
<PAGE>
 
                                                                  Exhibit 10(f) 

                         ALLEGHENY LUDLUM CORPORATION

                       1987 STOCK OPTION INCENTIVE PLAN
                       --------------------------------
                            (Amended and Restated)


Article I.    Purposes of the Plan

          The purposes of the Allegheny Ludlum Corporation 1987 Stock Option
Incentive Plan are to promote the growth and profitability of Allegheny Ludlum
Corporation, to provide key employees of Allegheny Ludlum Corporation and of any
corporation the majority of the voting stock of which is owned by Allegheny
Ludlum Corporation with an incentive to achieve long-term corporate objectives,
to attract and retain key employees of outstanding competence and to provide key
employees with an opportunity to acquire an equity interest in Allegheny Ludlum
Corporation.


Article II.    Definitions

          As used herein, the following terms shall have the meanings set forth:

          2.01  "Award" shall mean the grant of a Stock Option and/or a Stock
Appreciation Right under the Plan.

          2.02  "Award Agreement" shall mean the agreement between the Optionee
and the Company evidencing the grant of Stock Options and/or Stock Appreciation
Rights under the Plan, which Award Agreement shall contain such terms,
conditions and restrictions as the Committee may deem advisable; provided,
however, Award Agreements entered into at different times or with different
Optionees need not contain similar provisions.

          2.03  "Board" shall mean the Board of Directors of the Company.

          2.04   "CEO" shall mean the Chief Executive Officer of the Company.

          2.05  "Committee" shall mean the Personnel and Compensation Committee
of the Board, subject to the provisions of Section 3.4(a) hereof.

          2.06  "Common Stock" shall mean common stock, $0.10 par value per
share, of the Company.

          2.07  "Company" shall mean Allegheny Ludlum Corporation.
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          2.08  "Eligible Participants" shall mean (i) those officers and key
employees of the Company, or of any corporation the majority of the voting stock
of which is owned by the Company, designated by the Board in accordance with the
procedures set forth in Article III hereof as eligible to receive an Award under
the Plan, and (ii) subject to the following sentence, all Executive Officers of
the Company.  Directors of the Company who are not otherwise officers or
employees of the Company and Directors who are members of the Committee may not
be designated as Eligible Participants.

          2.09  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.

          2.10  "Executive Officer" shall mean an "officer" of the Company as
defined in Rule 16a-1(f) as promulgated by the Securities and Exchange
Commission under the Exchange Act, as such Rule may be amended from time to
time.

          2.11  "Fair Market Value" shall mean the fair market value of shares
of Common Stock, as determined by the Committee in its discretion.  The
Committee may change from time to time any method or formula by which it
determines Fair Market Value.

          2.12  "Optionee" shall mean an Eligible Participant who has received a
grant of Stock Options and/or Stock Appreciation Rights under the Plan.
Whenever the word "Optionee" is used in any provision of the Plan in
circumstances where the provision should logically be construed to apply to
executors, administrators or the person or persons to whom the Stock Options
and/or Stock Appreciation Rights may be transferred by will or the laws of
descent or distribution, the word "Optionee" shall be deemed to include such
executors, administrators or person or persons.

          2.13  "Option Period" shall mean the period or periods beginning on
the date on which a Stock Option or Stock Appreciation Right is granted and
ending on the last day on which such Stock Option or Stock Appreciation Right
may be exercised by an Optionee, as determined by the Committee upon
recommendation of the CEO and as set forth in the Award Agreement; provided,
however, no Option Period may extend beyond the tenth anniversary of the date of
granting the related Stock Option or Stock Appreciation Right.

          2.14  "Option Price" shall mean (i) with respect to Stock Options, the
price at which a share of Common Stock may be purchased pursuant to Stock
Options granted under the Plan upon exercise thereof, and (ii) with respect to
Stock Appreciation Rights, the price at which a Stock Appreciation Right may be
exercised, as such Option Price may be adjusted from time to time in accordance
with the provisions of Article V and Section 9.8 hereof and the terms of the
Award Agreement.

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          2.15  "Plan" shall mean the Allegheny Ludlum Corporation 1987 Stock
Option Incentive Plan, as amended from time to time pursuant to Section 9.10
hereof.

          2.16  "Rule 16b-3" shall mean Rule 16b-3 as promulgated by the
Securities and Exchange Commission under the Exchange Act, as in effect prior to
May 1, 1991 until the Committee elects otherwise and thereafter as such Rule may
be amended from time to time.

          2.17  "Stock Appreciation Right" shall mean a right which upon
exercise shall entitle the Optionee to receive for each share of Common Stock
subject to such Stock Appreciation Right the excess, if any, of the Fair Market
Value of a share of Common Stock as of the date of such exercise over the Option
Price.

          2.18  "Stock Option" shall mean the right and option of an Optionee to
purchase the aggregate number of shares of Common Stock as is set forth in the
Award Agreement.

          2.19  "Termination Date" shall mean the date upon which this Plan
terminates, which shall be January 1, 1997.


Article III.   Operation of the Plan

          3.1  Designation of Eligible Participants
               ------------------------------------

          (a)  Designation by Board

          The Board, upon recommendation made in accordance with Section 3.1(b)
hereof, shall determine and designate those officers and key employees of the
Company or of any corporation the majority of the voting stock of which is owned
by the Company, in addition to the Executive Officers, who shall be eligible to
participate in the Plan.  The Board shall make such determination and
designation only from those individuals, job classifications or other
descriptions of officers and key employees recommended to the Board in
accordance with Section 3.1(b) hereof.

          (b) Procedure for Recommendation to the Board

              (i)  Recommendation by CEO

          Any and all recommendations concerning eligibility to participate in
the Plan shall be initiated by the CEO.  The CEO may, at such times and from
time to time as he may determine in his discretion, recommend to the Committee
those officers and key employees, by naming such individuals, by describing job
classifications or otherwise describing the persons or classes of

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employees, whom the CEO in his discretion considers to be officers or key
employees eligible to participate in the Plan.  The CEO may, from time to time,
as he may determine in his discretion, recommend the addition of such
individuals, job classifications or other descriptions of employees to those
previously designated as Eligible Participants or the deletion of Eligible
Participants from those previously designated as eligible to participate.

                    (ii)  Review by Committee

          The Committee shall review each recommendation of the CEO as soon as
practicable after presentation of such recommendation by the CEO.  Upon such
review, the Committee shall recommend to the Board those individuals, job
classifications or other descriptions of employees from among those recommended
by the CEO which the Committee, in its discretion, considers to be officers or
key employees eligible to participate in the Plan.

          (c)  Designation of Eligibility Does Not Require Grant of Options

          Designation of an officer or key employee as an Eligible Participant
shall not require the CEO to recommend the grant of an Award or the Committee to
grant an Award to such Eligible Participant, either upon initial designation or
from time to time thereafter.

          3.2  Grant of Stock Options and/or Stock Appreciation
               ------------------------------------------------
               Rights
               ------

          (a)  Grant by Committee

          The Committee, upon recommendation made in accordance with Section
3.2(b) hereof, may grant Stock Options and/or Stock Appreciation Rights under
the Plan to any Eligible Participant recommended to receive an Award whether or
not such Eligible Participant has previously received an Award under the Plan,
in respect to an amount of shares and subject to such restrictions as the
Committee may deem appropriate, in its discretion but only upon the
recommendation of the CEO in accordance with Section 3.2(b) hereof.

          (b)  Procedure for Recommendation

          Any and all recommendations concerning the grant of an Award under the
Plan, including but not limited to the identity of the Eligible Participant, the
form of the Award and the number of shares subject to Stock Options or Stock
Appreciation Rights in an Award granted to an Eligible Participant, shall be
initiated by the CEO.  The CEO may, at such times and from time to time as he
may determine, recommend to the

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Committee the identity of the Eligible Participant(s) to whom an Award should be
granted together with (i) the number of shares subject to Stock Options and/or
Stock Appreciation Rights to be granted to each Eligible Participant so
recommended, (ii) the respective Option Periods applicable thereto and (iii) any
restrictions or other terms and conditions applicable to Stock Options and/or
Stock Appreciation Rights.  The Committee shall review each recommendation of
the CEO as soon as practicable after presentation of such recommendation by the
CEO.

          (c)  General

          The CEO, in recommending, and the Committee, in granting, such Awards
and determining their form and amount, shall give consideration to the functions
and responsibilities of the Eligible Participant, his or her contributions to
profitability and sound growth of the Company and such other factors as the CEO
and the Committee, as the case may be, may deem appropriate.  An Optionee, upon
receipt of a grant of an Award, shall state his or her good faith intention to
continue as an employee of the Company for such period (but not less than six
months) from the date of the grant of the Award as shall be provided in the
Award Agreement, subject to the right of the Company to terminate the employment
of the Optionee at any time.  No Award may be granted to an Eligible Participant
within six months of the Eligible Participant's expected retirement date.  No
Stock Option or Stock Appreciation Right may be granted under the Plan after
December 31, 1996, or such earlier date as may be determined by the Board.

          3.3  Vesting of Stock Options and/or Stock Appreciation
               --------------------------------------------------
               Rights
               ------

          Stock Options and Stock Appreciation Rights granted under the Plan
shall not be immediately exercisable but shall become exercisable in accordance
with a vesting schedule set forth in the Award Agreement evidencing such grant.
Except as permitted by the Committee upon recommendation of the CEO, no Award
Agreement may set forth a vesting schedule which provides for vesting more rapid
than the rate of one third of the number of shares subject to such Award
Agreement on each of the third, fourth and fifth anniversaries of the grant of
such Award.  Stock Options and Stock Appreciation Rights, to the extent vested
under the schedule set forth in the Award Agreement, shall be separately
exercisable in whole or in part.

          3.4  General Administration
               ----------------------

          (a)  The Plan shall be administered by the Committee.  A person who is
not a disinterested person for the purposes of Rule 16b-3 or, effective as of
the 1995 annual meeting of shareholders, who is not an "outside director" for
the

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purposes of Section 162(m) of the Internal Revenue Code of 1986 and the
regulations promulgated thereunder, shall not be a member of the Committee, and
shall not participate in the administration of the Plan, for any purpose
relating to any Executive Officer participant or participants in the Plan.  Such
disqualification shall be effective immediately prior to the occurrence of any
event or circumstance that causes the person to lose the status of disinterested
person or outside director, as the case may be.

          (b)  The Committee shall have the authority in its sole discretion
from time to time:  (i) upon recommendation of the CEO, to grant Awards provided
for in the Plan; (ii) to prescribe such limitations, restrictions and conditions
upon any such Stock Options and/or Stock Appreciation Rights as the Committee,
upon recommendation of the CEO, shall deem appropriate; and (iii) to interpret
the Plan, to adopt, amend and rescind rules and regulations relating to the
Plan, and to make all other determinations and to take all other actions
necessary or advisable for the implementation and administration of the Plan.  A
majority of the Committee shall constitute a quorum, and the action of a
majority of members of the Committee present at any meeting at which a quorum is
present, or acts unanimously adopted in writing without the holding of a
meeting, shall be the acts of the Committee.

          (c)  All such actions of the Committee shall be final, conclusive and
binding upon Eligible Participants and Optionees.  No member of the Committee
shall be liable for any action taken or decision made in good faith relating to
the Plan or any grant hereunder.


Article IV.    Aggregate Limitation on Shares Subject to Plan

          Shares of Common Stock which may be issued pursuant to Stock Options
or Stock Appreciation Rights granted under the Plan may be either authorized and
unissued shares or authorized and issued shares of Common Stock held by the
Company as treasury shares.  The number of shares of Common Stock reserved for
issuance under the Plan shall not exceed 2,700,000 shares, as adjusted to
reflect the 3-for-2 stock split effective July 2, 1990 and the 2-for-1 stock
split effective July 1, 1993, subject to further adjustment pursuant to Section
9.8 hereof; provided, however, if any Stock Option or Stock Appreciation Right
shall expire or be cancelled prior to its exercise in full for any reason, the
shares subject to such Stock Option or Stock Appreciation Right shall be
thereafter available under the Plan.

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Article V.     Option Price

          5.1  Option Price on Date of Grant
               -----------------------------

          The Option Price on the date of grant of Stock Options or Stock
Appreciation Right under the Plan shall be determined by the Committee upon
recommendation of the CEO and shall be an amount not less than the Fair Market
Value of a share of Common Stock at the time such Stock Option or Stock
Appreciation Right is granted.

          5.2  Adjustments to Option Price
               ---------------------------

          In addition to the adjustments provided in Section 9.8, upon
recommendation by the CEO the Committee may grant Stock Options and/or Stock
Appreciation Rights which provide that the Option Price on the date of exercise
shall be determined by subtracting from the Option Price on the date of grant,
as determined under Section 5.1 and set forth in the Award Agreement, a
percentage of the excess, if any, of (i) the Fair Market Value of a share of
Common Stock as of the date of exercise over (ii) the Option Price on the date
of grant, provided, however, that in no event may the Option Price, as adjusted,
be less than $1.00.


Article VI.    Option Periods; Rights Upon Retirement, Death or
               Disability

          6.1  Option Period
               -------------

          Each Award Agreement shall state the period or periods within which a
Stock Option or Stock Appreciation Right may, to the extent then vested, be
exercised or surrendered by the Optionee, in whole or in part, which period
shall be as determined by the Committee upon recommendation of the CEO;
provided, however, except as otherwise determined by the Committee upon
recommendation of the CEO, each Option Period shall cease upon termination of an
Optionee's employment with the Company.  Except as so determined by the
Committee upon recommendation of the CEO, an Optionee may not exercise a Stock
Option or Stock Appreciation Right, in whole or in part, after such termination
of employment.

          6.2  Rights in the Event of Retirement
               ---------------------------------

          Notwithstanding Section 6.1 hereof, if an Optionee retires with the
consent of the Company without having fully exercised or surrendered the then
vested portion of a Stock Option or Stock Appreciation Right, no additional
shares shall vest after the date of such retirement unless otherwise provided by
the Committee but the Optionee shall have the right to

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exercise the outstanding and then exercisable portion of such Stock Option
and/or Stock Appreciation Rights, or to surrender the outstanding and then
exercisable portion of such Stock Option and/or Stock Appreciation Right
pursuant to Article VII hereof at any time prior to the earlier of (i) the end
of the Option Period set forth in the Award Agreement or (ii) the third
anniversary of the date of such retirement.

          6.3  Rights in the Event of Death or Disability
               ------------------------------------------

          Notwithstanding Section 6.1 hereof, if an Optionee dies or becomes
disabled without having fully exercised or surrendered the then vested portion
of a Stock Option and/or Stock Appreciation Right, no additional shares shall
vest after the date of such death or disability unless otherwise provided by the
Committee but the Optionee and the executors, administrators, legatees or
distributees of the Optionee shall have the right, to the extent of their
respective custody and control, to exercise the outstanding and then exercisable
portion of such Stock Option and/or Stock Appreciation Right, or to surrender
the outstanding and then exercisable portion of the Stock Option and/or Stock
Appreciation Right, pursuant to Article VII hereof, at any time prior to the
earlier of (i) the end of the Option Period set forth in the Award Agreement or
(ii) the third anniversary of the date of death or disability.  Disability shall
mean full, permanent disability as determined by the Committee.  The date of
disability shall be determined by the Committee.


Article VII.   Surrender of Options and Stock Appreciation Rights

          In addition to the rights to surrender Stock Options and/or Stock
Appreciation Rights, to the extent then exercisable, as provided in Section 6.2
hereof and Section 6.3 hereof, the Committee may authorize, upon such conditions
and restrictions as it deems advisable, the surrender, to the extent then
exercisable, of the right to exercise a Stock Option and/or Stock Appreciation
Right, or any portion thereof, and the payment by the Company in exchange
therefor of an amount, after withholding for taxes as provided in Section 8.4
hereof, equal to the excess of the Fair Market Value of the shares of Common
Stock covered by the Stock Option and/or Stock Appreciation Right, or portion
thereof, surrendered over the aggregate Option Price of such shares.  Such
payment may be made in shares of Common Stock valued at Fair Market Value or in
cash or partly in cash and partly in shares of Common Stock, as the Committee
deems advisable.  The shares of Common Stock covered by any Stock Option or
Stock Appreciation Right, or portion of either, as to which the right to
exercise shall have been so surrendered shall not again be available for
purposes of the Plan.  Any shares of Common Stock delivered upon any such
surrender may be authorized unissued or reacquired Common Stock and shall not be
charged

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against the number of shares of Common Stock available for grant of Stock
Options under the Plan.


Article VIII.  Manner of Exercise, Payment of Purchase Price and
               Withholding

          8.1  Exercise of Options
               -------------------

          A Stock Option may be exercised by an Optionee from time to time, in
whole or in part, independent of any Stock Appreciation Right to the extent then
exercisable by delivering an irrevocable written notice to the Committee of his
or her intent to exercise the Stock Option with respect to a specified number of
shares.  The specified number of shares will be issued and transferred to the
Optionee upon receipt by the Committee of (i) such notice and (ii) payment,
including applicable taxes, for such shares.

          8.2  Payment of Purchase Price
               -------------------------

          The purchase price of the shares for which a Stock Option may be
exercised shall be paid to the Company, prior to the delivery of the shares
being purchased in the form of, at the discretion of the Optionee, (i) cash,
(ii) whole shares of Common Stock already owned by the Optionee, valued at their
Fair Market Value as of the day immediately preceding the date of exercise or
(iii) a combination of cash and Common Stock equal in value to the purchase
price.

          8.3  Exercise of Stock Appreciation Rights
               -------------------------------------

          A Stock Appreciation Right may be exercised independently of any Stock
Option by an Optionee from time to time, in whole or in part, to the extent then
exercisable by delivering written notice to the Committee of his or her intent
to exercise the Stock Appreciation Right with respect to a specified number of
shares.  Upon exercise of a Stock Appreciation Right, the amount realized by the
Optionee may be payable, in the discretion of the Committee, in the form of
shares of Common Stock valued at their then Fair Market Value or cash or a
combination of Common Stock and cash.  The amount of cash or number of shares
payable upon exercise of a Stock Appreciation Right, as determined by the
Committee, will be delivered to the Optionee upon receipt of such notice and
receipt of payment for, or withholding of, applicable taxes.

          8.4  Withholding
               -----------

          In each case where an Optionee shall exercise a Stock Option and/or
Stock Appreciation Right, in whole or in part, the Company shall notify the
Optionee of the amount of

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withholding tax, if any, which must be paid under federal, state and local law.
The Company shall, in the discretion of the Company, but with the consent of the
Committee, arrange for payment for such withholding taxes in any one or
combination of the following ways:  (i) acceptance of an amount in cash paid by
the Optionee, (ii) deduction of amounts for withholding taxes from Optionee's
regular salary payments, (iii) deduction of amounts for withholding taxes from
amounts of cash payable to Optionee upon exercise, (iv) reduction in the number
of shares to be issued pursuant to such exercise by that number of shares having
a Fair Market Value equal to the amount the Company is required to withhold
and/or (v) acceptance of whole shares of Common Stock already owned by the
Optionee having a Fair Market Value equal to the amount the Company is required
to withhold.  If the full amount of the withholding tax is not recovered in the
above manner, the Optionee shall, forthwith upon receipt of notice, remit the
deficiency to the Company.  No shares acquired pursuant to exercise of a Stock
Option or Stock Appreciation Right shall be issued or delivered to an Optionee
until all applicable withholding taxes shall have been satisfied in full.

          8.5  Delivery of Shares and/or Cash
               ------------------------------

          As soon as practicable after each exercise and upon compliance by an
Optionee with all applicable conditions, the Company will issue and deliver by
mail, or cause delivery by mail to the Optionee at the address specified, the
number of shares of Common Stock and/or the Company's check for the amount of
cash which the Optionee is entitled to receive (subject to reduction for
withholding tax as provided in Section 8.4 hereof) under the provisions of the
Plan and the Award Agreement.  Such shares, and any certificates issued to
evidence such shares, shall be registered in the name of the Optionee or such
other person or entity as the Optionee shall specify in writing at the time such
options are exercised.

          8.6. Authorization of Other Procedures
               ---------------------------------

          The Committee is authorized to establish procedures in order to
facilitate the sale by an Optionee of a sufficient number of shares of Common
Stock purchased under the Plan to pay the purchase price of such shares and to
facilitate the delivery of shares of Common Stock purchased hereunder.


Article IX.    Miscellaneous

          9.1  General Restriction
               -------------------

          Any Award granted under the Plan shall be subject to the requirement
that, if at any time the Committee shall determine that any listing or
registration of the shares of

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Common Stock or any consent or approval of any governmental body, or any other
agreement or consent is necessary or desirable as a condition of the granting of
a Stock Option or issuance of shares of Common Stock or cash in satisfaction of
the exercise of an Award, such grant of a Stock Option or issuance of shares of
Common Stock may not be consummated unless such requirement is satisfied in a
manner acceptable to the Committee.

          9.2  Awards to Executive Officers
               ----------------------------

          For the purposes of the Plan, and notwithstanding any provision of the
Plan to the contrary, the selection of Executive Officers to receive Awards, and
decisions concerning the timing, pricing, and amount of Awards to Executive
Officers, shall be made solely by the Committee in its discretion.  The
Committee shall receive and review recommendations of the CEO relating to
Executive Officers under the Plan, but shall not be bound by such
recommendations and may initiate action under the Plan with respect to Executive
Officers although not initiated by the CEO.

          9.3  Non-Assignability
               -----------------

          No Stock Option or Stock Appreciation Right granted under the Plan
shall be assignable or transferable by the recipient thereof, except by will or
by the laws of descent and distribution.  During the life of the recipient, any
Stock Option or Stock Appreciation Right shall be exercisable only by such
individual.  No assignment or transfer of a Stock Option or Stock Appreciation
Right, or of the rights represented thereby, whether voluntary or involuntary,
by operation of law or otherwise (except by will or the laws of descent and
distribution), shall vest in the assignee or transferee any interest or right
herein whatsoever, but immediately upon such assignment or transfer the Stock
Option or Stock Appreciation Right shall terminate and become of no further
effect.

          9.4  Investment Representation
               -------------------------

          Each Award Agreement may provide that the Optionee or recipient shall
deliver to the Committee, upon demand by the Committee, at the time of any
exercise of any Stock Option or Stock Appreciation Right for which the Committee
elects to issue shares of Common Stock a written representation that the shares
to be acquired are to be acquired for investment and not for resale or with a
view to the distribution thereof.  Upon such demand, delivery of such
representation prior to delivery of any shares shall be a condition precedent to
the right of the Optionee or such other person to acquire any shares.

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<PAGE>
 
          9.5  No Right to Employment
               ----------------------

          Nothing in the Plan or in any agreement entered into pursuant to it
shall confer upon any Optionee or Eligible Participant the right to continue in
the employment of the Company or affect any right which the Company may have to
terminate the employment of such Participant.

          9.6  Non-Uniform Determinations
               --------------------------

          The recommendations of the CEO and the Committee and the
determinations of the Board and the Committee under the Plan (including without
limitation the respective determinations or recommendations of the persons to
receive an Award, the form, amount and timing of such Awards and the terms and
provisions of such Awards) need not be uniform and may be made selectively among
persons who receive, or are eligible to receive, an Award under the Plan,
whether or not such persons are similarly situated.

          9.7  No Rights as Shareholders
               -------------------------

          Recipients of Stock Options and/or Stock Appreciation Rights under the
Plan shall have no rights as shareholders of the Company with respect thereto
unless and until shares of Common Stock are issued to them.

          9.8  Adjustments of Stock Options and Stock Appreciation Rights
               ----------------------------------------------------------

          In the event of any change or changes in the outstanding Common Stock
of the Company by reason of any stock dividend, recapitalization,
reorganization, merger, consolidation, split-up, combination or exchange of
shares or any rights offering to purchase a substantial amount of Common Stock
at below Fair Market Value or of any similar change affecting the Common Stock,
any of which takes effect after the first grant of an Award under the Plan, the
Committee may, in its discretion, appropriately adjust the number of shares of
Common Stock which may be issued under the Plan, the number of shares of Common
Stock subject to Stock Options and/or Stock Appreciation Rights theretofore
granted under the Plan, the Option Price of such Stock Options or Stock
Appreciation Rights, and any and all other adjustments deemed appropriate by the
Committee to prevent substantial dilution or enlargement of the rights granted
to an employee in such manner as the Committee shall deem appropriate.

          9.9  Options and/or Stock Appreciation Rights Not A Bar     
               ---------------------------------------------------
               to Corporate Event
               ------------------

          The existence of the Stock Options and/or Stock Appreciation Rights
granted hereunder shall not affect in any way

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the right or the power of the Company or its shareholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business, or any merger or consolidation
of the Company, or any issue of bonds, debentures, preferred or prior preference
stocks ahead of or affecting the Common Stock or the rights thereof, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.

         9.10  Amendment or Termination of the Plan
               ------------------------------------

          The Board may at any time terminate the Plan or any part thereof and
may from time to time amend the Plan as it may deem advisable; provided,
however, that without shareholder approval, the Board may not (i) increase the
aggregate number of shares of Common Stock which may be issued under the Plan
(other than increases permitted under Paragraph 9.8 hereof), (ii) extend the
term of the Plan, or (iii) extend the period during which Stock Options or Stock
Appreciation Rights may be exercised.  The termination or amendment of the Plan
shall not, without the consent of an Optionee, affect such Optionee's rights
under a previous grant of Stock Options or Stock Appreciation Rights.


Article X.     Effective Date of the Plan; Contingent Effectiveness

          The effective date of the Plan shall be the date upon which the latter
of the following occurs: (i) the closing on an initial public offering by the
Company of shares of Common Stock in a transaction registered under the
Securities Act of 1933 on Form S-1 and (ii) the approval, at a regular or
special meeting, by the shareholders of the Company holding not less than a
majority of the issued and outstanding shares of Common Stock.  Notwithstanding
the foregoing, if the Plan shall have been approved by the Board prior to such
shareholder approval, Stock Options and/or Stock Appreciation Rights may be
granted hereunder subject to subsequent shareholder approval.  Notwithstanding
approval by the Board and the shareholders, in the event that no such offering
takes place prior to January 1, 1988, the Plan, together with all actions taken
and agreements executed in relation thereto, shall be null and void and without
further effect.


Article XI.    Termination of Plan

          The Plan shall expire on January 1, 1997.

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<PAGE>
 
Article XII.   Rule 16b-3 Compliance.

          It is intended that the Plan comply with Rule 16b-3 and that all
interpretations of the Plan relating to Executive Officers shall be consistent
with such Rule and the Exchange Act.  In order to maintain compliance with such
Rule and the Exchange Act and to facilitate and promote the conformity of the
transactions of Executive Officer participants under the Plan with such Rule,
the Committee may adopt such rules and policies as it deems advisable,
including, but not limited to, rules and policies restricting the timing of a
surrender of a Stock Option for cash or of an exercise of a Stock Appreciation
Right for cash or of the reduction in the number of shares to be issued pursuant
to the exercise of a Stock Option pursuant to Section 8.4 hereof and elections
with respect thereto.

                                                                        PAT00462

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