

                                                                EXHIBIT 10.12

                            THE ALLSTATE CORPORATION

                EQUITY INCENTIVE PLAN FOR NON-EMPLOYEE DIRECTORS

                  AS AMENDED AND RESTATED ON NOVEMBER 12, 1996


I.       PURPOSE.

         The  purpose of The  Allstate  Corporation  Equity  Incentive  Plan for
Non-Employee  Directors (the "Plan") is to promote the interests of The Allstate
Corporation  (the "Company") by providing an inducement to obtain and retain the
services of  qualified  persons as members of the  Company's  Board of Directors
(the  "Board") and to align more closely the  interests of such persons with the
interests of the Company's  stockholders  by providing a significant  portion of
the  compensation  provided to such persons in the form of equity  securities of
the Company.

II.      ADMINISTRATION.

         The Plan shall be  administered  by the Committee.  The Committee shall
have full power to  construe  and  interpret  the Plan and  Shares  and  Options
granted  hereunder,  to establish and amend rules for its  administration and to
correct any defect or omission and to reconcile any inconsistency in the Plan or
in any Share or Option  granted  hereunder  to the  extent the  Committee  deems
desirable  to carry  the Plan or any  Share or  Option  granted  hereunder  into
effect.  Any decisions of the Committee in the  administration of the Plan shall
be final and  conclusive.  The  Committee  may  authorize any one or more of its
members, the secretary of the Committee or any officer of the Company to execute
and deliver documents on behalf of the Committee.  Each member of the Committee,
and, to the extent provided by the Committee, any other person to whom duties or
powers shall be delegated in connection with the Plan,  shall incur no liability
with  respect to any action taken or omitted to be take in  connection  with the
Plan and shall be fully  protected  in  relying in good faith upon the advice of
counsel, to the fullest extent permitted under applicable law.

III.     ELIGIBILITY.

         Each  Non-Employee  Director  shall be eligible to  participate  in the
Plan.

IV.      LIMITATION ON AGGREGATE SHARES.

         A. Maximum  Number of Shares.  The aggregate  maximum  number of Shares
that may be granted  pursuant  to the Plan or issued  upon  exercise  of Options
granted  pursuant to the Plan shall be 300,000  shares.  Such maximum  number of
Shares is subject to adjustment under the provisions of Section IV.B. The Shares
to be granted or issued upon exercise of Options may be authorized  but unissued
Shares or Shares previously issued which have been reacquired by the Company. In
the event any Option or Reload Option shall, for any reason, terminate or expire
or be  surrendered  without having been exercised in full, the Shares subject to
such Option or Reload Option but not

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purchased  thereunder shall be available for future Options or Reload Options to
be granted under the Plan.

     B. Adjustment.  The maximum number of Shares referred to in Section IV.A of
        ----------
the Plan, the number of Shares  granted  pursuant to Section VI of the Plan, the
number of Options  granted  pursuant to Section VII of the Plan,  and the option
price and the  number of Shares  which may be  purchased  under any  outstanding
Option granted under Section VII of the Plan shall be  proportionately  adjusted
for any increase or decrease in the number of issued and  outstanding  Shares as
the result of (i) the  declaration  and payment of a dividend  payable in Common
Stock,  or the division of the Common Stock  outstanding  at the date hereof (or
the date of the grant of any such  outstanding  Option,  as  applicable)  into a
greater  number of Shares without the receipt of  consideration  therefor by the
Company,  or any other  increase  in the  number of such  Shares of the  Company
outstanding at the date hereof (or the date of the grant of any such outstanding
Option,  as applicable)  which is effective without the receipt of consideration
therefor  by the  Company  (exclusive  of any Shares  granted by the  Company to
employees of the Company or any of its Subsidiaries  without receipt of separate
consideration  by  the  Company),  or  (ii)  the  consolidation  of  the  Shares
outstanding at the date hereof (or the date of the grant of any such outstanding
Option,  as  applicable)  into a smaller number of Shares without the payment of
consideration  thereof by the  Company,  or any other  decrease in the number of
such Shares outstanding at the date hereof (or the date of the grant of any such
outstanding Option, as applicable) effected without the payment of consideration
by the Company;  provided,  however,  that the total option price for all Shares
which may be purchased upon the exercise of any Option  granted  pursuant to the
Plan  (computed  by  multiplying  the  number of Shares  originally  purchasable
thereunder,  reduced by the number of such Shares  which have  theretofore  been
purchased  thereunder,  by the original option price per share before any of the
adjustments herein provided for) shall not be changed.

         In the event of a change in the Common Stock as  presently  constituted
which is limited to a change of the Company's authorized shares with a par value
into the same number of shares with a different  par value or without par value,
the shares  resulting from any such change will be deemed to be the Common Stock
within the meaning of this Plan and no adjustment  will be required  pursuant to
this Section IV.B.

         The  foregoing  adjustments  shall  be  made  by the  Committee,  whose
determination in that respect shall be final, binding and conclusive.  Except as
expressly  provided in this Section IV.B, a Non-Employee  Director shall have no
rights by reason of any subdivision or  consolidation  of shares of stock of any
class or the payment of any stock  dividend or any other increase or decrease in
the number of shares of stock of any class.

V.       DEFINITIONS.

         The  following  terms shall have the meanings set forth below when used
herein:

         "Code" means the Internal Revenue Code of 1986, as amended.


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         "Committee"  means the  Compensation  and  Nominating  Committee of the
          ---------
Board, any successor  committee of the Board performing similar functions or, in
the absence of such a committee, the Board.

         "Common Stock" means the Common Stock, par value $.01 per share, of 
          ------------
the Company.

         "Disability" means a mental or physical condition which, in the opinion
          ----------
of the Committee, renders a Non-Employee Director unable or incompetent to carry
out his or her  duties as a member of the  Board  and  which is  expected  to be
permanent or for an indefinite duration.

         "Election  Shares" means any Shares issued to a  Non-Employee  Director
          ----------------
pursuant to the  election of such person to receive  such Shares in lieu of cash
compensation made in accordance with Section VIII.B.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
          -----
amended.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.
          ------------

         "Fair Market Value" of any Share means, as of any applicable  date, the
          -----------------
mean  between  the high and low prices of the Shares as reported on the New York
Stock  Exchange-Composite  Tape, or if no such reported sale of the Shares shall
have occurred on such date, on the next  succeeding date on which there was such
a reported sale.

         "Initial  Election Date" means,  for each  Non-Employee  Director,  the
          ----------------------
later to occur of (i) the date the Plan is approved and adopted by the Company's
stockholders  pursuant  to Section  XIII of the Plan,  and (ii) the date of such
member's initial election or appointment to the Board.

         "Non-Employee  Director"  means each  member of the Board who is not an
          ----------------------
officer or employee of the Company or any of its Subsidiaries.

         "Option" means an option to purchase shares of Common Stock.
          ------

         "Shares" means shares of Common Stock.
          ------

         "Subsidiary" means any partnership,  corporation,  association, limited
          ----------
liability company,  joint stock company,  trust,  joint venture,  unincorporated
organization or other business entity of which (i) if a corporation,  a majority
of the total voting  power of shares of stock  entitled  (without  regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled,  directly or indirectly, by
the  Company  or one or more  of the  other  Subsidiaries  of the  Company  or a
combination  thereof, or (ii) if a partnership,  association,  limited liability
company, joint stock company, trust, joint venture,  unincorporated organization
or other business  entity, a majority of the partnership or other similar equity
ownership  interest  thereof is at the time  owned or  controlled,  directly  or
indirectly,  by the  Company  or one or more  Subsidiaries  of the  Company or a
combination  thereof.  For purposes hereof, the Company or a Subsidiary shall be
deemed to have a majority ownership interest in a partnership, association,

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limited  liability   company,   joint  stock  company,   trust,  joint  venture,
unincorporated  organization  or other  business  entity if the  Company or such
Subsidiary  shall be allocated a majority of partnership,  association,  limited
liability company,  joint stock company,  trust,  joint venture,  unincorporated
organization or other business entity gains or losses or shall be or control the
managing  director,  the  trustee,  the manager or the  general  partner of such
partnership, association, limited liability company, joint stock company, trust,
joint venture, unincorporated organization or other business entity.

VI.      FORMULA RESTRICTED STOCK GRANTS FOR NON-EMPLOYEE DIRECTORS.

         A. Annual Grant of Shares. Beginning December 1, 1996, on December 1 of
            ----------------------
each  year 500  Shares  shall  automatically  be  granted  to each  Non-Employee
Director serving on the Board on such date who has served in such capacity since
June 1 of such year. If any person serving as a Non- Employee Director on June 1
of any year ceases to serve as a director of the Company  prior to December 1 of
such year, such director shall be  automatically  granted on his or her last day
of service a number of Shares  equal to (i) 500  multiplied  by (ii) a fraction,
the numerator of which is the number of full calendar  months such  Non-Employee
Director has served on the Board during the period  beginning on such June 1 and
ending on such  director's  last date of service and the denominator of which is
6.

         B.  Grant  for  Newly  Appointed  Directors.  If after  June 1,  1996 a
             ---------------------------------------
Non-Employee  Director is initially  elected or appointed to the Board effective
on any date other than June 1, such Non- Employee  Director shall  automatically
be granted,  on the June 1 following the date he or she joins the Board (or such
earlier  date as he or she  ceases to serve as a  director),  a number of Shares
equal to (i) 500  multiplied  by (ii) a fraction,  the numerator of which is the
number of full  calendar  months such  Non-Employee  Director  has served on the
Board during the period beginning on the date such director joined the Board and
ending on the  following  May 31 (or such  earlier  date as he or she  ceases to
serve as a  director)  and the  denominator  of which is 6;  provided  that such
fraction shall in no event be greater than one.

         C.  Transition  Grant for Existing  Directors.  Subject to  stockholder
             -----------------------------------------
approval  and adoption  pursuant to Section  XIII of the Plan,  on May 31, 1996,
each Non-Employee  Director who was serving on the Board on March 12, 1996 shall
be automatically  granted a number of Shares equal to (i) 200 multiplied by (ii)
a fraction,  the  numerator  of which is the number of full  calendar  months of
service by such  Non-Employee  Director during the period beginning on the later
of (a) such  director's last  anniversary  date for service on the Board and (b)
the date such director  first attained the status of  Non-Employee  Director and
ending on May 31, 1996 (or such earlier date as such director ceases to serve as
a director) and the denominator of which is 12.

         D.  Rounding of Share Amounts.  To the  extent that application of the
             -------------------------  
the foregoing formulas would result in fractional Shares  being issuable,  such 
Non-Employee Director shall  be granted a  number of Shares equal to the nearest
whole number of Shares.

         E.  Payment for Estimated Taxes.  In addition, the Company shall pay to
             ---------------------------
each Non-Employee Director, in cash, as soon as  practicable after each issuance
of Shares pursuant to this

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Section  VI, an amount  equal to the  estimated  increase  in such  Non-Employee
Director's federal, state and local tax liabilities as a result of such grant of
Shares, assuming the maximum statutory tax rates applicable to such Non-Employee
Director.

         F. Restrictions.  The Non-Employee  Directors shall have no rights as a
            ------------
shareholder with respect to any Shares to be granted pursuant to this Section VI
prior to the time such Shares are granted.  Upon such grant, the Shares shall be
represented  by a stock  certificate  registered in the name of the holder.  The
Shares granted  pursuant to this Section VI shall be fully vested,  but shall be
subject to certain  restrictions  during the six month period following the date
of grant (the  "Restriction  Period").  The holder shall have the right to enjoy
                -------------------
all  shareholder  rights during the Restriction  Period  (including the right to
vote the  Shares and the right to receive  any cash or other  dividends  paid in
respect thereof) with the exception that (i) the holder may not sell,  transfer,
pledge or assign the Shares during the Restriction  Period, and (ii) the Company
shall retain  custody of the  certificates  representing  the Shares  during the
Restriction Period.

         All  restrictions  shall  lapse and the holder of the  Shares  shall be
entitled to the delivery of a stock certificate or certificates representing the
Shares  (and  to the  removal  of any  restrictive  legend  set  forth  on  such
certificates) upon the earliest of (i) six months from the date of grant of such
Shares, (ii) the date of the holder's death or Disability, and (iii) the date on
which the holder is no longer serving as a director of the Company.

VII.     FORMULA STOCK OPTION GRANTS FOR NON-EMPLOYEE DIRECTORS.

         A. Annual Grant of Options.  On June 1 of each year,  beginning June 1,
            -----------------------
1996,  Options to purchase 1,500 Shares shall  automatically  be granted to each
Non-Employee   Director  serving  on  the  Board  on  such  date.  If  any  such
Non-Employee  Director  will be required to retire  (pursuant to the policies of
the Board) during the 12 month period  beginning on the date of any grant (or if
any such Non-Employee  Director has notified the Board that he or she intends to
resign from the Board for any reason during the 12 month period beginning on the
date of any  grant),  such  director  shall  instead be granted on June 1 of the
relevant  year  Options  to  purchase  a number  of Shares  equal to (i)  1,500,
multiplied  by (ii) a  fraction,  the  numerator  of which is the number of full
--------------
calendar  months such  Non-Employee  Director will serve on the Board during the
period  beginning  on such  June 1 and  ending on such  director's  last date of
service and the denominator of which is 12.

         B.  Grant  for  Newly  Appointed  Directors.  If after  June 1,  1996 a
             ---------------------------------------
Non-Employee  Director is initially  elected or appointed to the Board effective
on any date other than June 1, such Non- Employee  Director shall  automatically
be granted, on the date he or she joins the Board,  Options to purchase a number
of Shares equal to (i) 1,500,  multiplied  by (ii) a fraction,  the numerator of
which is the number of full  calendar  months such  Non-Employee  Director  will
serve on the Board during the period  beginning on the date such director  joins
the Board and ending on the following May 31 and the denominator of which is 12.

         C.  Option Exercise Price.  The  exercise  price  per  Share  for each
             ---------------------
Option shall be 100% of the Fair Market Value of a  Share on the date of grant,
subject to Section IV.B.


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         D.       Term of Options.  Each Option shall be exercisable for ten
                  --------------- 
years after the date of grant, subject to Section VII.F.

         E.       Conditions and Limitations on Exercise.
                  --------------------------------------

                    (i)   Vesting.   Each  Option  shall  vest  in  three  equal
                          -------         
         installments on the first,  second and third  anniversaries of the date
         of grant. Upon a Non-Employee  Director's mandatory retirement pursuant
         to the policies of the Board, the unvested  portions of any outstanding
         Options held by such  Non-Employee  Director shall fully vest. Upon the
         termination of a Non-Employee  Director's  tenure for any other reason,
         the unvested  portions of any  outstanding  Options shall expire and no
         Options  granted  to such  Non-Employee  Director  shall vest after the
         termination of such director's tenure on the Board.

                   (ii)  Exercise.  Each Option shall be  exercisable  in one or
                         --------
         more  installments  and  shall  not be  exercisable  for less  than 100
         Shares, unless the exercise represents the entire remaining exercisable
         balance  of a grant  or  grants.  Each  Option  shall be  exercised  by
         delivery  to the  Company  of  written  notice of intent to  purchase a
         specific  number of Shares  subject to the Option.  The option price of
         any Shares as to which an Option  shall be  exercised  shall be paid in
         full at the time of the  exercise.  Payment may, at the election of the
         Non-Employee  Director,  be made in any one or any  combination  of the
         following forms:

                           (a) check or  wire  transfer  of  funds in  such form
                  as may be satisfactory to the Committee;

                           (b) delivery  of  Shares  valued at their Fair Market
                  Value on the date of  exercise  or, if the date of exercise is
                  not a business day, the next succeeding business day;

                           (c) through  simultaneous  sale  through a broker of
                  unrestricted Shares acquired on exercise, as  permitted  under
                  Regulation T of the Federal Reserve Board; or

                           (d) by authorizing  the Company in his or her written
                  notice of  exercise  to  withhold  from  issuance  a number of
                  Shares  issuable  upon  exercise  of such Option  which,  when
                  multiplied  by the Fair  Market  Value of Common  Stock on the
                  date  of  exercise  (or,  if the  date  of  exercise  is not a
                  business day, the next  succeeding  business day), is equal to
                  the  aggregate  exercise  price  payable  with  respect to the
                  Option so exercised.

         In the event a Non-Employee  Director  elects to pay the exercise price
payable with respect to an Option pursuant to clause (b) above, (i) only a whole
number of Share(s) (and not fractional Shares) may be tendered in payment,  (ii)
such Non-Employee  Director must present evidence acceptable to the Company that
he or she has owned any such Shares  tendered in payment of the  exercise  price
(and that such Shares tendered have not been subject to any substantial  risk of
forfeiture) for at least six months prior to the date of exercise, and (iii) the
certificate(s) for all such

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Shares  tendered in payment of the exercise  price must be  accompanied  by duly
executed  instruments  of transfer in a form  acceptable  to the  Company.  When
payment  of the  Option  exercise  price is made by the  tender of  Shares,  the
difference, if any, between the aggregate exercise price payable with respect to
the Option being exercised and the Fair Market Value of the Share(s) tendered in
payment (plus any  applicable  taxes) shall be paid by check or wire transfer of
funds.  No Non-  Employee  Director may tender Shares having a Fair Market Value
exceeding the aggregate  exercise price payable with respect to the Option being
exercised.

         In the event a Non-Employee  Director  elects to pay the exercise price
payable with respect to an Option pursuant to clause (d) above, (i) only a whole
number of Share(s)  (and not  fractional  Shares) may be withheld in payment and
(ii) such Non-Employee  Director must present evidence acceptable to the Company
that he or she has  owned a number of  Shares  at least  equal to the  number of
Shares to be  withheld  in  payment of the  exercise  price (and that such owned
Shares have not been subject to any substantial risk of forfeiture) for at least
six months  prior to the date of exercise.  When payment of the Option  exercise
price is made by the withholding of Shares, the difference,  if any, between the
aggregate  exercise price payable with respect to the Option being exercised and
the Fair Market Value of the Share(s)  withheld in payment (plus any  applicable
taxes)  shall  be paid by check  or wire  transfer  of  funds.  No  Non-Employee
Director may  authorize  the  withholding  of Shares  having a Fair Market Value
exceeding the aggregate  exercise price payable with respect to the Option being
exercised. Any withheld Shares shall no longer be issuable under such Option.

         F.       Additional Provisions.
                  ---------------------

                    (i)  Accelerated  Expiration of Options Upon  Termination of
                         -------------------------------------------------------
         Directorship.  Upon the termination of a Non-Employee Director's tenure
         ------------
         for any reason,  each  outstanding  vested and  previously  unexercised
         Option shall  expire  three months after the date of such  termination;
         provided that (a) upon the  termination  of a  Non-Employee  Director's
         tenure as a result of death or Disability,  each outstanding vested and
         previously  unexercised Option shall expire two years after the date of
         his or her  termination  as a  director,  and (b)  upon  the  mandatory
         retirement of a Non-Employee  Director  pursuant to the policies of the
         Board, each outstanding vested and previously  unexercised Option shall
         expire  five  years  after  the  date  of his or her  termination  as a
         director.  In no event  shall  the  provisions  of this  Section  VII.F
         operate to extend the original expiration date of any Option.

                   (ii)  Sale of the  Company.  In the  event of a merger of the
                         -------------------- 
         Company  with or into  another  corporation  constituting  a change  of
         control  of the  Company,  a sale  of all or  substantially  all of the
         Company's  assets or a sale of a majority of the Company's  outstanding
         voting securities (a "Sale of the Company"), the Options may be assumed
         by the successor  corporation or a parent of such successor corporation
         or substantially equivalent options may be substituted by the successor
         corporation  or a  parent  of such  successor  corporation,  and if the
         successor  corporation  does  not  assume  the  Options  or  substitute
         options,  then  all  outstanding  and  unvested  Options  shall  become
         immediately  exercisable and all outstanding Options shall terminate if
         not  exercised  as of the date of the  Sale of the  Company  (or  other
         prescribed  period of time). The Company shall provide at least 30 days
         prior  written  notice of the Sale of the Company to the holders of all
         outstanding Options, which notice shall state

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         whether (a) the Options will be assumed by the successor corporation or
         substantially  equivalent  options will be substituted by the successor
         corporation,  or (b) the Options are thereafter  vested and exercisable
         and will  terminate if not  exercised as of the date of the Sale of the
         Company (or other prescribed period of time).

                  (iii)  Liquidation  or  Dissolution.   In  the  event  of  the
                         ----------------------------
         liquidation  or  dissolution  of the Company,  Options shall  terminate
         immediately prior to the liquidation or dissolution.

         G.  Grant of Reload Options.  A Non-Employee Director who exercises all
             -----------------------
or any portion of an Option by the tender or  withholding of Shares which have a
Fair  Market  Value equal to not less than 100% of the  exercise  price for such
Options (the "Exercised  Options")  shall be granted,  subject to Section IV, an
              ------------------
additional option (a "Reload Option") for a number of Shares equal to the sum of
                      -------------
the number of Shares  tendered or withheld in payment of the exercise  price for
the Exercised Options.

         Reload Options shall be subject to the following terms and conditions:

                    (i)    the grant date for each Reload Option shall be the 
         date of exercise of the Exercised Option to which it relates;

                   (ii) subject to clause (iii) below,  the Reload Option may be
         exercised at any time during the unexpired term of the Exercised Option
         (subject to earlier termination thereof as provided in the Plan); and

                  (iii) the other terms of the Reload  Option  shall be the same
         as the terms of the  Exercised  Option to which it relates and shall be
         subject to the provisions of the Plan, except that (a) the option price
         shall be the Fair  Market  Value of the Shares on the grant date of the
         Reload Option,  (b) no Reload Option may be exercised within six months
         from the grant date  thereof,  and (c) no other Reload  Option shall be
         granted upon exercise of such Reload Option.

         H.  Non-Qualified Stock Options.   All Options granted  under the Plan 
             --------------------------- 
shall be non-qualified options not entitled to special tax treatment under Code
Section 422, as may be amended from time to time.

VIII.    ELECTION TO RECEIVE STOCK IN LIEU OF CASH COMPENSATION.

         A.       General.  A Non-Employee Director may elect to reduce the cash
                  -------
compensation otherwise payable for services to be rendered by  him or  her as a 
director for any period beginning on June 1 and continuing to the following May 
31 (or such other period for which cash compensation is payable to Non-Employee 
Directors pursuant to the policies of the Board), beginning June 1, 1996 and to 
receive in lieu thereof Shares as provided in this Section VIII.

         B.  Election.  By  the later of (i) the  date of the  Company's  annual
             --------
meeting of stockholders next preceding the June 1 to which such election relates
(but in no event less than five

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business  days  prior to such  June 1) and  (ii)  such  Non-Employee  Director's
Initial  Election  Date,  each  Non-Employee  Director  may make an  irrevocable
election to receive, in lieu of all or a specified  percentage (which percentage
shall be in 10%  increments)  of the cash  compensation  to which such  director
would  otherwise be entitled as a member of the Board and any committee  thereof
(including  the annual  retainer  fee and any meeting or other fees  payable for
services on the Board or any committee thereof,  but excluding any reimbursement
for out-of-pocket expenses) for the year beginning the following June 1 (or such
other  period  for which  cash  compensation  is  payable  to such  Non-Employee
Director  pursuant to the policies of the Board),  an equivalent value in Shares
granted in accordance with this Section VIII. An election shall be effective (i)
if made in accordance  with clause (i) of the preceding  sentence,  beginning on
the  June 1  following  such  election;  and  (ii) if made on such  Non-Employee
Director's Initial Election Date, immediately.

         Each such election shall (i) be in writing in a form  prescribed by the
Company, (ii) specify the amount of cash compensation to be received in the form
of Election  Shares  (expressed  as a percentage of the  compensation  otherwise
payable in cash),  and (iii) be delivered to the Secretary of the Company.  Such
election may not be revoked or changed  thereafter except as to compensation for
services to be rendered in any 12 month period  beginning on any June 1 at least
six months following such revocation or new election.

         C. Issuance of Common Stock. If a Non-Employee Director elects pursuant
            ------------------------
to  Section  VIII.B  above to  receive  Shares,  there  shall be  issued to such
director  promptly  following each  subsequent June 1 for which such election is
effective  (or promptly  following  the first day of such other period for which
such  election  is  effective)  a  number  of  Shares  equal  to the  amount  of
compensation  otherwise payable for the 12 month period beginning on such June 1
(or the other period for which such election is  effective)  divided by the Fair
Market  Value of the  Shares on such  June 1 (or on the first day of such  other
period).  To the extent that the  application  of the  foregoing  formula  would
result in fractional shares of Common Stock being issuable, cash will be paid to
the Non-Employee  Director in lieu of such fractional Shares based upon the Fair
Market Value of such fractional Share.

         D.  Compliance  with  Exchange  Act. The  election to receive  Election
             -------------------------------
Shares is intended to comply in all respects with Rule  16b-3(d)(1)  promulgated
under  Section  16(b) of the  Exchange  Act such that the  issuance  of Election
Shares  under the Plan on a grant date  occurring  at least six months after the
election shall be exempt from Section 16(b) of the Exchange Act.

         E.  Grant Date.  The grant date for  each  Election Share for the Non-
             ----------
Employee Director electing such option shall be the first day of the period
to which such election relates and is effective.

IX.      MISCELLANEOUS PROVISIONS.

         A.  Rights of Non-Employee Directors.  No Non-Employee Director shall 
             --------------------------------
be entitled under  the Plan to  voting rights,  dividends or  other rights of a 
stockholder prior to  the issuance of  Common Stock.  Neither  the Plan nor any 
action taken  hereunder shall be  construed as giving any Non-Employee Director 
any right to be retained in the service of the Company.


                                       A-9

<PAGE>



         B. Limitations on Transfer and Exercise.  All Options granted under the
            ------------------------------------
Plan shall not be transferable by the Non-Employee Director,  other than by will
or the laws of descent and  distribution  or  pursuant  to a qualified  domestic
relations order, as defined by ss.1 et seq, of the Code, Title I of ERISA or the
rules and  regulations  thereunder,  and shall be  exercisable  during  the Non-
Employee  Director's  lifetime  only by such  Non-Employee  Director  or by such
Non-Employee Director's guardian or other legal representative.

         C.  Compliance  with Laws.  No shares of Common  Stock  shall be issued
             ---------------------
hereunder  unless  counsel for the Company shall be satisfied that such issuance
will  be in  compliance  with  applicable  federal,  state,  local  and  foreign
securities, securities exchange and other applicable laws and requirements. Each
Share  granted  pursuant to Section VI or Section  VIII and each Option  granted
pursuant to Section VII shall be subject to the requirement  that if at any time
the Committee shall determine, in its discretion, that the listing, registration
or  qualification  of the Shares  granted  or  subject  to the  Option  upon any
securities  exchange  or under any state or federal  securities  or other law or
regulation,  or the consent or approval of any governmental  regulatory body, is
necessary or desirable as a condition to or in  connection  with the granting of
such Share,  such Option or the  issuance or purchase of Shares  thereunder,  no
such Share may be issued and no Option may be exercised or paid in Common Stock,
in whole or in part, unless such listing, registration,  qualification,  consent
or approval  shall have been  effected or obtained  free of any  conditions  not
acceptable to the Committee.  The holder of such Share or Option will supply the
Company with such certificates,  representations  and information as the Company
shall request and shall  otherwise  cooperate with the Company in obtaining such
listing, registration,  qualification, consent or approval. The Committee may at
any time impose any  limitations  upon the sale of a Share or the exercise of an
Option or the sale of the Common Stock  issued upon  exercise of an Option that,
in the  Committee's  discretion,  are  necessary or desirable in order to comply
with Section 16(b) of the Exchange Act and the rules and regulations thereunder.
The Committee  may at any time impose  additional  limitations,  or may amend or
delete the existing  limitations,  upon the exercise of Options by the tender or
withholding of Shares in accordance  with Section VII.E  (including an amendment
or  deletion  of the  related  ownership  period  for Shares  specified  in such
Section),  if such  additional,  amended or deleted  limitations  are necessary,
desirable  or no longer  required  (as the case may be) to remain in  compliance
with applicable accounting  pronouncements relating to the treatment of the plan
as a fixed plan for accounting purposes.

         D.  Payment  of  Withholding  Tax.  Whenever  Shares  are to be  issued
             -----------------------------
pursuant to Section VI or Section  VIII of the Plan or upon  exercise of Options
issued  pursuant  to Section VII of the Plan,  the Company  shall be entitled to
require as a condition  of  delivery  (i) that the  participant  remit an amount
sufficient to satisfy all federal,  state and local withholding tax requirements
related thereto, (ii) the withholding of Shares due to the participant under the
Plan with a Fair Market Value equal to such amount,  or (iii) any combination of
the foregoing.

         E.  Expenses.  The expenses of the Plan shall be borne by the Company 
             --------
and its Subsidiaries.

         F.  Deemed Acceptance, Ratification and Consent.  By accepting any 
             -------------------------------------------
Common Stock hereunder or other benefit under the Plan, each Non-Employee 
Director and each person claiming

                                      A-10

<PAGE>


under or through him or her shall be  conclusively  deemed to have indicated his
or her  acceptance and  ratification  of, and consent to, any action taken under
the Plan by the Company, the Board or the Committee.

     G.      Securities  Act  Registration.  The Company  shall  use  its  best 
             -----------------------------
efforts to cause to be filed under the Securities  Act of 1933, as amended,  a 
registration statement covering the Shares issued, and issuable upon exercise of
options granted, under the Plan.

         H.  Governing Law. The provisions of the Plan shall be governed by and
             -------------
construed in accordance with the laws of the State of Delaware.

         I.  Election  Shares.  Pending the grant of Election Shares  hereunder,
             ----------------
all compensation  earned by a  Non-Employee Director with  respect to  which an 
election to receive the grant of Election Shares pursuant to Section VIII.B has
been made  shall be the  property of such  director and shall be paid to him or 
her in cash in  the event that  Election Shares are not granted  by the Company 
hereunder.

         J.  Headings; Construction.  Headings are given to the sections of the
             ----------------------
Plan solely as a convenience to facilitate reference.  Such headings, numbering
and paragraphing shall not in any case be deemed in any way material or relevant
to  the  construction of  the Plan or any  provisions  hereof.  The  use of the
singular shall also  include within  its meaning the  plural, where appropriate,
and vice versa.

XI.      AMENDMENT.

         The Plan may be amended at any time and from time to time by resolution
of the Board as the Board  shall  deem  advisable;  provided,  however,  that no
                                                    --------   -------
amendment  shall  become  effective   without   stockholder   approval  if  such
stockholder approval is required by law, rule or regulation. No amendment of the
Plan shall  materially and adversely  affect any right of any  participant  with
respect to any Options or Shares theretofore granted under the Plan without such
participant's written consent, except for any modifications required to maintain
compliance with any federal or state statute or regulation.

XII.     TERMINATION.

         The Plan shall  terminate  upon the earlier of the  following  dates or
events to occur:

                 (i)  upon the adoption of a resolution of the Board terminating
         the Plan; and

                (ii)  ten  years  from the date the Plan is  initially approved
         and adopted  by the  stockholders  of the  Company in  accordance with
         Article XIII.

         Except as  specifically  provided  herein,  no  termination of the Plan
shall  materially  and adversely  affect any of the rights or obligations of any
person  without  his or her  consent  with  respect  to any  Options  or  Shares
theretofore granted under the Plan.

                                      A-11

<PAGE>

XIII.    STOCKHOLDER APPROVAL AND ADOPTION.

         The Plan was originally  adopted by the Board on March 12, 1996 and was
approved and adopted at a meeting of the stockholders of the Company held on May
21,  1996.  The Plan was amended and  restated by the Board at a meeting held on
November 12, 1996.















                                      A-12


