

                          POWERHOUSE TECHNOLOGIES, INC.
                            1994 STOCK INCENTIVE PLAN
                 as amended June 18, 1997 and February 13, 1998


1.   Purpose.

     The purpose of this Plan is to  strengthen  Powerhouse  Technologies,  Inc.
(the "Company") by providing an incentive to its key employees and directors and
thereby  encouraging  them to devote their abilities and industry to the success
of the  Company's  business  enterprise.  It is  intended  that this  purpose be
achieved by extending to directors,  key employees,  consultants and advisors of
the Company an added  long-term  incentive  for high levels of  performance  and
unusual efforts through the grant of Incentive Stock Options, Nonqualified Stock
Options,  Stock  Appreciation  Rights,  Restricted Stock,  Performance Units and
Performance Shares (as each term is hereinafter defined).

2.   Effect on Other Plans.

     Upon approval of this Plan by the  stockholders of the Company  pursuant to
Section 20, no further  stock options or other awards shall be granted under the
Powerhouse  Technologies,  Inc. 1992 Stock Incentive Plan (the "1992 Plan"). All
stock options  outstanding under either the Powerhouse  Technologies,  Inc. 1991
Stock  Option  Plan (the  "1991  Plan") or the 1992 Plan  shall  continue  to be
governed by the terms of the 1991 Plan or the 1992 Plan, as the case may be, and
the relevant stock option agreement pertaining to each such stock option.

3.   Definitions.

For purposes of the Plan,  unless otherwise  specified,  capitalized terms shall
have the following meanings:

     3.1  "Adjusted  Fair  Market  Value"  means,  in the  event of a Change  in
          Control,  the  greater  of (i) the  highest  price per  Share  paid to
          holders of the Shares in any transaction  (or series of  transactions)
          constituting  or  resulting in a Change in Control or (ii) the highest
          Fair Market Value of a Share during the ninety (90) day period  ending
          on the date of a Change in Control.

     3.2  "Agreement"  means the  written  agreement  between the Company and an
          Optionee  or  Grantee  evidencing  the grant of an Option or Award and
          setting forth the terms and conditions thereof.

     3.3  "Award" means a grant of Stock Appreciation Rights,  Restricted Stock,
          a Performance Award or any or all of them.

     3.4  "Awardee"  means a  person  to whom  any  Stock  Appreciation  Rights,
          Restricted Stock or Performance Award has been granted under the Plan.

     3.5  "Board" means the Board of Directors of the Company.

     3.6  "Cause"  means (a) for purposes of Section 6.4, the  commission  of an
          act  of  fraud  or   intentional   misrepresentation   or  an  act  of
          embezzlement,  misappropriation or conversion of assets of the Company
          or any Subsidiary and (b) for all other purposes, the commission of an
          act  of  fraud,   dishonesty,   unlawful  or  illegal  conduct,  gross
          negligence,  insubordination,  failure to substantially  perform one's
          duties   with  the   Company  or  any   Subsidiary,   or   intentional
          misrepresentation,  or a violation of the Company's Code of Conduct or
          similar set of standards of conduct and business  practices adopted by
          the Board or an act of embezzlement, misappropriation or conversion of
          assets  or  opportunities  of  the  Company  or any  Subsidiary,  or a
          determination  by the  Board  that  there is a  reasonable  basis  for
          concern

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          that any regulatory  authority,  gaming or racing commission,  lottery
          agency or similar  authority in any  jurisdiction in which the Company
          or any  Subsidiary  conducts  or  intends to  conduct  business,  seek
          licensing or submit a proposal to conduct business may find the person
          unsuitable  or  unfit,  or  the  failure  of  the  person  to  provide
          appropriate  information to, or cooperate with any regulatory or other
          governmental authority.

     3.7  "Change in  Capitalization"  means any  increase or  reduction  in the
          number of Shares,  or any change  (including,  but not  limited  to, a
          change in value) in the Shares or  exchange  of Shares for a different
          number or kind of shares or other securities of the Company, by reason
          of  a  reclassification,   recapitalization,   merger,  consolidation,
          reorganization,  spin-off, split-up, issuance of warrants or rights or
          debentures,  stock dividend,  stock split or reverse stock split, cash
          dividend,  property  dividend,  combination  or  exchange  of  shares,
          repurchase of shares, change in corporate structure or otherwise.

     3.8  A "Change in Control" shall mean the occurrence during the term of the
          Plan of:

          (i)  The "acquisition" by any "Person" (as the term person is used for
               purposes of Section 13(d) or 14(d) of the Securities Exchange Act
               of  1934,  as  amended  (the  "Exchange   Act"))  of  "Beneficial
               Ownership"  (within the meaning of Ruley13d-3  promulgated  under
               the  Exchange  Act)  of  any  securities  of  the  Company  which
               generally  entitles the holder  thereof the vote for the election
               of directors of the Company (the "Voting Securities") which, when
               added to the Voting Securities then "Beneficially  Owned" by such
               person, would result in such Person  "Beneficially  Owning" forty
               percent  (40%)  or  more  of the  combined  voting  power  of the
               Company's then outstanding Voting Securities;  provided, however,
               that for  purposes of this  paragraph  (i), a Person shall not be
               deemed to have made an acquisition  of Voting  Securities if such
               Person:  (a) acquires  Voting  Securities  as a result of a stock
               split,  stock dividend or other corporate  restructuring in which
               all  stockholders  of the  class of such  Voting  Securities  are
               treated on a pro rata basis;  (b) acquires the Voting  Securities
               directly from the Company;  (c) becomes the  Beneficial  Owner of
               more than the permitted percentage of Voting Securities solely as
               a result of the  acquisition of Voting  Securities by the Company
               which, by reducing the number of Voting  Securities  outstanding,
               increases the proportional number of shares Beneficially Owned by
               such  Person;  (d) is the  Company  or any  corporation  or other
               Person of which a  majority  of its  voting  power or its  equity
               securities or equity  interest is owned directly or indirectly by
               the  Company  (a  "Controlled  Entity")  or (e)  acquires  Voting
               Securities in connection  with a  "Non-Control  Transaction"  (as
               defined in paragraph (iii) below); or

          (ii) The individuals who, as of June 1, 1994, are members of the Board
               of Directors of the Company (the  "Incumbent  Board"),  cease for
               any  reason to  constitute  at least  two-thirds  of the Board of
               Directors of the Company;  provided,  however, that if either the
               election of any new  director or the  nomination  for election of
               any new director by the Company's  stockholders was approved by a
               vote of at least  two-thirds  of the  Incumbent  Board,  such new
               director shall be considered as a member of the Incumbent  Board;
               provided further, however, that no individual shall be considered
               a member  of the  Incumbent  Board if such  individual  initially
               assumed  office as a result  of  either  an actual or  threatened
               "Election Contest" (as described in Rule 14a-11 promulgated under
               the Exchange Act) or other actual or threatened  solicitation  of
               proxies or  consents  by or on behalf of a Person  other than the
               Board of Directors (a "Proxy Contest") including by reason of any
               agreement  intended  to avoid or settle any  Election  Contest or
               Proxy Contest; or

          (iii) Consummation or effectiveness of:

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               (a)  A merger,  consolidation  or  reorganization  involving  the
                    Company (a "Business Combination"), unless

                    (1)  the stockholders of the Company, immediately before the
                         Business  Combination,   own,  directly  or  indirectly
                         immediately  following  the  Business  Combination,  at
                         least  fifty-one  percent (51%) of the combined  voting
                         power  of  the  outstanding  voting  securities  of the
                         corporation  resulting  from the  Business  Combination
                         (the "Surviving Corporation") in substantially the same
                         proportion as their ownership of the Voting  Securities
                         immediately before the Business Combination, and

                    (2)  the individuals who were members of the Incumbent Board
                         immediately  prior to the  execution  of the  agreement
                         providing  for the Business  Combination  constitute at
                         least  a  majority  of  the  members  of the  Board  of
                         Directors of the Surviving Corporation, and

                    (3)  no Person  (other  than the  Company or any  Controlled
                         Entity, a trustee or other fiduciary holding securities
                         under   one  or  more   employee   benefit   plans   or
                         arrangements  (or any  trust  forming  a part  thereof)
                         maintained by the Company, the Surviving Corporation or
                         any Controlled  Entity, or any Person who,  immediately
                         prior  to  the  Business  Combination,  had  Beneficial
                         Ownership  of forty  percent  (40%) or more of the then
                         outstanding Voting Securities) has Beneficial Ownership
                         of forty percent  (40%) or more of the combined  voting
                         power of the Surviving  Corporation's  then outstanding
                         voting  securities  (a  transaction  described  in this
                         subparagraph (a) shall be referred to as a "Non-Control
                         Transaction");

               (b)  A complete liquidation or dissolution of the Company; or

               (c)  The sale or other disposition of all or substantially all of
                    the  assets  of the  Company  to any  Person  (other  than a
                    transfer to a Controlled Entity).

Notwithstanding  the  foregoing,  (x) a Change in Control shall not be deemed to
occur solely because forty percent (40%) or more of the then outstanding  Voting
Securities is  Beneficially  Owned by (A) a trustee or other  fiduciary  holding
securities  under one or more  employee  benefit plans or  arrangements  (or any
trust forming a part thereof) maintained by the Company or any Controlled Entity
or (B) any  corporation  which,  immediately  prior to its  acquisition  of such
interest,  is owned directly or indirectly by the stockholders of the Company in
the same proportion as their ownership of stock in the Company immediately prior
to such acquisition;  and (y) if an Eligible Employee's employment is terminated
and the Eligible Employee reasonably  demonstrates that such termination (A) was
at the request of a third party who has  indicated  an  intention or taken steps
reasonably calculated to effect a Change in Control and who effectuates a Change
in Control or (B) otherwise  occurred in connection with, or in anticipation of,
a Change in Control which actually  occurs,  then for all purposes  hereof,  the
date of a Change in Control with respect to the Eligible Employee shall mean the
date immediately prior to the date of such termination of employment.

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

     3.10 "Committee" means a committee consisting of at least two (2) directors
          who are Disinterested Directors and Outside Directors appointed by the
          Board to  administer  the Plan and to perform the  functions set forth
          herein.

     3.11 "Company" means Powerhouse Technologies, Inc.

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     3.12 "Director Option" means an Option granted pursuant to Section 6.

     3.13 "Disability"  means a physical or mental  infirmity  which impairs the
          Optionee's  ability to perform  substantially  his or her duties for a
          period of one hundred eighty (180) consecutive days.

     3.14 "Disinterested  Director"  means  a  director  of the  Company  who is
          "disinterested  within the  meaning of Rule 16b-3  under the  Exchange
          Act.

     3.15 "Division"  means  any of the  operating  units  or  divisions  of the
          Company designated as a Division by the Committee.

     3.16 "Eligible  Employee" means any officer or other employee or consultant
          or advisor of the Company or a Subsidiary  designated by the Committee
          as eligible to receive Options or Awards subject to the conditions set
          forth herein.

     3.17 "Employee Option" means an Option granted pursuant to Section 7.

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

     3.19 "Fair Market  Value"  means the average of the closing  sales price of
          the shares on the principal national securities exchange on which such
          Shares are listed or  admitted  to  trading,  for the 20 trading  days
          preceding  the date of  grant.  If such  Shares  are not so  listed or
          admitted to trading,  the arithmetic mean of the per Share closing bid
          price and per Share  closing asked price on such date as quoted on the
          National  Association of Securities Dealers Automated Quotation system
          or such other market in which such prices are regularly quoted, or, if
          there have been no published bid or asked  quotations  with respect to
          shares  on such  date,  the  Fair  Market  Value  shall  be the  value
          established by the Board in good faith and in accordance  with Section
          422 of the Code."

     3.20 "Grantee"  means a person to whom an Award has been granted  under the
          Plan.

     3.21 "Incentive  Stock Option" means an Option  satisfying the requirements
          of  Section  422 of the Code and  designated  by the  Committee  as an
          Incentive Stock Option.

     3.22 "Nonemployee  Director"  means a director of the Company who is not an
          employee of the Company or any  Subsidiary and who is first elected or
          appointed to serve as a director of the Company after June 1, 1994.

     3.23 "Nonqualified  Stock Option" means an Option which is not an Incentive
          Stock Option.

     3.24 "Option" means an Employee  Option,  a Director  Option,  or either or
          both of them.

     3.25 "Optionee" means a person to whom an Option has been granted under the
          Plan.

     3.26 "Outside  Director" means a director of the Company who is an "outside
          directors"  within the  meaning of Section  162(m) of the Code and the
          regulations promulgated thereunder.

     3.27 "Parent" means any corporation which is a parent  corporation  (within
          the  meaning  of  Section  424(e) of the  Code)  with  respect  to the
          Company.

     3.28 "Performance  Awards" means Performance  Units,  Performance Shares or
          either or both of them.

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     3.29 "Performance  Cycle" means the time period  specified by the Committee
          at  the  time  a  Performance   Award  is  granted  during  which  the
          performance  of the  Company,  a  Subsidiary  or a  Division  will  be
          measured.

     3.30 "Performance Objective" has the meaning set forth in Section 11.1.

     3.31 "Performance Shares" means Shares issued or transferred to an Eligible
          Employee  under  Section 11.3 which are subject to  restrictions  that
          lapse if and when certain prescribed performance goals are met.

     3.32 "Performance Unit" means Performance Units granted under Section 11.2.

     3.33 "Restricted  Stock" means Shares issued or  transferred to an Eligible
          Employee  pursuant  to  Section 10 which are  subject to  restrictions
          which  lapse  over  time  without  regard  to the  performance  of the
          Company, a Subsidiary or a Division.

     3.34 "Plan" means the Powerhouse  Technologies,  Inc. 1994 Stock  Incentive
          Plan.

     3.35 "Pooling  Period" means,  with respect to a Pooling  Transaction,  the
          period  ending on the day after the first  date on which the  combined
          entity resulting from the Pooling Transaction publishes thirty days of
          combined  operating  results or, if the Board  makes a  determination,
          such other period  following the Pooling  Transaction  which the Board
          reasonably  determines is appropriate  in connection  with the Pooling
          Transaction as a means of qualifying  for and  preserving  "pooling of
          interests" accounting treatment.

     3.36 "Pooling  Transaction"  means an acquisition of or by the Company in a
          transaction  which  is  intended  to  be  treated  as  a  "pooling  of
          interests" under generally accepted accounting principles.

     3.37 "Shares"  means the common  stock,  par value  $.01 per share,  of the
          Company.

     3.38 "Stock  Appreciation  Right"  means a  right  to  receive  all or some
          portion  of the  increase  in the value of the  Shares  subject  to an
          Option as provided in Section 9.

     3.39 "Subsidiary"  means any corporation which is a subsidiary  corporation
          (within the meaning of Section 424(f) of the Code) with respect to the
          Company.

     3.40 "Successor Corporation" means a corporation, or a parent or subsidiary
          thereof within the meaning of Section 424(a) of the Code, which issues
          or assumes a stock option in a transaction  to which Section 424(a) of
          the Code applies.

     3.41 "Ten-Percent Stockholder" means an Eligible Employee, who, at the time
          an Incentive Stock Option is to be granted to him or her, owns (within
          the meaning of Section  422(b)(6) of the Code) stock  possessing  more
          than ten  percent  (10%) of the  total  combined  voting  power of all
          classes of stock of the Company, or of a Parent or a Subsidiary.

4.   Administration.

     4.1  The Plan  shall be  administered  by the  Committee  which  shall hold
          meetings   at  such  times  as  may  be   necessary   for  the  proper
          administration  of the Plan.  The Committee  shall keep minutes of its
          meetings.  A quorum shall  consist of not less than two members of the
          Committee  and a majority of a quorum may  authorize  any action.  Any
          decision or determination  reduced to writing and signed by a majority
          of all of the members of the Committee  shall be as fully effective as
          if made by a majority  vote at a meeting  duly  called and held.  Each
          member  of the  Committee  shall be a  Disinterested  Director  and an
          Outside  Director.  No member of the Committee shall be liable for any
          action,  failure to act,

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          determination  or  interpretation  made in good faith with  respect to
          this Plan or any transaction  hereunder,  except for liability arising
          from his or her own willful misfeasance,  gross negligence or reckless
          disregard of his or her duties. The Company hereby agrees to indemnify
          each member of the  Committee  for all costs and expenses  and, to the
          extent  permitted  by  applicable  law,  any  liability   incurred  in
          connection with defending against,  responding to, negotiation for the
          settlement of or otherwise dealing with any claim,  cause of action or
          dispute  of any  kind  arising  in  connection  with  any  actions  in
          administering this Plan or in authorizing or denying  authorization to
          any transaction hereunder.

     4.2  Subject to the express  terms and  conditions  set forth  herein,  the
          Committee shall have the power from time to time to:

          (a)  determine  those  individuals  to whom Employee  Options shall be
               granted under the Plan and the number of Incentive  Stock Options
               and/or  Nonqualified Stock Options to be granted to each Eligible
               Employee and to prescribe  the terms and  conditions  (which need
               not be identical) of each Employee Option, including the purchase
               price per Share  subject to each  Employee  Option,  and make any
               amendment or  modification  to any Agreement  consistent with the
               terms of the Plan; and

          (b)  select those  Eligible  Employees to whom Awards shall be granted
               under the Plan and to determine the number of Performance  Units,
               Performance  Shares,  Shares of  Restricted  Stock,  and/or Stock
               Appreciation  Rights to be granted  pursuant to each  Award,  the
               terms and conditions of each Award, including the restrictions or
               performance  criteria  relating to such Units,  Shares or Rights,
               the maximum value of each Performance Unit and Performance  Share
               and  make  any  amendment  or   modification   to  any  Agreement
               consistent with the terms of the Plan.

     4.3  Subject to the express  terms and  conditions  set forth  herein,  the
          Committee shall have the power from time to time:

          (a)  to  construe  and  interpret  the Plan and the Options and Awards
               granted  thereunder and to establish,  amend and revoke rules and
               regulations for the  administration of the Plan,  including,  but
               not limited to,  correcting any defect or supplying any omission,
               or reconciling any inconsistency in the Plan or in any Agreement,
               in the  manner  and to the  extent  it shall  deem  necessary  or
               advisable to make the Plan fully effective, and all decisions and
               determinations  by the  Committee  in the  exercise of this power
               shall be final,  binding and  conclusive  upon the  Company,  its
               Subsidiaries,  the  Optionees  and Grantees and all other persons
               having any interest therein;

          (b)  to  determine  the  duration  and  purposes for leaves of absence
               which may be granted to an Optionee  or Grantee on an  individual
               basis without constituting a termination of employment or service
               for purposes of the Plan;

          (c)  to exercise its discretion  with respect to the powers and rights
               granted to it as set forth in the Plan; and

          (d)  generally,  to exercise  such powers and to perform  such acts as
               are deemed  necessary or advisable to promote the best  interests
               of the Company with respect to the Plan.

5.   Stock Subject to the Plan.

     5.1  The  maximum  number of Shares that may be made the subject of Options
          and Awards granted under the Plan is 1,500,000,  which may be treasury
          Shares,  authorized  but  unissued  Shares or Shares  purchased in the
          market for issuance  upon the exercise of

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          outstanding  Options or the grant of Awards under the Plan;  provided,
          however,  that such  maximum  number  shall be increased to the extent
          that any such  shares  granted  under  the Plan are  purchased  in the
          market;  and provided  further that the maximum  number of Shares that
          any Eligible  Employee may receive  pursuant to the plan in respect of
          Options  and Awards may not exceed  400,000  Shares.  Upon a Change in
          Capitalization  the maximum  number of Shares  (both in the  aggregate
          under the Plan and with respect to each  Eligible  Employee)  shall be
          adjusted in number and kind  pursuant to Section 13. The Company shall
          reserve  for the  purposes  of the  Plan,  out of its  authorized  but
          unissued  Shares or out of Shares held in the Company's  treasury,  or
          partly out of each,  such number of Shares as shall be  determined  by
          the Board.

     5.2  Whenever any outstanding  Option or Award or portion thereof  expires,
          is  cancelled or is otherwise  terminated  for any reason,  the Shares
          allocable  to the  cancelled or  otherwise  terminated  portion of the
          Option or Award may again be the subject of Options or Awards  granted
          hereunder.  Whenever a Stock Appreciation Right is exercised (for cash
          or Shares or a combination thereof) the excess of the number of Shares
          in respect of which the Stock  Appreciation Right was granted over the
          number  of  Shares,  if any,  actually  issued or  transferred  to the
          Awardee  as a result  of such  exercise  may again be the  subject  of
          Options or Awards granted hereunder;  provided,  however,  that future
          transactions involving such Shares (including, without limitation, the
          grant of  Options  or  Awards  in  respect  of such  Shares)  shall be
          eligible  for the  exemptions  provided  under Rule 16b-3  promulgated
          under the  Exchange Act only to the extent  permitted  under that Rule
          with respect to such securities.

6.   Option grants for Nonemployee Directors.

     6.1  Grant.  Subject to the  availability  of an adequate  number of Shares
          designated under the Plan, each  Nonemployee  Director shall receive a
          one-time  grant of an Option to  purchase  10,000  Shares  (subject to
          adjustment  as provided in Section 13)  effective as of the date which
          is the earlier of the date on which he or she is initially  elected to
          serve as a  Director  by vote of the  holders of Shares or the date on
          which he or she is  initially  appointed to serve as a Director by the
          members of the Board, pursuant to the Company's bylaws and articles of
          incorporation, as then in effect (a "Director Option").

     6.2  Purchase  Price.  The purchase  price for shares  under each  Director
          Option  shall be equal to 100% of the Fair Market Value of such shares
          on the date of grant.

     6.3  Vesting.  Subject to Sections 6.4 and 8.4, each Director  Option shall
          become  exercisable  with respect to 50% of the Shares subject thereto
          effective   immediately   as  of  the  grant  date  and  shall  become
          exercisable  with respect to an additional  25% of the Shares  subject
          thereto effective as of each of the first and second  anniversaries of
          the grant date;  provided,  that the Optionee  continues to serve as a
          Director  as of such  dates.  If an  Optionee  ceases  to  serve  as a
          Director  for any  reason,  the  Optionee  shall  have no rights  with
          respect to that portion of a Director Option which has not then vested
          pursuant  to  the   preceding   sentence   and  the   Optionee   shall
          automatically  forfeit  that  portion  of the  Director  Option  which
          remains unvested.

     6.4  Duration.  Each Director  Option shall  terminate on the date which is
          the tenth anniversary of the grant date, unless terminated  earlier as
          follows:

          (a)  If an Optionee's service as a Director  terminates for any reason
               other than  Disability,  death or Cause,  the  Optionee may for a
               period of three (3) months after such termination exercise his or
               her  Option  to the  extent,  and only to the  extent,  that such
               Option or portion  thereof was vested and  exercisable  as of the
               date the Optionee's service as a Director terminated, after which
               time the Option shall automatically terminate in full.

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          (b)  If an  Optionee's  service as a Director  terminates by reason of
               the Optionee's  resignation or removal from the Board,  in either
               case,  due to  Disability,  the Optionee may, for a period of one
               (1) year after such  termination,  exercise  his or her Option to
               the extent,  and only to the extent,  that such Option or portion
               thereof was vested and exercisable, as of the date the Optionee's
               service as Director terminated, after which time the Option shall
               automatically terminate in full.

          (c)  If an Optionee's service as a Director  terminates for Cause, the
               Option  granted  to  the  Optionee  hereunder  shall  immediately
               terminate in full and no rights thereunder may be exercised.

          (d)  If an Optionee  dies while a Director or within  three (3) months
               after termination of service as a Director as described in clause
               (a) or  (b) of  this  Section  6.4,  the  Option  granted  to the
               Optionee may be  exercised at any time within  twelve (12) months
               after the  Optionee's  death by the person or person to whom such
               rights  under the Option  shall  pass by will,  or by the laws of
               descent  or  distribution,  after  which  time the  Option  shall
               terminate  in full;  provided,  however,  that an  Option  may be
               exercised to the extent, and only to the extent,  that the Option
               or  portion  thereof  was  exercisable  on the  date of  death or
               earlier termination of the Optionee's services as a Director.

7.   Option Grants for Eligible Employees.

     7.1  Authority of Committee.  Subject to the  provisions of the Plan and to
          Section 5.1 above,  the Committee  shall have full and final authority
          to select those Eligible  Employees who will receive Options (each, an
          "Employee  Option"),  the terms and  conditions  of which shall be set
          forth in an Agreement; provided, however, that no person shall receive
          any  Incentive  Stock  Options  unless he or she is an employee of the
          Company,  a Parent or a  Subsidiary  at the time the  Incentive  Stock
          Option is granted.

     7.2  Purchase Price. The purchase price or the manner in which the purchase
          price is to be determined for Shares under each Employee  Option shall
          be  determined  by the  Committee  and  set  forth  in the  Agreement,
          provided that the purchase price per Share under each Employee  Option
          shall not be less than 100% of the Fair Market Value of a Share on the
          date the Employee  Option is granted (110% in the case of an Incentive
          Stock Option granted to a Ten-Percent Stockholder).

     7.3  Maximum Duration. Employee Options granted hereunder shall be for such
          term as the  Committee  shall  determine,  provided  that an Incentive
          Stock Option shall not be exercisable after the expiration of ten (10)
          years  from the date it is  granted  (five (5) years in the case of an
          Incentive  Stock Option  granted to a Ten-Percent  Stockholder)  and a
          Nonqualified   Stock  Option  shall  not  be  exercisable   after  the
          expiration  of ten  (10)  years  from  the  date  it is  granted.  The
          Committee  may,  subsequent  to the granting of any  Employee  Option,
          extend the term  thereof but in no event shall the term as so extended
          exceed the maximum term provided for in the preceding sentence.

     7.4  Vesting.  Subject to Section 8.4 hereof,  each  Employee  Option shall
          become exercisable in such installments  (which need not be equal) and
          at such times as may be  designated  by the Committee and set forth in
          the  Agreement.  To  the  extent  not  exercised,  installments  shall
          accumulate and be exercisable,  in whole or in part, at any time after
          becoming exercisable,  but not later than the date the Employee Option
          expires.  The  Committee  may  accelerate  the  exercisability  of any
          Employee Option or portion thereof at any time.

     7.5  Modification  or  Substitution.  The Committee may, in its discretion,
          modify  outstanding  Employee  Options  or  accept  the  surrender  of
          outstanding  Employee  Options (to the extent

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<PAGE>


          not  exercised)  and  grant  new  Options  in  substitution  for them.
          Notwithstanding  the foregoing,  no modification of an Employee Option
          shall  adversely  alter or impair any rights or obligations  under the
          Employee Option without the Optionee's consent.

8.   Terms and Conditions Applicable to All Options.

     8.1  Non-transferability. No Option granted hereunder shall be transferable
          by the Optionee to whom granted  otherwise than by will or the laws of
          descent and  distribution,  and an Option may be exercised  during the
          lifetime of such  Optionee only by the Optionee or his or her guardian
          or legal  representative.  The  terms of such  Option  shall be final,
          binding   and   conclusive   upon   the   beneficiaries,    executors,
          administrators, heirs and successors of the Optionee.

     8.2  Method of Exercise.  The exercise of an Option shall be made only by a
          written notice  delivered in person or by mail to the Secretary of the
          Company at the Company's  principal  executive office,  specifying the
          number of Shares to be purchased and  accompanied by payment  therefor
          and otherwise in accordance  with the Agreement  pursuant to which the
          Option  was  granted.  The  purchase  price for any  Shares  purchased
          pursuant to the  exercise of an Option shall be paid in full upon such
          exercise by any one or a  combination  of the  following:  (i) cash or
          (ii) transferring Shares to the Company upon such terms and conditions
          as determined by the Committee.  Until such person has been issued the
          Shares subject to such exercise,  he or she shall possess no rights as
          a  stockholder  with  respect  to  such  Shares.  Notwithstanding  the
          foregoing,  the  Committee  shall have  discretion to determine at the
          time of grant of each Employee  Option or at any later date (up to and
          including  the date of  exercise)  the form of payment  acceptable  in
          respect of the  exercise  of such  Employee  Option and may  establish
          cashless  exercise  procedures  which  provide for the exercise of the
          Option  and sale of the  underlying  Share by a  designated  broker or
          dealer.  In that  connection,  the  written  notice  pursuant  to this
          Section 8.2 may also  provide  instructions  from the  Optionee to the
          Company  that  upon  receipt  of  appropriate  instructions  from  the
          Optionee's broker or dealer, designated as such on the written notice,
          the Company shall issue such Shares directly to the designated  broker
          or dealer.  Any Shares  transferred  to the  Company as payment of the
          purchase  price  under an Option  shall be valued at their Fair Market
          Value on the day  preceding  the date of exercise of such  Option.  If
          requested by the  Committee,  the Optionee shall deliver the Agreement
          evidencing  the  Option  to the  Secretary  of the  Company  who shall
          endorse  thereon a notation of such exercise and return such Agreement
          to the Optionee.  No fractional Shares (or cash in lieu thereof) shall
          be issued upon exercise of an Option and the number of Shares that may
          be purchased  upon exercise  shall be rounded to the nearest number of
          whole Shares.

     8.3  Rights of Optionees. No Optionee shall be deemed for any purpose to be
          the owner of any Shares subject to any Option unless and until (i) the
          Option shall have been exercised  pursuant to the terms thereof,  (ii)
          the Company shall have issued and delivered the Shares to the Optionee
          and (iii) the Optionee's name shall have been entered as a stockholder
          of record on the books of the Company.  Thereupon,  the Optionee shall
          have full voting,  dividend and other ownership rights with respect to
          such Shares.

     8.4  Effect of Change in Control. Notwithstanding anything contained in the
          Plan or an Agreement to the contrary  (other than the last sentence of
          this  Section  8.4),  in the  event of a Change  in  Control,  (i) all
          Options outstanding on the date of such Change in Control shall become
          immediately  and  fully  exercisable,   (ii)  the  termination  of  an
          Optionee's employment following the Change in Control shall not affect
          his rights  under this  Section  8.4,  and (iii) an  Optionee  will be
          permitted to surrender for  cancellation  within sixty (60) days after
          such  Change in  Control,  any  Option or  portion of an Option to the
          extent not yet  exercised and the Optionee will be entitled to receive
          a cash payment in an amount equal to the excess, if any, of (x) (A) in
          the case of a Nonqualified  Stock Option,  the greater of (1) the Fair
          Market Value,  on the date  preceding  the date of  surrender,  of the
          Shares subject to the Option or

                                       9

<PAGE>


          portion  thereof  surrendered or (2) the Adjusted Fair Market Value of
          the Shares subject to the Option or portion thereof surrendered or (B)
          in the case of an Incentive  Stock Option,  the Fair Market Value,  on
          the date preceding the date of surrender, of the Shares subject to the
          Option or portion thereof surrendered, over (y) the aggregate purchase
          price for such Shares under the Option or portion thereof surrendered;
          provided,  however,  that in the case of an Option  granted within six
          (6) months  prior to the Change in Control to any  Optionee who may be
          subject to liability  under  Section  16(b) of the Exchange  Act, such
          Optionee  shall be entitled to surrender for  cancellation  his or her
          Option during the sixty (60) day period commencing upon the expiration
          of six (6) months  from the date of grant of any such  Option.  In the
          case  of  a  Change  in  Control  which  also  constitutes  a  Pooling
          Transaction and  notwithstanding  anything contained in the Plan or an
          Agreement  to the  contrary,  the  Committee  may, and with respect to
          Director  Options  shall,  take such  actions  which are  specifically
          recommended by an independent accounting firm retained by the Company,
          to the extent reasonably necessary in order to assure that the Pooling
          Transaction  will  qualify as such,  including,  but not  limited  to,
          providing  that (i) all Options or, in the  alternative,  such Options
          held by Optionees specifically identified by the Committee,  shall not
          become  immediately and fully exercisable on the date of the Change in
          Control but rather shall become  immediately and fully  exercisable on
          the date  following the last day on which the Pooling  Period  expires
          (whether  or not the  Optionee  is then an employee or director of the
          Company) and the holders of such Options  shall only have the right to
          surrender  for  cancellation  Options or portion  thereof for the cash
          payment specified in clause (ii) of the first sentence of this Section
          8.4 after the day following the  expiration of the Pooling  Period and
          for a period of sixty (60) days thereafter (in which case,  whether or
          not the  Optionee  holding  any such  Options  remains an  employee or
          director of the Company, any such Option shall not terminate and shall
          remain  exercisable  for the  greater  of sixty  (60)  days  after the
          expiration  of the  Pooling  Period  and the date  such  Option  would
          otherwise  terminate  in  accordance  with the  Plan and the  relevant
          Agreement), and/or (ii)the payment specified in this Section 8.4 shall
          be paid in the form of cash,  Shares or  securities  of a successor or
          acquiror  of  the  Company,  or a  combination  of the  foregoing,  as
          designated by the Committee.

9.   Stock Appreciation Rights.

     9.1  Grant.  The Committee may, in its  discretion,  in connection with the
          grant  of an  Employee  Option,  grant  to  Eligible  Employees  Stock
          Appreciation  Rights the terms and  conditions  of which  shall be set
          forth in an Agreement. A Stock Appreciation Right shall cover the same
          Shares  covered by the Option (or such lesser  number of Shares as the
          Committee may determine) and shall, except as provided in this Section
          9, be subject to the same terms and conditions as the related Option.

     9.2  Time of Grant. A Stock Appreciation Right may be granted either at the
          time of the related Option grant, or at any time thereafter during the
          term of the Option.

     9.3  Payment.  A Stock Appreciation Right shall entitle the holder thereof,
          upon exercise of the Stock  Appreciation Right or any portion thereof,
          to receive payment of an amount computed pursuant to Section 9.5.

     9.4  Exercise. A Stock Appreciation Right shall be exercisable at such time
          or  times  and  only  to  the  extent  that  the  related   Option  is
          exercisable,  and will not be  transferable  except to the  extent the
          related Option may be transferable. A Stock Appreciation Right granted
          in connection with an Incentive Stock Option shall be exercisable only
          if the Fair Market  Value of a Share on the date of  exercise  exceeds
          the purchase price of the related Incentive Stock Option.

     9.5  Amount Payable.  Upon the exercise of a Stock Appreciation  Right, the
          Grantee  shall  be  entitled  to  receive  an  amount   determined  by
          multiplying  (A) the excess of the Fair Market

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<PAGE>


          Value of a Share on the date  preceding  the date of  exercise of such
          Stock  Appreciation  Right over the per Share purchase price under the
          related  Option,  by (B) the  number of Shares as to which  such Stock
          Appreciation Right is being exercised.  Notwithstanding the foregoing,
          the Committee may limit in any manner the amount  payable with respect
          to any  Stock  Appreciation  Right  by  including  such a limit in the
          Agreement  evidencing the Stock  Appreciation  Right at the time it is
          granted.

     9.6  Treatment  of  Related  Options  and Stock  Appreciation  Rights  Upon
          Exercise. Upon the exercise of a Stock Appreciation Right, the related
          Option  shall be cancelled to the extent of the number of Shares as to
          which the Stock Appreciation Right is exercised, and upon the exercise
          of an Option granted in connection with a Stock  Appreciation Right or
          the  surrender  of such  Option  pursuant  to Section  8.4,  the Stock
          Appreciation  Right shall be  cancelled to the extent of the number of
          Shares as to which the Option is exercised or surrendered.

     9.7  Method of Exercise.  Stock Appreciation Rights shall be exercised by a
          Grantee only by a written notice delivered in person or by mail to the
          Secretary of the Company at the Company's  principal executive office,
          specifying  the  number  of  Shares  with  respect  to which the Stock
          Appreciation Right is being exercised.  If requested by the Committee,
          the  Grantee  shall  deliver  the  Agreement   evidencing   the  Stock
          Appreciation  Right being  exercised and the Agreement  evidencing any
          related  Option to the  Secretary  of the  Company  who shall  endorse
          thereon a notation of such  exercise and return such  Agreement to the
          Grantee.

     9.8  Form of Payment.  Payment of the amount  determined  under Section 9.5
          may be made in the discretion of the Committee, solely in whole Shares
          in a  number  determined  at  their  Fair  Market  Value  on the  date
          preceding  the date of exercise of the Stock  Appreciation  Right,  or
          solely  in  cash,  or in a  combination  of cash  and  Shares.  If the
          Committee  decides  to make  full  payment  in Shares  and the  amount
          payable  results in a  fractional  Share,  payment for the  fractional
          Share will be made in cash.  Notwithstanding the foregoing, no payment
          in the  form  of  cash  may be  made  upon  the  exercise  of a  Stock
          Appreciation  Right  pursuant  to  Section  9.5 to an  officer  of the
          Company or a  Subsidiary  who is subject to Section 16 of the Exchange
          Act,  unless the  exercise  of such Stock  Appreciation  Right is made
          during the period  beginning  on the third  business day and ending on
          the twelfth business day following the date of release for publication
          of the Company's quarterly or annual statements of sales and earnings.

     9.9  Restrictions.  No Stock Appreciation Right may be exercised before the
          date six (6) months after the date it is granted.

     9.10 Modification  or  Substitution.  Subject to the terms of the Plan, the
          Committee may modify outstanding  Awards of Stock Appreciation  Rights
          or accept the surrender of  outstanding  Awards of Stock  Appreciation
          Rights  (to  the  extent  not  exercised)  and  grant  new  Awards  in
          substitution for them.  Notwithstanding the foregoing, no modification
          of an Award shall  adversely alter or impair any rights or obligations
          under the Agreement without the Grantee's consent.

10.  Restricted Stock.

     10.1 Grant.  The Committee may grant to Eligible  Employees and Nonemployee
          Directors  Awards  of  Restricted  Stock,  and  may  issue  Shares  of
          Restricted Stock in payment in respect of vested Performance Units (as
          hereinafter  provided in Section 11.2), which shall be evidenced by an
          Agreement  between the Company and the Grantee.  Each Agreement  shall
          contain such restrictions,  terms and conditions as the Committee may,
          in its discretion,  determine, and (without limiting the generality of
          the foregoing) such Agreements may

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<PAGE>


          require  that an  appropriate  legend be place on Share  certificates.
          Awards  of  Restricted  Stock  shall  be  subject  to  the  terms  and
          provisions set forth below in this Section 10.

     10.2 Rights of Grantee.  Shares of Restricted  Stock granted pursuant to an
          Award  hereunder shall be issued in the name of the Grantee as soon as
          reasonably  practicable  after the Award is granted  provided that the
          Grantee  has  executed  an  Agreement   evidencing   the  Award,   the
          appropriate   blank  stock  powers  and,  in  the  discretion  of  the
          Committee,  an  escrow  agreement  and any other  documents  which the
          Committee  may require as a condition  to the issuance of such Shares.
          If a  Grantee  shall  fail  to  execute  the  Agreement  evidencing  a
          Restricted Stock Award, the appropriate blank stock powers and, in the
          discretion  of the  Committee,  an  escrow  agreement  and  any  other
          documents  which the  Committee  may  require  within the time  period
          prescribed  by the  Committee  at the time the Award is  granted,  the
          Award  shall be null and void.  At the  discretion  of the  Committee,
          Shares  issued in  connection  with a Restricted  Stock Award shall be
          deposited  together  with the stock powers with an escrow agent (which
          may be the Company) designated by the Committee.  Unless the Committee
          determines otherwise and as set forth in the Agreement,  upon delivery
          of the Shares to the escrow  agent,  the Grantee shall have all of the
          rights of a  stockholder  with respect to such Shares,  including  the
          right  to vote  the  Shares  and to  receive  all  dividends  or other
          distributions paid or made with respect to the Shares.

     10.3 Non-transferability.   Until  any  restrictions  upon  the  Shares  of
          Restricted  Stock awarded to a Grantee shall have lapsed in the manner
          set forth in Section 10.4, such Shares shall not be sold,  transferred
          or  otherwise  disposed  of and  shall  not be  pledged  or  otherwise
          hypothecated, nor shall they be delivered to the Grantee.

     10.4 Lapse of Restrictions.

          (a)  Generally.  Subject to Section  16,  restrictions  upon Shares of
               Restricted  Stock awarded  hereunder  shall lapse at such time or
               times  and on such  terms and  conditions  as the  Committee  may
               determine, which restrictions shall be set forth in the Agreement
               evidencing the Award.

          (b)  Effect of Change in Control.  Notwithstanding  anything contained
               in the Plan,  unless the Agreement  evidencing the Award provides
               to the  contrary,  in the  event  of a  Change  in  Control,  all
               restrictions  upon any Shares of  Restricted  Stock  shall  lapse
               immediately  and all such Shares shall become fully vested in the
               Grantee.

     10.5 Modification  or  Substitution.  Subject to the terms of the Plan, the
          Committee may modify  outstanding Awards of Restricted Stock or accept
          the surrender of outstanding Awards of Restricted Stock (to the extent
          not  exercised)  and  grant  new  Awards  in  substitution  for  them.
          Notwithstanding  the  foregoing,  no  modification  of an Award  shall
          adversely  alter  or  impair  any  rights  or  obligations  under  the
          Agreement without the Grantee's consent.

     10.6 Treatment of Dividends.  At the time the Award of Shares of Restricted
          Stock is granted, the Committee may, in its discretion, determine that
          the  payment  to the  Grantee of  dividends,  or a  specified  portion
          thereof,  declared or paid on such Shares by the Company  shall be (i)
          deferred  until the  lapsing  of the  restrictions  imposed  upon such
          Shares and (ii) held by the  Company  for the  account of the  Grantee
          until such time. If dividends are to be deferred,  the Committee shall
          determine whether such dividends are to be reinvested in Shares (which
          shall be held as  additional  shares of  Restricted  Stock) or held in
          cash.  If  deferred  dividends  are to be held in cash,  there  may be
          credited at the end of each year (or portion thereof)  interest on the
          amount of the account at the beginning of the year at a rate per annum
          as the  Committee,  in  its  discretion,  may  determine.  Payment  of
          deferred dividends,  together with interest accrued thereon,  shall be
          made upon the lapsing of restrictions  imposed on such Shares, and any
          dividends  deferred  (together with any interest  accrued  thereon) in

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<PAGE>



          respect of any Shares of Restricted  Stock shall be forfeited upon the
          forfeiture of such Shares.

     10.7 Delivery of Shares.  Upon the lapse of the  restrictions  on Shares of
          Restricted  Stock, the Committee shall cause a stock certificate to be
          delivered  to the Grantee  with  respect to such  Shares,  free of all
          restrictions hereunder.

11.  Performance Awards.

     11.1 Performance Objectives.  Performance objectives for Performance Awards
          (the  "Performance  Objectives")  may be  expressed  in  terms  of (i)
          earnings per Share, (ii) pre-tax profits,  (iii) revenue,  (iv) market
          share, (v) net earnings or net worth, (vi) return on equity or assets,
          or (vii) any combination of the foregoing.  Performance objectives may
          be in respect of the  performance of the Company and its  Subsidiaries
          (which may be on a  consolidated  basis),  a Subsidiary or a Division.
          Performance  objectives  may  be  absolute  or  relative  and  may  be
          expressed in terms of a progression within a specified range. Prior to
          the end of a Performance Cycle, the Committee, in its discretion,  may
          adjust  the  performance   objectives  to  reflect  a  Change  in  the
          Capitalization.   The   Performance   Objectives  with  respect  to  a
          Performance  Cycle shall be established by the Committee  prior to the
          commencement of that Performance Cycle.

     11.2 Performance  Units.  The  Committee  may  grant  Performance  Units to
          Eligible  Employees prior to the commencement of the Performance Cycle
          to which such  Performance  Units relate,  the terms and conditions of
          which shall be set forth in an  Agreement  between the Company and the
          Grantee.  Each Performance Unit shall,  contingent upon the attainment
          of specified  performance  objectives  within the  Performance  Cycle,
          represent one (1) Share.  Each  Agreement  shall specify the number of
          the Performance Units to which it relates, the Performance  Objectives
          which must be  satisfied in order for the  Performance  Units to vest,
          the Performance Cycle within which such objectives must be satisfied.

          (a)  Vesting  and  Forfeiture.  A Grantee  shall  become  vested  with
               respect  to  the  Performance   Units  to  the  extent  that  the
               Performance  Objectives  set forth in the Agreement are satisfied
               for  the   specified   Performance   Cycle,   provided  that  the
               Compensation   Committee   has  certified  in  writing  that  the
               Performance  Objectives and other terms of the relevant Award are
               satisfied.

          (b)  Payment of Awards.  Payment of  Performance  Units to Grantees in
               respect of vested  Performance  Units shall be made within  sixty
               (60) days  after the last day of the  Performance  Cycle to which
               such Award  relates  unless the  Agreement  evidencing  the Award
               provides  for the  deferral of payment,  in which event the terms
               and  conditions  of  the  deferral  shall  be  set  forth  in the
               Agreement.  Subject to Section  11.4,  such  payments may be made
               entirely  in  Shares,  entirely  in shares of  Restricted  Stock,
               entirely in cash, or in such  combination  of Shares,  Restricted
               Stock  and  cash  as  the  Committee  in  its  discretion,  shall
               determine at any time prior to such payment;  provided,  however,
               that if the Committee in its  discretion  determines to make such
               payment entirely or partially in Shares of Restricted  Stock, the
               Committee must determine the extent to which such payment will be
               in Shares of  Restricted  Stock at the time the Award is granted.
               Except as  provided  in Section  11.4,  if payment is made in the
               form of cash,  the  amount  payable  in  respect  of each  vested
               Performance Unit shall be equal to the average of the Fair Market
               Value of one (1) Share  during the ninety (90) day period  ending
               on the last day of the Performance Cycle.

     11.3 Performance Shares. The Committee, in its discretion, may grant Awards
          of Performance  Shares to Eligible Employees prior to the commencement
          of the  Performance  Cycle to which such Shares relate,  the terms and
          conditions of which, including the relevant

                                       13

<PAGE>


          Performance Objectives and Performance Cycle, shall be set forth in an
          Agreement  between the Company and the  Grantee.  Each  Agreement  may
          require that an  appropriate  legend be placed on Share  certificates.
          Awards of Performance  Shares shall be subject to the following  terms
          and provisions:

          (a)  Rights of Grantee.  The  Committee  shall  provide at the time an
               Award of  Performance  Shares is made, the time or times at which
               the actual Shares  represented by such Award  hereunder  shall be
               issued in the name of the  Grantee;  provided,  however,  that no
               Performance Shares shall be issued until the Grantee has executed
               an Agreement  evidencing the Award,  the appropriate  blank stock
               powers  and,  in the  discretion  of  the  Committee,  an  escrow
               agreement and any other documents which the Committee may require
               as a condition to the issuance of such Performance  Shares.  If a
               Grantee shall fail to execute the  Agreement  evidencing an Award
               of Performance Shares, the appropriate blank stock powers and, in
               the  discretion  of the  Committee,  an escrow  agreement and any
               other  documents  which the Committee may require within the time
               period  prescribed  by the  Committee  at the time  the  Award is
               granted,  the Award shall be null and void. At the  discretion of
               the  Committee,  Shares  issued  in  connection  with an Award of
               Performance  Shares  shall be deposited  together  with the stock
               powers with an escrow agent (which may be the Company) designated
               by the  Committee.  Except  as  restricted  by the  terms  of the
               Agreement,  upon delivery of the Shares to the escrow agent,  the
               Grantee shall have, in the  discretion of the  Committee,  all of
               the  rights  of  a  stockholder  with  respect  to  such  Shares,
               including  the  right  to vote  the  Shares  and to  receive  all
               dividends or other distributions paid or made with respect to the
               Shares.

          (b)  Non-transferability.  Until any restrictions upon the Performance
               Shares  awarded to a Grantee  shall have lapsed in the manner set
               forth in Sections 11.3(c) or 11.4, such Performance  Shares shall
               not be sold,  transferred or otherwise  disposed of and shall not
               be pledged or otherwise hypothecated, nor shall they be delivered
               to  the  Grantee.  The  Committee  may  also  impose  such  other
               restrictions and conditions on the Performance Shares, if any, as
               it deems appropriate.

          (c)  Lapse of Restrictions. Subject to Section 11.4, restrictions upon
               Performance   Shares  awarded  hereunder  shall  lapse  and  such
               Performance  Shares shall become vested at such time or times and
               on  such  terms,   conditions  and  satisfaction  of  performance
               objectives as the Committee may, in its discretion,  determine at
               the time an Award is granted,  provided  that the  Committee  has
               certified in writing that the  performance  objectives  and other
               material terms of the relevant award were satisfied.

          (d)  Treatment  of  Dividends.  At the time the  Award of  Performance
               Shares  is  granted,   the  Committee  may,  in  its  discretion,
               determine  that the  payment to the  Grantee of  dividends,  or a
               specified portion thereof, declared or paid on Performance Shares
               issued by the Company to the Grantee shall be (i) deferred  until
               the lapsing of the  restrictions  imposed  upon such  Performance
               Shares  and  (ii)  held by the  Company  for the  account  of the
               Grantee until such time. In the event of such deferral, there may
               be credited at the end of each year (or portion thereof) interest
               on the amount of the  account at the  beginning  of the year at a
               rate  per  annum  as  the  Committee,  in  its  discretion,   may
               determine.  Absent a Committee  determination,  no such  interest
               shall be paid. Payment of deferred  dividends,  together with any
               interest  accrued  thereon as  aforesaid,  shall be made upon the
               lapsing  of  restrictions  imposed  on such  Performance  Shares,
               except that any dividends  deferred  (together  with any interest
               accrued  thereon) in respect of any  Performance  Shares shall be
               forfeited upon the forfeiture of such Performance Shares.

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<PAGE>


          (e)  Delivery  of  Shares.  Upon  the  lapse  of the  restrictions  on
               Performance Shares awarded  hereunder,  or on such later dates as
               the  Committee  may provide at the time of the granting of Awards
               of  Performance   Shares,  the  Committee  shall  cause  a  stock
               certificate  to be  delivered to the Grantee with respect to such
               Shares, free of all restrictions hereunder.

     11.4 Effect of Change in Control. Notwithstanding anything contained in the
          Plan or any  Agreement  to the  contrary,  in the event of a Change in
          Control:

          (a)  With  respect to the  Performance  Units,  the Grantee  shall (i)
               become vested in a percentage of Performance  Units as determined
               by the  Committee  at the time of the  Award of such  Performance
               Units and as set forth in the  Agreement  and (ii) be entitled to
               receive in respect of all  Performance  Units which become vested
               as a result of a Change in  Control,  a cash  payment  within ten
               (10) days after such  Change in Control  equal to the  product of
               the  Adjusted  Fair  Market  Value of a Share  multiplied  by the
               number of  Performance  Units which become  vested in  accordance
               with this Section 11.4.

          (b)  With respect to the Performance  Shares,  all restrictions  shall
               lapse  immediately on all or a portion of the Performance  Shares
               as  determined  by the Committee at the time of the Award of such
               Performance Shares and as set forth in the Agreement.

          (c)  The  Agreements  evidencing  Performance  Shares and  Performance
               Units shall provide for the treatment of such Awards (or portions
               thereof)  which do not become vested as the result of a Change in
               Control,  including,  but  not  limited  to,  provisions  for the
               adjustment of applicable Performance Objectives.

     11.5 Non-transferability.  No Performance  Awards shall be  transferable by
          the  Grantee  otherwise  than  by  will or the  laws  of  descent  and
          distribution.

     11.6 Modification or Substitution.  No modification of a Performance  Award
          shall  adversely  alter or impair any rights or obligations  under the
          Agreement without the Grantee's consent.

12.  Effect of a Termination of Employment.

     The Agreement  evidencing the grant of each Employee  Option and each Award
shall set forth the terms and conditions  applicable to such Employee  Option or
Award  upon a  termination  or change in the  status  of the  employment  of the
Optionee or Grantee by the  Company,  a  Subsidiary  or a Division  (including a
termination  or change by reason of the sale of a Subsidiary or a Division),  as
the Committee may, in its discretion,  determine at the time the Employee Option
or Award is granted or thereafter.

13.  Adjustment Upon Changes in Capitalization.

     (a)  In the  event of a  Change  in  Capitalization,  the  Committee  shall
          conclusively determine the appropriate adjustments, if any, to the (i)
          maximum  number and class of Shares or other stock or securities  with
          respect to which Options or Awards may be granted under the Plan, (ii)
          the maximum  number of Shares with respect to which  Options or Awards
          may be granted to any Eligible  Employee  during the term of the Plan,
          (iii) the  number  and class of  Shares or other  stock or  securities
          which are subject to Director  Options  issuable under Section 6; (iv)
          the number and class of Shares or other stock or securities  which are
          subject to  outstanding  Options or Awards granted under the Plan, and
          the purchase price  therefor,  if applicable;  and (v) the Performance
          Objectives.

     (b)  Any such adjustment in the Shares or other stock or securities subject
          to outstanding  Incentive Stock Options  (including any adjustments in
          the purchase  price) shall be made in

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<PAGE>


          such manner as not to constitute a modification  as defined by Section
          424(h)(3)  of the Code and only to the extent  otherwise  permitted by
          Sections 422 and 424 of the Code.

     (c)  Any  stock  adjustment  in the  Shares  or other  stock or  securities
          subject to outstanding  Director Options (including any adjustments in
          the  purchase  price)  shall be made only to the extent  necessary  to
          maintain the  proportionate  interest of the  Optionee  and  preserve,
          without exceeding, the value of such Director Option.

     (d)  If, by reason of a Change  in  Capitalization,  a Grantee  of an Award
          shall be entitled to, or an Optionee  shall be entitled to exercise an
          Option with respect to, new,  additional or different  shares of stock
          or securities, such new additional or different shares shall thereupon
          be  subject to all of the  conditions,  restrictions  and  performance
          criteria  which were  applicable to the Shares subject to the Award or
          Option, as the case may be, prior to such Change in Capitalization.

14.  Effect of Certain Transactions.

     Subject  to  Sections  8.4,  10.4(b)  and  11.4,  in the  event  of (i) the
liquidation or dissolution of the Company or (ii) a merger or  consolidation  of
the  Company (a  "Transaction"),  the Plan and the  Options  and  Awards  issued
hereunder shall continue in effect in accordance with their respective terms and
each  Optionee and Grantee shall be entitled to receive in respect of each Share
subject to any outstanding  Options or Awards, as the case may be, upon exercise
of any Option or payment or  transfer  in respect of any Award,  the same number
and kind of stock, securities,  cash, property, or other consideration that each
holder of a Share was  entitled  to receive in the  Transaction  in respect of a
Share.

15.  Termination and Amendment of the Plan.

     The Plan shall terminate on the day preceding the tenth  anniversary of the
date of its  adoption  by the  Board  and no  Option  or  Award  may be  granted
thereafter.  The Board may  sooner  terminate  the Plan and the Board may at any
time and from time to time amend, modify or suspend the Plan; provided, however,
that:

     (a)  No such  amendment,  modification,  suspension  or  termination  shall
          impair or adversely  alter any Options or Awards  theretofore  granted
          under the Plan,  except with the  consent of the  Optionee or Grantee,
          nor shall  any  amendment,  modification,  suspension  or  termination
          deprive any Optionee or Grantee of any Shares which he or she may have
          acquired through or as a result of the Plan;

     (b)  To the extent  necessary  under  Section 16(b) of the Exchange Act and
          the rules and regulations  promulgated  thereunder or other applicable
          law,  no  amendment   shall  be  effective   unless  approved  by  the
          stockholders  of the Company in  accordance  with  applicable  law and
          regulations; and

     (c)  The  provisions of Section 6 shall not be amended more often than once
          every six (6) months,  other than to comport with changes in the Code,
          the Employee  Retirement  Income Security Act of 1974, as amended,  or
          the rules and regulations promulgated thereunder.

16.  Certain Limitations.

Notwithstanding any other provision of the Plan to the contrary:

          (i)  stockholder approval shall be required for any material amendment
               of the Plan to become  effective (with  materiality as determined
               for purposes of Section  16(b) of the Exchange Act, the rules and
               regulations  promulgated  thereunder,  and the interpretations of
               the  Securities   and  Exchange   Commission  and  its  staff  in
               connection therewith);

                                       16

<PAGE>


          (ii) no amendment or adjustment of the exercise  price of an Option or
               Stock Appreciation Right (whether through amendment, cancellation
               or  replacement  Grants,  or  other  means of  repricing  of such
               Options or Stock Appreciation  Rights) in respect of an Option or
               Stock  Appreciation  Right having an exercise  price greater than
               the Fair Market Value of a Share as of the date of such amendment
               or  adjustment   shall  be  authorized   under  the  Plan  unless
               stockholder approval of such repricing is obtained;

          (iii)stockholder  approval  shall be required  for any lapse or waiver
               of  restrictions  on Shares  of  Restricted  Stock not  expressly
               specified in the Agreement evidencing the Award; and

          (iv) an Award of Shares of  Restricted  Stock  shall  provide  for the
               lapse of  restrictions in no less than three years after the date
               of the Award in respect of at least 50% of the Shares  subject to
               that Award.

However, the Committee shall have the discretion to act in respect of Options or
Awards in a manner not in compliance with the  requirements of this Section 16.1
provided  that the number of Shares  which are the  subject  of such  Options or
Awards does not exceed in the aggregate three percent (3%) of the maximum number
of Shares that may be made the  subject of Options and Awards  under the Plan as
set forth in Section 5.1.


17.  Non-Exclusivity of the Plan.

     Except as  provided  in  Section 2, the  adoption  of the Plan by the Board
shall not be construed  as amending,  modifying  or  rescinding  any  previously
approved  incentive  arrangement or as creating any  limitations on the power of
the Board to adopt such other  incentive  arrangements as it may deem desirable,
including,  without  limitation,  the granting of stock options  otherwise  than
under the Plan, and such arrangements may be either applicable generally or only
in specific cases.

18.  Limitation of Liability.

As illustrative of the limitations of liability of the Company, but not intended
to be exhaustive thereof, nothing in the Plan shall be construed to:

          (i)  give any person any right to be granted an Option or Award  other
               than at the sole discretion of the Committee;

          (ii) give any  person  any rights  whatsoever  with  respect to Shares
               except as specifically provided in the Plan;

          (iii)limit  in any way the  right  of the  Company  to  terminate  the
               employment of any person at any time; or

          (iv) be evidence  of any  agreement  or  understanding,  expressed  or
               implied,   that  the  Company  will  employ  any  person  at  any
               particular rate of  compensation or for any particular  period of
               time.

                                       17

<PAGE>



19.  Regulations and Other Approvals; Governing Law.

     19.1 Except as to matters of federal  law,  this Plan and the rights of all
          persons  claiming  hereunder  shall be  construed  and  determined  in
          accordance  with the  laws of the  State of  Delaware  without  giving
          effect to conflicts of law principles.

     19.2 The  obligation of the Company to sell or deliver  Shares with respect
          to Options and Awards  granted  under the Plan shall be subject to all
          applicable  laws,  rules and  regulations,  including  all  applicable
          federal  and state  securities  laws,  and the  obtaining  of all such
          approvals  by  governmental  agencies  as may be deemed  necessary  or
          appropriate by the Committee.

     19.3 The Plan is intended to comply with Rule 16b-3  promulgated  under the
          Exchange Act and the  Committee  shall  interpret and  administer  the
          provisions  of  the  Plan  or any  Agreement  in a  manner  consistent
          therewith.  Any  provisions  inconsistent  with  such  Rule  shall  be
          inoperative and shall not affect the validity of the Plan.

     19.4 The Board may make such changes as may be necessary or  appropriate to
          comply with the rules and regulations of any government authority,  or
          to obtain for Eligible  Employees  granted Incentive Stock Options the
          tax  benefits  under  the  applicable   provisions  of  the  Code  and
          regulations promulgated thereunder.

     19.5 Each Option and Award is subject to the  requirement  that,  if at any
          time the Committee  determines,  in its discretion,  that the listing,
          registration or qualification of Shares issuable  pursuant to the Plan
          is required by any  securities  exchange or under any state or federal
          law, or the consent or approval of any governmental regulatory body is
          necessary or desirable as a condition of, or in connection  with,  the
          grant of an Option or Award or the  issuance of Shares,  no Options or
          Awards shall be granted or payment made or Shares issued,  in whole or
          in part,  unless  listing,  registration,  qualification,  consent  or
          approval  has been  effected or  obtained  free of any  conditions  as
          acceptable to the Committee.

     19.6 Notwithstanding anything contained in the Plan or any Agreement to the
          contrary,  in the  event  that  the  disposition  of  Shares  acquired
          pursuant  to the Plan is not  covered by a then  current  registration
          statement  under the  Securities  Act of 1933, as amended,  and is not
          otherwise  exempt  from  such  registration,   such  Shares  shall  be
          restricted  against  transfer to the extent required by the Securities
          Act of 1933, as amended, and Rule 144 or other regulations thereunder.
          The Committee may require any individual  receiving Shares pursuant to
          an Option or Award granted under the Plan, as a condition precedent to
          receipt of such  Shares,  to  represent  and warrant to the Company in
          writing  that the Shares  acquired  by such  individual  are  acquired
          without  a view to any  distribution  thereof  and will not be sold or
          transferred other than pursuant to an effective  registration  thereof
          under  said Act or  pursuant  to an  exemption  applicable  under  the
          Securities  Act of 1933,  as  amended,  or the rules  and  regulations
          promulgated thereunder. The certificates evidencing any of such Shares
          shall be  appropriately  amended to reflect their status as restricted
          securities as aforesaid.

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<PAGE>



20.  Miscellaneous.

     20.1 Multiple Agreements. The terms of each Option or Award may differ from
          other Options or Awards granted under the Plan at the same time, or at
          some other time.  The Committee may also grant more than one Option or
          Award to a given Eligible Employee during the term of the Plan, either
          in addition to, or in substitution  for, one or more Options or Awards
          previously granted to that Eligible Employee.

     20.2 Withholding  of Taxes.  (a) The Company shall have the right to deduct
          from any  distribution  of cash to any Optionee or Grantee,  an amount
          equal to the federal,  state and local income taxes and other  amounts
          as may be  required by law to be withheld  (the  "Withholding  Taxes")
          with  respect to any Option or Award.  If an Optionee or Grantee is to
          experience a taxable  event in  connection  with the receipt of Shares
          pursuant  to an Option  exercise  or payment  of an Award (a  "Taxable
          Event"),  the Optionee or Grantee shall pay the  Withholding  Taxes to
          the Company  prior to the  issuance,  or release from escrow,  of such
          Shares.  In satisfaction of the obligation to pay Withholding Taxes to
          the Company,  the Optionee or Grantee may make a written election (the
          "Tax  Election"),  which may be accepted or rejected in the discretion
          of the  Committee,  to have  withheld  a portion  of the  Shares  then
          issuable to him or her having an aggregate  Fair Market Value,  on the
          date  preceding the date of such  issuance,  equal to the  Withholding
          Taxes,  provided  that in respect of an Optionee or Grantee who may be
          subject to liability  under  Section 16(b) of the Exchange Act either:
          (i) in the case of a  Taxable  Event  involving  an Option or an Award
          (A)the Tax  Election is made at least six (6) months prior to the date
          of the  Taxable  Event and (B)the Tax  Election  is  irrevocable  with
          respect to all Taxable Events of a similar nature  occurring  prior to
          the  expiration  of six (6) months  following a revocation  of the Tax
          Election;  or (ii) in the case of the  exercise  of an Option  (A) the
          Optionee makes the Tax Election at least six (6) months after the date
          the Option was  granted,  (B) the Option is  exercised  during the ten
          (10) day period  beginning on the third business day and ending on the
          twelfth  business day  following  the release for  publication  of the
          Company's  quarterly  or annual  statement  of sales and  earnings  (a
          "Window  Period")  and (C)the Tax  Election  is made during the Window
          Period  in which the  related  Option  is  exercised  or prior to such
          Window  Period and  subsequent  to the  immediately  preceding  Window
          Period; or (iii)in the case of a Taxable Event relating to the payment
          of an Award  (A)the  Grantee  makes the Tax  Election at least six (6)
          months  after the date the Award was granted and (B) the Tax  Election
          is made (x) in the case of a Taxable Event  occurring  within a Window
          Period, during the Window Period in which the Taxable Event occurs, or
          (y) in the  case of a  Taxable  Event  not  occurring  within a Window
          Period,  during the Window  Period  immediately  preceding the Taxable
          Event  relating  to the  Award.  Notwithstanding  the  foregoing,  the
          Committee  may, by the adoption of rules or otherwise,  (i) modify the
          provisions  of this  Section  19.2  (other  than as  regards  Director
          Options)  or impose  such other  restrictions  or  limitations  on Tax
          Elections as may be necessary to ensure that the Tax Elections will be
          exempt  transactions under Section 16(b) of the Exchange Act, and (ii)
          permit Tax  Elections  to be made at such other  times and  subject to
          such other  conditions as the  Committee  determines  will  constitute
          exempt transactions under Section 16(b) of the Exchange Act.

               (b) If an  Optionee  makes a  disposition,  within the meaning of
          Section 424(c) of the Code and regulations promulgated thereunder,  of
          any Share or Shares issued to such  Optionee  pursuant to the exercise
          of an Incentive Stock Option within the two-year period  commencing on
          the day  after the date of the grant or  within  the  one-year  period
          commencing  on the day after  the date of  transfer  of such  Share or
          Shares to the Optionee pursuant to such exercise,  the Optionee shall,
          within ten (10) days of such disposition,  notify the Company thereof,
          by  delivery  of  written  notice  to the  Company  at  its  principal
          executive office.

                                       19

<PAGE>


               (c) The Committee shall have the authority,  at the time of grant
          of an Employee  Option  under the Plan or at any time  thereafter,  to
          award tax  bonuses  to  designated  Optionees,  to be paid upon  their
          exercise of Employee Options granted hereunder. The amount of any such
          payments  shall be determined by the  Committee.  The Committee  shall
          have full authority in its absolute discretion to determine the amount
          of any such tax  bonus  and the terms  and  conditions  affecting  the
          vesting and payment thereof.

     20.3.Interpretation.  Unless  otherwise  expressly  stated in the  relevant
          Agreement,  any  grant  of an  Award  or  Options  is  intended  to be
          performance-based   compensation   within   the   meaning  of  Section
          162(m)(4)(C)  of the Code.  The  Committee  shall not be  entitled  to
          exercise any discretion otherwise authorized hereunder with respect to
          such Options or Awards if the ability to exercise  such  discretion or
          the exercise of such  discretion  itself would cause the  compensation
          attributable  to  such  Options  or  Awards  to  fail  to  qualify  as
          performance-based compensation.

21.  Effective Date.

     The  effective  date of the Plan shall be the date of its  adoption  by the
Board,  subject only to the approval by the affirmative vote of the holders of a
majority of the securities of the Company present, or represented,  and entitled
to vote at a meeting of stockholders duly held in accordance with the applicable
laws of the State of Delaware within twelve (12) months of such adoption.



                                       20

