plan shall be evidenced by a written
agreement approved by the Plan Administrator (the "Agreement"). Agreements may
contain such additional provisions, not inconsistent with this Plan, as the Plan
Administrator in its discretion may deem advisable. All Options also shall
comply with the following requirements:

               (a)  NUMBER OF SHARES AND TYPE OF OPTION.

          Each Agreement shall state the number of shares of Common Stock to
which it pertains and whether the Option is intended to be an Incentive Stock
Option or a Non-Qualified Stock option. In the absence of action to the contrary
by the Plan Administrator in connection with the grant of an Option, all Options
shall be Non-Qualified Stock Options. The aggregate fair market value
(determined at the Date of Grant, as defined below) of the stock with respect to
which Incentive Stock Options are exercisable for the first time by the Optionee
during any calendar year (granted under this Plan and all other Incentive Stock
Option plans of the Company, a Related Corporation or a predecessor corporation)
shall not exceed $100,000, or such other limit as may be prescribed by the Code
as it may be amended from time to time. Any Option which exceeds the annual
limit shall not be void but rather shall be a Non-Qualified Stock Option.

               (b)  DATE OF GRANT.

          Each Agreement shall state the date the Plan Administrator has deemed
to be the effective date of the Option for purposes of this Plan (the "Date of
Grant").


                                        II-12

<PAGE>


               (c)  OPTION PRICE.

          Each Agreement shall state the price per share of Common Stock at
which it is exercisable. The exercise price shall be fixed by the Plan
Administrator at whatever price the Plan Administrator may determine in the
exercise of its sole discretion; PROVIDED, that the per share exercise price for
any Option granted following the effective date of registration of any of the
Company's securities under Section 12 of the Securities Exchange Act of 1934
shall not be less than the fair market value per share of the Common Stock at
the Date of Grant as determined by the Plan Administrator in good faith;
PROVIDED FURTHER, that the per share exercise price for an Incentive Stock
Option shall not be less than the fair market value per share of the Common
Stock at the Date of Grant as determined by the Plan Administrator in good
faith; PROVIDED FURTHER, that with respect to Incentive Stock Options granted to
greater-than-ten percent (>10%) shareholders of the Company (as determined with
reference to Section 424(d) of the Code), the exercise price per share shall not
be less than one hundred ten percent (110%) of the fair market value per share
of the Common Stock at the Date of Grant; and, PROVIDED FURTHER, that Incentive
Stock Options granted in substitution for outstanding Options of another
corporation in connection with the merger, consolidation, acquisition of
property or stock or other reorganization involving such other corporation and
the Company or any subsidiary of the Company may be granted with an exercise
price equal to the exercise price for the substituted Option of the other
corporation, subject to any adjustment consistent with the terms of the
transaction pursuant to which the substitution is to occur.

               (d)  DURATION OF OPTIONS.

          At the time of the grant of the Option, the Plan Administrator shall
designate, subject to paragraph 5(g) below, the expiration date of the Option,
which date shall not be later than ten (10) years from the Date of Grant in the
case of Incentive Stock Options; PROVIDED, that the expiration date of any
Incentive Stock Option granted to a greater-than-ten percent (>10%) shareholder
of the Company (as determined with reference to Section 424(d) of the Code)
shall not be later than five (5) years from the Date of Grant. In the absence of
action to the contrary by the Plan Administrator in connection with the grant of
a particular Option, and except in the case of Incentive Stock Options as
described above, all Options granted under this Plan shall expire ten (10) years
from the Date of Grant.


                                        II-13

<PAGE>


               (e)  VESTING SCHEDULE.

          No Option shall be exercisable until it has vested. The vesting
schedule for each Option shall be specified by the Plan Administrator at the
time of grant of the Option; PROVIDED, that if no vesting schedule is specified
at the time of grant, the Option shall vest according to the following schedule:

<TABLE>
<CAPTION>
                                             Percentage of
               Number of Years               Total Option to
               Following Date of Grant       be Exercisable
               -----------------------       --------------
               <S>                           <C>

                 1                                20%
                 2                                40%
                 3                                60%
                 4                                80%
                 5                                100%
</TABLE>

               (f) ACCELERATION OF VESTING.

          The vesting of one or more outstanding Options may be accelerated by
the Plan Administrator at such times and in such amounts as it shall determine
in its sole discretion. If an Employee Optionee's employment terminates by
reason of death or Disability (as defined in Section 5(g) below), any Option
held by such Employee Optionee who has been Continuously Employed by the Company
or Related Corporation for a minimum of two (2) years shall become fully vested
and exercisable and may thereafter be exercised during the term of the Option
set forth in Section 5(g) below. "Continuously Employed" shall mean the absence
of any interruption or termination of service. Continuous Employment with the
Company or Related Corporation shall not be considered interrupted in the case
of sick leave, military leave or any other leave of absence approved by the
Company or Related Corporation or in the case of transfers between locations of
the Company or between the Company, Related Corporations or their successors,
provided that the Optionee continues to be an employee of the Company or any
Related Corporation. The vesting of Options also shall be accelerated under the
circumstances described in Sections 5(m) and 5(n) below.

               (g)  TERM OF OPTION.

          Vested Options shall terminate, to the extent not previously
exercised, upon the occurrence of the first of the following events: (i) the
expiration of the Option, as designated by the Plan Administrator in accordance
with Section 5(d) above; (ii) the expiration of ninety (90) days from the date
of an Optionee's termination of employment or contractual relationship with the
Company or any Related Corporation for any reason whatsoever other than death or
Disability (as defined below) unless, in the case of a Non-Qualified Stock
Option, the exercise period is extended by the Plan Administrator until a date
not later than the expiration date of the Option; or (iii) the expiration of one
(1) year from (A) the date of death of the Optionee or (B) cessation of an
Optionee's employment or contractual relationship by reason of Disability (as
defined below) unless, in the case of a Non-Qualified Stock Option, the exercise
period is extended by the Plan Administrator until a date not later than the
expiration date of the Option. If an Optionee's employment or contractual
relationship is terminated by death, any Option held by the Optionee shall be
exercisable only by the person or persons to whom such Optionee's rights under
such Option shall pass by the Optionee's will or by the laws of descent and
distribution of the state or


                                        II-14

<PAGE>


county of the Optionee's domicile at the time of death. "Disability" shall mean
that a person is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment that can be expected
to result in death or that has lasted or can be expected to last for a
continuous period of not less than twelve (12) months. The Plan Administrator
shall determine whether an Optionee has incurred a Disability on the basis of
medical evidence acceptable to the Plan Administrator. Upon making a
determination of Disability, the Committee shall, for purposes of the Plan,
determine the date of an Optionee's termination of employment or contractual
relationship.

          Unless accelerated in accordance with Section 5(f) above, unvested
Options shall terminate immediately upon termination of employment of the
Optionee by the Company for any reason whatsoever, including death or
Disability.

          If, in the case of an Incentive Stock Option, an Optionee's
relationship with the Company changes (e.g., from an Employee to a non-Employee,
such as a consultant), such change shall not constitute a termination of an
Optionee's employment with the Company but rather the Optionee's Incentive Stock
Option. For purposes of this subsection 5(g), transfer of employment between or
among the Company and/or any Related Corporation shall not be deemed to
constitute a termination of employment with the Company or any Related
Corporation. For purposes of this subsection 5(g), employment shall be deemed to
continue while the Optionee is on military leave, sick leave or other bona fide
leave of absence (as determined by the Plan Administrator). The foregoing
notwithstanding, with respect to Incentive Stock Options, employment shall not
be deemed to continue beyond the first ninety (90) days of such leave, unless
the Optionee's re-employment rights are guaranteed by statute or by contract.

               (h)  EXERCISE OF OPTIONS.

          Options shall be exercisable, either all or in part, at any time after
vesting, until termination; PROVIDED, that after registration of any of the
Company's securities under Section 12 of the Exchange Act, Optionee must comply
with the six (6) month holding period requirements of Section 16(b) of the
Exchange Act and Rule 16b-3 thereunder. If less than all of the shares included
in the vested portion of any Option are purchased, the remainder may be
purchased at any subsequent time prior to the expiration of the Option term. No
portion of any option for less than fifty (50) shares (as adjusted pursuant to
Section 5(m) below) may be exercised; PROVIDED, that if the vested portion of
any Option is less than fifty (50) shares, it may be exercised with respect to
all shares for which it is vested. Only whole shares may be issued pursuant to
an Option, and to the extent that an Option covers less than one (1) share, it
is unexercisable. Options or portions thereof may be exercised by giving to the
Company an executed notice of election to exercise, which notice shall specify
the number of shares to be purchased, and be accompanied by payment in the
amount of the aggregate exercise price for the Common Stock so purchased, which
payment shall be in the form specified in Section 5(i) below. The Company shall
not be obligated to issue, transfer or deliver a certificate of Common Stock to
any Optionee, or to his personal representative, until the aggregate exercise
price has been paid for all shares for which the Option shall have been
exercised and adequate provision has been made by the Optionee for satisfaction
of any tax withholding obligations associated with such exercise. During the
lifetime of an Optionee, Options are exercisable only by the Optionee.

               (i)  PAYMENT UPON EXERCISE OF OPTION.


                                        II-15

<PAGE>


          Upon the exercise of any Option, the aggregate exercise price shall be
paid to the Company in cash or by certified or cashier's check. In addition,
upon approval of the Plan Administrator, an Optionee may pay for all or any
portion of the aggregate exercise price by (i) delivering to the Company shares
of Common Stock previously held by such Optionee, (ii) having shares withheld
from the amount of shares of Common Stock to be received by the Optionee, (iii)
delivering an irrevocable subscription agreement obligating the Optionee to take
and pay for the shares of Common Stock to be purchased within one (1) year of
the date of such exercise or (iv) complying with any other payment mechanisms as
the Plan Administrator may approve from time to time. The shares of Common Stock
received or withheld by the Company as payment for shares of Common Stock
purchased upon the exercise of Options shall have a fair market value at the
date of exercise (as determined by the Plan Administrator) equal to the
aggregate exercise price (or portion thereof) to be paid by the Optionee upon
such exercise.

               (j)  RIGHTS AS A SHAREHOLDER.

          An Optionee shall have no rights as a shareholder with respect to any
shares covered by an Option until such Optionee becomes a record holder of such
shares, irrespective of whether such Optionee has given notice of exercise.
Subject to the provisions of Sections 5(m) and 5(n) hereof, no rights shall
accrue to an Optionee and no adjustments shall be made on account of dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights declared on, or created in, the Common Stock for
which the record date is prior to the date the Optionee becomes a record holder
of the shares of Common Stock covered by the Option, irrespective of whether
such Optionee has given notice of exercise.

               (k)  TRANSFER OF OPTION.

          Options granted under this Plan and the rights and privileges
conferred by this Plan may not be transferred, assigned, pledged or hypothecated
in any manner (whether by operation of law or otherwise) other than by will or
by applicable laws of descent and distribution, as defined by the Code, or the
Employee Retirement Income Security Act, or the rules and regulations
thereunder, and shall not be subject to execution, attachment or similar
process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of any Option or of any right or privilege conferred by this Plan
contrary to the provisions hereof, or upon the sale, levy or any attachment or
similar process upon the rights and privileges conferred by this Plan, such
Option shall thereupon terminate and become null and void.

               (l)  SECURITIES REGULATION AND TAX WITHHOLDING.


                                        II-16

<PAGE>


                    (1)  Shares shall not be issued with respect to an Option
unless the exercise of such Option and the issuance and delivery of such shares
shall comply with all relevant provisions of law, including, without limitation,
any applicable state securities laws, the Securities Act of 1933, as amended,
the Exchange Act, as amended, the rules and regulations thereunder and the
requirements of any stock exchange upon which such shares may then be listed,
and such issuance shall be further subject to the approval of counsel for the
Company with respect to such compliance, including the availability of an
exemption from registration for the issuance and sale of such shares. The
inability of the Company to obtain from any regulatory body the authority deemed
by the Company to be necessary for the lawful issuance and sale of any shares
under this Plan, or the unavailability of an exemption from registration for the
issuance and sale of any shares under this Plan, shall relieve the Company of
any liability with respect to the non-issuance or sale of such shares.

          As a condition to the exercise of an Option, the Plan Administrator
may require the Optionee to represent and warrant in writing at the time of such
exercise that the shares are being purchased only for investment and without any
then-present intention to sell or distribute such shares. At the option of the
Plan Administrator, a stop-transfer order against such shares may be placed on
the stock books and records of the Company, and a legend indicating that the
stock may not be pledged, sold or otherwise transferred unless an opinion of
counsel is provided stating that such transfer is not in violation of any
applicable law or regulation, may be stamped on the certificates representing
such shares in order to assure an exemption from registration. The Plan
Administrator also may require such other documentation as may from time to time
be necessary to comply with federal and state securities laws. THE COMPANY HAS
NO OBLIGATION TO UNDERTAKE REGISTRATION OF OPTIONS OR THE SHARES OF STOCK
ISSUABLE UPON THE EXERCISE OF OPTIONS.

                    (2)  As a condition to the exercise of any Option granted
under this Plan, the Optionee shall make such arrangements as the Plan
Administrator may require for the satisfaction of any federal, state or local
withholding tax obligations that may arise in connection with such exercise.

                    (3)   The issuance, transfer or delivery of certificates of
Common Stock pursuant to the exercise of Options may be delayed, at the
discretion of the Plan Administrator, until the Plan Administrator is satisfied
that the applicable requirements of the federal and state securities laws and
the withholding provisions of the Code have been met.

               (m)  STOCK DIVIDEND. REORGANIZATION OR LIQUIDATION.

                    (1) If (i) the Company shall at any time be involved in a
transaction described in Section 424(a) of the Code (or any successor provision)
or any "corporate transaction" described in the regulations thereunder; (ii) the
Company shall declare a dividend payable in, or shall subdivide or combine, its
Common Stock or (iii) any other event with substantially the same effect shall
occur, the Plan Administrator shall, with respect to each outstanding Option,
proportionately adjust the number of shares of Common Stock and/or the exercise
price per share so as to preserve the rights of the Optionee substantially
proportionate to the rights of the Optionee prior to such event, and to the
extent that such action shall include an increase or decrease in the number of
shares of Common Stock subject to outstanding Options, the number of shares
available under Section 4 above shall automatically be increased or decreased,
as the case may be, proportionately, without further action on the part of the
Plan Administrator, the Company or the Company's shareholders.


                                        II-17

<PAGE>


                    (2) If the Company is liquidated or dissolved, the Plan
Administrator shall allow the holders of any outstanding Options to exercise all
or any part of the unvested portion of the Options held by them; PROVIDED, that
such Options must be exercised prior to the effective date of such liquidation
or dissolution. If the Option holders do not exercise their Options prior to
such effective date, each outstanding Option shall terminate as of the effective
date of the liquidation or dissolution.

                    (3) The foregoing adjustments in the shares subject to
Options shall be made by the Plan Administrator, or by any successor
administrator of this Plan, or by the applicable terms of any assumption or
substitution document.

                    (4) The grant of an Option shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge,
consolidate or dissolve, to liquidate or to sell or transfer all or any part of
its business or assets.


               (n)  CHANGE IN CONTROL: DECLARATION OF EXTRAORDINARY DIVIDEND.

                    (1)  CHANGE IN CONTROL. If at any time there is a Change in
Control (as defined below) of the Company, all Options shall accelerate and
become fully vested and immediately exercisable for the duration of the Option
term. For purposes of this subsection (n)(1), "Change in Control" shall mean
either one of the following: (i) When any "person," as such term is used in
sections 13(d) and 14(d) of the Exchange Act (other than a shareholder of the
Company on the date of this Plan, the Company, a Subsidiary or an employee
benefit plan of the Company, including any trustee of such plan acting as
trustee) becomes, after the date of this Plan, the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of the
combined voting power of the Company's then outstanding securities; or (ii) the
occurrence of a transaction requiring shareholder approval, and involving the
sale of all or substantially all of the assets of the Company or the merger of
the Company with or into another corporation.

                    (2)  DECLARATION OF EXTRAORDINARY DIVIDEND. If at any time
the Company declares an Extraordinary Dividend (as defined below), all Options
shall accelerate and thereupon become fully vested and immediately exercisable
for the duration of the Option term. For purposes of this subsection (n)(2),
"Extraordinary Dividend" shall mean a cash dividend payable to holders of record
of the Common Stock in an amount in excess of ten percent (10%) of the then fair
market value of the Company's Common Stock. The fair market value of the
Company's Common Stock shall be determined in good faith by the Board.

          6.  EFFECTIVE DATE; TERM.


                                        II-18

<PAGE>


          This Plan shall be effective as of the date it is approved by the
Board. Incentive Stock Options may be granted by the Plan Administrator from
time to time thereafter until ten (10) years after such approval. Non-Qualified
Stock Options may be granted until this Plan is terminated by the Board in its
sole discretion. Termination of this Plan shall not terminate any Option granted
prior to such termination. Any Incentive Stock Options granted by the Plan
Administrator prior to the approval of this Plan by a majority of the
shareholders of the Company shall be granted subject to ratification of this
Plan by the shareholders of the Company within twelve (12) months after this
Plan is adopted by the Board, and if shareholder ratification is not obtained,
each and every Incentive Stock Option shall become a Non-Qualified Stock Option.

          7.  NO OBLIGATIONS TO EXERCISE OPTION.

          The grant of an Option shall impose no obligation upon the Optionee to
exercise such Option.

          8.  NO RIGHT TO OPTIONS OR TO EMPLOYMENT.

          The grant of any options under this Plan shall be exclusively within
the discretion of the Plan Administrator, and nothing contained in this Plan
shall be construed as giving any person any right to participate under this
Plan. The Plan shall not confer on any Optionee any right with respect to
continuation of any employment or contractual relationship with the Company or
any Related Corporation, nor shall it interfere in any way with the Company's
or, where applicable, a Related Corporation's right to terminate any Optionee's
employment or contractual relationship at any time, which right is hereby
reserved.

          9.  APPLICATION OF FUNDS.

          The proceeds received by the Company from the sale of Common Stock
issued upon the exercise of Options shall be used for general corporate
purposes, unless otherwise directed by the Board.

          10.  INDEMNIFICATION OF PLAN ADMINISTRATOR.

          In addition to all other rights of indemnification they may have as
members of the Board, members of the Plan Administrator shall be indemnified by
the Company for all reasonable expenses and liabilities of any type or nature,
including reasonable attorneys' fees, incurred in connection with any action,
suit or proceeding to which they or any of them are a party by reason of, or in
connection with, this Plan or any Option granted under this Plan, and against
all amounts paid by them in settlement thereof (provided that such settlement is
approved by independent legal counsel selected by the Company), except to the
extent that such expenses relate to matters for which it is adjudged that such
Plan Administrator member is liable for willful misconduct; PROVIDED, that
within fifteen (15) days after the institution of any such action, suit or
proceeding, the Plan Administrator member involved therein shall, in writing,
notify the Company of such action, suit or proceeding, so that the Company may
have the opportunity to make appropriate arrangements to prosecute or defend the
same.

          11.  AMENDMENT OF PLAN.


                                        II-19

<PAGE>


          The Plan Administrator may, at any time, modify, amend or terminate
this Plan and options granted under this Plan, including, without limitation,
such modifications or amendments as are necessary to maintain compliance with
applicable statutes, rules or regulations; PROVIDED, that no amendment with
respect to an outstanding Option shall be made over the objection of the
Optionee thereof; and PROVIDED FURTHER, that, following registration of any of
the Company's securities under Section 12 of the Exchange Act, the approval of
the holders of a majority of the Company's outstanding shares of voting capital
stock represented at a meeting at which a quorum is present is required within
twelve (12) months before or after the adoption by the Plan Administrator of any
amendment that will permit the granting of Options to a class of persons other
than those currently eligible to receive Options under this Plan or that would
cause this Plan to no longer comply with Securities and Exchange Commission Rule
16b-3, as amended, or any successor rule or other regulatory requirements.
Without limiting the generality of the foregoing, the Plan Administrator may
modify grants to persons who are eligible to receive Options under this Plan who
are foreign nationals or employed outside the United States to recognize
differences in local law, tax policy or custom.

Approved by the Company's Board of Directors as of           .
                                                   ----------

-------------------------
Corporate Secretary


Approved by the Company's Shareholders as of           .
                                             ----------

-------------------------
Corporate Secretary


                                        II-20

