1998 Incentive Stock Plan - Cyberian Outpost inc.


                             CYBERIAN OUTPOST, INC.
                           1998 INCENTIVE STOCK PLAN
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  1.   Objectives.  The CYBERIAN OUTPOST, INC. 1998 Incentive Stock Plan (the
'Plan') is designed to retain directors, executives and selected employees and
consultants and reward them for making major contributions to the success of the
Company.  These objectives are accomplished by making long-term incentive awards
under the Plan thereby providing Participants with a proprietary interest in the
growth and performance of the Company.

  2.   Definitions.

       (a)  'Board' - The Board of Directors of the Company.
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       (b)  'Code' - The Internal Revenue Code of 1986, as amended from time to
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time.

       (c)  'Committee' - The Compensation Committee of the Company's Board, or
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such other committee of the Board that is designated by the Board to administer
the Plan, composed of not less than two members of the Board all of whom are
disinterested persons, as contemplated by Rule 16b-3 ('Rule 16b-3') promulgated
under the Securities Exchange Act of 1934, as amended (the 'Exchange Act').  The
foregoing requirement for disinterested administration shall not apply prior to
the date of the first registration of any of the securities of the Company under
the Exchange Act.

       (d)  'Company' - CYBERIAN OUTPOST, INC. and its subsidiaries including
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subsidiaries of subsidiaries.

       (e)  'Exchange Act' - The Securities Exchange Act of 1934, as amended 
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from time to time.

       (f)  'Fair Market Value' - The fair market value of the Company's issued 
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and outstanding Stock as determined in good faith by the Board or Committee.

       (g)  'Grant' - The grant of any form of stock option to a Participant
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pursuant to such terms, conditions and limitations as the Committee may
establish in order to fulfill the objectives of the Plan.

       (h)  'Grant Agreement' - An agreement between the Company and a 
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Participant that sets forth the terms, conditions and limitations applicable to
a Grant.

       (i)  'Option' - Either an Incentive Stock Option, in accordance with 
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Section 422 of Code, or a Nonstatutory Option, to purchase the Company's Stock
that may be awarded to a Participant under the Plan. A Participant who receives
a Grant of an Option shall be referred to as an 'Optionee.'

       (j)  'Participant' - A director, officer, employee or consultant of the
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Company to whom a Grant has been made under the Plan.

       (k)  'Securities Act' - The Securities Act of 1933, as amended from time 
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to time.

       (l)  'Stock' - Authorized and issued or unissued shares of common stock,
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without par value,  of the Company.

  3.   Administration.

       (a)  The Plan shall be administered by the Board, provided however, that
the Board may delegate such administration to the Committee. A majority of the
members of the Committee shall constitute a quorum, and, subject to the
limitations in this Section 3, all actions of the Committee shall require the
affirmative vote of members who constitute a majority of such quorum. Members of
the Committee may vote on any matters affecting the administration of the Plan,
except that no such member shall act on the granting of any Option to himself or
herself (but any such member may be counted in determining the existence of a
quorum at any meeting of the Committee during which action is taken with respect
to the granting of an Option to him or her).

       (b)  Subject to the provisions of the Plan, the Board and/or the
Committee shall have authority to (i) grant, in its discretion, Incentive Stock
Options in accordance with Section 422 of the Code, or Nonstatutory Options;
(ii) determine in good faith the fair market value of the Stock covered by any
Grant; (iii) determine which eligible persons shall receive 

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Grants and the number of shares, restrictions, terms and conditions to be
included in such Grants; (iv) construe and interpret the Plan; (v) promulgate,
amend and rescind rules and regulations relating to its administration, and
correct defects, omissions and inconsistencies in the Plan or any Grant; (vi)
consistent with the Plan and with the consent of the Participant, as
appropriate, amend any outstanding Grant or amend the exercise date or dates
thereof; (vii) determine the duration and purpose of leaves of absence which may
be granted to Participants without constituting termination of their employment
for the purpose of the Plan or any Grant; and (viii) make all other
determinations necessary or advisable for the Plan's administration. The
interpretation and construction by the Board of any provisions of the Plan or
selection of Participants shall be conclusive and final. 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 Grant made thereunder.

  4.   Eligibility.

       (a)  General: The persons who shall be eligible to receive Grants shall 
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be directors, officers, employees or consultants to the Company. The term
consultant shall mean any person, other than an employee, who is engaged by the
Company to render services and is compensated for such services. An Optionee may
hold more than one Option. Any issuance of a Grant to an officer or director of
the Company subsequent to the first registration of any of the securities of the
Company under the Exchange Act shall comply with the requirements of Rule 16b-3.

       (b)  Incentive Stock Options: Incentive Stock Options may only be issued 
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to employees of the Company. Incentive Stock Options may be granted to officers
or directors, provided they are also employees of the Company. Payment of a
director's fee shall not be sufficient to constitute employment by the Company.

  The Company shall not grant an Incentive Stock Option under the Plan to any
employee if such Grant would result in such employee holding the right to
exercise for the first time in any one calendar year, under all Incentive Stock
Options granted under the Plan or any other plan maintained by the Company, with
respect to shares of Stock having an aggregate fair market value, determined as
of the date of the Option is granted, in excess of $100,000.  Should it be
determined that an Incentive Stock Option granted under the Plan exceeds such
maximum for any reason other than a failure in good faith to value the Stock
subject to such option, the excess portion of such option shall be considered a
Nonstatutory Option.  To the extent the employee holds two (2) or more such
Options which become exercisable for the first time in the same calendar year,
the foregoing limitation on the exercisability of such Option as Incentive
Stock Options under the Federal tax laws shall be applied on the basis of the
order in which such Options are granted.  If, for any reason, an entire Option
does not qualify as an Incentive Stock Option by reason of exceeding such
maximum, such Option shall be considered a Nonstatutory Option.

       (c)  Nonstatutory Option: The provisions of the foregoing Section 4(b) 
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shall not apply to any Option designated as a 'Nonstatutory Option' or which
sets forth the intention of the parties that the Option be a Nonstatutory
Option.

       (d)  Additional Requirements: At the discretion of the Board or the
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Committee,  each prospective Participant's eligibility to receive Grants of
Options under the Plan shall be dependent upon the execution and delivery by
each such prospective Participant of agreements or similar contractual
arrangements relative to assigning patents and inventions to the Company,
restricting disclosure of the confidential and proprietary information and trade
secrets of the Company, and restricting solicitation of the customers, vendors
and employees of the Company.

  5.   Stock.

       (a)  Authorized Stock: Stock subject to Grants may be either unissued or
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reacquired Stock.

       (b)  Number of Shares: Subject to adjustment as provided in Section 6(i) 
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of the Plan, the total number of shares of Stock which may be granted as Options
under the Plan shall not exceed Five Hundred and Forty Thousand (540,000).  If
any Grant shall for any reason terminate or expire, any shares allocated thereto
but remaining unpurchased upon such expiration or termination shall again be
available for Grants with respect thereto under the Plan as though no Grant had
previously occurred with respect to such shares.  Any shares of Stock issued
pursuant to a Grant and repurchased pursuant to the terms thereof shall be
available for future Grants as though not previously covered by a Grant.

       (c)  Reservation of Shares: The Company shall reserve and keep available 
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at all times during the term of the Plan such number of shares as shall be
sufficient to satisfy the requirements of the Plan.  If, after reasonable
efforts, which efforts shall not include the registration of the Plan or Grants
under the Securities Act, the Company is unable to obtain authority from any
applicable regulatory body, which authorization is deemed necessary by legal
counsel for the Company 

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for the lawful issuance of shares hereunder, the Company shall be relieved of
any liability with respect to its failure to issue and sell the shares for which
such requisite authority was so deemed necessary unless and until such authority
is obtained.

       (d)  Application of Funds:  The proceeds received by the Company from the
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sale of Stock pursuant to the exercise of Options will be used for general
corporate purposes.

       (e)  No Obligation to Exercise:  The issuance of a Grant shall impose no
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obligation upon the Participant to exercise any rights under such Grant.

  6.   Terms and Conditions of Options.  Options granted hereunder shall be
evidenced by agreements between the Company and the respective Optionees, in
such form and substance as the Board or Committee shall from time to time
approve.  Grant Agreements need not be identical, and in each case may include
such provisions as the Board or Committee may determine, but all such agreements
shall be subject to and limited by the following terms and conditions:

       (a)  Number of Shares: Each Option shall state the number of shares to 
            ----------------  
which it pertains.

       (b)  Exercise Price: Each Option shall state the exercise price, which 
            --------------  
shall be determined as follows:

            (i)   Any Option granted to a person who at the time the Option is
                  granted owns (or is deemed to own pursuant to Section 424(d)
                  of the Code) stock possessing more than ten percent (10%) of
                  the total combined voting power or value of all classes of
                  stock of the Company ('Ten Percent Holder') shall have an
                  exercise price of no less than 110% of the Fair Market Value
                  of the Stock as of the date of grant; and

            (ii)  Incentive Stock Options granted to a person who at the time
                  the Option is granted is not a Ten Percent Holder shall have
                  an exercise price of no less than 100% of the Fair Market
                  Value of the Stock as of the date of grant; and

            (iii) Nonstatutory Options granted to a person who at the time the
                  Option is granted is not a Ten Percent Holder shall have an
                  exercise price of no less than 90% of the Fair Market Value of
                  the Stock as of the date of grant.

  For the purposes of this Section 6(b), the Fair Market Value shall be as
determined by the Board in good faith, which determination shall be conclusive
and binding; provided however, that if there is a public market for such Stock,
the Fair Market Value per share shall be the average of the bid and asked prices
(or the closing price if such stock is listed on the NASDAQ National Market
System or Small Cap Issue Market) on the date of grant of the Option, or if
listed on a stock exchange, the closing price on such exchange on such date of
grant.

       (c)  Medium and Time of Payment: The exercise price shall become 
            --------------------------  
immediately due upon exercise of the Option and shall be paid in cash or check
made payable to the Company. Should the Company's outstanding Stock be
registered under Section 12(g) of the Exchange Act at the time the Option is
exercised, then the exercise price may also be paid as follows:

            (i)   in shares of Stock held by the Optionee for the requisite
                  period necessary to avoid a charge to the Company's earnings
                  for financial reporting purposes and valued at Fair Market
                  Value on the exercise date, or

            (ii)  through a special sale and remittance procedure pursuant to
                  which the Optionee shall concurrently provide irrevocable
                  written instructions (a) to a Company designated brokerage
                  firm to effect the immediate sale of the purchased shares and
                  remit to the Company, out of the sale proceeds available on
                  the settlement date, sufficient funds to cover the aggregate
                  exercise price payable for the purchased shares plus all
                  applicable Federal, state and local income and employment
                  taxes required to be withheld by the Company by reason of such
                  purchase and (b) to the Company to deliver the certificates
                  for the purchased shares directly to such brokerage firm in
                  order to complete the sale transaction.

  At the discretion of the Board, exercisable either at the time of Option grant
or of Option exercise, the exercise price may also be paid (i) by Optionee's
delivery of a promissory note in form and substance satisfactory to the Company
and permissible under the laws of the State of Connecticut and bearing interest
at a rate determined by the Board in its sole discretion but in no event less
than the minimum rate of interest required to avoid the imputation of
compensation income 

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to the Optionee under the Federal tax laws, or (ii) in such other form of
consideration permitted by the Connecticut corporations law as may be acceptable
to the Board.

    (d)  Term and Exercise of Options: Any Option granted to an employee of the
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Company shall become exercisable over a period of no longer than five (5) years,
and no less than twenty percent (20%) of the shares covered thereby shall become
exercisable annually.  No Option shall be exercisable, in whole or in part,
prior to one (1) year from the date it is granted unless the Board shall
specifically determine otherwise, as provided herein.  In no event shall any
Option be exercisable after the expiration of ten (10) years from the date it is
granted, and no Incentive Stock Option granted to a Ten Percent Holder shall, by
its terms, be exercisable after the expiration of five (5) years from the date
of the Option.  Unless otherwise specified by the Board or the Committee in the
resolution authorizing such Option, the date of grant of an Option shall be
deemed to be the date upon which the Board or the Committee authorizes the
granting of such Option.

  Each Option shall be exercisable to the nearest whole share, in installments
or otherwise, as the respective Option agreements may provide.  During the
lifetime of an Optionee, the Option shall be exercisable only by the Optionee
and shall not be assignable or transferable by the Optionee, and no other person
shall acquire any rights therein.  To the extent not exercised, installments (if
more than one) shall accumulate, but shall be exercisable, in whole or in part,
only during the period for exercise as stated in the Grant Agreement, whether or
not other installments are then exercisable.

    (e)  Termination of Status as Employee, Consultant or Director: If
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Optionee's status as an employee shall terminate for any reason other than
Optionee's disability or death, then Optionee (or if the Optionee shall die
after such termination, but prior to exercise, Optionee's personal
representative or the person entitled to succeed to the Option) shall have the
right to exercise the portions of any of Optionee's Incentive Stock Options
which were exercisable as of the date of such termination, in whole or in part,
not less than thirty (30) days nor more than three (3) months after such
termination (or, in the event of 'termination for cause' (subject to the laws of
the State of Connecticut) by the terms of the Plan or a Grant Agreement or an
employment agreement, or the established policies and directives of the Company,
the Option shall automatically terminate as of the termination of employment as
to all shares covered by the Option).

  With respect to Nonstatutory Options granted to employees, directors or
consultants, the Board may specify such period for exercise, not less than
thirty (30) days (except that in the case of 'termination for cause' or removal
of a director, the Option shall automatically terminate as of the termination of
employment or services as to shares covered by the Option, following termination
of employment or services as the Board deems reasonable and appropriate).  The
Option may be exercised only with respect to installments that the Optionee
could have exercised at the date of termination of employment or services.
Nothing contained herein or in any Option granted pursuant hereto shall be
construed to affect or restrict in any way the right of the Company to terminate
the employment or services of an Optionee with or without cause.

  Each Option shall terminate with respect to all installments which are not
exercisable at the date of an Optionee's termination of employment or services,
as applicable.

    (f)  Disability of Optionee: If an Optionee is disabled (within the meaning
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of Section 22(e)(3) of the Code) at the time of termination, the three (3) month
period set forth in Section 6(e) shall be a period, as determined by the Board
and set forth in the Option, of not less than six (6) months nor more than one
year after such termination.

    (g)  Death of Optionee: If an Optionee dies while employed by, engaged as a
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consultant to, or serving as a Director of the Company, the portion of such
Optionee's Option which was exercisable at the date of death may be exercised,
in whole or in part, by the estate of the decedent or by a person succeeding to
the right to exercise such Option at any time within (i) a period, as determined
by the Board and set forth in the Option, of not less than six (6) months nor
more than one (1) year after Optionee's death, which period shall not be more,
in the case of a Nonstatutory Option, than the period for exercise following
termination of employment or services, or (ii) during the remaining term of the
Option, whichever is the lesser.  The Option may be so exercised only with
respect to installments exercisable at the time of Optionee's death and not
previously exercised by the Optionee.

    (h)  Nontransferability of Option: No Option shall be transferable by the
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Optionee, except by will or by the laws of descent and distribution.  Any
violation or attempted violation of  such restriction shall result in the
immediate termination of the Option.

    (i)  Recapitalization: Subject to any required action of shareholders, the
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number of shares of Stock covered by each outstanding Option, and the exercise
price per share thereof set forth in each such Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Stock of
the Company resulting from a stock split, stock dividend, combination,
subdivision or reclassification of shares, or the payment of a stock dividend,
or any other increase 

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or decrease in the number of such shares affected without receipt of
consideration by the Company; provided, however, the conversion of any
convertible securities of the Company shall not be deemed to have been 'effected
without receipt of consideration' by the Company.

  In the event of a proposed dissolution or liquidation of the Company, a merger
or consolidation in which the Company is not the surviving entity, or a sale of
all or substantially all of the assets or capital stock of the Company
(collectively, a 'Reorganization'), unless otherwise provided by the Board, each
outstanding Option shall terminate immediately prior to such date as is
determined by the Board, which date shall be no later than the consummation of
such Reorganization.  In such event, if the entity which shall be the surviving
entity does not tender to an Optionee an offer, for which it has no obligation
to do so, to substitute for any unexercised Option a stock option or capital
stock of such surviving entity, as applicable, which on an equitable basis shall
provide the Optionee with substantially the same economic benefit as such
unexercised Option, then the Board may grant to such Optionee, in its sole and
absolute discretion and without obligation, the right for a period commencing
thirty (30) days prior to and ending immediately prior to the date determined by
the Board pursuant hereto for termination of the Option or during the remaining
term of the Option, whichever is the lesser, to exercise any unexpired Option or
Options without regard to the installment provisions of Paragraph 6(d) of the
Plan; provided, that any such right granted shall be granted to all Optionees
not receiving an offer to receive substitute options on a consistent basis, and
provided further, that any such exercise shall be subject to the consummation of
such Reorganization.

  Subject to any required action of shareholders, if the Company shall be the
surviving entity in any merger or consolidation, each outstanding Option
thereafter shall pertain to and apply to the securities to which a holder of
shares of Stock equal to the shares subject to the Option would have been
entitled by reason of such merger or consolidation.

  In the event of a change in the Stock of the Company as presently constituted,
which is limited to a change of all of its authorized shares without par value
into the same number of shares with a par value, the shares resulting from any
such change shall be deemed to be the Stock within the meaning of the Plan.

  To the extent that the foregoing adjustments relate to stock or securities of
the Company, such adjustments shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive.  Except as expressly
provided in this Section 6(i), the Optionee shall have no rights by reason of
any subdivision or consolidation of shares of stock of any class or the payment
of any stock dividend or any other increase or decrease in the number of shares
of stock of any class, and the number or price of shares of Stock subject to any
Option shall not be affected by, and no adjustment shall be made by reason of,
any dissolution, liquidation, merger, consolidation or sale of assets or capital
stock, or any issue by the Company of shares of stock of any class or securities
convertible into shares of stock of any class.

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

    (j)  Rights as a Shareholder: An Optionee shall have no rights as a
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shareholder with respect to any shares covered by an Option until the effective
date of the issuance of the shares following exercise of such Option by
Optionee.  No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the date such stock certificate is issued,
except as expressly provided in Section 6(i) hereof.

    (k)  Modification, Acceleration, Extension, and Renewal of Options: Subject
         -------------------------------------------------------------         
to the terms and conditions and within the limitations of the Plan, the Board
may modify an Option, or, once an Option is exercisable, accelerate the rate at
which it may be exercised, and may extend or renew outstanding Options granted
under the Plan or accept the surrender of outstanding Options (to the extent not
theretofore exercised) and authorize the granting of new Options in substitution
for such Options, provided such action is permissible under Section 422 of the
Code and applicable state securities laws.  Notwithstanding the provisions of
this Section 6(k), however, no modification of an Option shall, without the
consent of the Optionee, alter to the Optionee's detriment or impair any rights
or obligations under any Option theretofore granted under the Plan.

    (l)  Exercise Before Exercise Date: At the discretion of the Board, the
         -----------------------------                                     
Option may, but need not, include a provision whereby the Optionee may elect to
exercise all or any portion of the Option prior to the stated exercise date of
the Option or any installment thereof.  Any shares so purchased prior to the
stated exercise date shall be subject to repurchase by the Company upon
termination of Optionee's employment as contemplated by Section 6(n) hereof
prior to the exercise date stated in the Option and such other restrictions and
conditions as the Board or Committee may deem advisable.

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    (m)  Other Provisions: The Grant Agreements authorized under the Plan shall
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contain such other provisions, including, without limitation, restrictions upon
the exercise of the Options, as the Board or the Committee shall deem advisable.
Shares shall not be issued pursuant to the exercise of an Option, if the
exercise of such Option or the issuance of shares thereunder would violate, in
the opinion of legal counsel for the Company, the provisions of any applicable
law or the rules or regulations of any applicable governmental or administrative
agency or body, such as the Code, the Securities Act, the Exchange Act,
applicable state securities laws, Connecticut  corporation law, and the rules
promulgated under the foregoing or the rules and regulations of any exchange
upon which the shares of the Company are listed.  Without limiting the
generality of the foregoing, the exercise of each Option shall be subject to the
condition that if at any time the Company shall determine that (i) the
satisfaction of withholding tax or other similar liabilities, or (ii) the
listing, registration or qualification of any shares covered by such exercise
upon any securities exchange or under any state or federal law, or (iii) the
consent or approval of any regulatory body, or (iv) the perfection of any
exemption from any such withholding, listing, registration, qualification,
consent or approval is necessary or desirable in connection with such exercise
or the issuance of shares thereunder, then in any such event, such exercise
shall not be effective unless such withholding, listing registration,
qualification, consent, approval or exemption shall have been effected, obtained
or perfected free of any conditions not acceptable to the Company.

    (n)  Repurchase Agreement: The Board may, in its discretion, require as a
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condition to the Grant of an Option hereunder, that an Optionee execute an
agreement with the Company, in form and substance satisfactory to the Board in
its discretion (a 'Repurchase Agreement'), (i) restricting the Optionee's right
to transfer shares purchased under such Option without first offering such
shares to the Company or other shareholders of the Company upon the same terms
and conditions as provided therein; and, among other things, (ii) providing that
upon termination of Optionee's employment with the Company, for any reason, the
Company (or other shareholders of the Company, as provided in the Repurchase
Agreement) shall have the right at its discretion (or the discretion of such
other shareholders) to purchase and/or redeem all such shares owned by the
Optionee on the date of termination of his or her employment, upon further terms
(including as to purchase price and terms of payment) to be determined by the
Board or the Committee, at its discretion.  The terms and conditions of any
Repurchase Agreement may be incorporated into a Grant Agreement.

  7.   Investment Intent.  All Grants under the Plan are intended to be exempt
from registration under the Securities Act provided by Rule 701 thereunder.
Unless and until the granting of Options or sale and issuance of Stock subject
to the Plan are registered under the Securities Act or shall be exempt pursuant
to the rules promulgated thereunder, each Grant under the Plan shall provide
that the purchases or other acquisitions of Stock thereunder shall be for
investment purposes and not with a view to, or for resale in connection with,
any distribution thereof.  Further, unless the issuance and sale of the Stock
have been registered under the Securities Act, each Grant shall provide that no
shares shall be purchased upon the exercise of the rights under such Grant
unless and until (i) all then applicable requirements of state and federal laws
and regulatory agencies shall have been fully complied with to the satisfaction
of the Company and its counsel, and (ii) if requested to do so by the Company,
the person exercising the rights under the Grant shall (i) give written
assurances as to knowledge and experience of such person (or a representative
employed by such person) in financial and business matters and the ability of
such person (or representative) to evaluate the merits and risks of exercising
the Option, and (ii) execute and deliver to the Company a letter of investment
intent and/or such other form related to applicable exemptions from
registration, all in such form and substance as the Company may require.  If
shares are issued upon exercise of any rights under a Grant without registration
under the Securities Act, subsequent registration of such shares shall relieve
the purchaser thereof of any investment restrictions or representations made
upon the exercise of such rights.

  8.   Amendment, Modification, Suspension or Discontinuance of the Plan.  The
Board may, insofar as permitted by law, from time to time, with respect to any
shares at the time not subject to outstanding Grants, suspend or terminate the
Plan or revise or amend it in any respect whatsoever, except that without the
approval of the shareholders of the Company, no such revision or amendment shall
(i) increase the number of shares subject to the Plan, (ii) decrease the price
at which Grants may be granted, (iii) materially increase the benefits to
Participants, or (iv) change the class of persons eligible to receive Grants
under the Plan; provided, however, no such action shall alter or impair the
rights and obligations under any Option outstanding as of the date thereof
without the written consent of the Participant thereunder.  No Grant may be
issued while the Plan is suspended or after it is terminated, but the rights and
obligations under any Grant issued while the Plan is in effect shall not be
impaired by suspension or termination of the Plan.

  In the event of any change in the outstanding Stock by reason of a stock
split, stock dividend, combination or reclassification of shares,
recapitalization, merger, or similar event, the Board or the Committee may
adjust proportionally (a) the number of shares of Stock (i) reserved under the
Plan, and (ii) available for Incentive Stock Options and Nonstatutory Options;
(b) the Stock prices related to outstanding Grants; and (c) the appropriate Fair
Market Value and other price determinations for such Grants. In the event of any
other change affecting the Stock or any distribution (other 

                                     Page 6
 
than normal cash dividends) to holders of Stock, such adjustments as may be
deemed equitable by the Board or the Committee, including adjustments to avoid
fractional shares, shall be made to give proper effect to such event. In the
event of a corporate merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation, the Board or the Committee shall be
authorized to issue or assume stock options, whether or not in a transaction to
which Section 424(a) of the Code applies, and other Grants by means of
substitution of new Grant Agreements for previously issued Grants or an
assumption of previously issued Grants.

  9.   Tax Withholding.  At the time of delivery or exercise of Options, as may
be applicable, the Company shall have the right to deduct from amounts otherwise
due to any Optionee and/or withhold an appropriate number of shares for payment
of taxes required by law or to take such other action as may be necessary in the
opinion of the Company to satisfy all obligations for withholding of such taxes.
If Stock is used to satisfy tax withholding, such Stock shall be valued based on
the Fair Market Value when the tax withholding is required to be made.

  10.  Availability of Information.  During the term of the Plan and any
additional period during which a Grant granted pursuant to the Plan shall be
exercisable, the Company shall make available, not later than one hundred and
twenty (120) days following the close of each of its fiscal years, such
financial and other information regarding the Company as is required by the
Bylaws of the Company and applicable law to be furnished in an annual report to
the shareholders of the Company.

  11.  Notice.  Any written notice to the Company required by any of the
provisions of the Plan shall be addressed to the chief personnel officer or to
the chief executive officer of the Company, and shall become effective when it
is received by the office of the chief personnel officer or the chief executive
officer.

  12.  Indemnification of Board.  In addition to such other rights or
indemnifications as they may have as directors or otherwise, and to the extent
allowed by applicable law, the members of the Board and the Committee shall be
indemnified by the Company against the reasonable expenses, including attorneys'
fees, actually and necessarily incurred in connection with the defense of any
claim, action, suit or proceeding, or in connection with any appeal thereof, to
which they or any of them may be a party by reason of any action taken, or
failure to act, under or in connection with the Plan or any Grant granted
thereunder, and against all amounts paid by them in settlement thereof (provided
such settlement is approved by independent legal counsel selected by the
Company) or paid by them in satisfaction of a judgment in any such claim,
action, suit or proceeding, except in any case in relation to matters as to
which it shall be adjudged in such claim, action, suit or proceeding that such
Board or Committee member is liable for negligence or misconduct in the
performance of his or her duties; provided that within sixty (60) days after
institution of any such action, suit or Board proceeding the member involved
shall offer the Company, in writing, the opportunity, at its own expense, to
handle and defend the same.

  13.  Governing Law.  The Plan and all determinations made and actions taken
pursuant hereto, to the extent not otherwise governed by the Code or the
securities laws of the United States, shall be governed by the law of the State
of Connecticut and construed accordingly.

  14.  Effective and Termination Dates.  The Plan shall become effective on the
date it is approved by the holders of a majority of the shares of Stock then
outstanding.  The Plan shall terminate (10) ten years later, subject to earlier
termination by the Board pursuant to Section 8.

  The foregoing 1998 Incentive Stock Plan (consisting of 7 pages, including this
page) was duly adopted and approved by the Board of Directors on January 7, 1998
and approved by the shareholders of the Corporation on February 26, 1998.


/s/ Katherine N. Vick
--------------------------------
Katherine N. Vick, Secretary

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