

                                                                  

                                  BESICORP LTD.

                               1999 INCENTIVE PLAN


         1.       PURPOSE OF THE PLAN.

                  This  1999  Incentive  Plan (the  "Plan")  is  intended  as an
incentive,  to  retain in the  employ  of and as  consultants  and  advisors  to
BESICORP  LTD.,  a New York  corporation  (the  "Company"),  and any  subsidiary
corporation of the Company (each, a "Subsidiary"), within the meaning of Section
424(f) of the United States Internal  Revenue Code of 1986, as amended and as it
may be amended from time to time (the "Code"),  persons of training,  experience
and  ability,  to attract  new  employees,  officers,  directors,  advisors  and
consultants  whose services are considered  valuable,  to encourage the sense of
proprietorship  and to  stimulate  the active  interest  of such  persons in the
development  and financial  success of the Company and its  Subsidiaries.  It is
intended that this incentive will be effected through (a) the granting of shares
of Common  Stock,  $.01 par value per share,  of the Company  ("Common  Stock"),
pursuant to  restricted  stock grant  agreements  and (b) the  granting of stock
options,  including options for restricted shares of Common Stock (collectively,
such options and grants of shares are referred to herein as "Awards").

                  It is further  intended that certain options granted  pursuant
to the Plan shall  constitute  incentive  stock  options  within the  meaning of
Section 422 of the Code (the  "Incentive  Options")  while certain other options
granted  pursuant  to  the  Plan  shall  be  non-qualified  stock  options  (the
"Non-qualified  Options").  Incentive  Options  and  Non-qualified  Options  are
hereinafter  referred to collectively  as "Options."  Grants of shares of Common
Stock pursuant to restricted stock agreements  ("Restricted  Stock  Agreements")
are  hereinafter  referred to  collectively  as "Restricted  Stock."  Restricted
shares  of  Common  Stock  issued  pursuant  to  the  exercise  of  Options  are
hereinafter referred to collectively as "Restricted Option Shares."

                  The Company  intends  that the Plan meet the  requirements  of
Rule 16b-3  ("Rule 16b- 3")  promulgated  under the  Securities  Exchange Act of
1934,  as  amended  (the  "Exchange  Act")  and  that  transactions  of the type
specified in  subparagraphs  (c) to (f)  inclusive of Rule 16b-3 by officers and
directors of the Company  pursuant to the Plan will be exempt from the operation
of Section  16(b) of the  Exchange  Act.  In all cases,  the terms,  provisions,
conditions  and  limitations  of the Plan  shall be  construed  and  interpreted
consistent with the Company's intent as stated in this Section 1.

         2.       ADMINISTRATION OF THE PLAN.

                  The  Plan  shall  be  administered  by  either  the  Board  of
Directors  of  the  Company  (the  "Board")  or a  committee  (the  "Committee")
appointed by the Board,  which  committee  shall  consist  solely of two or more
Non-Employee  Directors  (as such term is defined in Rule  16b-3),  which  shall
serve at the pleasure of the Board (such Committee or the Board as administrator
of the Plan, the


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"Administrator").  The Administrator,  subject to the express terms of the Plan,
shall have full power and authority to designate  recipients of Awards, the type
of Award to be granted,  to determine the terms and conditions of the Awards and
the instruments and agreements governing Awards (the "Instruments")  (which need
not be identical),  to interpret the provisions and supervise the administration
of the Plan and Awards (including the Instruments),  make such rules as it deems
necessary  for  the  proper   administration   of  the  Plan,   make  all  other
determinations  necessary or advisable  for the  administration  of the Plan and
correct any defects or fill in any omission or reconcile  any  inconsistency  in
the Plan or in any Awards and  Instruments  granted under the Plan in the manner
and to the extent that the  Administrator  deems  desirable to carry into effect
the Plan or any Awards.

                  The act or  determination  of a majority of the  Administrator
shall be the act or determination of the  Administrator and any decision reduced
to writing and signed by all of the members of the Administrator  shall be fully
effective as if it had been made by a majority at a meeting  duly held.  Subject
to the  provisions of the Plan,  any action taken or  determination  made by the
Administrator  pursuant  to this and the  other  Sections  of the Plan  shall be
conclusive on all parties.

                  In the event that for any reason the  Administrator  is unable
to act or if the  Administrator is a Committee and such Committee at the time of
any grant, award or other acquisition under the Plan of Awards or Stock does not
consist solely of two or more Non-Employee Directors, then any such grant, award
or  other   acquisition  may  be  approved  or  ratified  in  any  other  manner
contemplated by subparagraph (d) of Rule 16b-3.

         3.       DESIGNATION OF AWARDEES.

                  The  persons  eligible  for   participation  in  the  Plan  as
recipients of Awards (the "Awardees") shall be employees, officers and directors
of, and consultants  and advisors to, the Company or any  Subsidiary;  provided,
however that Incentive Options may only be granted to individuals who are in the
employ  of the  Company  and  the  Subsidiaries  and  who  meet  the  applicable
requirements of the Code pertaining to such Options. In selecting Awardees,  and
in  determining  the number of shares to be  covered  by each  Award  granted to
Awardees,  the  Administrator  may consider  the office or position  held by the
Awardee or the Awardee's  relationship to the Company,  the Awardee's  degree of
responsibility  for and contribution to the growth and success of the Company or
any  Subsidiary,  the  Awardee's  length of service to the Company,  promotions,
potential and any other factors that the Administrator may consider relevant. An
Awardee who has been  granted an Award  hereunder  may be granted an  additional
Award or Awards, if the Administrator shall so determine.

         4.       STOCK RESERVED FOR THE PLAN.

                  Subject to adjustment as provided in Section 8 hereof, a total
of 40,000 shares of the Company's  shares of Common Stock (the "Stock") shall be
subject to the Plan.  The shares of Stock  subject to the Plan shall  consist of
unissued shares or previously issued shares held by the Company, and such amount
of shares of Stock shall be and is hereby reserved for such purpose. Any of such
shares of Stock that may remain  unsold and that are not subject to  outstanding
Awards at the


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termination of the Plan shall cease to be reserved for the purposes of the Plan,
but until  termination  of the Plan the  Company  shall at all  times  reserve a
sufficient  number  of  shares  of Stock to meet the  requirements  of the Plan.
Should any Award  expire or be canceled  prior to its exercise in full or should
the number of shares of Stock to be  delivered  upon the  exercise in full of an
Award be reduced for any reason, the shares of Stock theretofore subject to such
Award may be subject to future  Awards  under the Plan,  subject to the Code and
the regulations promulgated pursuant to the Code (the "Regulations").

         5.       TERMS AND CONDITIONS OF OPTIONS.

                  Options   granted   under  the  Plan  shall  be  evidenced  by
Instruments  ("Option  Instruments")  (each of which  shall  be  subject  to the
provisions of this Plan), shall be subject to the following conditions and shall
contain such additional terms and conditions, not inconsistent with the terms of
the Plan, as the Administrator shall deem desirable:

              (a)  OPTION  PRICE.  The  purchase  price  of each  share of Stock
purchasable under an Option shall be determined by the Administrator at the time
of grant and shall  not be less  than the par value of the  Common  Stock on the
date that the Option is granted,  provided,  however, that the purchase price of
each share of Stock purchasable under an Incentive Option shall not be less than
100% of the Fair Market  Value (as defined  below) of such share of Stock on the
date the Option is granted;  provided further, however, that with respect to any
Awardee  who,  at the time an  Incentive  Option is  granted,  owns  (within the
meaning  of  Section  424(d)  of the Code)  more than 10% of the total  combined
voting  power of all classes of stock of the Company or of any  Subsidiary,  the
purchase  price per  share of Stock  shall be at least  110% of the Fair  Market
Value  per  share of Stock on the date of  grant.  The  exercise  price for each
Option  shall be subject to  adjustment  as provided  in Section 8 below.  "Fair
Market Value" means the closing price of publicly  traded shares of Stock on the
principal United States securities  exchange on which shares of Stock are listed
(if the shares of Stock are so listed),  or on the NASDAQ  Stock  Market (if the
shares of Stock are regularly quoted on the NASDAQ Stock Market),  or, if not so
listed or regularly quoted, the mean between the closing bid and asked prices of
publicly traded shares of Stock in the over-the-counter  market, or, if such bid
and  asked  prices  shall  not be  available,  as  reported  by  any  nationally
recognized  quotation  service selected by the Company,  or as determined by the
Administrator in good faith and, in the case of Incentive  Options,  in a manner
consistent with the provisions of the Code.

                         (b) OPTION TERM. The term of each Option shall be fixed
by the  Administrator,  but no Option shall be  exercisable  more than ten years
after the date such Option is granted,  provided,  however, that with respect to
any Awardee  who, at the time an Incentive  Option is granted,  owns (within the
meaning  of  Section  424(d)  of the Code)  more than 10% of the total  combined
voting  power of all classes of stock of the Company or of any  Subsidiary,  the
term of such  Option  shall be no more than five years from the date such Option
is granted.

               (c) EXERCISABILITY.  Options shall be exercisable at such time or
times and subject to such terms and  conditions  as shall be  determined  by the
Administrator at the time of grant or subsequently, subject to the provisions of
this Plan.

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<PAGE>

                              (d) METHOD OF EXERCISE. Options to the extent then
exercisable  may be  exercised in whole or in part at any time during the option
period, by giving written notice to the Company  specifying the number of shares
of Stock to be purchased,  accompanied by payment in full of the purchase price,
in  cash,  by  check  or  such  other  instrument  as may be  acceptable  to the
Administrator. As determined by the Administrator, in its sole discretion, at or
after  grant,  payment  in full or in part  may  also be made (i) in the form of
Stock owned by the Awardee  (based on the Fair Market  Value of the Stock on the
last  trading  day  before  the  Option  is  exercised)  and (ii) in the case of
Non-qualified Options in the form of withholding of Stock issuable upon exercise
in  accordance  with  Section 9(b)  hereof.  An Awardee  shall have the right to
dividends and other rights of a shareholder  of record with respect to shares of
Stock  purchased  upon exercise of an Option after the Awardee has given written
notice of exercise and has paid in full for such shares.


                           (e) TRANSFERABILITY OF OPTIONS. Options are 
transferable;  provided,  however that Incentive  Options and Options to acquire
Restricted Option Shares are not transferable and may be exercised solely by the
Awardee during his lifetime or after his death by the person or persons entitled
thereto under his will or the laws of descent and  distribution.  Any attempt to
transfer,  assign,  pledge or otherwise  dispose of, or to subject to execution,
attachment or similar  process,  any Option  contrary to the  provisions  hereof
shall  be void  and  ineffective  and  shall  give  no  right  to the  purported
transferee.

                           (f) TERMINATION BY DEATH. Subject to Section 6(c) an
the  requirements  of the  Securities  Act of 1933, as amended (the  "Securities
Act") and the rules and regulations  promulgated  thereunder,  unless  otherwise
determined by the Administrator,  if any Awardee's employment with or service to
the  Company or any  Subsidiary  terminates  by reason of death,  the Option may
thereafter be exercised,  to the extent then exercisable (or on such accelerated
basis as the  Administrator  shall  determine at or after  grant),  by the legal
representative  of the estate or by the legatee of the Awardee under the will of
the Awardee,  for a period of one year after the date of such death or until the
expiration  of the  stated  term of such  Option  as  provided  under  the Plan,
whichever period is shorter.

                           (g) OTHER TERMINATION. Subject to Section 6 (d),
unless otherwise  determined by the Administrator,  if any Awardee's  employment
with or service to the Company or any Subsidiary terminates for any reason other
than death, any Option held by such Awardee may not thereafter be exercised.

                           (h) LIMIT ON VALUE OF INCENTIVE OPTION. The aggregate
Fair Market Value, determined as of the date the Incentive Option is granted, of
Stock for which  Incentive  Options  are  exercisable  for the first time by any
Awardee  during any calendar  year under the Plan (and/or any other stock option
plans of the Company or any Subsidiary) shall not exceed $100,000 (or such other
amount as may be subsequently specified by the Code).

                           (i) TRANSFER OF INCENTIVE OPTION SHARES. If an
Awardee makes a  disposition,  within the meaning of Section  424(c) of the Code
and regulations promulgated  thereunder,  of any share or shares of Stock issued
to him upon exercise of an Incentive Option

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granted  under the Plan within the two-year  period  commencing on the day after
the date of the  grant of such  Incentive  Option or  within a  one-year  period
commencing  on the day after the date of  transfer of the share or shares to him
pursuant to the  exercise of such  Incentive  Option,  he shall,  within 10 days
after such  disposition,  notify the Company thereof and immediately  deliver to
the Company any amount of United States federal income tax or other  withholding
required by law.

                           (j) INCENTIVE OPTIONS.  Each Option which is intended
to qualify as an Incentive Option,  and each Option which is intended to qualify
as another type of tax-qualified  option which may subsequently be authorized by
law, shall comply with the applicable  provisions of the Code pertaining to such
Options.  Each such Option shall contain such  provisions  as the  Administrator
shall deem advisable in order to comply with such  applicable  provisions of the
Code and shall in all events be  consistent  with and shall contain or be deemed
to contain all provisions  required in order to qualify the Options as Incentive
Options (or such other type of tax-qualified  option).  To the extent any Option
does not  qualify  as an  Incentive  Option,  it  shall  constitute  a  separate
Non-qualified Option.

              (k) OPTIONS TO ACQUIRE RESTRICTED OPTION SHARES. The Administrator
shall  determine at the time of grant of each Option whether the shares issuable
upon the exercise of such Option shall be  Restricted  Option  Shares and if the
Administrator determines that such shares shall be Restricted Option Shares, the
Options for such  Restricted  Shares and the Restricted  Option Shares  issuable
upon the exercise of such  Options  shall be subject to the  provisions  of both
Sections 5 and 6.

                  6.       GRANTS OF RESTRICTED STOCK AND RESTRICTED OPTION
SHARES.

                  The  Administrator may (i) authorize,  in its discretion,  the
grant of shares of Restricted  Stock to Awardees  pursuant to  Restricted  Stock
Agreements  in  such  form,  and  not   inconsistent   with  the  Plan,  as  the
Administrator  shall  approve  from time to time and (ii) provide that shares of
Stock issuable pursuant to certain Options shall be Restricted Option Shares, in
which case the Option Instruments for such Options (the "Options Instruments for
Restricted  Shares")  shall include  provisions  with respect to the  Restricted
Option Shares issuable upon the exercise of such Options which  provisions shall
be in such form, and not inconsistent with the Plan, as the Administrator  shall
approve from time to time and in the case of both  Restricted  Stock  Agreements
and Option Instruments for Restricted Option Shares shall include  substantially
the following terms and conditions as the Administrator shall determine:

                           (a) RESTRICTIONS AGAINST DISPOSITION. Shares of 
Restricted Stock acquired by an Awardee pursuant to a Restricted Stock Agreement
and  Restricted  Option  Shares  issued as a result of the exercise of an Option
shall  not be sold,  transferred,  or  otherwise  disposed  of and  shall not be
pledged or otherwise  hypothecated,  except as provided in the Restricted  Stock
Agreement or the Option  Instrument for Restricted  Shares,  provided,  however,
that if the Restricted  Stock Agreement or the Option  Instrument for Restricted
Shares does not indicate the period during which such shares of Restricted Stock
or Restricted Option Shares are so restricted

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against disposition, such shares of Restricted Stock or Restricted Option Shares
shall be restricted against disposition for a period of five years from the date
of grant of the  Restricted  Stock or the Option to acquire  Restricted  Shares,
except that the  restrictions  against  disposition  shall lapse with respect to
twenty  percent of such shares  annually on the  anniversary  of the date of the
issuance of such shares.  These restrictions on any such sale, transfer or other
disposition,  or  any  pledge  or  other  hypothecation  are be  referred  to as
"restrictions against disposition."  Certificates for all shares issued pursuant
to Restricted Stock grants and Option Instruments for Restricted Shares shall be
issued in the  recipient's  name but  shall be held in  escrow  by the  Company,
together with stock powers  executed by the recipient  transferring  such shares
back to the Company, pending lapse of the restrictions against disposition.  For
each  recipient of  Restricted  Stock and each  recipient of  Restricted  Option
Shares,  the  Company  shall  have an  escrow  account  (the  "Escrow  Account")
consisting of all shares granted pursuant to Restricted Stock Agreements and all
Restricted  Option  Shares  issued upon the exercise of Option  Instruments  for
Restricted Option Shares,  plus any cash,  additional shares of Common Stock and
other dividends thereon,  minus (i) shares as to which the restrictions  against
disposition  have  lapsed  and  (ii)  dividends,   and  the  proceeds   thereof,
attribuatable  to the shares as to which the  restrictions  against  disposition
have lapsed.

                           (b) TERMINATION OF SERVICE AND FORFEITURE OF SHARES. 
The Restricted  Stock  Agreements and Option  Instruments for Restricted  Option
Shares shall provide that if the recipient  ceases to be employed by the Company
or any  Subsidiary  for any reason  within six months after the date of grant of
the Restricted  Stock or the Options to acquire  Restricted  Option  Shares,  as
applicable,  he or she  shall  automatically  forfeit,  without  receipt  of any
consideration (other than the exercise price for the Restricted Option Shares if
the Options to acquire Restricted Option Shares have been exercised), all shares
covered by the Restricted  Stock Agreement or Option  Instruments for Restricted
Option  Shares,  as the case may be,  and if the  Option to  acquire  Restricted
Option Shares has not been exercised, the Option shall expire and be terminated.
After the aforementioned  six-month period, if employment  terminates other than
by retirement with the consent of the Company or by death,  then, subject to any
provisions  in  the  Restricted  Stock  Agreement  or  Option   Instruments  for
Restricted  Option  Shares,  as the case may be,  to the  contrary,  the  shares
subject to the Restricted Stock Agreement and Option  Instruments for Restricted
Option Shares as to which the restrictions  against  disposition have not lapsed
(the "Restricted  Period") shall be forfeited to the Company immediately without
payment of any  consideration  (other than the exercise price for the Restricted
Option  Shares if the  Options to acquire  Restricted  Option  Shares  have been
exercised),  and if any Options to acquire Restricted Option Shares has not been
exercised, any such Options shall expire and be terminated.

              (c) NO FORFEITURE OF SHARES UPON DEATH OR RETIREMENT. In the event
of the death of a recipient of Restricted Stock,  Options to acquire  Restricted
Option  Shares or  Restricted  Option Shares while an employee of the Company or
any Subsidiary, or his retirement with the written consent of the Company (which
consent expressly provides that all such shares of Restricted Stock and all such
Restricted Option Shares shall remain the property of the recipient),  in either
case after the six-month  period  referred to in Section 6 (b) herein,  all such
shares of Restricted  Stock and all such  Restricted  Option Shares shall remain
the property of the  recipient or his estate,  as the case may be, the Option to
acquire Restricted Option Shares shall remain in effect


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and terminate in accordance with Section 5 hereof, and the restrictions  against
disposition shall lapse at the rate they would have lapsed if such recipient had
not so died or retired provided,  however, that the Adminisitrator may take such
action as is necessary so that such  restrictions  shall lapse  immediately with
respect  to such  number of shares of  Restricted  Stock and  Restricted  Option
Shares,  the sale of which would be  necessary  in order for such  recipient  to
satisfy all obligations  with respect to taxes on account of the vesting of such
shares of Restricted Stock and such Restricted Option Shares.

                           (d) VOTING RIGHTS AND DIVIDENDS.  Recipients of 
Restricted  Stock  grants  and all  Restricted  Option  Shares  issued  upon the
exercise of Option Instruments for Restricted Option Shares shall be entitled to
vote all shares  covered by such  grants and such  exercises  and to receive any
dividends  (except that such dividends shall be added to the recipient's  Escrow
Account and shall be either distributed or forfeited together with the shares as
to  which  such  shares  were   initially   issued   pursuant  to  dividends  or
distributions).

              7.    TERM OF PLAN.

                    No Award  shall be granted  pursuant to the Plan on or after
February 1, 2009,  but Options  theretofore  granted may extend beyond that date
and Restricted Option Shares and shares of Restricted Stock shall not be forfeit
as a result of the  attainment  of such date.  The Plan shall  terminate  on the
first day that no Options are  outstanding,  the  restrictions  have lapsed with
respect to all of the shares of Restricted  Stock and Restricted  Option Shares,
and no more Awards may be granted hereunder.

              8.    CAPITAL CHANGE OF THE COMPANY.

                    In the event of any merger,  reorganization,  consolidation,
recapitalization,  stock  dividend,  stock  distribution,  or  other  change  in
corporate  structure  affecting  the  Stock,  the  Administrator  shall  make an
appropriate  and  equitable  adjustment  in the  number  and kind of  securities
reserved  for  issuance  under the Plan and in the number  and  option  price of
securities  subject to  outstanding  Options  granted under the Plan, to the end
that after such event each Awardee's  proportionate interest shall be maintained
as immediately before the occurrence of such event. No adjustments shall be made
for cash dividends and cash distributions.

                    The Administrator may,  notwithstanding  any other provision
of this Plan to the contrary,  make  adjustments to Options,  Restricted  Option
Shares and shares of Restricted  Stock in order to provide for  acceleration  of
benefits thereunder in the event of a change in control, merger,  consolidation,
reorganization,  recapitalization,  sale or exchange of substantially all assets
or dissolution of or spinoff or similar transaction by the Company.

              9.     TAXES.

                    (a) The  Company  may make  such  provisions  as it may deem
appropriate,  consistent  with  applicable  law, in  connection  with any Awards
granted  under the Plan with  respect to the  withholding  of any United  States
taxes or any other tax matters.


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                    (b) Subject to the consent of the Administrator,  due to (i)
the  exercise  of a  Nonqualified  Option,  (ii) the  lapse of  restrictions  on
Restricted  Option Shares and shares of Restricted  Stock, or (iii) the issuance
of any Option,  an Awardee may make an irrevocable  election (an  "Election") to
(A) have shares of Stock  otherwise  issuable under clause (i) withheld,  or (B)
tender back to the  Company  shares of Stock  (other  than shares of  Restricted
Stock and Restricted  Option Shares for which the restrictions  have not lapsed)
received  pursuant to clauses  (i),  (ii) or (iii),  or (C) deliver  back to the
Company  pursuant to clauses (i), (ii), or (iii)  previously-acquired  shares of
Stock of the  Company  (other  than shares of  Restricted  Stock and  Restricted
Option Shares for which the  restrictions  have not lapsed) having a Fair Market
Value  sufficient  to  satisfy  all or  part  of  the  Awardee's  estimated  tax
obligations  associated with the  transaction.  Such Election must be made by an
Awardee prior to the date on which the relevant tax obligation  arises (the "Tax
Date").  The  Administrator  may  disapprove  of any  Election,  may  suspend or
terminate the right to make Elections,  or may provide with respect to any Award
under  this  Plan  that the  rights  to make  Elections  shall not apply to such
Awards.

              10.    EFFECTIVE DATE OF PLAN.

                    The Plan shall be  effective  on February 1, 1999,  provided
however  that the Plan shall  subsequently  be approved by majority  vote of the
Company's shareholders not later than February 1, 2000.

              11.  AMENDMENT  AND  TERMINATION  OF PLAN AND  AWARDS;  SUBSTITUTE
OPTIONS.

                    Subject  to the  Code,  the  Regulations  and  the  Business
Corporation  Law (the  "BCL")  of the State of New  York,  the Board may  amend,
suspend,  or terminate  the Plan,  except that no  amendment  shall be made that
would  impair  the rights of any  Awardee  under any Award  theretofore  granted
without his or her consent.

              The  Administrator  may amend  the terms of any Award  theretofore
granted, prospectively or retroactively,  but no such amendment shall impair the
rights of any Awardee without his consent.

              The  Administrator  may also substitute grants of Restricted Stock
for previously  granted  Restricted  Stock,  new Options for previously  granted
Options,  including  options granted under other plans applicable to the Awardee
and previously granted Options having higher exercise prices, upon such terms as
the  Administrator  may deem  appropriate so long as the terms of the Substitute
Awards are no less  favorable  to the Awardee  than the terms of the  previously
granted Award.

              12.   GOVERNMENT REGULATIONS.

                    The Plan,  the grant of Awards  hereunder,  the  exercise of
Options hereunder,  and the obligation of the Company to sell and deliver shares
under such Options and to issue Restricted


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Stock  pursuant  to  Restricted  Stock  Agreements  ,  shall be  subject  to all
applicable  laws,   rules  and  regulations,   and  to  such  approvals  by  any
governmental agencies or national securities exchanges as may be required.

              13.   GENERAL PROVISIONS.

                           (a) CERTIFICATES. All certificates for shares of 
Stock delivered under the Plan shall be subject to such stop transfer orders and
other  restrictions  as the  Administrator  may deem advisable  under the rules,
regulations and other requirements of the Securities and Exchange Commission, or
other securities commission having jurisdiction, any applicable Federal or state
securities  law, any stock  exchange upon which the Stock is then listed and the
Administrator  may  cause  a  legend  or  legends  to  be  placed  on  any  such
certificates to make appropriate reference to such restrictions.

                           (b) RIGHTS AS SHAREHOLDERS.  Subject to Section 5(d)
hereof,  no Awardee shall have any rights as a  shareholder  of the Company with
respect to shares covered by such Options.


                           (c) REGISTRATION OF STOCK. Notwithstanding any other 
provision in the Plan, no shares of Restricted Stock may be issued and no Option
may be  exercised  unless  and until the  Stock to be issued  upon the  exercise
thereof  has been  registered  under the  Securities  Act and  applicable  state
securities  laws, or are, in the opinion of counsel to the Company,  exempt from
such  registration  in the United  States.  The  Company  shall not be under any
obligation to register under  applicable  federal or state  securities  laws any
shares of  Restricted  Stock or any Stock to be issued  upon the  exercise of an
Option  granted  hereunder,  or to comply  with an  appropriate  exemption  from
registration  under such laws in order to permit the  issuance  of any shares of
Restricted  Stock or the  exercise of an Option and the issuance and sale of the
Stock subject to such Option.  However,  the Company may in its sole  discretion
register such Stock at such time as the Company shall determine.  If the Company
chooses to comply with such an  exemption  from  registration,  the Stock issued
under the Plan may, at the direction of the  Administrator,  bear an appropriate
restrictive  legend  restricting the transfer or pledge of the Stock represented
thereby,   and  the  Administrator  may  also  give  appropriate  stop  transfer
instructions to the Company's transfer agents.

                           (d) LEGAL COMPLIANCE.  Each person being issued 
shares  of  Restricted  Stock or  exercising  an  Option  under  the Plan may be
required by the Company to execute such instruments as the  Administrator  deems
necessary  in  order  to  comply  with  the  Securities  Act and the  rules  and
regulations promulgated thereunder. In the case of officers, directors and other
persons subject to Section 16 of the Exchange Act, the  Administrator may at any
time impose any limitations  upon the issuance of shares of Restricted  Stock or
the exercise,  delivery or payment of any Option which, in the discretion of the
Administrator,  are necessary or desirable in order to comply with Section 16 of
the  Exchange  Act and the  rules  and  regulations  thereunder.  To the  extent
required to comply  with  Section 16 of the  Exchange  Act, no transfer or other
disposition of any shares of Restricted Stock may be made within six months from
the date of grant of such shares of Restricted

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Stock and no transfer or other disposition of any shares of Stock underlying any
Option may be made within six months from the date of grant of such Option.  Any
transfer  contrary to this Section  13(d) will be null and void and will nullify
the Option or issuance of Stock.

                           (e) LOANS. Subject to the requirements of the BCL, 
the Administrator may provide for the Company or any Subsidiary to make loans to
finance the exercise of any Option as well as the  estimated or actual amount of
any taxes  payable by the holder as a result of the  exercise  of or payment for
any Option, and may prescribe,  or may empower the Company or such Subsidiary to
prescribe,  the other terms and conditions  (including,  but not limited to, the
interest rate, maturity date and whether or not the loan will be secured) of any
such loan.

                           (f) EMPLOYMENT MATTERS. The adoption of the Plan 
shall not confer upon any Awardee of the Company or any Subsidiary, any right to
continued  employment  or  retention  or,  in the  case of an  Awardee  who is a
director,  continued service as a director, with the Company or a Subsidiary, as
the case may be, nor shall it interfere in any way with the right of the Company
or any  Subsidiary to terminate  the  employment  of any of its  employees,  the
service of any of its directors and the retention of any of its  consultants and
advisors at any time.

                           (g)  LEAVES OF ABSENCE; TRANSFERS The Administrator 
shall be entitled to make such rules, regulations and determinations as it deems
appropriate  under this Plan in respect of any leave of absence from the Company
granted to an Awardee.  Without  limiting the generality of the  foregoing,  the
Administrator  shall  be  entitled  to  determine,  subject  to  the  applicable
requirements  of the Code  pertaining to Incentive  Stock Options (1) whether or
not any such leave of absence shall be treated as if the Awardee ceased to be an
employee, officer, director,  consultant or advisor, as the case may be, and (2)
the impact,  if any, of any such leave of absence on shares of Restricted Stock,
on  Restricted  Option  Shares and on Options  under this Plan.  In the event an
Awardee  transfers within the Company,  such Awardee shall not be deemed to have
ceased to be an employee, officer, director,  consultant or advisor, as the case
may be, for purposes of this Plan.

               (h)    NON-UNIFORM     DETERMINATIONS.     The    Administrator's
determinations   under  this  Plan,   including  without  limitation,   (1)  the
determination of the Awardees to receive Awards, (2) the form, amount and timing
of such Awards and (3) the terms and  provisions  of Awards and the  Instruments
evidencing the same, need not be uniform and may be made by it selectively among
Awardees  who receive,  or who are eligible to receive,  Awards under this Plan,
whether or not such Awardees are similarly situated.

                           (i) LIMITATION OF LIABILITY. No member of the Board 
or the Administrator, or any officer or employee of the Company acting on behalf
of the Board or the  Administrator,  shall be personally  liable for any action,
determination, or interpretation taken or made in good faith with respect to the
Plan, and all members of the Board or the Administrator and each and any officer
or employee of the Company acting on their behalf shall, to the extent permitted
by law, be fully indemnified and protected by the Company in respect of any such
action, determination or interpretation.

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              (j)   INCONSISTENCIES   WITH   INSTRUMENTS.   In   the   case   of
inconsistencies  between  provisions  of the  Plan  and  the  provisions  of any
Instrument, the provisions of this Plan shall control.

                           (k) COMPANY MAY ADOPT OTHER PLANS.  The adoption of
this Plan shall not  preclude  the  adoption by  appropriate  means of any other
stock  option  or other  incentive  plan  for  directors,  officers,  employees,
advisors or consultants.

                                       11


