AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 11, 1996

                                                    REGISTRATION NO. 33-________

--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-8

                          REGISTRATION STATEMENT UNDER
                           THE SECURITIES ACT OF 1933

                     ADVANCED DEPOSITION TECHNOLOGIES, INC.
                     --------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


            DELAWARE                                           04-2865714
            --------                                           ----------
 (State or Other Jurisdiction of                            (I.R.S. Employer
  Incorporation or Organization)                           Identification No.)


 580 MYLES STANDISH BOULEVARD, TAUNTON, MASSACHUSETTS            02780
 ----------------------------------------------------            -----
      (Address of Principal Executive Offices)                  Zip Code


                     ADVANCED DEPOSITION TECHNOLOGIES, INC.
                             1988 STOCK OPTION PLAN
                             1993 STOCK OPTION PLAN
                         1994 FORMULA STOCK OPTION PLAN
                         ------------------------------
                            (Full Title of the Plans)


                           GLENN J. WALTERS, PRESIDENT
                          580 MYLES STANDISH BOULEVARD
                          TAUNTON, MASSACHUSETTS 02780
                                 (508) 823-0707
                                 --------------
            (Name, Address and Telephone Number of Agent for Service)

                                   Copies to:
                             PAUL D. BROUDE, ESQUIRE
                            ANDREW D. MYERS, ESQUIRE
                           O'CONNOR, BROUDE & ARONSON
                          950 WINTER STREET, SUITE 2300
                          WALTHAM, MASSACHUSETTS 02154
                                 (617) 890-6600







<TABLE>
<CAPTION>

                                          CALCULATION OF REGISTRATION FEE

                                              1988 STOCK OPTION PLAN


---------------------------------------------------------------------------------------------------------------
Title of Each Class         Amount to be         Proposed                Proposed                  Amount of
of Securities to Be         Registered(1)        Maximum                 Maximum                   Registration
Registered                                       Offering Price          Aggregate                 Fee
                                                 per Share(2)            Offering Price(2)
---------------------------------------------------------------------------------------------------------------
<S>                              <C>                 <C>                   <C>                       <C>
Common Stock,                    4,216               $0.53                 $2,234.48                  $ 0.68
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                    1,874               $0.27                $   505.98                  $ 0.15
$.01 par value
---------------------------------------------------------------------------------------------------------------
</TABLE>



<TABLE>
<CAPTION>

                                              1993 STOCK OPTION PLAN

---------------------------------------------------------------------------------------------------------------


Title of Each Class         Amount to be         Proposed                  Proposed                Amount of
of Securities to Be         Registered(1)        Maximum                   Maximum                 Registration
Registered                                       Offering Price            Aggregate               Fee
                                                 per Share(2)              Offering Price(2)
---------------------------------------------------------------------------------------------------------------
<S>                           <C>                    <C>                    <C>                       <C>
Common Stock,                 191,000                $2.00                  $ 382,000.00              $115.76
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                   2,800                $2.75                  $   7,700.00              $  2.33
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                  10,000                $2.38                  $  23,800.00              $  7.21
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                  20,000                $2.88                  $  57,600.00              $ 17.45
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                  10,000                $4.46875               $  44,687.50              $ 13.54
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                  15,000                $4.07                  $  61,050.00               $18.50
$.01 par value
---------------------------------------------------------------------------------------------------------------

</TABLE>

                                       -1-






<TABLE>
<CAPTION>

                                         1994 FORMULA STOCK OPTION PLAN

---------------------------------------------------------------------------------------------------------------

Title of Each Class         Amount to be         Proposed                Proposed                  Amount of
of Securities to Be         Registered(1)        Maximum                 Maximum                   Registration
Registered                                       Offering Price          Aggregate                 Fee
                                                 per Share(2)            Offering Price(2)
---------------------------------------------------------------------------------------------------------------
<S>                              <C>                 <C>                   <C>                        <C>
Common Stock,                    1,500               $5.44                 $8,160.00                  $2.47
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                    1,500               $2.38                 $3,570.00                  $1.08
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                    1,000               $2.38                 $2,380.00                  $0.72
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                    1,000               $2.38                 $2,380.00                  $0.72
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                    1,000               $2.38                 $2,380.00                  $0.72
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                    1,000               $5.063                $5,063.00                  $1.53
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                    1,500               $2.875                $4,312.50                  $1.31
$.01 par value
---------------------------------------------------------------------------------------------------------------
</TABLE>



<TABLE>
<CAPTION>

                                               TOTAL

---------------------------------------------------------------------------------------------------------------

                                                  Proposed Maximum      Proposed Maximum
   Title of Securities         Amount to be      Offering Price Per    Aggregate Offering         Amount of
    to be Registered           Registered(1)          Share(2)              Price(2)         Registration Fee(3)
---------------------------------------------------------------------------------------------------------------
<S>                              <C>                     <C>              <C>                 <C>
Common Stock, $.01
par value per share              856,090                 $5.44            $2,830,448.40          $857.70
(the "Common
Stock").....................

---------------------------------------------------------------------------------------------------------------

</TABLE>

                                       -2-



(1)      Pursuant to Rule 416, there are also being  registered  such additional
         shares of Common Stock as may become issuable  pursuant to stock splits
         or similar transactions.

(2)      The offering  price for shares  subject to options  outstanding  on the
         date hereof is the actual exercise price of such options.  The offering
         price for options exercised as of the date hereof is the exercise price
         of such options.

(3)      The total  Registration  Fee  includes  $673.52  payable  in respect of
         551,200 and 41,500 shares under the 1993 Stock Option Plan and the 1994
         Formula  Stock  Option  Plan,  respectively,  that  have not been  made
         subject to  options.  The  offering  price for  shares  not  subject to
         options on the date hereof has been estimated solely for the purpose of
         determining the  registration fee pursuant to Regulation C, Rule 457(h)
         on the basis of the average of the high and low prices of the Company's
         Common Stock, as reported in the  consolidated  reporting system of the
         NASDAQ SmallCap Market on December 9, 1996 as $3.75.


                                       -3-






                                     PART I

              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

         The document(s)  containing the information specified in Part I of Form
S-8 are not required to be filed with the  Securities  and  Exchange  Commission
(the  "Commission")  as part of this  Registration  Statement on Form S-8.  Such
documents  and the  documents  incorporated  by reference  in this  Registration
Statement on Form S-8 pursuant to Item 3 of Part II hereof,  as described below,
taken together,  constitute a prospectus (the "Section 10(a)  Prospectus")  that
meets the  requirements  of  Section  10(a) of the  Securities  Act of 1933,  as
amended (the "Securities Act").



                                       -4-






         THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT
HAVE  BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT OF  1933,  AS  AMENDED  (THE
"SECURITIES ACT").

PROSPECTUS
----------

                     ADVANCED DEPOSITION TECHNOLOGIES, INC.

                         856,090 SHARES OF COMMON STOCK
                            $.01 PAR VALUE PER SHARE

         This  Prospectus  relates to 856,090  shares of common stock,  $.01 par
value per share (the "Common Stock"), of Advanced Deposition Technologies, Inc.,
a Delaware corporation (the "Company"), issued or reserved for issuance pursuant
to the granting of options under the Company's 1988 Stock Option Plan (the "1988
Plan"),  1993 Stock Option Plan (the "1993 Plan") and 1994 Formula  Stock Option
Plan (the  "Formula  Plan"),  and for  reoffer  or  resale  from time to time by
selling stockholders (the "Selling Stockholders").  The 1988 Plan, 1993 Plan and
the Formula  Plan are  sometimes  collectively  referred to herein as the "Stock
Option Plans" or the "Plans."

         This offering (the  "Offering") is not being  underwritten.  The Shares
being  offered  hereunder  may be  sold by  Selling  Stockholders  and/or  their
registered  representatives  from time to time at prices to be determined at the
time of such sales. See "Plan of Distribution." The Company will not receive any
proceeds  of any sale of the  Common  Stock made by  Selling  Stockholders.  The
Company will receive the exercise price upon the exercise of any options granted
pursuant to the Stock Option Plans. See "Use of Proceeds."

         The sale of  Shares  being  offered  hereby,  when  made,  will be made
through customary  brokerage  channels either through  broker-dealers  acting as
agents or brokers for Selling Stockholders or through  broker-dealers  acting as
principals who may then resell the Shares on the NASDAQ SmallCap Market ("NSCM")
or otherwise, or by private sales on the NSCM or otherwise, at negotiated prices
related  to  prevailing  market  prices  at  the  time  of  the  sales,  or by a
combination of such methods of offering.  Thus, the  distribution of such Shares
may occur over an extended period of time. Selling Stockholders may effect these
transactions  by selling  Shares to or through  broker-dealers  or by pledges of
Shares  to  broker-dealers  who  may,  from  time  to  time,  themselves  effect
distributions  of  Shares  in their  capacity  as  broker-dealers.  See "Plan of
Distribution."

         Selling  Stockholders and any broker-dealer who acts in connection with
the sale of any Shares hereunder may be deemed to be "underwriters" as that term
is defined in the Securities Act and any commission  received by them and profit
on any  resale of the  Shares as  principal  might be deemed to be  underwriting
discounts and  commissions  under the Securities  Act. The Selling  Stockholders
will pay or assume brokerage  commissions or underwriting  discounts incurred in
connection  with the sale of their Shares,  which  commissions or discounts will
not be paid or assumed by the Company. See "Plan of Distribution."

         The Company's  Common Stock is traded on NSCM under the symbols "ADTC".
The shares of Common  Stock to be offered for sale  pursuant to this  Prospectus
may be offered  for sale on NSCM or in  privately  negotiated  transactions.  On
December 9, 1996, the average of the high and low prices of the Company's Common
Stock on NSCM was $3.75 per share.

                                   ----------

         THE SECURITIES  OFFERED HEREBY INVOLVE  CERTAIN RISKS TO THE PURCHASERS
OF SUCH SECURITIES. SEE "RISK FACTORS."

                                   ----------

         THESE   SECURITIES  HAVE  NOT  BEEN  APPROVED  OR  DISAPPROVED  BY  THE
SECURITIES AND EXCHANGE  COMMISSION NOR ANY STATE SECURITIES  COMMISSION NOR HAS
THE COMMISSION OR ANY STATE  SECURITIES  COMMISSION  PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS.  ANY  REPRESENTATION  TO THE CONTRARY IS A CRIMINAL
OFFENSE.
                                   ----------

                THE DATE OF THIS PROSPECTUS IS DECEMBER 11, 1996.







                              AVAILABLE INFORMATION

         The  Company  is  subject  to  the  informational  requirements  of the
Securities  Exchange  Act of 1934,  as amended  (the  "Exchange  Act"),  and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission").  Such reports,  proxy
statements  and other  information  can be inspected  and copies  thereof may be
obtained,  at prescribed rates, at the public reference facilities maintained by
the  Commission at the Public  Reference  Section,  Room 1024, 450 Fifth Street,
N.W.,  Washington,  D.C. 20549, and at the Commission's Regional Offices located
at 7 World Trade  Center,  13th Floor,  New York,  New York 10048,  and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
be obtained at prescribed  rates by writing to the Public  Reference  Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.

         The Company has filed a  Registration  Statement  on Form S-8 under the
Securities  Act  covering  the Common Stock  included in this  Prospectus.  This
Prospectus  does not  contain  all the  information  set forth in or  annexed as
exhibits to the Registration  Statement filed by the Company with the Commission
and reference is made to such  Registration  Statement and the exhibits  thereto
for the  complete  text  thereof.  For further  information  with respect to the
Company and the securities offered hereby, reference is made to the Registration
Statement,  including the exhibits filed as part thereof, copies of which may be
obtained at prescribed rates upon request to the Commission in Washington,  D.C.
Any statements  contained herein  concerning the provisions of any documents are
not necessarily complete,  and, in each instance,  such statements are qualified
in their  entirety  by  reference  to such  document  filed as an exhibit to the
Registration Statement or otherwise filed with the Commission.

         NO DEALER,  SALESMAN,  OR ANY OTHER PERSON HAS BEEN  AUTHORIZED TO GIVE
ANY  INFORMATION OR TO MAKE ANY  REPRESENTATIONS,  OTHER THAN THOSE CONTAINED OR
INCORPORATED  BY  REFERENCE  IN THIS  PROSPECTUS,  AND,  IF GIVEN OR MADE,  SUCH
INFORMATION OR REPRESENTATION  MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE SELLING STOCKHOLDERS.  THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER BY THE  SELLING  STOCKHOLDERS  TO SELL  ANY OF THE  SECURITIES  OFFERED
HEREBY IN ANY  JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL FOR THE SELLING
STOCKHOLDERS  TO MAKE SUCH OFFER IN SUCH  JURISDICTION.  NEITHER THE DELIVERY OF
THIS  PROSPECTUS,  NOR ANY SALE MADE HEREUNDER  SHALL,  UNDER ANY  CIRCUMSTANCE,
CREATE  ANY  IMPLICATION  THAT  THERE HAS BEEN NO CHANGE IN THE  AFFAIRS  OF THE
COMPANY SINCE THE DATE HEREOF.




                                       -3-







                                   THE COMPANY

         Advanced  Deposition  Technologies,   Inc.  (the  "Company")  develops,
manufactures,  markets and sells patented and proprietary  metallized  films for
energy  management  applications,  primarily  within  the  electronics  and food
packaging  industries.  The  Company  produces  metallized  films by applying an
ultra-thin  layer or layers of vaporized  metal onto different  types of polymer
films.  From 1993 through 1995, the Company developed several new products based
on its proprietary method for metallizing film in high-resolutions patterns. The
Company  markets  and  sells  many of its new  products  to the  food  packaging
industry and actively pursues other  applications for its patterned,  metallized
films.

         The  primary  source of the  Company's  revenues  to date has been from
sales to the electronic  capacitor  market.  During the years ended December 31,
1995,  1994 and 1993 the Company's  sales to the food packaging  market totalled
approximately  $2,737,000 (28.7%  revenues),  $1,763,000 (27.9% of revenues) and
$92,000 (1.6% of  revenues),  respectively.  While the Company  expects that its
sales  to the  electronic  capacitor  market  will  continue  to  account  for a
significant  part of its business,  the Company believes the market for its food
packaging  products and other potential  applications  for its metallized  films
will generate much of its anticipated future growth in revenues.

         The Company began  operations in 1985 as a supplier of metallized  film
to the  electronic  capacitor  industry.  In 1989,  the  Company  developed  and
introduced  its first  metallized  films  for use in  microwave  food  packaging
applications.  The Company's metallized films for microwavable foods create heat
fields  within  the  package,  resulting  in more  uniformly  cooked  food  than
conventional  microwave food packaging.  The Company  generally sells metallized
film packed in rolls to converters,  who  incorporate the film into a final food
package.

         In 1994, the Company  introduced a microwave  browning and crisping bag
(the "ACCU- CRISP(R) Bag"), made with a patented fuse susceptor metallized film.
The Company has sold the ACCU-CRISP(R) Bags through retail channels. The Company
has also developed, and manufactured on a limited basis for evaluation purposes,
authentication  holograms,  electronic article surveillance tags,  electrostatic
discharge materials,  microwave sterilization devices and solar protective films
using the Company's metallization process.

         The  Company's  executive  offices  and  manufacturing  operations  are
located at 580 Myles  Standish  Boulevard,  Taunton,  Massachusetts  02780.  Its
telephone number is (508) 823-0707.

         Except as set forth  above,  during the past  year,  there have been no
bankruptcy proceedings, receivership, or similar proceedings with respect to the
Company,  nor has there been any merger or  consolidation  of the  Company,  and
there has been no disposition of any material amount of the Company's assets.


                                       -4-





                                  RISK FACTORS

         The Common Stock  offered  hereby  involves a high degree of risk.  The
Securities  should not be  purchased  by persons  who cannot  afford the loss of
their entire  investment.  Purchasers should carefully  consider the information
presented below.

RECENT HISTORY OF LOSSES;  WORKING CAPITAL  DEFICIT;  AUDITORS'  REPORT CONTAINS
EXPLANATORY PARAGRAPH

         The Company  reported net income of  approximately  $6,000 for the year
ended December 31, 1995 and net losses of approximately  $1,809,000 for the year
ended  December  31, 1994.  As of December  31, 1995,  the Company had a working
capital  deficiency of  approximately  $1,381,000 and an accumulated  deficit of
approximately  $2,088,000.  The report of the Company's independent  accountants
upon  the  Company's  financial  statements  incorporated  herein  by  reference
contains an  explanatory  paragraph,  which  states that the Company has working
capital  deficiency,  primarily due to the classification of certain obligations
to a bank as short term. In 1996, the Company raised  approximately $4.8 million
in net proceeds from the exercise of Common Stock Purchase Warrants and obtained
a new bank line of credit and term loan which  eliminated the Company's  working
capital  deficiency as of July 31, 1996.  In order to operate  profitably in the
future, the Company must successfully market its new products to new industries,
sell these  products to  existing  and new  customers,  increase  gross  margins
through higher volumes and manufacturing efficiencies, and control its operating
expenses.  There  can  be no  assurance  that  the  Company  will  operate  on a
profitable basis in the future.

COMPETITION

         The food  packaging  industry  is highly  competitive  and  subject  to
changes in the types of food products requiring  packaging and food preparation.
The Company will depend on its abilities to provide high quality, cost-effective
metallized  film  for the  food  packaging  industry,  to  establish  continuing
relationships with microwave and non-microwave food packaging companies,  and to
respond  to  the  changing  needs  of  the   marketplace  in  order  to  compete
successfully in this industry.  The Company competes with numerous  providers of
food packaging and food packaging supplies,  many of which have a longer history
of operations and  substantially  greater  financial,  marketing,  technical and
other  resources  than  the  Company,  all  of  which  may  give  them  numerous
competitive  advantages.  No  assurance  can be given  that  current  and future
competitors will not develop new or enhanced  technologies or products perceived
to be superior to those sold or developed by the  Company.  No assurance  can be
given that the Company can successfully  compete or operate profitably in such a
competitive environment.

         The electronic  capacitor  market in which the Company competes is also
highly  competitive.  The Company competes with competitors in this market which
have substantially greater financial,  marketing,  technical and other resources
than the Company.  No assurance can be given that current and future competitors
will not develop new or enhanced technologies perceived to be superior to



                                       -5-





those  sold or  developed  by the  Company.  In  recent  years,  there  has been
increasing price  competition in this market,  resulting in reduced margins.  No
assurance can be given that the Company will continue to compete successfully in
this market.

RISK OF EXPANSION INTO NEW MARKETS; RELIANCE ON DISTRIBUTION PARTNERS

         The Company recently developed products for, and began to focus much of
its marketing efforts on, the microwave food packaging and other industries. The
Company has only recently begun to generate revenues from these markets,  and no
assurances  can be given that such revenues  will continue or will  economically
justify the  Company's  development  and  marketing  efforts in these areas.  In
addition,  the  Company's  initial  expansion  into  certain  new markets may be
dependent on relationships with potential  marketing and distribution  partners,
and on new  partners'  success in these  markets with  products  supplied by the
Company. The Company's expansion plans into new markets will subject the Company
to all of the risks incident to the expansion of a small business,  particularly
the possible  adverse  impact  associated  with the  integration of new lines of
products into the Company's existing  operations and the potential  diversion of
management time and attention from the Company's  traditional  line of business.
In  addition,  no assurance  can be given that new  products can be  effectively
marketed and sold by the Company on a profitable basis. Companies that establish
new product lines directed toward new markets  frequently  encounter  unforeseen
expenses, difficulties, complications and delays.

NEED FOR ADDITIONAL FINANCING

         Based on the Company's  operating plan, the Company anticipates that it
will require  additional  financing to meet its current plans for expansion.  No
assurance  can be given that the Company will be  successful  in obtaining  such
additional  financing on favorable terms, or at all. If the Company is unable to
obtain such additional financing,  the Company's ability to maintain its current
level of operations and to expand may be materially  adversely  affected and the
Company may be required to reduce its overall  expenditures and cancel plans for
further expansion.

DEPENDENCE ON MAJOR CUSTOMERS

         Two customers accounted for approximately 34% and 11%, respectively, of
the Company's revenues in the year ended December 31, 1995. Substantially all of
the  Company's  sales  of  food  packaging  material,  not  including  sales  of
ACCU-CRISP(R) Bags which are ordinarily made through retail channels,  were made
to Printpack Enterprises, Inc. ("Printpack") the customer that accounted for 34%
of the  Company's  revenues in 1995.  The Company has entered  into an agreement
with Printpack  that,  among other things,  terminates a purchase  agreement and
lease agreement between the parties.  As a result, the Company  anticipates that
it may not  continue to  recognize  significant  revenue  from  Printpack in the
future.  If the Company were to substantially  reduce doing business with any of
its major customers,  the Company's  business and results of operations could be
materially and adversely effected.



                                       -6-





PATENTS AND PROPRIETARY TECHNOLOGY

         The Company has been granted  eight  patents and has filed eight patent
applications  with the U.S.  Patent  and  Trademark  Office.  Most of the patent
applications pertain to products,  such as the Company's  ACCU-CRISP(R) Bags and
proposed security hologram  products,  made with vaporized metals deposited onto
substrates.  In addition,  the Company has pending patent applications in Europe
and  Japan.  The  Company's  patent  and trade  secret  rights  are of  material
importance  to the Company and its future  prospects.  No assurance can be given
that  the  patents  will be held  valid  if  subsequently  challenged,  that any
additional  patents  will be issued or that the scope of any  patent  protection
will  exclude  competitors.  No  assurance  can be given that any  patents  will
provide  competitive   advantages  for  the  Company's   products.   Even  if  a
competitor's products were to infringe patents owned by the Company, it would be
costly for the Company to enforce its rights in an infringement action and would
divert  funds  and   management   resources   from  the  Company's   operations.
Furthermore,  no assurance  can be given that the  Company's  products  will not
infringe  any  patents of others.  If valid  patents are  infringed  upon by the
Company,  the patent  owners  might be able to prevent the future use,  sale and
manufacture of the Company's products.  Also, the Company may be required to pay
damages for past  infringement,  or to pay license  fees or  royalties on future
sales of any infringing  products,  if a license could be obtained.  To date, no
legal  action has been  initiated  against the Company for  infringement  of any
patents.

         The Company also relies on trade  secrets that it seeks to protect,  in
part, through confidentiality  agreements with employees,  consultants and other
parties.  No assurance can be given that these  agreements will not be breached,
that the  Company  will  have  adequate  remedies  for any  breach,  or that the
Company's  trade  secrets will not  otherwise  become known to or  independently
developed by existing or potential  competitors  of the Company.  As the Company
intends to enforce its patents,  trademarks and copyrights and protect its trade
secrets,  it may be involved  from time to time in  litigation  to determine the
enforceability,  scope and validity of these rights.  Any such litigation  could
result  in  substantial  cost to the  Company  and  diversion  of  effort by the
Company's management and technical personnel.

LIMITED PRODUCT LINES; TECHNOLOGICAL CHANGE

         The Company's  metallized films developed for the electronic  capacitor
and food  packaging  markets are  presently  the  Company's  primary  commercial
products.  Although the Company is expanding  its product line sold within these
markets and is currently developing additional applications for its products, no
assurance  can  be  given  that  any  proposed  application  or  product  can be
successfully developed, marketed or sold on a profitable basis.

         The electronic  capacitor and microwave food packaging markets in which
the Company operates are undergoing rapid technological change. No assurance can
be given that the  development  of new  technology by others will not render the
Company's products obsolete or commercially unmarketable.



                                       -7-





NO DIVIDENDS

         The  Company  has not paid  dividends  on its  Common  Stock  since its
inception  and does not intend to pay any dividends to its  stockholders  in the
foreseeable future. The Company currently intends to reinvest earnings,  if any,
in the  development  and  expansion of its business.  The Company's  bank lender
prohibits payment of dividends without the bank's prior consent.

CONTROL BY CURRENT MANAGEMENT

         The  Directors  and  Executive  Officers of the Company  currently  own
approximately  22% of the  outstanding  Common Stock.  As a result,  the current
management is able to exert  substantial  influence  over the election of all of
the members of the Board of Directors and the outcome of any issues which may be
subject to a vote of the Company's stockholders.

SUBSTANTIAL  NUMBER OF SHARES RESERVED FOR ISSUANCE UPON EXERCISE OF OPTIONS AND
WARRANTS

         Under the 1988 Plan,  the Company has issued  options to purchase 6,090
shares of Common Stock to employees,  officers,  directors and  consultants at a
weighted  average  exercise  price of $0.47 per share.  Under the 1993 Plan, the
Company  may issue  options  to  purchase  800,000  shares  of  Common  Stock to
employees,  officers,  directors and  consultants,  of which options to purchase
248,800  shares  of  Common  Stock  were  outstanding  on  December 9, 1996 at a
weighted average  exercise price of $3.09 per share.  Both the 1988 Plan and the
1993 Plan allow the Board of Directors to grant  options with an exercise  price
that is less than,  but  reasonably  related  to, the fair  market  value of the
Common Stock on the date of the grant without stockholder approval. In addition,
the  Company  has  reserved  50,000  shares of Common  Stock for  issuance  upon
exercise of stock  options that may be granted  under its Formula Plan, of which
options to purchase 8,500 shares of Common Stock at a weighted  average exercise
price of $3.27 per share are  outstanding  as  of  December 9,  1996.  Under the
Formula Plan, any  non-employee  who becomes a member of the Company's  Board of
Directors  receives an option to purchase  1,500 shares of Common  Stock,  which
vests  annually  in thirds  beginning  on the date of the grant  subject  to the
individual  continuing  to serve on the Board of  Directors.  In addition,  each
non-employee who has served on the Board of Directors for at least one full year
receives an option to  purchase  1,000  shares of Common  Stock to vest one year
from the date of the grant.  The exercise price of all options granted under the
Formula  Plan is equal to the fair market  value of the Common Stock on the date
of the grant.

         The 132,084 IPO Warrants  outstanding  as of December 9, 1996  together
with 1,044,389 Class B Redeemable  Common Stock Purchase  Warrants (the "Class B
Warrants")  outstanding  as of December 9, 1996 will be  exercisable to purchase
shares of Common Stock until March 8, 1997 and May 12, 1998,  respectively,  and
the Representative's Warrants grant the holders thereof the right to purchase up
to 100,000 shares of Common Stock and up to 100,000 redeemable  warrants through
September 9, 1998.

         The  existence  of  the  IPO   Warrants,   Class  B  Warrants  and  the
Representative's  Warrant and the Options may prove to be a hindrance  to future
financing by the Company. In addition, the

                                       -8-





exercise of any such  options or warrants  may further  dilute the net  tangible
book  value of the Common  Stock.  Further,  the  holders  of such  options  and
warrants may exercise them at a time when the Company would otherwise be able to
obtain additional equity capital on terms more favorable to the Company.

POTENTIAL SALES PURSUANT TO RULE 144

         The sale, or  availability  for sale, of substantial  amounts of Common
Stock in the public  market  subsequent  to this  offering  pursuant to Rule 144
under the Act ("Rule 144") or otherwise could adversely  affect the market price
of the Common Stock and could impair the Company's  ability to raise  additional
capital  through  the  sale of its  equity  securities  or debt  financing.  The
availability  of Rule 144 to the holder of restricted  securities of the Company
would be conditioned on, among other factors, the availability of certain public
information  concerning the Company. Of the Company's 4,222,694 shares of Common
Stock issued and outstanding as of December 9, 1996,  1,460,763 shares of Common
Stock  are  "restricted  securities"  as  that  term  is  defined  in  Rule  144
promulgated  under  the  Act  and  may,  under  certain  circumstances,  be sold
immediately without  registration  pursuant to Rule 144. As of December 9, 1996,
1,460,763  restricted  shares of Common Stock are eligible for sale  pursuant to
Rule 144 subject to the volume trading limits under Rule 144. Future sales under
Rule 144 may have a depressive effect on the market price of the Common Stock.

POSSIBLE VOLATILITY IN PRICE OF SECURITIES

         The level of trading in the  Company's  Common Stock on NASDAQ has been
volatile and no  assurance  can be given that a  sustained,  active  market will
develop.  Accordingly,  purchasers of the Common Stock may experience difficulty
selling or otherwise  disposing of such Common Stock.  The stock market has from
time to time experienced  significant price and volume  fluctuations that may be
unrelated to the operating  performance of any particular  company. In addition,
the market prices of the securities of many publicly traded emerging  companies,
including the Company,  have in the past been, and can in the future be expected
to be,  especially  volatile.  Various  factors  and  events,  including  future
announcements of technological innovations or new products by the Company or its
competitors, developments or disputes concerning, among other things, patents or
proprietary rights,  publicity regarding actual or potential results relating to
products under  development by the Company or its competitors,  and economic and
other  external  factors,  as  well  as  period-to-period  fluctuations  in  the
Company's  financial results,  may have a significant impact on the market price
of the securities and the Company's business.

POSSIBLE ABEYANCE OF MARKET MAKING ACTIVITIES

         In  connection  with any  solicitation  by the  Representative,  unless
granted  an  exemption  by  the   Securities   and  Exchange   Commission   (the
"Commission")  from its Rule 10b-6,  promulgated  under the  Exchange  Act,  the
Representative  and any other soliciting  broker-dealer  will be prohibited from
engaging  in  any  market  making  activities  with  respect  to  the  Company's
securities for the period commencing either two or nine business days (depending
on the  market  price of the  Common  Stock)  prior to any  solicitation  of the
exercise of the Warrants until the later of (i) the termination



                                       -9-





of such  solicitation  activity or (ii) the termination (by waiver or otherwise)
of any right which the Representative or any other soliciting  broker-dealer may
have to receive a fee for the exercise of Warrants  following such solicitation.
As a result,  the  Representative  or any other soliciting  broker-dealer may be
unable to provide a market for the Company's  securities,  should they desire to
do  so,  during  certain  periods  while  the  Warrants  are  exercisable.  Such
solicitations  and  reduction  in the number of market  makers  could  adversely
affect the market price of the securities.

POSSIBLE REDEMPTION OF IPO WARRANTS AND CLASS B WARRANTS

         The IPO Warrants and Class B Warrants  (collectively referred to herein
as the  "Warrants") may be subject to redemption at $.10 per Warrant on 30 days'
prior written notice,  provided that the market price of the Common Stock equals
or exceeds  $7.00 per share (the "Call Price") for 10  consecutive  trading days
ending within 20 days prior to the notice of redemption.  The Company's Board of
Directors has the  discretion to reduce the exercise price and the Call Price of
the  Warrants.  In the  event the  Company  exercises  the  right to redeem  the
Warrants,  such Warrants will be exercisable  until the close of business on the
date fixed for  redemption in such notice.  If any Warrant called for redemption
is not  exercised  by such time it will cease to be  exercisable  and the holder
will be entitled only to the redemption price.

POSSIBLE ANTI-TAKEOVER EFFECTS OF CERTAIN CHARTER PROVISIONS

         The Company's  Certificate  of  Incorporation  authorizes  the Board of
Directors to issue up to 1,000,000 shares of preferred stock, $.01 par value per
share.  The  preferred  stock may be issued in one or more series,  the terms of
which may be  determined  at the time of  issuance  by the  Board of  Directors,
without further action by stockholders, and may include voting rights (including
the  right  to  vote as a  series  on  particular  matters),  preferences  as to
dividends and  liquidation,  conversion and  redemption  rights and sinking fund
provisions. No preferred stock is currently outstanding,  and the Company has no
present  plans for the  issuance  thereof.  However,  the  issuance  of any such
preferred  stock could  adversely  affect the rights of holders of Common  Stock
and, therefore, could reduce the value of the Common Stock.

         The By-laws of the Company  provide  for a Board of  Directors  divided
into three classes serving for staggered three-year terms.

         The ability of the Board of Directors to issue  preferred stock and the
classification  of the Board into three classes with staggered  three-year terms
could discourage, delay or prevent a takeover of the Company.

         In addition, the Company, as a Delaware corporation,  is subject to the
General  Corporation  Law of the State of  Delaware,  including  Section 203, an
anti-takeover law enacted in 1988. In general,  the law restricts the ability of
a public  Delaware  corporation  to engage in a "business  combination"  with an
"interested  stockholder"  for a period  of three  years  after  the date of the
transaction in which the person became an interested stockholder. As a result of
the  application  of  Section  203  and  certain  provisions  in  the  Company's
Certificate of Incorporation and Bylaws, as


                                      -10-





amended,  potential  acquirors  of the Company may find it more  difficult or be
discouraged from attempting to acquire the Company,  thereby possibly  depriving
holders  of the  Company's  securities  of  certain  opportunities  to  sell  or
otherwise  dispose of such  securities at  above-market  prices pursuant to such
transactions.

                                 USE OF PROCEEDS

         The Company  will not  receive any part of the  proceeds of any sale of
transactions made by Selling Stockholders. The Company will receive the proceeds
from the exercise of any options  exercised  pursuant to the Stock Option Plans.
Any  proceeds  received by the  Company  will be used by the Company for general
working capital purposes.


                              SELLING STOCKHOLDERS

         The  following  table sets forth,  as of December 9, 1996,  the name of
certain  Selling  Stockholders,  the nature of his  position,  office,  or other
material  relationship  with the Company within the past three years; the number
of  shares  subject  to  stock  options   granted  to  certain  of  the  Selling
Stockholders  which may be sold  pursuant  to this  offering;  and the number of
shares  of  Common  Stock  owned by them  other  than by means of stock  options
represented by those shares. Some Selling  Stockholders may be restricted in the
number and  amount of shares of Common  Stock they may sell and by the timing of
such  sales.  Certain  persons  not named  below who are not  affiliates  of the
Company and who hold less than 1,000 shares of Common Stock acquired through the
exercise of stock options issued under one of the Stock Option Plans may reoffer
and resell  their  Common  Stock  under  this  Prospectus  and the  Registration
Statement of which this  Prospectus is a part,  and are considered to be Selling
Stockholders.


<TABLE>
<CAPTION>

                                    Common
                                    Stock                                Common Stock         Percentage of
                                    Beneficially         Common          Beneficially         Class Beneficially
                                    Owned                Stock           Owned After          Owned After
Name and Relationship               Prior to             Being           Completion of        Completion of
of Selling Stockholders             Offering             Offered         Offering             Offering
-----------------------             --------             -------         --------             --------

<S>                                 <C>                 <C>            <C>                       <C>
Gordon E. Walters(1)                  311,547             60,000           251,547              61.9%
Mark R. Thomas(2)                         0               40,000            40,000               9.8%
Robert M. Pozzo(3)                     88,558             17,000           105,558              26.0%
John M. Buckley(4)                        0                2,000             2,000                *
Charles R. Buffler(5)                     0                2,500             2,500                *
John J. Moroney(6)                        0                1,500             1,500                *
Salvatore F. D'Amato(7)                   0                1,500             1,500                *
                                    ---------           --------          --------            --------
         Total                        400,105            124,500           404,605             100.0%

--------
*Less than one percent (1%).
</TABLE>


                                      -11-






(1)      Includes  60,000 shares of Common Stock  underlying  unexercised  stock
         options held by Mr. Gordon E. Walters.  Does not include 515,057 shares
         of Common Stock owned by the children of Mr. Gordon Walters,  including
         those  owned by Mr.  Glenn  Waters,  as to  which  Mr.  Gordon  Walters
         disclaims any beneficial  interest.  Mr. Gordon Walters is the Chairman
         of the Board of Directors of the Company.

(2)      Includes  40,000 shares of Common Stock  underlying  unexercised  stock
         options held by Mr. Thomas.  Mr. Thomas is the Chief Financial  Officer
         and a Director of the Company.

(3)      Includes  17,000 shares of Common Stock  underlying  unexercised  stock
         options held by Mr. Pozzo. Mr. Pozzo is a Director of the Company.

(4)      Includes  2,000 shares of Common  Stock  underlying  unexercised  stock
         options held by Mr. Buckley. Mr. Buckley is a Director of the Company.

(5)      Includes  2,500 shares of Common  Stock  underlying  unexercised  stock
         options held by Dr. Buffler. Dr. Buffler is a Director of the Company.

(6)      Includes  1,500 shares of Common  Stock  underlying  unexercised  stock
         options held by Mr. Moroney. Mr. Moroney is a Director of the Company.

(7)      Includes  1,500 shares of Common  Stock  underlying  unexercised  stock
         options held by Mr. D'Amato. Mr. D'Amato is a Director of the Company.


                             THE STOCK OPTION PLANS

GENERAL INFORMATION

         In conjunction with this  Prospectus,  the Company has filed a Form S-8
Registration  Statement  with the  Commission  registering  50,000 shares of the
Common Stock  issuable  upon exercise of options that have been granted and that
may be granted under the Formula Plan,  800,000  shares of Common Stock issuable
upon  exercise of options that have been  granted and that may be granted  under
the 1993 Plan,  and 6,090  shares of Common  Stock  issuable  upon  exercise  of
options that have been granted under the 1988 Plan.

         The purpose of the  Formula  Plan is to advance  the  interests  of the
Company by enhancing its ability to reward non-employee Directors of the Company
and of any future subsidiary of the Company.  The Formula Plan is not subject to
the  provisions  of the Employee  Retirement  Income  Security  Act of 1974,  as
amended ("ERISA").

         The purpose of the 1988 Plan and 1993 Plan is to  encourage  and enable
employees,  consultants,  Directors  and others  who are in a  position  to make
significant  contributions  to the  success  of the  Company to acquire a closer
identification  of their  interests  with those of the Company by providing them
with opportunities to purchase stock in the Company, and thereby




                                      -12-





stimulate their efforts on behalf of the Company and strengthen  their desire to
remain  involved  with the  Company.  The 1988  Plan and 1993  Plan are also not
subject to the provisions of ERISA.

         To obtain  additional  information  about the 1988 Plan, the 1993 Plan,
the  Formula  Plan or their  administrators,  or to  obtain a copy of any of the
Plans or documents  incorporated by reference with the Registration Statement on
Form S-8, you may write to Advanced  Deposition  Technologies,  Inc.,  580 Myles
Standish Boulevard, Taunton, Massachusetts 02780, Attention: Investor Relations,
or call the Company at (508) 823-0707. Copies will be provided without charge.


                             1988 STOCK OPTION PLAN


         ADMINISTRATION OF THE 1988 PLAN

         Members of the Board of  Directors of the Company  administer  the 1988
Plan by (a) determining those individuals who, if any, shall be granted options;
(b)  determining  the time or times when options shall be granted and the number
of shares of Common  Stock to be subject to each  option;  (c)  determining  the
exercise  price of each  option;  (d)  determining  the time or times  when each
option  becomes  exercisable  and  the  duration  of the  exercise  period;  (e)
prescribing  the form or forms of the  instruments  required under the 1988 Plan
and changing such forms from time to time; (f) adopting, amending and rescinding
rules  and  regulations  for  the  administration  of the  1988  Plan;  and  (g)
interpreting  the  1988  Plan  and  deciding  all  questions  and  settling  all
controversies and disputes which may arise in connection with the 1988 Plan. All
decisions,  determinations and interpretations of the administrators are binding
on all parties  concerned.  The1988 Plan is not  administered  by  disinterested
members (as defined by Rule 16b-3  promulgated  under the  Exchange  Act) of the
Board of Directors.

         SECURITIES OFFERED UNDER THE 1988 PLAN

         The term options ("Options") shall include options that are intended to
qualify as  incentive  stock  options as defined in Section 422 of the  Internal
Revenue Code of 1986, as amended (the "Code" and"Incentive Stock Options"),  and
options  that  are  not  intended  to  qualify  as   incentive   stock   options
("Non-Qualified  Options").  The Board of Directors has terminated the 1988 Plan
such that no additional options will be granted  thereunder.  The purchase price
for Common  Stock  issuable  upon  exercise of Options  already  outstanding  is
determined by the Board of Directors.

         PERSONS WHO MAY PARTICIPATE IN THE 1988 PLAN

         The  Participants in the 1988 Plan shall be such  employees,  directors
and consultants of the Company or of any of its subsidiaries,  and others as may
be selected  from time to time by the Board of Directors in its  discretion,  as
being in a position to contribute substantially to the success of the Company or
such subsidiaries.



                                      -13-





         TERMS AND CONDITIONS OF INCENTIVE  STOCK OPTIONS GRANTED UNDER THE 1988
         PLAN

         In no event may the Company  grant an Incentive  Stock Option under the
1988 Plan that is first  exercisable  during any one calendar year to the extent
that the  aggregate  fair market  value of the Common  Stock which is subject to
Options in the  Company's  Common  Stock  (under any plan of the Company and its
affiliates) by any one Participant exceeds $100,000.

         All  Incentive  Stock  Options are subject to the  following  terms and
conditions and to such other terms and conditions consistent with the applicable
provisions  of the Code for  Incentive  Stock  Options as the Board of Directors
shall determine appropriate to accomplish the purposes of the 1988 Plan:

         (a) Option Price. The exercise price for each Incentive Stock Option is
determined by the Board of Directors.  Incentive  Stock Options will not have an
exercise price less than 100% of the fair market value per share of Common Stock
measured  at the time the Option is  granted;  nor shall the  exercise  price be
less,  in the case of an original  issue of  authorized  stock,  than par value.
However,  if at the time of grant,  the Participant  owns stock  possessing more
than 10% of the  total  combined  voting  power of all  classes  of stock of the
Company or its  subsidiaries,  the exercise  price will not be less than 110% of
the fair market value per share of the Common Stock  subject to the Option.  For
purposes of  determining  a  Participant's  ownership  of stock,  the  ownership
attribution rules of the Code and the regulations promulgated thereunder apply.

         (b) Period of  Options.  The term for each  Incentive  Stock  Option is
determined by the Board of Directors,  but may not in any event exceed ten years
from the date of grant.  However,  if at the time of grant, the Participant owns
stock possessing more than 10% of the total combined voting power of all classes
of  stock  of  the  Company  or of  its  subsidiaries,  the  Option  may  not be
exercisable  after the  expiration  of five years from the date of grant of such
Option.

         (c)      Exercise of Options.

                  (1) Each Incentive  Stock Option shall be made  exercisable at
such time or times as the Board of  Directors  shall  prescribe  at the time the
Option is granted. In the case of an Option not immediately exercisable in full,
the Board of Directors may at any time  accelerate  the time at which all or any
part of the Option may be  exercised.  In the event that the Board of  Directors
accelerates the time at which all or any part of an Option held by a Participant
may be  exercised,  and such  accelerated  vesting  exceeds  the annual  vesting
limitations  contained in Section  422(d)(1)  of the Code,  such option shall be
treated as a Non-Qualified Option.

                  (2) A  Participant  electing  to  exercise an Option must give
written notice to the Company, as specified by the Board of Directors, of his or
her  election and of the number of shares of Common  Stock the  Participant  has
elected to purchase. Such notice must be accompanied by:

                           (i)   the instrument evidencing the Option;


                                      -14-





                           (ii)  payment in full for all shares of Common  Stock
         then being  purchased  thereunder in full in the form of (A) cash,  (B)
         check,  (C)  through the  delivery  of Common  Stock (duly owned by the
         Participant and for which the Participant has good title free and clear
         of any liens and encumbrances), valued at Fair Market Value, as defined
         in the 1988 Plan, (D) a combination of cash and Common Stock, or (E) by
         any such  other  lawful  consideration  as the Board of  Directors  may
         determine;

                           (iii) any other  documents  required  by the Board of
         Directors.

                  (3) A  Participant  exercising  an  Option  must  execute  and
deliver to the Company any shareholder's  agreement or other agreements that may
be required by the terms of the Option being exercised.

                  (4) A  Participant  receiving an  Incentive  Stock Option must
agree to notify the Company in writing immediately after the Participant makes a
Disqualifying  Disposition,  as defined below, of any stock acquired pursuant to
the exercise of an Incentive Stock Option. A "Disqualifying  Disposition" is any
disposition (including any sale) of such stock before the later of (a) two years
after the date the Participant was granted the Incentive Stock Option or (b) one
year after the date the employee  acquired  stock by  exercising  the  Incentive
Stock Option.  If the  Participant has died before such stock is sold, the above
holding  requirements  do not apply and no  Disqualifying  Disposition can occur
thereafter.

         TERMS AND CONDITIONS OF  NON-QUALIFIED  OPTIONS  GRANTED UNDER THE 1988
         PLAN

         All Non-Qualified  Stock Options are subject to the following terms and
conditions  and to such other  terms and  conditions  as the Board of  Directors
shall determine appropriate to accomplish the purposes of the 1988 Plan:

         (a) Option Price. The exercise price for each  Non-Qualified  Option is
determined by the Board of Directors.

         (b)  Period  of  Options.  The term for each  Non-Qualified  Option  is
determined by the Board of  Directors,  but may not in any event exceed 10 years
from the date of grant  and  will be  exercisable  at such  time or times as the
Board of Directors  prescribes at the time the Option is granted. In the case of
a  Non-Qualified  Option  not  immediately  exercisable  in full,  the  Board of
Directors may at any time accelerate the time at which all or part of the Option
may be exercised.

         (c) Exercise of Options.

             (1) A Participant  electing to exercise a Non-Qualified Option must
give written notice to the Company,  as specified by the Board of Directors,  of
his or her election and of the number of shares of Common Stock the  Participant
has elected to purchase. Such notice must be accompanied by:



                                      -15-






                           (i)      the instrument evidencing such Option;

                           (ii)  payment in full for all shares of Common  Stock
         then being purchased  thereunder,  including (if the Board of Directors
         so requires) an amount equal to all applicable local,  state or federal
         withholding  taxes,  if any,  in the form of (A) cash,  (B) check,  (C)
         through the delivery of Common Stock (duly owned by the Participant and
         for which the  Participant  has good  title free and clear of any liens
         and encumbrances),  valued at Fair Market Value, as defined in the 1988
         Plan, and having a Fair Market Value on the last business day preceding
         the date of exercise  equal to the purchase  price and the  withholding
         taxes,  if any, (D) a combination  of cash and Common Stock,  or (E) by
         any such  other  lawful  consideration  as the Board of  Directors  may
         determine; and

                           (iii) any other  documents  required  by the Board of
         Directors.

                  (2) A person  exercising a  Non-Qualified  Option must execute
and deliver to the Company any shareholder's  agreement or other agreements that
may be required by the terms of the Option being exercised.

         DELIVERY OF COMMON STOCK

         Common  Stock to be  delivered  under the 1988 Plan may  constitute  an
original  issue of authorized  stock or may consist of previously  issued Common
Stock acquired by the Company, as shall be determined by the Board of Directors.
The Board of  Directors  and the proper  officers of the Company  shall take any
appropriate  action  required  for  such  delivery.  The  Company  shall  not be
obligated to deliver any Common  Stock  unless and until,  in the opinion of the
Company's  counsel,  all applicable  federal and state laws and regulations have
been complied with, or, if the Common Stock is at the time listed upon any stock
exchange,  unless and until the Common Stock to be delivered  has been listed or
authorized  to be added to the list upon  official  notice of issuance upon such
exchange,  or unless or until all other  legal  matters in  connection  with the
issuance  and  delivery  of Common  Stock have been  approved  by the  Company's
counsel.

         SUMMARY OF TAX TREATMENT OF 1988 PLAN

         INCENTIVE STOCK OPTIONS

         Under the current tax rules,  an employee  who has  received  Incentive
Stock  Options  under  the  1988  Plan may be  eligible  for the  following  tax
treatment:

         No income is realized by the employee when the  Incentive  Stock Option
is received or when the Option is exercised and the employee receives the shares
of Common Stock. When the employee sells the stock received upon the exercise of
the Option, the employee incurs taxable income but only to the extent the amount
received by the employee exceeds the amount the employee paid upon



                                      -16-





exercise of the Option. Further, to the extent taxable income is incurred, it is
taxed at long-term capital gain rates. However, note that as a result of the Tax
Reform  Act  of  1986,   and  depending   upon  each   individual's   particular
circumstances, this distinction may not be meaningful.

         To  obtain  this  tax  treatment,  the  following  conditions  must  be
satisfied:

         (a) The employee must hold any Common Stock  received upon the exercise
of the  Incentive  Stock  Option at least  until (i) at least two years from the
date of the  grant of the  Option  and (ii) at least  one year from the date the
Option was exercised.

         (b) The employee must not transfer any Incentive  Stock Option received
under the 1988 Plan.

         (c) The employee  must  exercise any  Incentive  Stock Option  received
under the 1988 Plan  within ten years of the date it is  granted by the  Company
(or such shorter period as may be specified by the grant of the Incentive  Stock
Option), unless the employee holds in excess of 10% of the stock of the Company,
in which case the employee must exercise the Incentive  Stock Option within five
years of the date of the grant.

         (d) If the employee dies and an Incentive  Stock Option  granted to the
employee was never  exercised,  the executor of the  employee's  estate or legal
representative   may  exercise  the  Incentive   Stock  Option  (to  the  extent
exercisable on the date of the employee's  death)  provided that Incentive Stock
Option is exercised within one year of the employee's death.

         If the above  conditions  are not  satisfied,  the employee  recognizes
taxable  ordinary  income as of the date of the  exercise of the Option equal to
the fair market value of the Common Stock purchased on the date of exercise less
the  exercise  price  of the  Option.  Upon the sale of the  Common  Stock,  the
Participant  recognizes further gain based upon the difference between the price
at which the Participant sells the stock and the fair market value of the Common
Stock on the day of the exercise of the Option. In the event a Participant sells
any Common Stock  acquired  upon exercise of an Incentive  Stock Option  without
complying  with the  above-described  conditions,  the Company may  require,  in
accordance with Section 3402(a) of the Code, that the Participant pay additional
withholding  taxes in  respect  of the amount  that is  considered  compensation
includable in the Participant's gross income.

         Notwithstanding  the above summary,  holders of Incentive Stock Options
should note that the exercise of an Incentive  Stock Option does produce  income
for alternative  minimum tax ("AMT") purposes.  When calculating  income for AMT
purposes,  the "spread" between the exercise price of the Incentive Stock Option
and the  fair  market  value  of the  Common  Stock  is  treated  as an "item of
adjustment" to income.



                                      -17-






         NON-QUALIFIED OPTIONS

         When Non-Qualified Options are granted under the 1988 Plan, neither the
Company nor the  employee  realizes any tax impact,  provided  that the exercise
price is at or above fair market value of the Company's Common Stock on the date
of exercise. When the holder of a Non-Qualified Option exercises the Option, the
"spread"  between the Option  exercise  price and the fair  market  value of the
Common  Stock on the date the  Non-Qualified  Option is  exercised is treated as
ordinary  income to the Option  holder.  If this  "spread" is  significant,  tax
liability  associated  with  exercising a  Non-Qualified  Option may become very
high. At the time the Non-Qualified Option is exercised,  the Company is allowed
a compensation  deduction based upon the "spread" or value of the Non- Qualified
Option  at  the  time  it  is  granted  for  federal  tax  purposes.   When  the
Non-Qualified  Option holder later sells the stock,  he recognizes any gain over
the fair  market  value of the  Common  Stock on the day such  Common  Stock was
acquired.

         TAX LAWS IN THIS AREA ARE  COMPLEX  AND  SUBJECT TO  CHANGE.  EMPLOYEES
SHOULD CONSULT WITH THEIR PERSONAL TAX CONSULTANT  RATHER THAN RELY ON THE ABOVE
SUMMARY FOR A  DEFINITIVE  DETERMINATION  OF THE TAX  TREATMENT  RESULTING  FROM
PARTICIPATION UNDER THE 1988 PLAN.


                             1993 STOCK OPTION PLAN

         ADMINISTRATION OF THE 1993 PLAN

         Members of the Board of  Directors of the Company  administer  the 1993
Plan by (a) determining those individuals who, if any, shall be granted options;
(b)  determining  the time or times when options shall be granted and the number
of shares of Common  Stock to be subject to each  option;  (c)  determining  the
exercise  price of each  option;  (d)  determining  the time or times  when each
option  becomes  exercisable  and  the  duration  of the  exercise  period;  (e)
prescribing  the form or forms of the  instruments  required under the 1993 Plan
and changing such forms from time to time; (f) adopting, amending and rescinding
rules  and  regulations  for  the  administration  of the  1993  Plan;  and  (g)
interpreting  the  1993  Plan  and  deciding  all  questions  and  settling  all
controversies and disputes which may arise in connection with the 1993 Plan. All
decisions,  determinations and interpretations of the administrators are binding
on all parties  concerned.  The 1993 Plan is not  administered by  disinterested
members (as defined by Rule 16b-3  promulgated  under the  Exchange  Act) of the
Board of Directors.

         SECURITIES OFFERED UNDER THE 1993 PLAN

         The term options ("Options") shall include options that are intended to
qualify as  incentive  stock  options  as  defined  in  Section  422 of the Code
("Incentive  Stock  Options"),  and options  that are not intended to qualify as
incentive stock options ("Non-Qualified Options"). The Company may grant Options
to purchase up to 800,000 shares of Common Stock under the 1993 Plan. The



                                      -18-





purchase  price for Common Stock issuable upon exercise of Options is determined
by the Board of Directors.

         PERSONS WHO MAY PARTICIPATE IN THE 1993 PLAN

         The  Participants in the 1993 Plan shall be such  employees,  directors
and consultants of the Company or of any of its subsidiaries,  and others as may
be selected  from time to time by the Board of Directors in its  discretion,  as
being in a position to contribute substantially to the success of the Company or
such subsidiaries.

         TERMS AND CONDITIONS OF INCENTIVE  STOCK OPTIONS GRANTED UNDER THE 1993
         PLAN

         In no event may the Company  grant an Incentive  Stock Option under the
1993 Plan that is first  exercisable  during any one calendar year to the extent
that the  aggregate  fair market  value of the Common  Stock which is subject to
Options in the  Company's  Common  Stock  (under any plan of the Company and its
affiliates) by any one Participant exceeds $100,000.

         All  Incentive  Stock  Options are subject to the  following  terms and
conditions and to such other terms and conditions consistent with the applicable
provisions  of the Code for  Incentive  Stock  Options as the Board of Directors
shall determine appropriate to accomplish the purposes of the 1993 Plan:

         (a) Option Price. The exercise price for each Incentive Stock Option is
determined by the Board of Directors.  Incentive  Stock Options will not have an
exercise price less than 100% of the fair market value per share of Common Stock
measured  at the time the Option is  granted;  nor shall the  exercise  price be
less,  in the case of an original  issue of  authorized  stock,  than par value.
However,  if at the time of grant,  the Participant  owns stock  possessing more
than 10% of the  total  combined  voting  power of all  classes  of stock of the
Company or its  subsidiaries,  the exercise  price will not be less than 110% of
the fair market value per share of the Common Stock  subject to the Option.  For
purposes of  determining  a  Participant's  ownership  of stock,  the  ownership
attribution rules of the Code and the regulations promulgated thereunder apply.

         (b) Period of  Options.  The term for each  Incentive  Stock  Option is
determined by the Board of Directors,  but may not in any event exceed ten years
from the date of grant.  However,  if at the time of grant, the Participant owns
stock possessing more than 10% of the total combined voting power of all classes
of  stock  of  the  Company  or of  its  subsidiaries,  the  Option  may  not be
exercisable  after the  expiration  of five years from the date of grant of such
Option.

         (c)      Exercise of Options.

                  (1) Each Incentive  Stock Option shall be made  exercisable at
such time or times as the Board of  Directors  shall  prescribe  at the time the
Option is granted. In the case of an Option not immediately exercisable in full,
the Board of Directors may at any time accelerate the time at



                                      -19-





which all or any part of the  Option  may be  exercised.  In the event  that the
Board of  Directors  accelerates  the time at which all or any part of an Option
held by a Participant may be exercised, and such accelerated vesting exceeds the
annual  vesting  limitations  contained in Section  422(d)(1) of the Code,  such
option shall be treated as a Non-Qualified Option.

                  (2) A  Participant  electing  to  exercise an Option must give
written notice to the Company, as specified by the Board of Directors, of his or
her  election and of the number of shares of Common  Stock the  Participant  has
elected to purchase. Such notice must be accompanied by:

                           (i)      the instrument evidencing the Option;

                           (ii)  payment in full for all shares of Common  Stock
         then being  purchased  thereunder in full in the form of (A) cash,  (B)
         check,  (C)  through the  delivery  of Common  Stock (duly owned by the
         Participant and for which the Participant has good title free and clear
         of any liens and encumbrances), valued at Fair Market Value, as defined
         in the 1993 Plan, (D) a combination of cash and Common Stock, or (E) by
         any such  other  lawful  consideration  as the Board of  Directors  may
         determine;

                           (iii) any other  documents  required  by the Board of
         Directors.

                  (3) A  Participant  exercising  an  Option  must  execute  and
deliver to the Company any shareholder's  agreement or other agreements that may
be required by the terms of the Option being exercised.

                  (4) A  Participant  receiving an  Incentive  Stock Option must
agree to notify the Company in writing immediately after the Participant makes a
Disqualifying  Disposition,  as defined below, of any stock acquired pursuant to
the exercise of an Incentive Stock Option. A "Disqualifying  Disposition" is any
disposition (including any sale) of such stock before the later of (a) two years
after the date the Participant was granted the Incentive Stock Option or (b) one
year after the date the employee  acquired  stock by  exercising  the  Incentive
Stock Option.  If the  Participant has died before such stock is sold, the above
holding  requirements  do not apply and no  Disqualifying  Disposition can occur
thereafter.

         TERMS AND CONDITIONS OF  NON-QUALIFIED  OPTIONS  GRANTED UNDER THE 1993
         PLAN

         All Non-Qualified  Stock Options are subject to the following terms and
conditions  and to such other  terms and  conditions  as the Board of  Directors
shall determine appropriate to accomplish the purposes of the 1993 Plan:

         (a) Option Price. The exercise price for each  Non-Qualified  Option is
determined by the Board of Directors.


                                      -20-





         (b)  Period  of  Options.  The term for each  Non-Qualified  Option  is
determined by the Board of  Directors,  but may not in any event exceed 10 years
from the date of grant  and  will be  exercisable  at such  time or times as the
Board of Directors  prescribes at the time the Option is granted. In the case of
a  Non-Qualified  Option  not  immediately  exercisable  in full,  the  Board of
Directors may at any time accelerate the time at which all or part of the Option
may be exercised.

         (c)      Exercise of Options.

                  (1) A Participant  electing to exercise a Non-Qualified Option
must give written notice to the Company, as specified by the Board of Directors,
of his  or her  election  and of the  number  of  shares  of  Common  Stock  the
Participant has elected to purchase. Such notice must be accompanied by:

                           (i)      the instrument evidencing such Option;

                           (ii)  payment in full for all shares of Common  Stock
         then being purchased  thereunder,  including (if the Board of Directors
         so requires) an amount equal to all applicable local,  state or federal
         withholding  taxes,  if any,  in the form of (A) cash,  (B) check,  (C)
         through the delivery of Common Stock (duly owned by the Participant and
         for which the  Participant  has good  title free and clear of any liens
         and encumbrances),  valued at Fair Market Value, as defined in the 1993
         Plan, and having a Fair Market Value on the last business day preceding
         the date of exercise  equal to the purchase  price and the  withholding
         taxes,  if any, (D) a combination  of cash and Common Stock,  or (E) by
         any such  other  lawful  consideration  as the Board of  Directors  may
         determine; and

                           (iii) any other  documents  required  by the Board of
         Directors.

                  (2) A person  exercising a  Non-Qualified  Option must execute
and deliver to the Company any shareholder's  agreement or other agreements that
may be required by the terms of the Option being exercised.

         DELIVERY OF COMMON STOCK

         Common  Stock to be  delivered  under the 1993 Plan may  constitute  an
original  issue of authorized  stock or may consist of previously  issued Common
Stock acquired by the Company, as shall be determined by the Board of Directors.
The Board of  Directors  and the proper  officers of the Company  shall take any
appropriate  action  required  for  such  delivery.  The  Company  shall  not be
obligated to deliver any Common  Stock  unless and until,  in the opinion of the
Company's  counsel,  all applicable  federal and state laws and regulations have
been complied with, or, if the Common Stock is at the time listed upon any stock
exchange,  unless and until the Common Stock to be delivered  has been listed or
authorized  to be added to the list upon  official  notice of issuance upon such
exchange,  or unless or until all other  legal  matters in  connection  with the
issuance  and  delivery  of Common  Stock have been  approved  by the  Company's
counsel.



                                      -21-





         SUMMARY OF TAX TREATMENT OF 1993 PLAN

         INCENTIVE STOCK OPTIONS

         Under the current tax rules,  an employee who receives  Incentive Stock
Options under the 1993 Plan may be eligible for the following tax treatment:

         No income is realized by the employee when the  Incentive  Stock Option
is received or when the Option is exercised and the employee receives the shares
of Common Stock. When the employee sells the stock received upon the exercise of
the Option, the employee incurs taxable income but only to the extent the amount
received by the employee  exceeds the amount the employee  paid upon exercise of
the Option.  Further,  to the extent taxable income is incurred,  it is taxed at
long-term capital gain rates.  However,  note that as a result of the Tax Reform
Act of 1986, and depending upon each individual's particular circumstances, this
distinction may not be meaningful.

         To  obtain  this  tax  treatment,  the  following  conditions  must  be
satisfied:

         (a) The employee must hold any Common Stock  received upon the exercise
of the  Incentive  Stock  Option at least  until (i) at least two years from the
date of the  grant of the  Option  and (ii) at least  one year from the date the
Option was exercised.

         (b) The employee must not transfer any Incentive  Stock Option received
under the 1993 Plan.

         (c) The employee  must  exercise any  Incentive  Stock Option  received
under the 1993 Plan  within ten years of the date it is  granted by the  Company
(or such shorter period as may be specified by the grant of the Incentive  Stock
Option), unless the employee holds in excess of 10% of the stock of the Company,
in which case the employee must exercise the Incentive  Stock Option within five
years of the date of the grant.

         (d) If the employee dies and an Incentive  Stock Option  granted to the
employee was never  exercised,  the executor of the  employee's  estate or legal
representative   may  exercise  the  Incentive   Stock  Option  (to  the  extent
exercisable on the date of the employee's  death)  provided that Incentive Stock
Option is exercised within one year of the employee's death.

         If the above  conditions  are not  satisfied,  the employee  recognizes
taxable  ordinary  income as of the date of the  exercise of the Option equal to
the fair market value of the Common Stock purchased on the date of exercise less
the  exercise  price  of the  Option.  Upon the sale of the  Common  Stock,  the
Participant  recognizes further gain based upon the difference between the price
at which the Participant sells the stock and the fair market value of the Common
Stock on the day of the exercise of the Option. In the event a Participant sells
any Common Stock  acquired  upon exercise of an Incentive  Stock Option  without
complying  with the  above-described  conditions,  the Company may  require,  in
accordance with Section 3402(a) of the Code, that the Participant pay



                                      -22-





additional  withholding  taxes  in  respect  of the  amount  that is  considered
compensation includable in the Participant's gross income.

         Notwithstanding  the above summary,  holders of Incentive Stock Options
should note that the exercise of an Incentive  Stock Option does produce  income
for alternative  minimum tax ("AMT") purposes.  When calculating  income for AMT
purposes,  the "spread" between the exercise price of the Incentive Stock Option
and the  fair  market  value  of the  Common  Stock  is  treated  as an "item of
adjustment" to income.

         NON-QUALIFIED OPTIONS

         When Non-Qualified Options are granted under the 1993 Plan, neither the
Company nor the  employee  realizes any tax impact,  provided  that the exercise
price is at or above fair market value of the Company's Common Stock on the date
of exercise. When the holder of a Non-Qualified Option exercises the Option, the
"spread"  between the Option  exercise  price and the fair  market  value of the
Common  Stock on the date the  Non-Qualified  Option is  exercised is treated as
ordinary  income to the Option  holder.  If this  "spread" is  significant,  tax
liability  associated  with  exercising a  Non-Qualified  Option may become very
high. At the time the Non-Qualified Option is exercised,  the Company is allowed
a compensation  deduction based upon the "spread" or value of the Non- Qualified
Option  at  the  time  it  is  granted  for  federal  tax  purposes.   When  the
Non-Qualified  Option holder later sells the stock,  he recognizes any gain over
the fair  market  value of the  Common  Stock on the day such  Common  Stock was
acquired.

         TAX LAWS IN THIS AREA ARE  COMPLEX  AND  SUBJECT TO  CHANGE.  EMPLOYEES
SHOULD CONSULT WITH THEIR PERSONAL TAX CONSULTANT  RATHER THAN RELY ON THE ABOVE
SUMMARY FOR A  DEFINITIVE  DETERMINATION  OF THE TAX  TREATMENT  RESULTING  FROM
PARTICIPATION UNDER THE 1993 PLAN.

         AMENDMENTS TO THE 1993 PLAN

         The 1993  Plan  provides  that the  provisions  of the 1993 Plan may be
amended at any time or the 1993 Plan may be terminated in its entirety. However,
no amendments to the 1993 Plan affecting the following subjects shall be made by
the Board of Directors  without the approval of the stockholders of the Company:
(a) the  number  of  shares  of Common  Stock to which  Options  may be  granted
thereunder other than pursuant to a change in the Company's  capital  structure,
(b) the  requirements as to eligibility for  participation in the 1993 Plan, (c)
the  minimum  price at which  Options may be  granted,  (d) the maximum  term of
Options granted, or (e) the term of the 1993 Plan.

         Options granted prior to suspension or termination of the 1993 Plan may
not be cancelled  solely  because of the  suspension or  termination of the 1993
Plan, except with the consent of the grantee of the Options.



                                      -23-





                                1994 FORMULA PLAN

         ADMINISTRATION OF THE FORMULA PLAN/PERSONS WHO MAY PARTICIPATE

         The  Formula  Plan is  administered  by the Board of  Directors  of the
Company.  The Board of  Directors  may also  designate  a  committee  thereof to
administer  the Formula  Plan.  All  non-employee  Directors  of the Company are
eligible to be granted  Non-Qualified  Option  Awards  under the  Formula  Plan,
unless they choose not to participate in the Formula Plan.

         Under the Formula Plan,  options will be granted  pursuant to a formula
that  determines the timing,  pricing and amount of the option awards using only
objective criteria,  without discretion on the part of the administrators of the
Formula Plan.

         Options  granted under the Formula Plan will not exceed fifty  thousand
(50,000) shares of Common Stock. Options shall be granted under the Formula Plan
to eligible non-employee Directors (the "Participants") as follows:

                  (a)  Effective  August  9,  1994,  on the first  business  day
         immediately following the Company's annual meeting of shareholders, the
         Company  shall grant,  to each of its  non-employee  Directors  who has
         served as a Director of the Company for at least one full year, options
         to purchase a total of 1,000 shares of Common Stock.  The options shall
         be  granted  to a  non-employee  Director  only  if the  Director  is a
         Director  on the  date  of the  grant  and  has  attended,  during  the
         Company's fiscal year immediately  preceding the grant, at least 75% of
         meetings  of the Board of  Directors  and the  Committees  on which the
         Director  has  served.  Said  options  shall  vest  completely  and  be
         exercisable  one  year  from  the  date of the  grant,  subject  to the
         Director's continued service as a Director on such date.

                  (b) Each  non-employee  Director who becomes a Director  after
         November 1, 1993 will  receive,  on the later of (i) the date he or she
         becomes a Director  or (ii) the  effective  date of the  Formula  Plan,
         options to purchase a total of 1,500 shares of Common Stock. One- third
         of said options shall vest and be exercisable immediately and one-third
         will vest on each of the first and second  anniversaries  of the grant,
         subject to the  Director's  continued  service  as a  Director  on such
         dates.

         TERMS AND CONDITIONS OF OPTIONS GRANTED UNDER THE FORMULA PLAN

         All Options are subject to the following terms and conditions:

                  (a) Option Price and Exercise of Options.  The exercise  price
         of options to be granted under the Formula Plan will be the fair market
         value, as defined in the Formula Plan, of the shares of Common Stock on
         the date of the grant and said options shall vest and be exercisable as
         determined pursuant to the provisions of the instrument evidencing such
         option.




                                      -24-




                  (b) A person  electing to exercise an Option granted under the
         Formula  Plan must give  written  notice to the Company of his election
         and of the  number of shares of Common  Stock he or she has  elected to
         purchase. Such notice must be accompanied by:

                           (i)      the instrument evidencing the Option;

                           (ii)  payment in full for all shares of Common  Stock
                  then being  purchased  thereunder in the form of cash,  check,
                  through  the  delivery  of  Common  Stock  (duly  owned by the
                  Director  and for which the  Director  has good title free and
                  clear of any  liens  and  encumbrances)  having a fair  market
                  value on the last  business day preceding the date of exercise
                  equal  to the  purchase  price,  or,  at the  election  of the
                  Company,  issuance of a promissory  note, or a combination  of
                  cash and  Common  Stock or in such other form as the Board may
                  designate at the time an Option is granted;

                           (iii)  payment in (a) cash,  (b) check or, (c) if the
                  Board  determines at the time an Option is exercised,  through
                  the  delivery  of  Common  Stock,  of an  amount  equal to all
                  applicable local, state or federal  withholding taxes, if any,
                  or such other  assurance of the payment to the Company of such
                  amount as shall be  satisfactory  to the  Board in their  sole
                  discretion; and

                           (iv)     any other documents required by the Board.

                  (c) A person  exercising an Option must execute and deliver to
         the Company any stockholder's agreement or other agreements that may be
         required by the terms of the Option being exercised.

         Options  may be granted to  participants  in the  Formula  Plan who are
foreign  nationals  or  employed  outside  the  United  States on such terms and
conditions  different  from those  specified in the Formula Plan as the Board or
designated committee considers necessary or advisable to achieve the purposes of
the Formula Plan or comply with applicable laws.

         DELIVERY OF COMMON STOCK

         Common Stock to be delivered  under the Formula Plan may  constitute an
original  issue of authorized  stock or may consist of previously  issued Common
Stock  acquired by the Company,  as shall be determined by the Board.  The Board
and the  proper  officers  of the  Company  shall  take any  appropriate  action
required for such  delivery.  The Company  shall not be obligated to deliver any
Common  Stock unless and until,  in the opinion of the  Company's  counsel,  all
applicable  federal and state laws and regulations  have been complied with, or,
if the Common  Stock is at the time listed upon any stock  exchange,  unless and
until the Common Stock to be delivered has been listed or authorized to be added
to the list upon official notice of issuance upon such exchange, or unless or



                                      -25-





until all other legal  matters in  connection  with the issuance and delivery of
Common Stock have been approved by the Company's counsel.

         SUMMARY OF TAX TREATMENT OF THE FORMULA PLAN

         A participant  recognizes  taxable ordinary income as of the date he or
she  exercise a Non-  Qualified  Option  equal to the fair  market  value of the
Common  Stock  purchased  less  the  exercise  price  of the  Option.  When  the
participant sells the Common Stock, he or she recognizes further gain based upon
the difference between the price at which he or she sells his stock and the fair
market value of the Common Stock on the day he or she exercised the Option.

         TAX LAWS IN THIS AREA ARE COMPLEX  AND SUBJECT TO CHANGE.  PARTICIPANTS
SHOULD CONSULT WITH THEIR PERSONAL TAX CONSULTANT  RATHER THAN RELY ON THE ABOVE
SUMMARY FOR A  DEFINITIVE  DETERMINATION  ON THE TAX  TREATMENT  RESULTING  FROM
PARTICIPATION UNDER THE FORMULA PLAN.

         AMENDMENTS TO THE FORMULA PLAN

         The Formula Plan provides that its  provisions  may not be amended more
than once  every six  months,  other  than to comply  with  changes in the Code,
ERISA, or the rules thereunder.  The Board may at any time discontinue  granting
Options under the Formula Plan and may at any time amend any outstanding Options
for the purpose of satisfying the requirements of any changes in applicable laws
or  regulations  or for any other  purpose  that may at the time be permitted by
law. However, no amendments to the Formula Plan affecting the following subjects
shall be made by the Board  without  the  approval  of the  stockholders  of the
Company  (a) the  number of shares of Common  Stock as to which  Options  may be
granted  thereunder  other than  pursuant to a change in the  Company's  capital
structure,  (b) the  requirements  as to eligibility  for  participation  in the
Formula Plan,  (c) the minimum price at which Options may thereafter be granted,
(d) the maximum term of Options granted, or (e) the term of the Formula Plan.

                             APPLICABLE TO ALL PLANS

         POSSIBLE RESTRICTIONS ON RESALE OF COMMON STOCK ISSUED PURSUANT TO  THE
         PLANS

         The  Company  may  require  from the  person  exercising  an  Option an
investment  representation  or other  agreement  as counsel  for the Company may
consider necessary to comply with the Securities Act and any applicable Blue Sky
or state  securities laws and may require that the person agree that any sale of
the  shares of Common  Stock  will be made only on a stock  exchange  or in such
other  manner as is  permitted  by the Board and that he or she will  notify the
Company upon any disposition of the shares whether by sale, gift or otherwise.


                                      -26-





         To the extent  required to qualify for the  exemption  provided by Rule
16b-3 under the Exchange Act, and any successor  provision,  at least six months
must  elapse  from the date of an  acquisition  of an Option by a person  who is
subject to Section 16 of the Exchange Act  (including  directors of the Company)
to the date of  disposition  of such  Option  (other  than by  exercise)  or its
underlying Common Stock.

         Stock  issuable upon the exercise of an option  granted under the Plans
may be subject to such restrictions on transfer or repurchase rights as shall be
determined by the Board of Directors.

         NONTRANSFERABILITY OF OPTIONS

         Each Option, by its terms, shall not be transferable by the participant
otherwise  than by will or by the laws of descent and  distribution.  During the
participant's lifetime, the Option shall be exercisable only by him or her.


                              PLAN OF DISTRIBUTION

         The Shares are being registered to permit public  secondary  trading of
the Shares  from time to time by any  Selling  Stockholders.  The  Shares  being
offered  hereby were  issued,  or will be issued,  by the Company as a result of
participation by Selling  Stockholders in the Company's Stock Option Plans. Such
securities are being registered at the expense of the Company, exclusive of fees
and expenses of Selling  Stockholders'  attorneys or other  representatives  and
selling  or  brokerage  commissions,  if any,  as the  result of any sale of the
Shares.

         Selling  Stockholders  are not  restricted as to the price or prices at
which  they may sell the  Shares and sales of the Shares at less than the market
price may depress the market price of the Common Stock.  It is anticipated  that
any  sales  of the  Shares,  when and if made,  will be made  through  customary
channels  either  through  broker-dealers  acting as agents or  brokers  for the
seller, or through broker-dealers acting as principals,  who may then resell the
Shares  in  the   over-the-counter   market,   or  at   private   sales  in  the
over-the-counter market or otherwise, at negotiated prices related to prevailing
market  prices at the time of the sales,  or by a  combination  of such methods.
Thus, the sale of such Shares by Selling Stockholders may occur over an extended
period of time.  Selling  Stockholders  will act independently of the Company in
making  decisions  with  respect to the timing,  market,  or otherwise of prices
related to the then current market price or in negotiated transactions.

         Shares  may be sold from time to time by  Selling  Stockholders,  or by
pledgees,  donees,  transferees or other  successors in interest.  Shares may be
sold  by  Selling  Stockholders  in one or more  transactions  on the  NSCM,  or
otherwise  at prices and at terms then  prevailing  or at prices  related to the
then current market price, or in negotiated transactions. The Shares may be sold
by one or more of the following: (a) a block trade in which the broker or dealer
so engaged  will attempt to sell the Shares as agent but may position and resell
a portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer



                                      -27-





for  its  account  pursuant  to this  Prospectus;  and  (c)  ordinary  brokerage
transactions  and  transactions  in which the  broker  solicits  purchasers.  In
effecting sales,  broker-dealers engaged by Selling Stockholders may arrange for
other  broker-dealers  to  participate.  Usual  and  customary  or  specifically
negotiated  brokerage fees or commissions may be paid by Selling Stockholders in
connection  with such sales.  The Company will not receive any proceeds from any
sales of the Common Stock by Selling Stockholders.

         In offering the Shares, Selling Stockholders and any broker-dealers and
any  other   participating   broker-dealers   who  execute   sales  for  Selling
Stockholders  may be deemed  to be  "underwriters"  within  the  meaning  of the
Securities  Act in  connection  with such  sales,  and any  profits  realized by
Selling  Stockholders and the compensation of such  broker-dealers may be deemed
to be underwriting discounts and commissions. In addition, any Shares covered by
this  Prospectus  which  qualify for sale pursuant to Rule 144 may be sold under
Rule 144 rather than pursuant to this Prospectus.

         The Company has advised Selling  Stockholders  that during such time as
they may be engaged in a distribution of Shares they are required to comply with
Rules 10b-6 and 10b-7 under the  Exchange  Act (as those Rules are  described in
more detail below) and, in connection therewith, that they may not engage in any
stabilization activity, except as permitted under the Exchange Act, are required
to furnish each broker-dealer  through which Common Stock included herein may be
offered  copies  of  this  Prospectus,  and may  not  bid  for or  purchase  any
securities  of the  Company or attempt  to induce  any  person to  purchase  any
securities except as permitted under the Exchange Act.

         Rule 10b-6 under the Exchange Act prohibits,  with certain  exceptions,
participants in a distribution from bidding for or purchasing, for an account in
which the participant has a beneficial interest,  any of the securities that are
the subject of the  distribution.  Rule 10b-7 governs bids and purchases made in
order to stabilize the price of a security in connection  with a distribution of
the security.


                               RECENT DEVELOPMENTS

         No material  changes in the Company's  affairs have occurred  since the
end of  Fiscal  1995,  which  have not been  described  in a report on an Annual
Report on Form 10-KSB,  a Quarterly Report on Form 10-QSB or a Current Report on
Form 8-K filed by the Company under the Exchange Act.


                                 INDEMNIFICATION

         Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to  directors,  officers,  and  controlling  persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Commission such



                                      -28-





indemnification is against public policy as expressed in  the Securities Act and
is, therefore, unenforceable.

         Delaware  General   Corporation  Law,  Section  102(b)(7),   enables  a
corporation in its original certificate of incorporation or an amendment thereto
validly  approved by  stockholders  to eliminate or limit personal  liability of
members of its Board of Directors for violations of a director's  fiduciary duty
of care. However,  the elimination or limitation shall not apply where there has
been a breach of the duty of loyalty,  failure to act in good faith, engaging in
intentional  misconduct  or  knowingly  violating  a law,  paying a dividend  or
approving a stock  repurchase  which is deemed  illegal or obtaining an improper
personal  benefit.  The  Company's  Certificate  of  Incorporation  includes the
following language:

                  To the maximum  extent  permitted by Section  102(b)(7) of the
         General  Corporation  Law of Delaware,  a director of this  Corporation
         shall not be personally  liable to the Corporation or its stockholders,
         for monetary damages for breach of fiduciary duty as a director, except
         for liability (i) for any breach of the  director's  duty of loyalty to
         the Corporation or its stockholders,  (ii) for acts or omissions not in
         good  faith  or  which  involve  intentional  misconduct  or a  knowing
         violation  of law,  (iii)  under  Section 174 of the  Delaware  General
         Corporation  Law, or (iv) for any  transaction  from which the director
         derived an improper personal benefit.

         Delaware  General  Corporation  Law, Section 145, permits a corporation
organized under Delaware law to indemnify directors and officers with respect to
any matter in which the director or officer  acted in good faith and in a manner
he reasonably  believed to be not opposed to the best  interests of the Company,
and, with respect to any criminal  action,  had reasonable  cause to believe his
conduct was lawful. The By-laws of the Company include the following provision:

                  Reference  is made to  Section  145  and  any  other  relevant
         provisions  of the General  Corporation  Law of the State of  Delaware.
         Particular  reference  is made to the  class  of  persons,  hereinafter
         called "Indemnitees",  who may be indemnified by a Delaware corporation
         pursuant to the provisions of such Section 145, namely,  any person, or
         the heirs, executors, or administrators of such person, who was or is a
         party or is threatened to be made a party to any threatened, pending or
         completed  action,  suit,  or  proceeding,   whether  civil,  criminal,
         administrative,  or  investigative,  by  reason  of the fact  that such
         person  is or was a  director,  officer,  employee,  or  agent  of such
         corporation or is or was serving at the request of such  corporation as
         a director, officer, employee or agent of such corporation or is or was
         serving at the  request of such  corporation  as a  director,  officer,
         employee, or agent of another corporation,  partnership, joint venture,
         trust,  or other  enterprise.  The  Corporation  shall,  and is  hereby
         obligated to, indemnify the Indemnitees,  and each of them, in each and
         every  situation  where  the  Corporation  is  obligated  to make  such
         indemnification  pursuant to the aforesaid  statutory  provisions.  The
         Corporation shall indemnify the Indemnitees,  and each of them, in each
         and every situation where,


                                      -29-





         under  the  aforesaid  statutory  provisions,  the  Corporation  is not
         obligated,  but is  nevertheless  permitted or empowered,  to make such
         indemnification,   it  being  understood   that,   before  making  such
         indemnification,  with  respect  to any  situation  covered  under this
         sentence,  (i) the Corporation shall promptly make or cause to be made,
         by any of the methods  referred to in  Subsection  (d) of such  Section
         145, a determination  as to whether each Indemnitee acted in good faith
         and in a manner he reasonably believed to be in, or not opposed to, the
         best  interests  of the  Corporation,  and, in the case of any criminal
         action or  proceeding,  had no  reasonable  cause to  believe  that his
         conduct was unlawful,  and (ii) that no such  indemnification  shall be
         made unless it is determined that such  Indemnitee  acted in good faith
         and in a manner he reasonably believed to be in, or not opposed to, the
         best  interests  of the  Corporation,  and, in the case of any criminal
         action or  proceeding,  had no  reasonable  cause to  believe  that his
         conduct was unlawful.





                                      -30-






================================================================================

No dealer,  salesman or any other person has been  authorized in connection with
this Offering to give any information or to make any representations  other than
those contained in this  Prospectus  and, if given or made, such  information or
representations  must  not be  relied  upon as  having  been  authorized  by the
Company.  This Prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities  offered hereby in any  jurisdiction in
which such offer or solicitation is not authorized or in which the person making
such offer or solicitation is not qualified to do so or to any person to whom it
is unlawful to make such an offer or solicitation.  Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create an
implication that there has been no change in the circumstances of the Company or
the facts herein set forth since the date hereof.


                             ---------------------

                               TABLE OF CONTENTS

                                                            Page

              AVAILABLE INFORMATION.......................     3
              THE COMPANY.................................     4
              RISK FACTORS................................     5
              USE OF PROCEEDS.............................    11
              SELLING STOCKHOLDERS........................    11
              THE STOCK OPTION PLANS......................    12
              PLAN OF DISTRIBUTION........................    27
              RECENT DEVELOPMENTS.........................    28
              INDEMNIFICATION.............................    28


================================================================================






================================================================================


                                 856,090 SHARES
                                 OF COMMON STOCK
                            $.01 PAR VALUE PER SHARE



                               ADVANCED DEPOSITION
                               TECHNOLOGIES, INC.





                                 ---------------

                                   PROSPECTUS

                                 ---------------





                                December 11, 1996


================================================================================







                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.    INCORPORATION OF DOCUMENTS BY REFERENCE.

         The following documents,  which have been filed by the Company with the
Commission under the Securities Act and the Securities and Exchange Act of 1934,
as amended (the "Exchange Act"), are incorporated herein by reference:

         (1)      The Company's Annual Report on Form 10-KSB for the fiscal year
                  ended December 31, 1995 ("Fiscal 1995");

         (2)      The Company's  Quarterly  Report on Form 10-QSB for the fiscal
                  quarter  ended  March 31,  1996,  as  amended;  the  Company's
                  Quarterly  Report on Form 10- QSB for the fiscal quarter ended
                  June 30,  1996;  and the  Company's  Quarterly  Report on Form
                  10-QSB for the fiscal quarter ended September 30, 1996.

         (3)      The Company's  Proxy  Statement for its 1995 Annual Meeting of
                  Stockholders filed with the Commission on May 3, 1996;

         (4)      Description  of the  Company's  Common Stock in the  Company's
                  Form S-3 Registration Statement,  filed with the Commission on
                  May 13, 1996; and

         (5)      The Company's  current reports pursuant to Section 13 or 15(d)
                  of the Exchange  Act on Form 8-K dated June 4, 1996;  June 13,
                  1996;  June 18, 1996; June 25, 1996; July 17, 1996; and August
                  12, 1996.

         All documents filed by the Company  pursuant to Sections 13(a),  13(c),
14 or  15(d)  of the  Securities  Exchange  Act  subsequent  to the date of this
Registration Statement on Form S-8 and prior to such time as the Company files a
post-effective  amendment  to this  Registration  Statement  on Form  S-8  which
indicates that all securities offered hereby have been sold or which deregisters
all such securities then remaining unsold, shall be deemed to be incorporated by
reference  in this  Registration  Statement  on Form S-8 and to be a part hereof
from the date of filing such documents.

ITEM 4.  DESCRIPTION OF SECURITIES.

         Not applicable.

ITEM 5.  INTERESTS OF NAMED EXPERTS AND COUNSEL.

         Not applicable.


                                      II-1





ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to  directors,  officers,  and  controlling  persons of the
Company pursuant to the following provisions, or otherwise, the Company has been
advised  that in the opinion of the  Securities  and  Exchange  Commission  such
indemnification  is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.

         Delaware  General   Corporation  Law,  Section  102(b)(7),   enables  a
corporation in its original certificate of incorporation or an amendment thereto
validly  approved by  stockholders  to eliminate or limit personal  liability of
members of its Board of Directors for violations of a director's  fiduciary duty
of care. However,  the elimination or limitation shall not apply where there has
been a breach of the duty of loyalty,  failure to act in good faith, engaging in
intentional  misconduct  or  knowingly  violating  a law,  paying a dividend  or
approving a stock  repurchase  which is deemed  illegal or obtaining an improper
personal  benefit.  The  Company's  Certificate  of  Incorporation  includes the
following language:

                  To the maximum  extent  permitted by Section  102(b)(7) of the
         General  Corporation  Law of Delaware,  a director of this  Corporation
         shall not be personally  liable to the Corporation or its stockholders,
         for monetary damages for breach of fiduciary duty as a director, except
         (i) for any breach of the director's duty of loyalty to the Corporation
         or its  stockholders,  (ii) for acts or omissions  not in good faith or
         which involve  intentional  misconduct  or a knowing  violation of law,
         (iii) under  Section 174 of the Delaware  General  Corporation  Law, or
         (iv) for any  transaction  from which the director  derived an improper
         personal benefit.

         Delaware  General  Corporation  Law, Section 145, permits a corporation
organized under Delaware law to indemnify directors and officers with respect to
any matter in which the director or officer  acted in good faith and in a manner
he reasonably  believed to be not opposed to the best  interests of the Company,
and, with respect to any criminal  action,  had reasonable  cause to believe his
conduct was lawful. The Bylaws of the Company include the following provision:

                  Reference  is made to  Section  145  and  any  other  relevant
         provisions  of the General  Corporation  Law of the State of  Delaware.
         Particular  reference  is made to the  class  of  persons,  hereinafter
         called "Indemnitees",  who may be indemnified by a Delaware corporation
         pursuant to the provisions of such Section 145, namely,  any person, or
         the heirs, executors, or administrators of such person, who was or is a
         party or is threatened to be made a party to any threatened, pending or
         completed  action,  suit,  or  proceeding,   whether  civil,  criminal,
         administrative,  or  investigative,  by  reason  of the fact  that such
         person  is or was a  director,  officer,  employee,  or  agent  of such
         corporation or is or was serving at the request of such  corporation as
         a director, officer, employee or agent of such corporation or is or was
         serving at the  request of such  corporation  as a  director,  officer,
         employee, or agent of another

                                      II-2





         corporation,  partnership,  joint venture,  trust, or other enterprise.
         The  Corporation  shall,  and is hereby  obligated  to,  indemnify  the
         Indemnitees,  and each of them, in each and every  situation  where the
         Corporation is obligated to make such  indemnification  pursuant to the
         aforesaid  statutory  provisions.  The Corporation  shall indemnify the
         Indemnitees, and each of them, in each and every situation where, under
         the aforesaid statutory  provisions,  the Corporation is not obligated,
         but  is   nevertheless   permitted   or   empowered,   to   make   such
         indemnification,   it  being  understood   that,   before  making  such
         indemnification,  with  respect  to any  situation  covered  under this
         sentence,  (i) the Corporation shall promptly make or cause to be made,
         by any of the methods  referred to in  Subsection  (d) of such  Section
         145, a determination  as to whether each Indemnitee acted in good faith
         and in a manner he reasonably believed to be in, or not opposed to, the
         best  interests  of the  Corporation,  and, in the case of any criminal
         action or  proceeding,  had no  reasonable  cause to  believe  that his
         conduct was unlawful,  and (ii) that no such  indemnification  shall be
         made unless it is determined that such  Indemnitee  acted in good faith
         and in a manner he reasonably believed to be in, or not opposed to, the
         best  interests  of the  Corporation,  and, in the case of any criminal
         action or  proceeding,  had no  reasonable  cause to  believe  that his
         conduct was unlawful.

ITEM 7.  EXEMPTION FROM REGISTRATION CLAIMED.

         With respect to restricted  securities (the "Reoffer Securities") to be
reoffered or resold pursuant to the Registration  Statement and the accompanying
Prospectus,  the Company states that all Reoffer  Securities were acquired under
an exemption from  registration  pursuant to Section 4(2) of the Securities Act,
and that no general  solicitation,  advertising,  or offer to the general public
was made with respect to the Reoffer Securities.

ITEM 8.  EXHIBITS.

         (a) The following  exhibits  have been filed  (except  where  otherwise
indicated) as part of this Registration Statement:

          Exhibit
            No.            Description
            ---            -----------

             4a        1988 Stock Option Plan.

             4b        1993 Stock Option Plan.

             4c        1994 Formula Stock Option Plan.

             4d        Certificate of Incorporation.




                                      II-3





             4e        By-laws.

             5         Opinion  Letter  of  O'Connor,  Broude  &  Aronson  as to
                       legality of shares being registered.

            23a        Consent  of  O'Connor,  Broude &  Aronson  (contained  in
                       Opinion filed as Exhibit 5).

            23b        Consent of Arthur Andersen LLP



ITEM 9.  UNDERTAKINGS.

         (a)      The undersigned registrant hereby undertakes:

                  1. To file,  during  any  period in which  offers or sales are
being made, a post-effective amendment to this registration statement;

                           (i) To include  any  prospectus  required  by Section
10(a)(3) of the Securities Act;

                           (ii) To reflect in the prospectus any facts or events
arising  after the  effective  date of the  registration  statement (or the most
recent  post-effective   amendment  thereof)  which,   individually  or  in  the
aggregate,  represent a fundamental  change in the  information set forth in the
registration statement.  Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was  registered)  and any deviation  from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus  filed  with  the  Commission  pursuant  to Rule  424(b)  if,  in the
aggregate,  the changes in volume and price  represent no more than a 20 percent
change in the maximum aggregate  offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.

                           (iii)  To  include  any  material   information  with
respect to the plan of distribution not previously disclosed in the registration
statement  or any  material  change  in  such  information  in the  registration
statement;

provided,  however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a  post-effective  amendment by those  paragraphs  is
contained in periodic  reports filed with or furnished to the  Commission by the
registrant  pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.

                  2. That,  for the purpose of determining  any liability  under
the Securities Act, each such  post-effective  amendment shall be deemed to be a
new registration statement relating to



                                      II-4





the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

                  3. To remove from  registration  by means of a  post-effective
amendment  any of the  securities  being  registered  which remain unsold at the
termination of the offering.

         (b) The undersigned  registrant hereby undertakes that, for purposes of
determining  any  liability  under  the  Securities  Act,  each  filing  of  the
registrant's  annual reports  pursuant to Section 13(a) or 15(d) of the Exchange
Act (and,  where  applicable,  each filing of an employee  benefit plan's annual
report  pursuant to Section 15(d) of the Exchange Act) that is  incorporated  by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities  offered therein,  and the offering of such
securities  at that time shall be deemed to be the  initial  bona fide  offering
thereof.

         (c)  Insofar  as  indemnification  for  liabilities  arising  under the
Securities Act may be permitted to directors,  officers and controlling  persons
of the registrant  pursuant to the provisions  described  under Item 6 above, or
otherwise, the registrant has been advised that in the opinion of the Commission
such  indemnification  is against  public policy as expressed in the  Securities
Act,  and  is,  therefore,   unenforceable.  In  the  event  that  a  claim  for
indemnification  against  such  liabilities  (other  than  the  payment  by  the
registrant of expenses  incurred or paid by a director,  officer or  controlling
person of the  registrant  in the  successful  defense  of any  action,  suit or
proceeding)  is  asserted by such  director,  officer or  controlling  person in
connection with the securities being registered,  the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit  to a  court  of  appropriate  jurisdiction  the  question  whether  such
indemnification  by it is against  public policy as expressed in the  Securities
Act and will be governed by the final adjudication of such issue.





                                      II-5





                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the  requirements  for  filing  on  Form  S-8 and has  duly  caused  this
registration statement to be signed on its behalf by the undersigned,  thereunto
duly authorized,  in the City of Taunton,  Commonwealth of Massachusetts on this
11th day of December, 1996.

                                    ADVANCED DEPOSITION TECHNOLOGIES, INC.


                                    By:/s/ Glenn J. Walters
                                       ----------------------------------
                                           Glenn J. Walters

         Pursuant to the requirements of the Securities Act of 1933, as amended,
this  Registration  Statement  has been signed by the  following  persons in the
capacities and on the date indicated.



<TABLE>
<CAPTION>

Name                                                 Capacity                                  Date
----                                                 --------                                  ----

<S>                                         <C>                                        <C>
/s/ Glenn J. Walters                        Chief Executive Officer,                    December 11, 1996
-------------------------------             President and Director
    Glenn J. Walters                        (principal executive officer)


/s/ Gordon E. Walters                       Chairman of the Board                       December 11, 1996
-------------------------------             of Directors
    Gordon E. Walters

/s/ Mark R. Thomas                          Chief Financial Officer                     December 11, 1996
-------------------------------             (principal financial and
    Mark R. Thomas                           accounting officer)


/s/ John M. Buckley                         Director                                    December 11, 1996
-------------------------------
    John M. Buckley

/s/ Dr. Charles R. Buffler                  Director                                    December 11, 1996
-------------------------------
    Dr. Charles R. Buffler

/s/ Salvatore F. D'Amato                    Director                                    December 11, 1996
-------------------------------
    Salvatore F. D'Amato

/s/ John J. Moroney                         Director                                    December 11, 1996
-------------------------------
    John J. Moroney

/s/ Robert M. Pozzo                         Director                                    December 11, 1996
-------------------------------
    Robert M. Pozzo

</TABLE>


                                      II-6
[{"type": "S-8", "sequence": "1", "description": "FORM S-8 REGISTRATION STATEMENT", "secsgml_size_bytes": 122375}]
{"company-data": {"conformed-name": "ADVANCED DEPOSITION TECHNOLOGIES INC", "cik": "0000909963", "assigned-sic": "3490", "irs-number": "042865714", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-17653", "film-number": "96679239"}, "business-address": {"street1": "580 MYLES STANDISH INDUSTRIAL PARK", "city": "TAUNTON", "state": "MA", "zip": "02780", "phone": "5088230707"}, "mail-address": {"street1": "580 MYLES STANDISH INDUSTRIAL PARK", "city": "TAUNTON", "state": "MA", "zip": "02780"}}
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 11, 1996

                                                    REGISTRATION NO. 33-________

--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-8

                          REGISTRATION STATEMENT UNDER
                           THE SECURITIES ACT OF 1933

                     ADVANCED DEPOSITION TECHNOLOGIES, INC.
                     --------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

            DELAWARE                                           04-2865714
            --------                                           ----------
 (State or Other Jurisdiction of                            (I.R.S. Employer
  Incorporation or Organization)                           Identification No.)

 580 MYLES STANDISH BOULEVARD, TAUNTON, MASSACHUSETTS            02780
 ----------------------------------------------------            -----
      (Address of Principal Executive Offices)                  Zip Code

                     ADVANCED DEPOSITION TECHNOLOGIES, INC.
                             1988 STOCK OPTION PLAN
                             1993 STOCK OPTION PLAN
                         1994 FORMULA STOCK OPTION PLAN
                         ------------------------------
                            (Full Title of the Plans)

                           GLENN J. WALTERS, PRESIDENT
                          580 MYLES STANDISH BOULEVARD
                          TAUNTON, MASSACHUSETTS 02780
                                 (508) 823-0707
                                 --------------
            (Name, Address and Telephone Number of Agent for Service)

                                   Copies to:
                             PAUL D. BROUDE, ESQUIRE
                            ANDREW D. MYERS, ESQUIRE
                           O'CONNOR, BROUDE & ARONSON
                          950 WINTER STREET, SUITE 2300
                          WALTHAM, MASSACHUSETTS 02154
                                 (617) 890-6600
CALCULATION OF REGISTRATION FEE

                                              1988 STOCK OPTION PLAN

---------------------------------------------------------------------------------------------------------------
Title of Each Class         Amount to be         Proposed                Proposed                  Amount of
of Securities to Be         Registered(1)        Maximum                 Maximum                   Registration
Registered                                       Offering Price          Aggregate                 Fee
                                                 per Share(2)            Offering Price(2)
---------------------------------------------------------------------------------------------------------------
Common Stock,                    4,216               $0.53                 $2,234.48                  $ 0.68
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                    1,874               $0.27                $   505.98                  $ 0.15
$.01 par value
---------------------------------------------------------------------------------------------------------------
1993 STOCK OPTION PLAN

---------------------------------------------------------------------------------------------------------------

Title of Each Class         Amount to be         Proposed                  Proposed                Amount of
of Securities to Be         Registered(1)        Maximum                   Maximum                 Registration
Registered                                       Offering Price            Aggregate               Fee
                                                 per Share(2)              Offering Price(2)
---------------------------------------------------------------------------------------------------------------
Common Stock,                 191,000                $2.00                  $ 382,000.00              $115.76
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                   2,800                $2.75                  $   7,700.00              $  2.33
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                  10,000                $2.38                  $  23,800.00              $  7.21
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                  20,000                $2.88                  $  57,600.00              $ 17.45
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                  10,000                $4.46875               $  44,687.50              $ 13.54
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                  15,000                $4.07                  $  61,050.00               $18.50
$.01 par value
---------------------------------------------------------------------------------------------------------------
-1-
1994 FORMULA STOCK OPTION PLAN

---------------------------------------------------------------------------------------------------------------

Title of Each Class         Amount to be         Proposed                Proposed                  Amount of
of Securities to Be         Registered(1)        Maximum                 Maximum                   Registration
Registered                                       Offering Price          Aggregate                 Fee
                                                 per Share(2)            Offering Price(2)
---------------------------------------------------------------------------------------------------------------
Common Stock,                    1,500               $5.44                 $8,160.00                  $2.47
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                    1,500               $2.38                 $3,570.00                  $1.08
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                    1,000               $2.38                 $2,380.00                  $0.72
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                    1,000               $2.38                 $2,380.00                  $0.72
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                    1,000               $2.38                 $2,380.00                  $0.72
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                    1,000               $5.063                $5,063.00                  $1.53
$.01 par value
---------------------------------------------------------------------------------------------------------------
Common Stock,                    1,500               $2.875                $4,312.50                  $1.31
$.01 par value
---------------------------------------------------------------------------------------------------------------
TOTAL

---------------------------------------------------------------------------------------------------------------

                                                  Proposed Maximum      Proposed Maximum
   Title of Securities         Amount to be      Offering Price Per    Aggregate Offering         Amount of
    to be Registered           Registered(1)          Share(2)              Price(2)         Registration Fee(3)
---------------------------------------------------------------------------------------------------------------
Common Stock, $.01
par value per share              856,090                 $5.44            $2,830,448.40          $857.70
(the "Common
Stock").....................

---------------------------------------------------------------------------------------------------------------
-2-

(1)      Pursuant to Rule 416, there are also being  registered  such additional
         shares of Common Stock as may become issuable  pursuant to stock splits
         or similar transactions.

(2)      The offering  price for shares  subject to options  outstanding  on the
         date hereof is the actual exercise price of such options.  The offering
         price for options exercised as of the date hereof is the exercise price
         of such options.

(3)      The total  Registration  Fee  includes  $673.52  payable  in respect of
         551,200 and 41,500 shares under the 1993 Stock Option Plan and the 1994
         Formula  Stock  Option  Plan,  respectively,  that  have not been  made
         subject to  options.  The  offering  price for  shares  not  subject to
         options on the date hereof has been estimated solely for the purpose of
         determining the  registration fee pursuant to Regulation C, Rule 457(h)
         on the basis of the average of the high and low prices of the Company's
         Common Stock, as reported in the  consolidated  reporting system of the
         NASDAQ SmallCap Market on December 9, 1996 as $3.75.

                                       -3-

                                     PART I

              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

         The document(s)  containing the information specified in Part I of Form
S-8 are not required to be filed with the  Securities  and  Exchange  Commission
(the  "Commission")  as part of this  Registration  Statement on Form S-8.  Such
documents  and the  documents  incorporated  by reference  in this  Registration
Statement on Form S-8 pursuant to Item 3 of Part II hereof,  as described below,
taken together,  constitute a prospectus (the "Section 10(a)  Prospectus")  that
meets the  requirements  of  Section  10(a) of the  Securities  Act of 1933,  as
amended (the "Securities Act").

                                       -4-

         THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT
HAVE  BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT OF  1933,  AS  AMENDED  (THE
"SECURITIES ACT").

PROSPECTUS
----------

                     ADVANCED DEPOSITION TECHNOLOGIES, INC.

                         856,090 SHARES OF COMMON STOCK
                            $.01 PAR VALUE PER SHARE

         This  Prospectus  relates to 856,090  shares of common stock,  $.01 par
value per share (the "Common Stock"), of Advanced Deposition Technologies, Inc.,
a Delaware corporation (the "Company"), issued or reserved for issuance pursuant
to the granting of options under the Company's 1988 Stock Option Plan (the "1988
Plan"),  1993 Stock Option Plan (the "1993 Plan") and 1994 Formula  Stock Option
Plan (the  "Formula  Plan"),  and for  reoffer  or  resale  from time to time by
selling stockholders (the "Selling Stockholders").  The 1988 Plan, 1993 Plan and
the Formula  Plan are  sometimes  collectively  referred to herein as the "Stock
Option Plans" or the "Plans."

         This offering (the  "Offering") is not being  underwritten.  The Shares
being  offered  hereunder  may be  sold by  Selling  Stockholders  and/or  their
registered  representatives  from time to time at prices to be determined at the
time of such sales. See "Plan of Distribution." The Company will not receive any
proceeds  of any sale of the  Common  Stock made by  Selling  Stockholders.  The
Company will receive the exercise price upon the exercise of any options granted
pursuant to the Stock Option Plans. See "Use of Proceeds."

         The sale of  Shares  being  offered  hereby,  when  made,  will be made
through customary  brokerage  channels either through  broker-dealers  acting as
agents or brokers for Selling Stockholders or through  broker-dealers  acting as
principals who may then resell the Shares on the NASDAQ SmallCap Market ("NSCM")
or otherwise, or by private sales on the NSCM or otherwise, at negotiated prices
related  to  prevailing  market  prices  at  the  time  of  the  sales,  or by a
combination of such methods of offering.  Thus, the  distribution of such Shares
may occur over an extended period of time. Selling Stockholders may effect these
transactions  by selling  Shares to or through  broker-dealers  or by pledges of
Shares  to  broker-dealers  who  may,  from  time  to  time,  themselves  effect
distributions  of  Shares  in their  capacity  as  broker-dealers.  See "Plan of
Distribution."

         Selling  Stockholders and any broker-dealer who acts in connection with
the sale of any Shares hereunder may be deemed to be "underwriters" as that term
is defined in the Securities Act and any commission  received by them and profit
on any  resale of the  Shares as  principal  might be deemed to be  underwriting
discounts and  commissions  under the Securities  Act. The Selling  Stockholders
will pay or assume brokerage  commissions or underwriting  discounts incurred in
connection  with the sale of their Shares,  which  commissions or discounts will
not be paid or assumed by the Company. See "Plan of Distribution."

         The Company's  Common Stock is traded on NSCM under the symbols "ADTC".
The shares of Common  Stock to be offered for sale  pursuant to this  Prospectus
may be offered  for sale on NSCM or in  privately  negotiated  transactions.  On
December 9, 1996, the average of the high and low prices of the Company's Common
Stock on NSCM was $3.75 per share.

                                   ----------

         THE SECURITIES  OFFERED HEREBY INVOLVE  CERTAIN RISKS TO THE PURCHASERS
OF SUCH SECURITIES. SEE "RISK FACTORS."

                                   ----------

         THESE   SECURITIES  HAVE  NOT  BEEN  APPROVED  OR  DISAPPROVED  BY  THE
SECURITIES AND EXCHANGE  COMMISSION NOR ANY STATE SECURITIES  COMMISSION NOR HAS
THE COMMISSION OR ANY STATE  SECURITIES  COMMISSION  PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS.  ANY  REPRESENTATION  TO THE CONTRARY IS A CRIMINAL
OFFENSE.
                                   ----------

                THE DATE OF THIS PROSPECTUS IS DECEMBER 11, 1996.

                              AVAILABLE INFORMATION

         The  Company  is  subject  to  the  informational  requirements  of the
Securities  Exchange  Act of 1934,  as amended  (the  "Exchange  Act"),  and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission").  Such reports,  proxy
statements  and other  information  can be inspected  and copies  thereof may be
obtained,  at prescribed rates, at the public reference facilities maintained by
the  Commission at the Public  Reference  Section,  Room 1024, 450 Fifth Street,
N.W.,  Washington,  D.C. 20549, and at the Commission's Regional Offices located
at 7 World Trade  Center,  13th Floor,  New York,  New York 10048,  and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
be obtained at prescribed  rates by writing to the Public  Reference  Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.

         The Company has filed a  Registration  Statement  on Form S-8 under the
Securities  Act  covering  the Common Stock  included in this  Prospectus.  This
Prospectus  does not  contain  all the  information  set forth in or  annexed as
exhibits to the Registration  Statement filed by the Company with the Commission
and reference is made to such  Registration  Statement and the exhibits  thereto
for the  complete  text  thereof.  For further  information  with respect to the
Company and the securities offered hereby, reference is made to the Registration
Statement,  including the exhibits filed as part thereof, copies of which may be
obtained at prescribed rates upon request to the Commission in Washington,  D.C.
Any statements  contained herein  concerning the provisions of any documents are
not necessarily complete,  and, in each instance,  such statements are qualified
in their  entirety  by  reference  to such  document  filed as an exhibit to the
Registration Statement or otherwise filed with the Commission.

         NO DEALER,  SALESMAN,  OR ANY OTHER PERSON HAS BEEN  AUTHORIZED TO GIVE
ANY  INFORMATION OR TO MAKE ANY  REPRESENTATIONS,  OTHER THAN THOSE CONTAINED OR
INCORPORATED  BY  REFERENCE  IN THIS  PROSPECTUS,  AND,  IF GIVEN OR MADE,  SUCH
INFORMATION OR REPRESENTATION  MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE SELLING STOCKHOLDERS.  THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER BY THE  SELLING  STOCKHOLDERS  TO SELL  ANY OF THE  SECURITIES  OFFERED
HEREBY IN ANY  JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL FOR THE SELLING
STOCKHOLDERS  TO MAKE SUCH OFFER IN SUCH  JURISDICTION.  NEITHER THE DELIVERY OF
THIS  PROSPECTUS,  NOR ANY SALE MADE HEREUNDER  SHALL,  UNDER ANY  CIRCUMSTANCE,
CREATE  ANY  IMPLICATION  THAT  THERE HAS BEEN NO CHANGE IN THE  AFFAIRS  OF THE
COMPANY SINCE THE DATE HEREOF.

                                       -3-

                                   THE COMPANY

         Advanced  Deposition  Technologies,   Inc.  (the  "Company")  develops,
manufactures,  markets and sells patented and proprietary  metallized  films for
energy  management  applications,  primarily  within  the  electronics  and food
packaging  industries.  The  Company  produces  metallized  films by applying an
ultra-thin  layer or layers of vaporized  metal onto different  types of polymer
films.  From 1993 through 1995, the Company developed several new products based
on its proprietary method for metallizing film in high-resolutions patterns. The
Company  markets  and  sells  many of its new  products  to the  food  packaging
industry and actively pursues other  applications for its patterned,  metallized
films.

         The  primary  source of the  Company's  revenues  to date has been from
sales to the electronic  capacitor  market.  During the years ended December 31,
1995,  1994 and 1993 the Company's  sales to the food packaging  market totalled
approximately  $2,737,000 (28.7%  revenues),  $1,763,000 (27.9% of revenues) and
$92,000 (1.6% of  revenues),  respectively.  While the Company  expects that its
sales  to the  electronic  capacitor  market  will  continue  to  account  for a
significant  part of its business,  the Company believes the market for its food
packaging  products and other potential  applications  for its metallized  films
will generate much of its anticipated future growth in revenues.

         The Company began  operations in 1985 as a supplier of metallized  film
to the  electronic  capacitor  industry.  In 1989,  the  Company  developed  and
introduced  its first  metallized  films  for use in  microwave  food  packaging
applications.  The Company's metallized films for microwavable foods create heat
fields  within  the  package,  resulting  in more  uniformly  cooked  food  than
conventional  microwave food packaging.  The Company  generally sells metallized
film packed in rolls to converters,  who  incorporate the film into a final food
package.

         In 1994, the Company  introduced a microwave  browning and crisping bag
(the "ACCU- CRISP(R) Bag"), made with a patented fuse susceptor metallized film.
The Company has sold the ACCU-CRISP(R) Bags through retail channels. The Company
has also developed, and manufactured on a limited basis for evaluation purposes,
authentication  holograms,  electronic article surveillance tags,  electrostatic
discharge materials,  microwave sterilization devices and solar protective films
using the Company's metallization process.

         The  Company's  executive  offices  and  manufacturing  operations  are
located at 580 Myles  Standish  Boulevard,  Taunton,  Massachusetts  02780.  Its
telephone number is (508) 823-0707.

         Except as set forth  above,  during the past  year,  there have been no
bankruptcy proceedings, receivership, or similar proceedings with respect to the
Company,  nor has there been any merger or  consolidation  of the  Company,  and
there has been no disposition of any material amount of the Company's assets.

                                       -4-

                                  RISK FACTORS

         The Common Stock  offered  hereby  involves a high degree of risk.  The
Securities  should not be  purchased  by persons  who cannot  afford the loss of
their entire  investment.  Purchasers should carefully  consider the information
presented below.

RECENT HISTORY OF LOSSES;  WORKING CAPITAL  DEFICIT;  AUDITORS'  REPORT CONTAINS
EXPLANATORY PARAGRAPH

         The Company  reported net income of  approximately  $6,000 for the year
ended December 31, 1995 and net losses of approximately  $1,809,000 for the year
ended  December  31, 1994.  As of December  31, 1995,  the Company had a working
capital  deficiency of  approximately  $1,381,000 and an accumulated  deficit of
approximately  $2,088,000.  The report of the Company's independent  accountants
upon  the  Company's  financial  statements  incorporated  herein  by  reference
contains an  explanatory  paragraph,  which  states that the Company has working
capital  deficiency,  primarily due to the classification of certain obligations
to a bank as short term. In 1996, the Company raised  approximately $4.8 million
in net proceeds from the exercise of Common Stock Purchase Warrants and obtained
a new bank line of credit and term loan which  eliminated the Company's  working
capital  deficiency as of July 31, 1996.  In order to operate  profitably in the
future, the Company must successfully market its new products to new industries,
sell these  products to  existing  and new  customers,  increase  gross  margins
through higher volumes and manufacturing efficiencies, and control its operating
expenses.  There  can  be no  assurance  that  the  Company  will  operate  on a
profitable basis in the future.

COMPETITION

         The food  packaging  industry  is highly  competitive  and  subject  to
changes in the types of food products requiring  packaging and food preparation.
The Company will depend on its abilities to provide high quality, cost-effective
metallized  film  for the  food  packaging  industry,  to  establish  continuing
relationships with microwave and non-microwave food packaging companies,  and to
respond  to  the  changing  needs  of  the   marketplace  in  order  to  compete
successfully in this industry.  The Company competes with numerous  providers of
food packaging and food packaging supplies,  many of which have a longer history
of operations and  substantially  greater  financial,  marketing,  technical and
other  resources  than  the  Company,  all  of  which  may  give  them  numerous
competitive  advantages.  No  assurance  can be given  that  current  and future
competitors will not develop new or enhanced  technologies or products perceived
to be superior to those sold or developed by the  Company.  No assurance  can be
given that the Company can successfully  compete or operate profitably in such a
competitive environment.

         The electronic  capacitor  market in which the Company competes is also
highly  competitive.  The Company competes with competitors in this market which
have substantially greater financial,  marketing,  technical and other resources
than the Company.  No assurance can be given that current and future competitors
will not develop new or enhanced technologies perceived to be superior to

                                       -5-

those  sold or  developed  by the  Company.  In  recent  years,  there  has been
increasing price  competition in this market,  resulting in reduced margins.  No
assurance can be given that the Company will continue to compete successfully in
this market.

RISK OF EXPANSION INTO NEW MARKETS; RELIANCE ON DISTRIBUTION PARTNERS

         The Company recently developed products for, and began to focus much of
its marketing efforts on, the microwave food packaging and other industries. The
Company has only recently begun to generate revenues from these markets,  and no
assurances  can be given that such revenues  will continue or will  economically
justify the  Company's  development  and  marketing  efforts in these areas.  In
addition,  the  Company's  initial  expansion  into  certain  new markets may be
dependent on relationships with potential  marketing and distribution  partners,
and on new  partners'  success in these  markets with  products  supplied by the
Company. The Company's expansion plans into new markets will subject the Company
to all of the risks incident to the expansion of a small business,  particularly
the possible  adverse  impact  associated  with the  integration of new lines of
products into the Company's existing  operations and the potential  diversion of
management time and attention from the Company's  traditional  line of business.
In  addition,  no assurance  can be given that new  products can be  effectively
marketed and sold by the Company on a profitable basis. Companies that establish
new product lines directed toward new markets  frequently  encounter  unforeseen
expenses, difficulties, complications and delays.

NEED FOR ADDITIONAL FINANCING

         Based on the Company's  operating plan, the Company anticipates that it
will require  additional  financing to meet its current plans for expansion.  No
assurance  can be given that the Company will be  successful  in obtaining  such
additional  financing on favorable terms, or at all. If the Company is unable to
obtain such additional financing,  the Company's ability to maintain its current
level of operations and to expand may be materially  adversely  affected and the
Company may be required to reduce its overall  expenditures and cancel plans for
further expansion.

DEPENDENCE ON MAJOR CUSTOMERS

         Two customers accounted for approximately 34% and 11%, respectively, of
the Company's revenues in the year ended December 31, 1995. Substantially all of
the  Company's  sales  of  food  packaging  material,  not  including  sales  of
ACCU-CRISP(R) Bags which are ordinarily made through retail channels,  were made
to Printpack Enterprises, Inc. ("Printpack") the customer that accounted for 34%
of the  Company's  revenues in 1995.  The Company has entered  into an agreement
with Printpack  that,  among other things,  terminates a purchase  agreement and
lease agreement between the parties.  As a result, the Company  anticipates that
it may not  continue to  recognize  significant  revenue  from  Printpack in the
future.  If the Company were to substantially  reduce doing business with any of
its major customers,  the Company's  business and results of operations could be
materially and adversely effected.

                                       -6-

PATENTS AND PROPRIETARY TECHNOLOGY

         The Company has been granted  eight  patents and has filed eight patent
applications  with the U.S.  Patent  and  Trademark  Office.  Most of the patent
applications pertain to products,  such as the Company's  ACCU-CRISP(R) Bags and
proposed security hologram  products,  made with vaporized metals deposited onto
substrates.  In addition,  the Company has pending patent applications in Europe
and  Japan.  The  Company's  patent  and trade  secret  rights  are of  material
importance  to the Company and its future  prospects.  No assurance can be given
that  the  patents  will be held  valid  if  subsequently  challenged,  that any
additional  patents  will be issued or that the scope of any  patent  protection
will  exclude  competitors.  No  assurance  can be given that any  patents  will
provide  competitive   advantages  for  the  Company's   products.   Even  if  a
competitor's products were to infringe patents owned by the Company, it would be
costly for the Company to enforce its rights in an infringement action and would
divert  funds  and   management   resources   from  the  Company's   operations.
Furthermore,  no assurance  can be given that the  Company's  products  will not
infringe  any  patents of others.  If valid  patents are  infringed  upon by the
Company,  the patent  owners  might be able to prevent the future use,  sale and
manufacture of the Company's products.  Also, the Company may be required to pay
damages for past  infringement,  or to pay license  fees or  royalties on future
sales of any infringing  products,  if a license could be obtained.  To date, no
legal  action has been  initiated  against the Company for  infringement  of any
patents.

         The Company also relies on trade  secrets that it seeks to protect,  in
part, through confidentiality  agreements with employees,  consultants and other
parties.  No assurance can be given that these  agreements will not be breached,
that the  Company  will  have  adequate  remedies  for any  breach,  or that the
Company's  trade  secrets will not  otherwise  become known to or  independently
developed by existing or potential  competitors  of the Company.  As the Company
intends to enforce its patents,  trademarks and copyrights and protect its trade
secrets,  it may be involved  from time to time in  litigation  to determine the
enforceability,  scope and validity of these rights.  Any such litigation  could
result  in  substantial  cost to the  Company  and  diversion  of  effort by the
Company's management and technical personnel.

LIMITED PRODUCT LINES; TECHNOLOGICAL CHANGE

         The Company's  metallized films developed for the electronic  capacitor
and food  packaging  markets are  presently  the  Company's  primary  commercial
products.  Although the Company is expanding  its product line sold within these
markets and is currently developing additional applications for its products, no
assurance  can  be  given  that  any  proposed  application  or  product  can be
successfully developed, marketed or sold on a profitable basis.

         The electronic  capacitor and microwave food packaging markets in which
the Company operates are undergoing rapid technological change. No assurance can
be given that the  development  of new  technology by others will not render the
Company's products obsolete or commercially unmarketable.

                                       -7-

NO DIVIDENDS

         The  Company  has not paid  dividends  on its  Common  Stock  since its
inception  and does not intend to pay any dividends to its  stockholders  in the
foreseeable future. The Company currently intends to reinvest earnings,  if any,
in the  development  and  expansion of its business.  The Company's  bank lender
prohibits payment of dividends without the bank's prior consent.

CONTROL BY CURRENT MANAGEMENT

         The  Directors  and  Executive  Officers of the Company  currently  own
approximately  22% of the  outstanding  Common Stock.  As a result,  the current
management is able to exert  substantial  influence  over the election of all of
the members of the Board of Directors and the outcome of any issues which may be
subject to a vote of the Company's stockholders.

SUBSTANTIAL  NUMBER OF SHARES RESERVED FOR ISSUANCE UPON EXERCISE OF OPTIONS AND
WARRANTS

         Under the 1988 Plan,  the Company has issued  options to purchase 6,090
shares of Common Stock to employees,  officers,  directors and  consultants at a
weighted  average  exercise  price of $0.47 per share.  Under the 1993 Plan, the
Company  may issue  options  to  purchase  800,000  shares  of  Common  Stock to
employees,  officers,  directors and  consultants,  of which options to purchase
248,800  shares  of  Common  Stock  were  outstanding  on  December 9, 1996 at a
weighted average  exercise price of $3.09 per share.  Both the 1988 Plan and the
1993 Plan allow the Board of Directors to grant  options with an exercise  price
that is less than,  but  reasonably  related  to, the fair  market  value of the
Common Stock on the date of the grant without stockholder approval. In addition,
the  Company  has  reserved  50,000  shares of Common  Stock for  issuance  upon
exercise of stock  options that may be granted  under its Formula Plan, of which
options to purchase 8,500 shares of Common Stock at a weighted  average exercise
price of $3.27 per share are  outstanding  as  of  December 9,  1996.  Under the
Formula Plan, any  non-employee  who becomes a member of the Company's  Board of
Directors  receives an option to purchase  1,500 shares of Common  Stock,  which
vests  annually  in thirds  beginning  on the date of the grant  subject  to the
individual  continuing  to serve on the Board of  Directors.  In addition,  each
non-employee who has served on the Board of Directors for at least one full year
receives an option to  purchase  1,000  shares of Common  Stock to vest one year
from the date of the grant.  The exercise price of all options granted under the
Formula  Plan is equal to the fair market  value of the Common Stock on the date
of the grant.

         The 132,084 IPO Warrants  outstanding  as of December 9, 1996  together
with 1,044,389 Class B Redeemable  Common Stock Purchase  Warrants (the "Class B
Warrants")  outstanding  as of December 9, 1996 will be  exercisable to purchase
shares of Common Stock until March 8, 1997 and May 12, 1998,  respectively,  and
the Representative's Warrants grant the holders thereof the right to purchase up
to 100,000 shares of Common Stock and up to 100,000 redeemable  warrants through
September 9, 1998.

         The  existence  of  the  IPO   Warrants,   Class  B  Warrants  and  the
Representative's  Warrant and the Options may prove to be a hindrance  to future
financing by the Company. In addition, the

                                       -8-

exercise of any such  options or warrants  may further  dilute the net  tangible
book  value of the Common  Stock.  Further,  the  holders  of such  options  and
warrants may exercise them at a time when the Company would otherwise be able to
obtain additional equity capital on terms more favorable to the Company.

POTENTIAL SALES PURSUANT TO RULE 144

         The sale, or  availability  for sale, of substantial  amounts of Common
Stock in the public  market  subsequent  to this  offering  pursuant to Rule 144
under the Act ("Rule 144") or otherwise could adversely  affect the market price
of the Common Stock and could impair the Company's  ability to raise  additional
capital  through  the  sale of its  equity  securities  or debt  financing.  The
availability  of Rule 144 to the holder of restricted  securities of the Company
would be conditioned on, among other factors, the availability of certain public
information  concerning the Company. Of the Company's 4,222,694 shares of Common
Stock issued and outstanding as of December 9, 1996,  1,460,763 shares of Common
Stock  are  "restricted  securities"  as  that  term  is  defined  in  Rule  144
promulgated  under  the  Act  and  may,  under  certain  circumstances,  be sold
immediately without  registration  pursuant to Rule 144. As of December 9, 1996,
1,460,763  restricted  shares of Common Stock are eligible for sale  pursuant to
Rule 144 subject to the volume trading limits under Rule 144. Future sales under
Rule 144 may have a depressive effect on the market price of the Common Stock.

POSSIBLE VOLATILITY IN PRICE OF SECURITIES

         The level of trading in the  Company's  Common Stock on NASDAQ has been
volatile and no  assurance  can be given that a  sustained,  active  market will
develop.  Accordingly,  purchasers of the Common Stock may experience difficulty
selling or otherwise  disposing of such Common Stock.  The stock market has from
time to time experienced  significant price and volume  fluctuations that may be
unrelated to the operating  performance of any particular  company. In addition,
the market prices of the securities of many publicly traded emerging  companies,
including the Company,  have in the past been, and can in the future be expected
to be,  especially  volatile.  Various  factors  and  events,  including  future
announcements of technological innovations or new products by the Company or its
competitors, developments or disputes concerning, among other things, patents or
proprietary rights,  publicity regarding actual or potential results relating to
products under  development by the Company or its competitors,  and economic and
other  external  factors,  as  well  as  period-to-period  fluctuations  in  the
Company's  financial results,  may have a significant impact on the market price
of the securities and the Company's business.

POSSIBLE ABEYANCE OF MARKET MAKING ACTIVITIES

         In  connection  with any  solicitation  by the  Representative,  unless
granted  an  exemption  by  the   Securities   and  Exchange   Commission   (the
"Commission")  from its Rule 10b-6,  promulgated  under the  Exchange  Act,  the
Representative  and any other soliciting  broker-dealer  will be prohibited from
engaging  in  any  market  making  activities  with  respect  to  the  Company's
securities for the period commencing either two or nine business days (depending
on the  market  price of the  Common  Stock)  prior to any  solicitation  of the
exercise of the Warrants until the later of (i) the termination

                                       -9-

of such  solicitation  activity or (ii) the termination (by waiver or otherwise)
of any right which the Representative or any other soliciting  broker-dealer may
have to receive a fee for the exercise of Warrants  following such solicitation.
As a result,  the  Representative  or any other soliciting  broker-dealer may be
unable to provide a market for the Company's  securities,  should they desire to
do  so,  during  certain  periods  while  the  Warrants  are  exercisable.  Such
solicitations  and  reduction  in the number of market  makers  could  adversely
affect the market price of the securities.

POSSIBLE REDEMPTION OF IPO WARRANTS AND CLASS B WARRANTS

         The IPO Warrants and Class B Warrants  (collectively referred to herein
as the  "Warrants") may be subject to redemption at $.10 per Warrant on 30 days'
prior written notice,  provided that the market price of the Common Stock equals
or exceeds  $7.00 per share (the "Call Price") for 10  consecutive  trading days
ending within 20 days prior to the notice of redemption.  The Company's Board of
Directors has the  discretion to reduce the exercise price and the Call Price of
the  Warrants.  In the  event the  Company  exercises  the  right to redeem  the
Warrants,  such Warrants will be exercisable  until the close of business on the
date fixed for  redemption in such notice.  If any Warrant called for redemption
is not  exercised  by such time it will cease to be  exercisable  and the holder
will be entitled only to the redemption price.

POSSIBLE ANTI-TAKEOVER EFFECTS OF CERTAIN CHARTER PROVISIONS

         The Company's  Certificate  of  Incorporation  authorizes  the Board of
Directors to issue up to 1,000,000 shares of preferred stock, $.01 par value per
share.  The  preferred  stock may be issued in one or more series,  the terms of
which may be  determined  at the time of  issuance  by the  Board of  Directors,
without further action by stockholders, and may include voting rights (including
the  right  to  vote as a  series  on  particular  matters),  preferences  as to
dividends and  liquidation,  conversion and  redemption  rights and sinking fund
provisions. No preferred stock is currently outstanding,  and the Company has no
present  plans for the  issuance  thereof.  However,  the  issuance  of any such
preferred  stock could  adversely  affect the rights of holders of Common  Stock
and, therefore, could reduce the value of the Common Stock.

         The By-laws of the Company  provide  for a Board of  Directors  divided
into three classes serving for staggered three-year terms.

         The ability of the Board of Directors to issue  preferred stock and the
classification  of the Board into three classes with staggered  three-year terms
could discourage, delay or prevent a takeover of the Company.

         In addition, the Company, as a Delaware corporation,  is subject to the
General  Corporation  Law of the State of  Delaware,  including  Section 203, an
anti-takeover law enacted in 1988. In general,  the law restricts the ability of
a public  Delaware  corporation  to engage in a "business  combination"  with an
"interested  stockholder"  for a period  of three  years  after  the date of the
transaction in which the person became an interested stockholder. As a result of
the  application  of  Section  203  and  certain  provisions  in  the  Company's
Certificate of Incorporation and Bylaws, as

                                      -10-

amended,  potential  acquirors  of the Company may find it more  difficult or be
discouraged from attempting to acquire the Company,  thereby possibly  depriving
holders  of the  Company's  securities  of  certain  opportunities  to  sell  or
otherwise  dispose of such  securities at  above-market  prices pursuant to such
transactions.

                                 USE OF PROCEEDS

         The Company  will not  receive any part of the  proceeds of any sale of
transactions made by Selling Stockholders. The Company will receive the proceeds
from the exercise of any options  exercised  pursuant to the Stock Option Plans.
Any  proceeds  received by the  Company  will be used by the Company for general
working capital purposes.

                              SELLING STOCKHOLDERS

         The  following  table sets forth,  as of December 9, 1996,  the name of
certain  Selling  Stockholders,  the nature of his  position,  office,  or other
material  relationship  with the Company within the past three years; the number
of  shares  subject  to  stock  options   granted  to  certain  of  the  Selling
Stockholders  which may be sold  pursuant  to this  offering;  and the number of
shares  of  Common  Stock  owned by them  other  than by means of stock  options
represented by those shares. Some Selling  Stockholders may be restricted in the
number and  amount of shares of Common  Stock they may sell and by the timing of
such  sales.  Certain  persons  not named  below who are not  affiliates  of the
Company and who hold less than 1,000 shares of Common Stock acquired through the
exercise of stock options issued under one of the Stock Option Plans may reoffer
and resell  their  Common  Stock  under  this  Prospectus  and the  Registration
Statement of which this  Prospectus is a part,  and are considered to be Selling
Stockholders.
Common
                                    Stock                                Common Stock         Percentage of
                                    Beneficially         Common          Beneficially         Class Beneficially
                                    Owned                Stock           Owned After          Owned After
Name and Relationship               Prior to             Being           Completion of        Completion of
of Selling Stockholders             Offering             Offered         Offering             Offering
-----------------------             --------             -------         --------             --------
Gordon E. Walters(1)                  311,547             60,000           251,547              61.9%
Mark R. Thomas(2)                         0               40,000            40,000               9.8%
Robert M. Pozzo(3)                     88,558             17,000           105,558              26.0%
John M. Buckley(4)                        0                2,000             2,000                *
Charles R. Buffler(5)                     0                2,500             2,500                *
John J. Moroney(6)                        0                1,500             1,500                *
Salvatore F. D'Amato(7)                   0                1,500             1,500                *
                                    ---------           --------          --------            --------
         Total                        400,105            124,500           404,605             100.0%

--------
*Less than one percent (1%).
-11-

(1)      Includes  60,000 shares of Common Stock  underlying  unexercised  stock
         options held by Mr. Gordon E. Walters.  Does not include 515,057 shares
         of Common Stock owned by the children of Mr. Gordon Walters,  including
         those  owned by Mr.  Glenn  Waters,  as to  which  Mr.  Gordon  Walters
         disclaims any beneficial  interest.  Mr. Gordon Walters is the Chairman
         of the Board of Directors of the Company.

(2)      Includes  40,000 shares of Common Stock  underlying  unexercised  stock
         options held by Mr. Thomas.  Mr. Thomas is the Chief Financial  Officer
         and a Director of the Company.

(3)      Includes  17,000 shares of Common Stock  underlying  unexercised  stock
         options held by Mr. Pozzo. Mr. Pozzo is a Director of the Company.

(4)      Includes  2,000 shares of Common  Stock  underlying  unexercised  stock
         options held by Mr. Buckley. Mr. Buckley is a Director of the Company.

(5)      Includes  2,500 shares of Common  Stock  underlying  unexercised  stock
         options held by Dr. Buffler. Dr. Buffler is a Director of the Company.

(6)      Includes  1,500 shares of Common  Stock  underlying  unexercised  stock
         options held by Mr. Moroney. Mr. Moroney is a Director of the Company.

(7)      Includes  1,500 shares of Common  Stock  underlying  unexercised  stock
         options held by Mr. D'Amato. Mr. D'Amato is a Director of the Company.

                             THE STOCK OPTION PLANS

GENERAL INFORMATION

         In conjunction with this  Prospectus,  the Company has filed a Form S-8
Registration  Statement  with the  Commission  registering  50,000 shares of the
Common Stock  issuable  upon exercise of options that have been granted and that
may be granted under the Formula Plan,  800,000  shares of Common Stock issuable
upon  exercise of options that have been  granted and that may be granted  under
the 1993 Plan,  and 6,090  shares of Common  Stock  issuable  upon  exercise  of
options that have been granted under the 1988 Plan.

         The purpose of the  Formula  Plan is to advance  the  interests  of the
Company by enhancing its ability to reward non-employee Directors of the Company
and of any future subsidiary of the Company.  The Formula Plan is not subject to
the  provisions  of the Employee  Retirement  Income  Security  Act of 1974,  as
amended ("ERISA").

         The purpose of the 1988 Plan and 1993 Plan is to  encourage  and enable
employees,  consultants,  Directors  and others  who are in a  position  to make
significant  contributions  to the  success  of the  Company to acquire a closer
identification  of their  interests  with those of the Company by providing them
with opportunities to purchase stock in the Company, and thereby

                                      -12-

stimulate their efforts on behalf of the Company and strengthen  their desire to
remain  involved  with the  Company.  The 1988  Plan and 1993  Plan are also not
subject to the provisions of ERISA.

         To obtain  additional  information  about the 1988 Plan, the 1993 Plan,
the  Formula  Plan or their  administrators,  or to  obtain a copy of any of the
Plans or documents  incorporated by reference with the Registration Statement on
Form S-8, you may write to Advanced  Deposition  Technologies,  Inc.,  580 Myles
Standish Boulevard, Taunton, Massachusetts 02780, Attention: Investor Relations,
or call the Company at (508) 823-0707. Copies will be provided without charge.

                             1988 STOCK OPTION PLAN

         ADMINISTRATION OF THE 1988 PLAN

         Members of the Board of  Directors of the Company  administer  the 1988
Plan by (a) determining those individuals who, if any, shall be granted options;
(b)  determining  the time or times when options shall be granted and the number
of shares of Common  Stock to be subject to each  option;  (c)  determining  the
exercise  price of each  option;  (d)  determining  the time or times  when each
option  becomes  exercisable  and  the  duration  of the  exercise  period;  (e)
prescribing  the form or forms of the  instruments  required under the 1988 Plan
and changing such forms from time to time; (f) adopting, amending and rescinding
rules  and  regulations  for  the  administration  of the  1988  Plan;  and  (g)
interpreting  the  1988  Plan  and  deciding  all  questions  and  settling  all
controversies and disputes which may arise in connection with the 1988 Plan. All
decisions,  determinations and interpretations of the administrators are binding
on all parties  concerned.  The1988 Plan is not  administered  by  disinterested
members (as defined by Rule 16b-3  promulgated  under the  Exchange  Act) of the
Board of Directors.

         SECURITIES OFFERED UNDER THE 1988 PLAN

         The term options ("Options") shall include options that are intended to
qualify as  incentive  stock  options as defined in Section 422 of the  Internal
Revenue Code of 1986, as amended (the "Code" and"Incentive Stock Options"),  and
options  that  are  not  intended  to  qualify  as   incentive   stock   options
("Non-Qualified  Options").  The Board of Directors has terminated the 1988 Plan
such that no additional options will be granted  thereunder.  The purchase price
for Common  Stock  issuable  upon  exercise of Options  already  outstanding  is
determined by the Board of Directors.

         PERSONS WHO MAY PARTICIPATE IN THE 1988 PLAN

         The  Participants in the 1988 Plan shall be such  employees,  directors
and consultants of the Company or of any of its subsidiaries,  and others as may
be selected  from time to time by the Board of Directors in its  discretion,  as
being in a position to contribute substantially to the success of the Company or
such subsidiaries.

                                      -13-

         TERMS AND CONDITIONS OF INCENTIVE  STOCK OPTIONS GRANTED UNDER THE 1988
         PLAN

         In no event may the Company  grant an Incentive  Stock Option under the
1988 Plan that is first  exercisable  during any one calendar year to the extent
that the  aggregate  fair market  value of the Common  Stock which is subject to
Options in the  Company's  Common  Stock  (under any plan of the Company and its
affiliates) by any one Participant exceeds $100,000.

         All  Incentive  Stock  Options are subject to the  following  terms and
conditions and to such other terms and conditions consistent with the applicable
provisions  of the Code for  Incentive  Stock  Options as the Board of Directors
shall determine appropriate to accomplish the purposes of the 1988 Plan:

         (a) Option Price. The exercise price for each Incentive Stock Option is
determined by the Board of Directors.  Incentive  Stock Options will not have an
exercise price less than 100% of the fair market value per share of Common Stock
measured  at the time the Option is  granted;  nor shall the  exercise  price be
less,  in the case of an original  issue of  authorized  stock,  than par value.
However,  if at the time of grant,  the Participant  owns stock  possessing more
than 10% of the  total  combined  voting  power of all  classes  of stock of the
Company or its  subsidiaries,  the exercise  price will not be less than 110% of
the fair market value per share of the Common Stock  subject to the Option.  For
purposes of  determining  a  Participant's  ownership  of stock,  the  ownership
attribution rules of the Code and the regulations promulgated thereunder apply.

         (b) Period of  Options.  The term for each  Incentive  Stock  Option is
determined by the Board of Directors,  but may not in any event exceed ten years
from the date of grant.  However,  if at the time of grant, the Participant owns
stock possessing more than 10% of the total combined voting power of all classes
of  stock  of  the  Company  or of  its  subsidiaries,  the  Option  may  not be
exercisable  after the  expiration  of five years from the date of grant of such
Option.

         (c)      Exercise of Options.

                  (1) Each Incentive  Stock Option shall be made  exercisable at
such time or times as the Board of  Directors  shall  prescribe  at the time the
Option is granted. In the case of an Option not immediately exercisable in full,
the Board of Directors may at any time  accelerate  the time at which all or any
part of the Option may be  exercised.  In the event that the Board of  Directors
accelerates the time at which all or any part of an Option held by a Participant
may be  exercised,  and such  accelerated  vesting  exceeds  the annual  vesting
limitations  contained in Section  422(d)(1)  of the Code,  such option shall be
treated as a Non-Qualified Option.

                  (2) A  Participant  electing  to  exercise an Option must give
written notice to the Company, as specified by the Board of Directors, of his or
her  election and of the number of shares of Common  Stock the  Participant  has
elected to purchase. Such notice must be accompanied by:

                           (i)   the instrument evidencing the Option;

                                      -14-

                           (ii)  payment in full for all shares of Common  Stock
         then being  purchased  thereunder in full in the form of (A) cash,  (B)
         check,  (C)  through the  delivery  of Common  Stock (duly owned by the
         Participant and for which the Participant has good title free and clear
         of any liens and encumbrances), valued at Fair Market Value, as defined
         in the 1988 Plan, (D) a combination of cash and Common Stock, or (E) by
         any such  other  lawful  consideration  as the Board of  Directors  may
         determine;

                           (iii) any other  documents  required  by the Board of
         Directors.

                  (3) A  Participant  exercising  an  Option  must  execute  and
deliver to the Company any shareholder's  agreement or other agreements that may
be required by the terms of the Option being exercised.

                  (4) A  Participant  receiving an  Incentive  Stock Option must
agree to notify the Company in writing immediately after the Participant makes a
Disqualifying  Disposition,  as defined below, of any stock acquired pursuant to
the exercise of an Incentive Stock Option. A "Disqualifying  Disposition" is any
disposition (including any sale) of such stock before the later of (a) two years
after the date the Participant was granted the Incentive Stock Option or (b) one
year after the date the employee  acquired  stock by  exercising  the  Incentive
Stock Option.  If the  Participant has died before such stock is sold, the above
holding  requirements  do not apply and no  Disqualifying  Disposition can occur
thereafter.

         TERMS AND CONDITIONS OF  NON-QUALIFIED  OPTIONS  GRANTED UNDER THE 1988
         PLAN

         All Non-Qualified  Stock Options are subject to the following terms and
conditions  and to such other  terms and  conditions  as the Board of  Directors
shall determine appropriate to accomplish the purposes of the 1988 Plan:

         (a) Option Price. The exercise price for each  Non-Qualified  Option is
determined by the Board of Directors.

         (b)  Period  of  Options.  The term for each  Non-Qualified  Option  is
determined by the Board of  Directors,  but may not in any event exceed 10 years
from the date of grant  and  will be  exercisable  at such  time or times as the
Board of Directors  prescribes at the time the Option is granted. In the case of
a  Non-Qualified  Option  not  immediately  exercisable  in full,  the  Board of
Directors may at any time accelerate the time at which all or part of the Option
may be exercised.

         (c) Exercise of Options.

             (1) A Participant  electing to exercise a Non-Qualified Option must
give written notice to the Company,  as specified by the Board of Directors,  of
his or her election and of the number of shares of Common Stock the  Participant
has elected to purchase. Such notice must be accompanied by:

                                      -15-

                           (i)      the instrument evidencing such Option;

                           (ii)  payment in full for all shares of Common  Stock
         then being purchased  thereunder,  including (if the Board of Directors
         so requires) an amount equal to all applicable local,  state or federal
         withholding  taxes,  if any,  in the form of (A) cash,  (B) check,  (C)
         through the delivery of Common Stock (duly owned by the Participant and
         for which the  Participant  has good  title free and clear of any liens
         and encumbrances),  valued at Fair Market Value, as defined in the 1988
         Plan, and having a Fair Market Value on the last business day preceding
         the date of exercise  equal to the purchase  price and the  withholding
         taxes,  if any, (D) a combination  of cash and Common Stock,  or (E) by
         any such  other  lawful  consideration  as the Board of  Directors  may
         determine; and

                           (iii) any other  documents  required  by the Board of
         Directors.

                  (2) A person  exercising a  Non-Qualified  Option must execute
and deliver to the Company any shareholder's  agreement or other agreements that
may be required by the terms of the Option being exercised.

         DELIVERY OF COMMON STOCK

         Common  Stock to be  delivered  under the 1988 Plan may  constitute  an
original  issue of authorized  stock or may consist of previously  issued Common
Stock acquired by the Company, as shall be determined by the Board of Directors.
The Board of  Directors  and the proper  officers of the Company  shall take any
appropriate  action  required  for  such  delivery.  The  Company  shall  not be
obligated to deliver any Common  Stock  unless and until,  in the opinion of the
Company's  counsel,  all applicable  federal and state laws and regulations have
been complied with, or, if the Common Stock is at the time listed upon any stock
exchange,  unless and until the Common Stock to be delivered  has been listed or
authorized  to be added to the list upon  official  notice of issuance upon such
exchange,  or unless or until all other  legal  matters in  connection  with the
issuance  and  delivery  of Common  Stock have been  approved  by the  Company's
counsel.

         SUMMARY OF TAX TREATMENT OF 1988 PLAN

         INCENTIVE STOCK OPTIONS

         Under the current tax rules,  an employee  who has  received  Incentive
Stock  Options  under  the  1988  Plan may be  eligible  for the  following  tax
treatment:

         No income is realized by the employee when the  Incentive  Stock Option
is received or when the Option is exercised and the employee receives the shares
of Common Stock. When the employee sells the stock received upon the exercise of
the Option, the employee incurs taxable income but only to the extent the amount
received by the employee exceeds the amount the employee paid upon

                                      -16-

exercise of the Option. Further, to the extent taxable income is incurred, it is
taxed at long-term capital gain rates. However, note that as a result of the Tax
Reform  Act  of  1986,   and  depending   upon  each   individual's   particular
circumstances, this distinction may not be meaningful.

         To  obtain  this  tax  treatment,  the  following  conditions  must  be
satisfied:

         (a) The employee must hold any Common Stock  received upon the exercise
of the  Incentive  Stock  Option at least  until (i) at least two years from the
date of the  grant of the  Option  and (ii) at least  one year from the date the
Option was exercised.

         (b) The employee must not transfer any Incentive  Stock Option received
under the 1988 Plan.

         (c) The employee  must  exercise any  Incentive  Stock Option  received
under the 1988 Plan  within ten years of the date it is  granted by the  Company
(or such shorter period as may be specified by the grant of the Incentive  Stock
Option), unless the employee holds in excess of 10% of the stock of the Company,
in which case the employee must exercise the Incentive  Stock Option within five
years of the date of the grant.

         (d) If the employee dies and an Incentive  Stock Option  granted to the
employee was never  exercised,  the executor of the  employee's  estate or legal
representative   may  exercise  the  Incentive   Stock  Option  (to  the  extent
exercisable on the date of the employee's  death)  provided that Incentive Stock
Option is exercised within one year of the employee's death.

         If the above  conditions  are not  satisfied,  the employee  recognizes
taxable  ordinary  income as of the date of the  exercise of the Option equal to
the fair market value of the Common Stock purchased on the date of exercise less
the  exercise  price  of the  Option.  Upon the sale of the  Common  Stock,  the
Participant  recognizes further gain based upon the difference between the price
at which the Participant sells the stock and the fair market value of the Common
Stock on the day of the exercise of the Option. In the event a Participant sells
any Common Stock  acquired  upon exercise of an Incentive  Stock Option  without
complying  with the  above-described  conditions,  the Company may  require,  in
accordance with Section 3402(a) of the Code, that the Participant pay additional
withholding  taxes in  respect  of the amount  that is  considered  compensation
includable in the Participant's gross income.

         Notwithstanding  the above summary,  holders of Incentive Stock Options
should note that the exercise of an Incentive  Stock Option does produce  income
for alternative  minimum tax ("AMT") purposes.  When calculating  income for AMT
purposes,  the "spread" between the exercise price of the Incentive Stock Option
and the  fair  market  value  of the  Common  Stock  is  treated  as an "item of
adjustment" to income.

                                      -17-

         NON-QUALIFIED OPTIONS

         When Non-Qualified Options are granted under the 1988 Plan, neither the
Company nor the  employee  realizes any tax impact,  provided  that the exercise
price is at or above fair market value of the Company's Common Stock on the date
of exercise. When the holder of a Non-Qualified Option exercises the Option, the
"spread"  between the Option  exercise  price and the fair  market  value of the
Common  Stock on the date the  Non-Qualified  Option is  exercised is treated as
ordinary  income to the Option  holder.  If this  "spread" is  significant,  tax
liability  associated  with  exercising a  Non-Qualified  Option may become very
high. At the time the Non-Qualified Option is exercised,  the Company is allowed
a compensation  deduction based upon the "spread" or value of the Non- Qualified
Option  at  the  time  it  is  granted  for  federal  tax  purposes.   When  the
Non-Qualified  Option holder later sells the stock,  he recognizes any gain over
the fair  market  value of the  Common  Stock on the day such  Common  Stock was
acquired.

         TAX LAWS IN THIS AREA ARE  COMPLEX  AND  SUBJECT TO  CHANGE.  EMPLOYEES
SHOULD CONSULT WITH THEIR PERSONAL TAX CONSULTANT  RATHER THAN RELY ON THE ABOVE
SUMMARY FOR A  DEFINITIVE  DETERMINATION  OF THE TAX  TREATMENT  RESULTING  FROM
PARTICIPATION UNDER THE 1988 PLAN.

                             1993 STOCK OPTION PLAN

         ADMINISTRATION OF THE 1993 PLAN

         Members of the Board of  Directors of the Company  administer  the 1993
Plan by (a) determining those individuals who, if any, shall be granted options;
(b)  determining  the time or times when options shall be granted and the number
of shares of Common  Stock to be subject to each  option;  (c)  determining  the
exercise  price of each  option;  (d)  determining  the time or times  when each
option  becomes  exercisable  and  the  duration  of the  exercise  period;  (e)
prescribing  the form or forms of the  instruments  required under the 1993 Plan
and changing such forms from time to time; (f) adopting, amending and rescinding
rules  and  regulations  for  the  administration  of the  1993  Plan;  and  (g)
interpreting  the  1993  Plan  and  deciding  all  questions  and  settling  all
controversies and disputes which may arise in connection with the 1993 Plan. All
decisions,  determinations and interpretations of the administrators are binding
on all parties  concerned.  The 1993 Plan is not  administered by  disinterested
members (as defined by Rule 16b-3  promulgated  under the  Exchange  Act) of the
Board of Directors.

         SECURITIES OFFERED UNDER THE 1993 PLAN

         The term options ("Options") shall include options that are intended to
qualify as  incentive  stock  options  as  defined  in  Section  422 of the Code
("Incentive  Stock  Options"),  and options  that are not intended to qualify as
incentive stock options ("Non-Qualified Options"). The Company may grant Options
to purchase up to 800,000 shares of Common Stock under the 1993 Plan. The

                                      -18-

purchase  price for Common Stock issuable upon exercise of Options is determined
by the Board of Directors.

         PERSONS WHO MAY PARTICIPATE IN THE 1993 PLAN

         The  Participants in the 1993 Plan shall be such  employees,  directors
and consultants of the Company or of any of its subsidiaries,  and others as may
be selected  from time to time by the Board of Directors in its  discretion,  as
being in a position to contribute substantially to the success of the Company or
such subsidiaries.

         TERMS AND CONDITIONS OF INCENTIVE  STOCK OPTIONS GRANTED UNDER THE 1993
         PLAN

         In no event may the Company  grant an Incentive  Stock Option under the
1993 Plan that is first  exercisable  during any one calendar year to the extent
that the  aggregate  fair market  value of the Common  Stock which is subject to
Options in the  Company's  Common  Stock  (under any plan of the Company and its
affiliates) by any one Participant exceeds $100,000.

         All  Incentive  Stock  Options are subject to the  following  terms and
conditions and to such other terms and conditions consistent with the applicable
provisions  of the Code for  Incentive  Stock  Options as the Board of Directors
shall determine appropriate to accomplish the purposes of the 1993 Plan:

         (a) Option Price. The exercise price for each Incentive Stock Option is
determined by the Board of Directors.  Incentive  Stock Options will not have an
exercise price less than 100% of the fair market value per share of Common Stock
measured  at the time the Option is  granted;  nor shall the  exercise  price be
less,  in the case of an original  issue of  authorized  stock,  than par value.
However,  if at the time of grant,  the Participant  owns stock  possessing more
than 10% of the  total  combined  voting  power of all  classes  of stock of the
Company or its  subsidiaries,  the exercise  price will not be less than 110% of
the fair market value per share of the Common Stock  subject to the Option.  For
purposes of  determining  a  Participant's  ownership  of stock,  the  ownership
attribution rules of the Code and the regulations promulgated thereunder apply.

         (b) Period of  Options.  The term for each  Incentive  Stock  Option is
determined by the Board of Directors,  but may not in any event exceed ten years
from the date of grant.  However,  if at the time of grant, the Participant owns
stock possessing more than 10% of the total combined voting power of all classes
of  stock  of  the  Company  or of  its  subsidiaries,  the  Option  may  not be
exercisable  after the  expiration  of five years from the date of grant of such
Option.

         (c)      Exercise of Options.

                  (1) Each Incentive  Stock Option shall be made  exercisable at
such time or times as the Board of  Directors  shall  prescribe  at the time the
Option is granted. In the case of an Option not immediately exercisable in full,
the Board of Directors may at any time accelerate the time at

                                      -19-

which all or any part of the  Option  may be  exercised.  In the event  that the
Board of  Directors  accelerates  the time at which all or any part of an Option
held by a Participant may be exercised, and such accelerated vesting exceeds the
annual  vesting  limitations  contained in Section  422(d)(1) of the Code,  such
option shall be treated as a Non-Qualified Option.

                  (2) A  Participant  electing  to  exercise an Option must give
written notice to the Company, as specified by the Board of Directors, of his or
her  election and of the number of shares of Common  Stock the  Participant  has
elected to purchase. Such notice must be accompanied by:

                           (i)      the instrument evidencing the Option;

                           (ii)  payment in full for all shares of Common  Stock
         then being  purchased  thereunder in full in the form of (A) cash,  (B)
         check,  (C)  through the  delivery  of Common  Stock (duly owned by the
         Participant and for which the Participant has good title free and clear
         of any liens and encumbrances), valued at Fair Market Value, as defined
         in the 1993 Plan, (D) a combination of cash and Common Stock, or (E) by
         any such  other  lawful  consideration  as the Board of  Directors  may
         determine;

                           (iii) any other  documents  required  by the Board of
         Directors.

                  (3) A  Participant  exercising  an  Option  must  execute  and
deliver to the Company any shareholder's  agreement or other agreements that may
be required by the terms of the Option being exercised.

                  (4) A  Participant  receiving an  Incentive  Stock Option must
agree to notify the Company in writing immediately after the Participant makes a
Disqualifying  Disposition,  as defined below, of any stock acquired pursuant to
the exercise of an Incentive Stock Option. A "Disqualifying  Disposition" is any
disposition (including any sale) of such stock before the later of (a) two years
after the date the Participant was granted the Incentive Stock Option or (b) one
year after the date the employee  acquired  stock by  exercising  the  Incentive
Stock Option.  If the  Participant has died before such stock is sold, the above
holding  requirements  do not apply and no  Disqualifying  Disposition can occur
thereafter.

         TERMS AND CONDITIONS OF  NON-QUALIFIED  OPTIONS  GRANTED UNDER THE 1993
         PLAN

         All Non-Qualified  Stock Options are subject to the following terms and
conditions  and to such other  terms and  conditions  as the Board of  Directors
shall determine appropriate to accomplish the purposes of the 1993 Plan:

         (a) Option Price. The exercise price for each  Non-Qualified  Option is
determined by the Board of Directors.

                                      -20-

         (b)  Period  of  Options.  The term for each  Non-Qualified  Option  is
determined by the Board of  Directors,  but may not in any event exceed 10 years
from the date of grant  and  will be  exercisable  at such  time or times as the
Board of Directors  prescribes at the time the Option is granted. In the case of
a  Non-Qualified  Option  not  immediately  exercisable  in full,  the  Board of
Directors may at any time accelerate the time at which all or part of the Option
may be exercised.

         (c)      Exercise of Options.

                  (1) A Participant  electing to exercise a Non-Qualified Option
must give written notice to the Company, as specified by the Board of Directors,
of his  or her  election  and of the  number  of  shares  of  Common  Stock  the
Participant has elected to purchase. Such notice must be accompanied by:

                           (i)      the instrument evidencing such Option;

                           (ii)  payment in full for all shares of Common  Stock
         then being purchased  thereunder,  including (if the Board of Directors
         so requires) an amount equal to all applicable local,  state or federal
         withholding  taxes,  if any,  in the form of (A) cash,  (B) check,  (C)
         through the delivery of Common Stock (duly owned by the Participant and
         for which the  Participant  has good  title free and clear of any liens
         and encumbrances),  valued at Fair Market Value, as defined in the 1993
         Plan, and having a Fair Market Value on the last business day preceding
         the date of exercise  equal to the purchase  price and the  withholding
         taxes,  if any, (D) a combination  of cash and Common Stock,  or (E) by
         any such  other  lawful  consideration  as the Board of  Directors  may
         determine; and

                           (iii) any other  documents  required  by the Board of
         Directors.

                  (2) A person  exercising a  Non-Qualified  Option must execute
and deliver to the Company any shareholder's  agreement or other agreements that
may be required by the terms of the Option being exercised.

         DELIVERY OF COMMON STOCK

         Common  Stock to be  delivered  under the 1993 Plan may  constitute  an
original  issue of authorized  stock or may consist of previously  issued Common
Stock acquired by the Company, as shall be determined by the Board of Directors.
The Board of  Directors  and the proper  officers of the Company  shall take any
appropriate  action  required  for  such  delivery.  The  Company  shall  not be
obligated to deliver any Common  Stock  unless and until,  in the opinion of the
Company's  counsel,  all applicable  federal and state laws and regulations have
been complied with, or, if the Common Stock is at the time listed upon any stock
exchange,  unless and until the Common Stock to be delivered  has been listed or
authorized  to be added to the list upon  official  notice of issuance upon such
exchange,  or unless or until all other  legal  matters in  connection  with the
issuance  and  delivery  of Common  Stock have been  approved  by the  Company's
counsel.

                                      -21-

         SUMMARY OF TAX TREATMENT OF 1993 PLAN

         INCENTIVE STOCK OPTIONS

         Under the current tax rules,  an employee who receives  Incentive Stock
Options under the 1993 Plan may be eligible for the following tax treatment:

         No income is realized by the employee when the  Incentive  Stock Option
is received or when the Option is exercised and the employee receives the shares
of Common Stock. When the employee sells the stock received upon the exercise of
the Option, the employee incurs taxable income but only to the extent the amount
received by the employee  exceeds the amount the employee  paid upon exercise of
the Option.  Further,  to the extent taxable income is incurred,  it is taxed at
long-term capital gain rates.  However,  note that as a result of the Tax Reform
Act of 1986, and depending upon each individual's particular circumstances, this
distinction may not be meaningful.

         To  obtain  this  tax  treatment,  the  following  conditions  must  be
satisfied:

         (a) The employee must hold any Common Stock  received upon the exercise
of the  Incentive  Stock  Option at least  until (i) at least two years from the
date of the  grant of the  Option  and (ii) at least  one year from the date the
Option was exercised.

         (b) The employee must not transfer any Incentive  Stock Option received
under the 1993 Plan.

         (c) The employee  must  exercise any  Incentive  Stock Option  received
under the 1993 Plan  within ten years of the date it is  granted by the  Company
(or such shorter period as may be specified by the grant of the Incentive  Stock
Option), unless the employee holds in excess of 10% of the stock of the Company,
in which case the employee must exercise the Incentive  Stock Option within five
years of the date of the grant.

         (d) If the employee dies and an Incentive  Stock Option  granted to the
employee was never  exercised,  the executor of the  employee's  estate or legal
representative   may  exercise  the  Incentive   Stock  Option  (to  the  extent
exercisable on the date of the employee's  death)  provided that Incentive Stock
Option is exercised within one year of the employee's death.

         If the above  conditions  are not  satisfied,  the employee  recognizes
taxable  ordinary  income as of the date of the  exercise of the Option equal to
the fair market value of the Common Stock purchased on the date of exercise less
the  exercise  price  of the  Option.  Upon the sale of the  Common  Stock,  the
Participant  recognizes further gain based upon the difference between the price
at which the Participant sells the stock and the fair market value of the Common
Stock on the day of the exercise of the Option. In the event a Participant sells
any Common Stock  acquired  upon exercise of an Incentive  Stock Option  without
complying  with the  above-described  conditions,  the Company may  require,  in
accordance with Section 3402(a) of the Code, that the Participant pay

                                      -22-

additional  withholding  taxes  in  respect  of the  amount  that is  considered
compensation includable in the Participant's gross income.

         Notwithstanding  the above summary,  holders of Incentive Stock Options
should note that the exercise of an Incentive  Stock Option does produce  income
for alternative  minimum tax ("AMT") purposes.  When calculating  income for AMT
purposes,  the "spread" between the exercise price of the Incentive Stock Option
and the  fair  market  value  of the  Common  Stock  is  treated  as an "item of
adjustment" to income.

         NON-QUALIFIED OPTIONS

         When Non-Qualified Options are granted under the 1993 Plan, neither the
Company nor the  employee  realizes any tax impact,  provided  that the exercise
price is at or above fair market value of the Company's Common Stock on the date
of exercise. When the holder of a Non-Qualified Option exercises the Option, the
"spread"  between the Option  exercise  price and the fair  market  value of the
Common  Stock on the date the  Non-Qualified  Option is  exercised is treated as
ordinary  income to the Option  holder.  If this  "spread" is  significant,  tax
liability  associated  with  exercising a  Non-Qualified  Option may become very
high. At the time the Non-Qualified Option is exercised,  the Company is allowed
a compensation  deduction based upon the "spread" or value of the Non- Qualified
Option  at  the  time  it  is  granted  for  federal  tax  purposes.   When  the
Non-Qualified  Option holder later sells the stock,  he recognizes any gain over
the fair  market  value of the  Common  Stock on the day such  Common  Stock was
acquired.

         TAX LAWS IN THIS AREA ARE  COMPLEX  AND  SUBJECT TO  CHANGE.  EMPLOYEES
SHOULD CONSULT WITH THEIR PERSONAL TAX CONSULTANT  RATHER THAN RELY ON THE ABOVE
SUMMARY FOR A  DEFINITIVE  DETERMINATION  OF THE TAX  TREATMENT  RESULTING  FROM
PARTICIPATION UNDER THE 1993 PLAN.

         AMENDMENTS TO THE 1993 PLAN

         The 1993  Plan  provides  that the  provisions  of the 1993 Plan may be
amended at any time or the 1993 Plan may be terminated in its entirety. However,
no amendments to the 1993 Plan affecting the following subjects shall be made by
the Board of Directors  without the approval of the stockholders of the Company:
(a) the  number  of  shares  of Common  Stock to which  Options  may be  granted
thereunder other than pursuant to a change in the Company's  capital  structure,
(b) the  requirements as to eligibility for  participation in the 1993 Plan, (c)
the  minimum  price at which  Options may be  granted,  (d) the maximum  term of
Options granted, or (e) the term of the 1993 Plan.

         Options granted prior to suspension or termination of the 1993 Plan may
not be cancelled  solely  because of the  suspension or  termination of the 1993
Plan, except with the consent of the grantee of the Options.

                                      -23-

                                1994 FORMULA PLAN

         ADMINISTRATION OF THE FORMULA PLAN/PERSONS WHO MAY PARTICIPATE

         The  Formula  Plan is  administered  by the Board of  Directors  of the
Company.  The Board of  Directors  may also  designate  a  committee  thereof to
administer  the Formula  Plan.  All  non-employee  Directors  of the Company are
eligible to be granted  Non-Qualified  Option  Awards  under the  Formula  Plan,
unless they choose not to participate in the Formula Plan.

         Under the Formula Plan,  options will be granted  pursuant to a formula
that  determines the timing,  pricing and amount of the option awards using only
objective criteria,  without discretion on the part of the administrators of the
Formula Plan.

         Options  granted under the Formula Plan will not exceed fifty  thousand
(50,000) shares of Common Stock. Options shall be granted under the Formula Plan
to eligible non-employee Directors (the "Participants") as follows:

                  (a)  Effective  August  9,  1994,  on the first  business  day
         immediately following the Company's annual meeting of shareholders, the
         Company  shall grant,  to each of its  non-employee  Directors  who has
         served as a Director of the Company for at least one full year, options
         to purchase a total of 1,000 shares of Common Stock.  The options shall
         be  granted  to a  non-employee  Director  only  if the  Director  is a
         Director  on the  date  of the  grant  and  has  attended,  during  the
         Company's fiscal year immediately  preceding the grant, at least 75% of
         meetings  of the Board of  Directors  and the  Committees  on which the
         Director  has  served.  Said  options  shall  vest  completely  and  be
         exercisable  one  year  from  the  date of the  grant,  subject  to the
         Director's continued service as a Director on such date.

                  (b) Each  non-employee  Director who becomes a Director  after
         November 1, 1993 will  receive,  on the later of (i) the date he or she
         becomes a Director  or (ii) the  effective  date of the  Formula  Plan,
         options to purchase a total of 1,500 shares of Common Stock. One- third
         of said options shall vest and be exercisable immediately and one-third
         will vest on each of the first and second  anniversaries  of the grant,
         subject to the  Director's  continued  service  as a  Director  on such
         dates.

         TERMS AND CONDITIONS OF OPTIONS GRANTED UNDER THE FORMULA PLAN

         All Options are subject to the following terms and conditions:

                  (a) Option Price and Exercise of Options.  The exercise  price
         of options to be granted under the Formula Plan will be the fair market
         value, as defined in the Formula Plan, of the shares of Common Stock on
         the date of the grant and said options shall vest and be exercisable as
         determined pursuant to the provisions of the instrument evidencing such
         option.

                                      -24-

                  (b) A person  electing to exercise an Option granted under the
         Formula  Plan must give  written  notice to the Company of his election
         and of the  number of shares of Common  Stock he or she has  elected to
         purchase. Such notice must be accompanied by:

                           (i)      the instrument evidencing the Option;

                           (ii)  payment in full for all shares of Common  Stock
                  then being  purchased  thereunder in the form of cash,  check,
                  through  the  delivery  of  Common  Stock  (duly  owned by the
                  Director  and for which the  Director  has good title free and
                  clear of any  liens  and  encumbrances)  having a fair  market
                  value on the last  business day preceding the date of exercise
                  equal  to the  purchase  price,  or,  at the  election  of the
                  Company,  issuance of a promissory  note, or a combination  of
                  cash and  Common  Stock or in such other form as the Board may
                  designate at the time an Option is granted;

                           (iii)  payment in (a) cash,  (b) check or, (c) if the
                  Board  determines at the time an Option is exercised,  through
                  the  delivery  of  Common  Stock,  of an  amount  equal to all
                  applicable local, state or federal  withholding taxes, if any,
                  or such other  assurance of the payment to the Company of such
                  amount as shall be  satisfactory  to the  Board in their  sole
                  discretion; and

                           (iv)     any other documents required by the Board.

                  (c) A person  exercising an Option must execute and deliver to
         the Company any stockholder's agreement or other agreements that may be
         required by the terms of the Option being exercised.

         Options  may be granted to  participants  in the  Formula  Plan who are
foreign  nationals  or  employed  outside  the  United  States on such terms and
conditions  different  from those  specified in the Formula Plan as the Board or
designated committee considers necessary or advisable to achieve the purposes of
the Formula Plan or comply with applicable laws.

         DELIVERY OF COMMON STOCK

         Common Stock to be delivered  under the Formula Plan may  constitute an
original  issue of authorized  stock or may consist of previously  issued Common
Stock  acquired by the Company,  as shall be determined by the Board.  The Board
and the  proper  officers  of the  Company  shall  take any  appropriate  action
required for such  delivery.  The Company  shall not be obligated to deliver any
Common  Stock unless and until,  in the opinion of the  Company's  counsel,  all
applicable  federal and state laws and regulations  have been complied with, or,
if the Common  Stock is at the time listed upon any stock  exchange,  unless and
until the Common Stock to be delivered has been listed or authorized to be added
to the list upon official notice of issuance upon such exchange, or unless or

                                      -25-

until all other legal  matters in  connection  with the issuance and delivery of
Common Stock have been approved by the Company's counsel.

         SUMMARY OF TAX TREATMENT OF THE FORMULA PLAN

         A participant  recognizes  taxable ordinary income as of the date he or
she  exercise a Non-  Qualified  Option  equal to the fair  market  value of the
Common  Stock  purchased  less  the  exercise  price  of the  Option.  When  the
participant sells the Common Stock, he or she recognizes further gain based upon
the difference between the price at which he or she sells his stock and the fair
market value of the Common Stock on the day he or she exercised the Option.

         TAX LAWS IN THIS AREA ARE COMPLEX  AND SUBJECT TO CHANGE.  PARTICIPANTS
SHOULD CONSULT WITH THEIR PERSONAL TAX CONSULTANT  RATHER THAN RELY ON THE ABOVE
SUMMARY FOR A  DEFINITIVE  DETERMINATION  ON THE TAX  TREATMENT  RESULTING  FROM
PARTICIPATION UNDER THE FORMULA PLAN.

         AMENDMENTS TO THE FORMULA PLAN

         The Formula Plan provides that its  provisions  may not be amended more
than once  every six  months,  other  than to comply  with  changes in the Code,
ERISA, or the rules thereunder.  The Board may at any time discontinue  granting
Options under the Formula Plan and may at any time amend any outstanding Options
for the purpose of satisfying the requirements of any changes in applicable laws
or  regulations  or for any other  purpose  that may at the time be permitted by
law. However, no amendments to the Formula Plan affecting the following subjects
shall be made by the Board  without  the  approval  of the  stockholders  of the
Company  (a) the  number of shares of Common  Stock as to which  Options  may be
granted  thereunder  other than  pursuant to a change in the  Company's  capital
structure,  (b) the  requirements  as to eligibility  for  participation  in the
Formula Plan,  (c) the minimum price at which Options may thereafter be granted,
(d) the maximum term of Options granted, or (e) the term of the Formula Plan.

                             APPLICABLE TO ALL PLANS

         POSSIBLE RESTRICTIONS ON RESALE OF COMMON STOCK ISSUED PURSUANT TO  THE
         PLANS

         The  Company  may  require  from the  person  exercising  an  Option an
investment  representation  or other  agreement  as counsel  for the Company may
consider necessary to comply with the Securities Act and any applicable Blue Sky
or state  securities laws and may require that the person agree that any sale of
the  shares of Common  Stock  will be made only on a stock  exchange  or in such
other  manner as is  permitted  by the Board and that he or she will  notify the
Company upon any disposition of the shares whether by sale, gift or otherwise.

                                      -26-

         To the extent  required to qualify for the  exemption  provided by Rule
16b-3 under the Exchange Act, and any successor  provision,  at least six months
must  elapse  from the date of an  acquisition  of an Option by a person  who is
subject to Section 16 of the Exchange Act  (including  directors of the Company)
to the date of  disposition  of such  Option  (other  than by  exercise)  or its
underlying Common Stock.

         Stock  issuable upon the exercise of an option  granted under the Plans
may be subject to such restrictions on transfer or repurchase rights as shall be
determined by the Board of Directors.

         NONTRANSFERABILITY OF OPTIONS

         Each Option, by its terms, shall not be transferable by the participant
otherwise  than by will or by the laws of descent and  distribution.  During the
participant's lifetime, the Option shall be exercisable only by him or her.

                              PLAN OF DISTRIBUTION

         The Shares are being registered to permit public  secondary  trading of
the Shares  from time to time by any  Selling  Stockholders.  The  Shares  being
offered  hereby were  issued,  or will be issued,  by the Company as a result of
participation by Selling  Stockholders in the Company's Stock Option Plans. Such
securities are being registered at the expense of the Company, exclusive of fees
and expenses of Selling  Stockholders'  attorneys or other  representatives  and
selling  or  brokerage  commissions,  if any,  as the  result of any sale of the
Shares.

         Selling  Stockholders  are not  restricted as to the price or prices at
which  they may sell the  Shares and sales of the Shares at less than the market
price may depress the market price of the Common Stock.  It is anticipated  that
any  sales  of the  Shares,  when and if made,  will be made  through  customary
channels  either  through  broker-dealers  acting as agents or  brokers  for the
seller, or through broker-dealers acting as principals,  who may then resell the
Shares  in  the   over-the-counter   market,   or  at   private   sales  in  the
over-the-counter market or otherwise, at negotiated prices related to prevailing
market  prices at the time of the sales,  or by a  combination  of such methods.
Thus, the sale of such Shares by Selling Stockholders may occur over an extended
period of time.  Selling  Stockholders  will act independently of the Company in
making  decisions  with  respect to the timing,  market,  or otherwise of prices
related to the then current market price or in negotiated transactions.

         Shares  may be sold from time to time by  Selling  Stockholders,  or by
pledgees,  donees,  transferees or other  successors in interest.  Shares may be
sold  by  Selling  Stockholders  in one or more  transactions  on the  NSCM,  or
otherwise  at prices and at terms then  prevailing  or at prices  related to the
then current market price, or in negotiated transactions. The Shares may be sold
by one or more of the following: (a) a block trade in which the broker or dealer
so engaged  will attempt to sell the Shares as agent but may position and resell
a portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer

                                      -27-

for  its  account  pursuant  to this  Prospectus;  and  (c)  ordinary  brokerage
transactions  and  transactions  in which the  broker  solicits  purchasers.  In
effecting sales,  broker-dealers engaged by Selling Stockholders may arrange for
other  broker-dealers  to  participate.  Usual  and  customary  or  specifically
negotiated  brokerage fees or commissions may be paid by Selling Stockholders in
connection  with such sales.  The Company will not receive any proceeds from any
sales of the Common Stock by Selling Stockholders.

         In offering the Shares, Selling Stockholders and any broker-dealers and
any  other   participating   broker-dealers   who  execute   sales  for  Selling
Stockholders  may be deemed  to be  "underwriters"  within  the  meaning  of the
Securities  Act in  connection  with such  sales,  and any  profits  realized by
Selling  Stockholders and the compensation of such  broker-dealers may be deemed
to be underwriting discounts and commissions. In addition, any Shares covered by
this  Prospectus  which  qualify for sale pursuant to Rule 144 may be sold under
Rule 144 rather than pursuant to this Prospectus.

         The Company has advised Selling  Stockholders  that during such time as
they may be engaged in a distribution of Shares they are required to comply with
Rules 10b-6 and 10b-7 under the  Exchange  Act (as those Rules are  described in
more detail below) and, in connection therewith, that they may not engage in any
stabilization activity, except as permitted under the Exchange Act, are required
to furnish each broker-dealer  through which Common Stock included herein may be
offered  copies  of  this  Prospectus,  and may  not  bid  for or  purchase  any
securities  of the  Company or attempt  to induce  any  person to  purchase  any
securities except as permitted under the Exchange Act.

         Rule 10b-6 under the Exchange Act prohibits,  with certain  exceptions,
participants in a distribution from bidding for or purchasing, for an account in
which the participant has a beneficial interest,  any of the securities that are
the subject of the  distribution.  Rule 10b-7 governs bids and purchases made in
order to stabilize the price of a security in connection  with a distribution of
the security.

                               RECENT DEVELOPMENTS

         No material  changes in the Company's  affairs have occurred  since the
end of  Fiscal  1995,  which  have not been  described  in a report on an Annual
Report on Form 10-KSB,  a Quarterly Report on Form 10-QSB or a Current Report on
Form 8-K filed by the Company under the Exchange Act.

                                 INDEMNIFICATION

         Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to  directors,  officers,  and  controlling  persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Commission such

                                      -28-

indemnification is against public policy as expressed in  the Securities Act and
is, therefore, unenforceable.

         Delaware  General   Corporation  Law,  Section  102(b)(7),   enables  a
corporation in its original certificate of incorporation or an amendment thereto
validly  approved by  stockholders  to eliminate or limit personal  liability of
members of its Board of Directors for violations of a director's  fiduciary duty
of care. However,  the elimination or limitation shall not apply where there has
been a breach of the duty of loyalty,  failure to act in good faith, engaging in
intentional  misconduct  or  knowingly  violating  a law,  paying a dividend  or
approving a stock  repurchase  which is deemed  illegal or obtaining an improper
personal  benefit.  The  Company's  Certificate  of  Incorporation  includes the
following language:

                  To the maximum  extent  permitted by Section  102(b)(7) of the
         General  Corporation  Law of Delaware,  a director of this  Corporation
         shall not be personally  liable to the Corporation or its stockholders,
         for monetary damages for breach of fiduciary duty as a director, except
         for liability (i) for any breach of the  director's  duty of loyalty to
         the Corporation or its stockholders,  (ii) for acts or omissions not in
         good  faith  or  which  involve  intentional  misconduct  or a  knowing
         violation  of law,  (iii)  under  Section 174 of the  Delaware  General
         Corporation  Law, or (iv) for any  transaction  from which the director
         derived an improper personal benefit.

         Delaware  General  Corporation  Law, Section 145, permits a corporation
organized under Delaware law to indemnify directors and officers with respect to
any matter in which the director or officer  acted in good faith and in a manner
he reasonably  believed to be not opposed to the best  interests of the Company,
and, with respect to any criminal  action,  had reasonable  cause to believe his
conduct was lawful. The By-laws of the Company include the following provision:

                  Reference  is made to  Section  145  and  any  other  relevant
         provisions  of the General  Corporation  Law of the State of  Delaware.
         Particular  reference  is made to the  class  of  persons,  hereinafter
         called "Indemnitees",  who may be indemnified by a Delaware corporation
         pursuant to the provisions of such Section 145, namely,  any person, or
         the heirs, executors, or administrators of such person, who was or is a
         party or is threatened to be made a party to any threatened, pending or
         completed  action,  suit,  or  proceeding,   whether  civil,  criminal,
         administrative,  or  investigative,  by  reason  of the fact  that such
         person  is or was a  director,  officer,  employee,  or  agent  of such
         corporation or is or was serving at the request of such  corporation as
         a director, officer, employee or agent of such corporation or is or was
         serving at the  request of such  corporation  as a  director,  officer,
         employee, or agent of another corporation,  partnership, joint venture,
         trust,  or other  enterprise.  The  Corporation  shall,  and is  hereby
         obligated to, indemnify the Indemnitees,  and each of them, in each and
         every  situation  where  the  Corporation  is  obligated  to make  such
         indemnification  pursuant to the aforesaid  statutory  provisions.  The
         Corporation shall indemnify the Indemnitees,  and each of them, in each
         and every situation where,

                                      -29-

         under  the  aforesaid  statutory  provisions,  the  Corporation  is not
         obligated,  but is  nevertheless  permitted or empowered,  to make such
         indemnification,   it  being  understood   that,   before  making  such
         indemnification,  with  respect  to any  situation  covered  under this
         sentence,  (i) the Corporation shall promptly make or cause to be made,
         by any of the methods  referred to in  Subsection  (d) of such  Section
         145, a determination  as to whether each Indemnitee acted in good faith
         and in a manner he reasonably believed to be in, or not opposed to, the
         best  interests  of the  Corporation,  and, in the case of any criminal
         action or  proceeding,  had no  reasonable  cause to  believe  that his
         conduct was unlawful,  and (ii) that no such  indemnification  shall be
         made unless it is determined that such  Indemnitee  acted in good faith
         and in a manner he reasonably believed to be in, or not opposed to, the
         best  interests  of the  Corporation,  and, in the case of any criminal
         action or  proceeding,  had no  reasonable  cause to  believe  that his
         conduct was unlawful.

                                      -30-

================================================================================

No dealer,  salesman or any other person has been  authorized in connection with
this Offering to give any information or to make any representations  other than
those contained in this  Prospectus  and, if given or made, such  information or
representations  must  not be  relied  upon as  having  been  authorized  by the
Company.  This Prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities  offered hereby in any  jurisdiction in
which such offer or solicitation is not authorized or in which the person making
such offer or solicitation is not qualified to do so or to any person to whom it
is unlawful to make such an offer or solicitation.  Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create an
implication that there has been no change in the circumstances of the Company or
the facts herein set forth since the date hereof.

                             ---------------------

                               TABLE OF CONTENTS

                                                            Page

              AVAILABLE INFORMATION.......................     3
              THE COMPANY.................................     4
              RISK FACTORS................................     5
              USE OF PROCEEDS.............................    11
              SELLING STOCKHOLDERS........................    11
              THE STOCK OPTION PLANS......................    12
              PLAN OF DISTRIBUTION........................    27
              RECENT DEVELOPMENTS.........................    28
              INDEMNIFICATION.............................    28

================================================================================

================================================================================

                                 856,090 SHARES
                                 OF COMMON STOCK
                            $.01 PAR VALUE PER SHARE

                               ADVANCED DEPOSITION
                               TECHNOLOGIES, INC.

                                 ---------------

                                   PROSPECTUS

                                 ---------------

                                December 11, 1996

================================================================================

                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.    INCORPORATION OF DOCUMENTS BY REFERENCE.

         The following documents,  which have been filed by the Company with the
Commission under the Securities Act and the Securities and Exchange Act of 1934,
as amended (the "Exchange Act"), are incorporated herein by reference:

         (1)      The Company's Annual Report on Form 10-KSB for the fiscal year
                  ended December 31, 1995 ("Fiscal 1995");

         (2)      The Company's  Quarterly  Report on Form 10-QSB for the fiscal
                  quarter  ended  March 31,  1996,  as  amended;  the  Company's
                  Quarterly  Report on Form 10- QSB for the fiscal quarter ended
                  June 30,  1996;  and the  Company's  Quarterly  Report on Form
                  10-QSB for the fiscal quarter ended September 30, 1996.

         (3)      The Company's  Proxy  Statement for its 1995 Annual Meeting of
                  Stockholders filed with the Commission on May 3, 1996;

         (4)      Description  of the  Company's  Common Stock in the  Company's
                  Form S-3 Registration Statement,  filed with the Commission on
                  May 13, 1996; and

         (5)      The Company's  current reports pursuant to Section 13 or 15(d)
                  of the Exchange  Act on Form 8-K dated June 4, 1996;  June 13,
                  1996;  June 18, 1996; June 25, 1996; July 17, 1996; and August
                  12, 1996.

         All documents filed by the Company  pursuant to Sections 13(a),  13(c),
14 or  15(d)  of the  Securities  Exchange  Act  subsequent  to the date of this
Registration Statement on Form S-8 and prior to such time as the Company files a
post-effective  amendment  to this  Registration  Statement  on Form  S-8  which
indicates that all securities offered hereby have been sold or which deregisters
all such securities then remaining unsold, shall be deemed to be incorporated by
reference  in this  Registration  Statement  on Form S-8 and to be a part hereof
from the date of filing such documents.

ITEM 4.  DESCRIPTION OF SECURITIES.

         Not applicable.

ITEM 5.  INTERESTS OF NAMED EXPERTS AND COUNSEL.

         Not applicable.

                                      II-1

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to  directors,  officers,  and  controlling  persons of the
Company pursuant to the following provisions, or otherwise, the Company has been
advised  that in the opinion of the  Securities  and  Exchange  Commission  such
indemnification  is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.

         Delaware  General   Corporation  Law,  Section  102(b)(7),   enables  a
corporation in its original certificate of incorporation or an amendment thereto
validly  approved by  stockholders  to eliminate or limit personal  liability of
members of its Board of Directors for violations of a director's  fiduciary duty
of care. However,  the elimination or limitation shall not apply where there has
been a breach of the duty of loyalty,  failure to act in good faith, engaging in
intentional  misconduct  or  knowingly  violating  a law,  paying a dividend  or
approving a stock  repurchase  which is deemed  illegal or obtaining an improper
personal  benefit.  The  Company's  Certificate  of  Incorporation  includes the
following language:

                  To the maximum  extent  permitted by Section  102(b)(7) of the
         General  Corporation  Law of Delaware,  a director of this  Corporation
         shall not be personally  liable to the Corporation or its stockholders,
         for monetary damages for breach of fiduciary duty as a director, except
         (i) for any breach of the director's duty of loyalty to the Corporation
         or its  stockholders,  (ii) for acts or omissions  not in good faith or
         which involve  intentional  misconduct  or a knowing  violation of law,
         (iii) under  Section 174 of the Delaware  General  Corporation  Law, or
         (iv) for any  transaction  from which the director  derived an improper
         personal benefit.

         Delaware  General  Corporation  Law, Section 145, permits a corporation
organized under Delaware law to indemnify directors and officers with respect to
any matter in which the director or officer  acted in good faith and in a manner
he reasonably  believed to be not opposed to the best  interests of the Company,
and, with respect to any criminal  action,  had reasonable  cause to believe his
conduct was lawful. The Bylaws of the Company include the following provision:

                  Reference  is made to  Section  145  and  any  other  relevant
         provisions  of the General  Corporation  Law of the State of  Delaware.
         Particular  reference  is made to the  class  of  persons,  hereinafter
         called "Indemnitees",  who may be indemnified by a Delaware corporation
         pursuant to the provisions of such Section 145, namely,  any person, or
         the heirs, executors, or administrators of such person, who was or is a
         party or is threatened to be made a party to any threatened, pending or
         completed  action,  suit,  or  proceeding,   whether  civil,  criminal,
         administrative,  or  investigative,  by  reason  of the fact  that such
         person  is or was a  director,  officer,  employee,  or  agent  of such
         corporation or is or was serving at the request of such  corporation as
         a director, officer, employee or agent of such corporation or is or was
         serving at the  request of such  corporation  as a  director,  officer,
         employee, or agent of another

                                      II-2

         corporation,  partnership,  joint venture,  trust, or other enterprise.
         The  Corporation  shall,  and is hereby  obligated  to,  indemnify  the
         Indemnitees,  and each of them, in each and every  situation  where the
         Corporation is obligated to make such  indemnification  pursuant to the
         aforesaid  statutory  provisions.  The Corporation  shall indemnify the
         Indemnitees, and each of them, in each and every situation where, under
         the aforesaid statutory  provisions,  the Corporation is not obligated,
         but  is   nevertheless   permitted   or   empowered,   to   make   such
         indemnification,   it  being  understood   that,   before  making  such
         indemnification,  with  respect  to any  situation  covered  under this
         sentence,  (i) the Corporation shall promptly make or cause to be made,
         by any of the methods  referred to in  Subsection  (d) of such  Section
         145, a determination  as to whether each Indemnitee acted in good faith
         and in a manner he reasonably believed to be in, or not opposed to, the
         best  interests  of the  Corporation,  and, in the case of any criminal
         action or  proceeding,  had no  reasonable  cause to  believe  that his
         conduct was unlawful,  and (ii) that no such  indemnification  shall be
         made unless it is determined that such  Indemnitee  acted in good faith
         and in a manner he reasonably believed to be in, or not opposed to, the
         best  interests  of the  Corporation,  and, in the case of any criminal
         action or  proceeding,  had no  reasonable  cause to  believe  that his
         conduct was unlawful.

ITEM 7.  EXEMPTION FROM REGISTRATION CLAIMED.

         With respect to restricted  securities (the "Reoffer Securities") to be
reoffered or resold pursuant to the Registration  Statement and the accompanying
Prospectus,  the Company states that all Reoffer  Securities were acquired under
an exemption from  registration  pursuant to Section 4(2) of the Securities Act,
and that no general  solicitation,  advertising,  or offer to the general public
was made with respect to the Reoffer Securities.

ITEM 8.  EXHIBITS.

         (a) The following  exhibits  have been filed  (except  where  otherwise
indicated) as part of this Registration Statement:

          Exhibit
            No.            Description
            ---            -----------

             4a        1988 Stock Option Plan.

             4b        1993 Stock Option Plan.

             4c        1994 Formula Stock Option Plan.

             4d        Certificate of Incorporation.

                                      II-3

             4e        By-laws.

             5         Opinion  Letter  of  O'Connor,  Broude  &  Aronson  as to
                       legality of shares being registered.

            23a        Consent  of  O'Connor,  Broude &  Aronson  (contained  in
                       Opinion filed as Exhibit 5).

            23b        Consent of Arthur Andersen LLP

ITEM 9.  UNDERTAKINGS.

         (a)      The undersigned registrant hereby undertakes:

                  1. To file,  during  any  period in which  offers or sales are
being made, a post-effective amendment to this registration statement;

                           (i) To include  any  prospectus  required  by Section
10(a)(3) of the Securities Act;

                           (ii) To reflect in the prospectus any facts or events
arising  after the  effective  date of the  registration  statement (or the most
recent  post-effective   amendment  thereof)  which,   individually  or  in  the
aggregate,  represent a fundamental  change in the  information set forth in the
registration statement.  Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was  registered)  and any deviation  from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus  filed  with  the  Commission  pursuant  to Rule  424(b)  if,  in the
aggregate,  the changes in volume and price  represent no more than a 20 percent
change in the maximum aggregate  offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.

                           (iii)  To  include  any  material   information  with
respect to the plan of distribution not previously disclosed in the registration
statement  or any  material  change  in  such  information  in the  registration
statement;

provided,  however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a  post-effective  amendment by those  paragraphs  is
contained in periodic  reports filed with or furnished to the  Commission by the
registrant  pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.

                  2. That,  for the purpose of determining  any liability  under
the Securities Act, each such  post-effective  amendment shall be deemed to be a
new registration statement relating to

                                      II-4

the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

                  3. To remove from  registration  by means of a  post-effective
amendment  any of the  securities  being  registered  which remain unsold at the
termination of the offering.

         (b) The undersigned  registrant hereby undertakes that, for purposes of
determining  any  liability  under  the  Securities  Act,  each  filing  of  the
registrant's  annual reports  pursuant to Section 13(a) or 15(d) of the Exchange
Act (and,  where  applicable,  each filing of an employee  benefit plan's annual
report  pursuant to Section 15(d) of the Exchange Act) that is  incorporated  by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities  offered therein,  and the offering of such
securities  at that time shall be deemed to be the  initial  bona fide  offering
thereof.

         (c)  Insofar  as  indemnification  for  liabilities  arising  under the
Securities Act may be permitted to directors,  officers and controlling  persons
of the registrant  pursuant to the provisions  described  under Item 6 above, or
otherwise, the registrant has been advised that in the opinion of the Commission
such  indemnification  is against  public policy as expressed in the  Securities
Act,  and  is,  therefore,   unenforceable.  In  the  event  that  a  claim  for
indemnification  against  such  liabilities  (other  than  the  payment  by  the
registrant of expenses  incurred or paid by a director,  officer or  controlling
person of the  registrant  in the  successful  defense  of any  action,  suit or
proceeding)  is  asserted by such  director,  officer or  controlling  person in
connection with the securities being registered,  the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit  to a  court  of  appropriate  jurisdiction  the  question  whether  such
indemnification  by it is against  public policy as expressed in the  Securities
Act and will be governed by the final adjudication of such issue.

                                      II-5

                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the  requirements  for  filing  on  Form  S-8 and has  duly  caused  this
registration statement to be signed on its behalf by the undersigned,  thereunto
duly authorized,  in the City of Taunton,  Commonwealth of Massachusetts on this
11th day of December, 1996.

                                    ADVANCED DEPOSITION TECHNOLOGIES, INC.

                                    By:/s/ Glenn J. Walters
                                       ----------------------------------
                                           Glenn J. Walters

         Pursuant to the requirements of the Securities Act of 1933, as amended,
this  Registration  Statement  has been signed by the  following  persons in the
capacities and on the date indicated.
Name                                                 Capacity                                  Date
----                                                 --------                                  ----
/s/ Glenn J. Walters                        Chief Executive Officer,                    December 11, 1996
-------------------------------             President and Director
    Glenn J. Walters                        (principal executive officer)

/s/ Gordon E. Walters                       Chairman of the Board                       December 11, 1996
-------------------------------             of Directors
    Gordon E. Walters

/s/ Mark R. Thomas                          Chief Financial Officer                     December 11, 1996
-------------------------------             (principal financial and
    Mark R. Thomas                           accounting officer)

/s/ John M. Buckley                         Director                                    December 11, 1996
-------------------------------
    John M. Buckley

/s/ Dr. Charles R. Buffler                  Director                                    December 11, 1996
-------------------------------
    Dr. Charles R. Buffler

/s/ Salvatore F. D'Amato                    Director                                    December 11, 1996
-------------------------------
    Salvatore F. D'Amato

/s/ John J. Moroney                         Director                                    December 11, 1996
-------------------------------
    John J. Moroney

/s/ Robert M. Pozzo                         Director                                    December 11, 1996
-------------------------------
    Robert M. Pozzo
II-6