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                                                                    Exhibit 10.1

Initially Approved by Board of Directors on May 27, 1999
Initially Approved by Shareholders on August 23, 1999
Amendments Approved by Board of Directors and Compensation Committee
  On January 4, 2001 and February 7, 2001
Amendments Approved by Shareholders on May 7, 2001
Amendments Approved by Board of Directors on January 22, 2002
Amendment Approved by Shareholders on November 6, 2002



                 [AMENDED AND RESTATED THROUGH NOVEMBER 6, 2002]

                   LADENBURG THALMANN FINANCIAL SERVICES INC.
                          1999 PERFORMANCE EQUITY PLAN

                                    ARTICLE I

                              PURPOSE: DEFINITIONS.


         1.1 PURPOSE. The purpose of the Ladenburg Thalmann Financial Services
Inc. 1999 Performance Equity Plan is to enable the Company to offer to its key
employees, officers, directors and consultants whose past, present and any
potential contributions to the Company and its Subsidiaries have been, are or
will be important to the success of the Company, an opportunity to acquire a
proprietary interest in the Company. The various types of long-term incentive
awards which may be provided under the Plan will enable the Company to respond
to changes in compensation practices, tax laws, accounting regulations and the
size and diversity of its businesses.

         1.2 DEFINITIONS. For purposes of the Plan, the following terms shall be
defined as set forth below.

                  (a) "Agreement" means the agreement between the Company and
the Holder setting forth the terms and conditions of an award under the Plan.

                  (b) "Board" means the Board of Directors of the Company.

                  (c) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto and the regulations promulgated
thereunder.

                  (d) "Committee" means the Stock Option Committee of the Board
or any other committee of the Board, which Board may designate to administer the
Plan or any portion thereof. If no Committee is so designated, then all
references in this Plan to "Committee" shall mean the Board.

                  (e) "Common Stock" means the Common Stock of the Company, no
par value per share.

                  (f) "Company" means Ladenburg Thalmann Financial Services
Inc., a corporation organized under the laws of the State of Florida.

                  (g) "Deferred Stock" means Stock to be received, under an
award made pursuant to Section 9 below, at the end of a specified deferral
period.



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                  (h) "Disability" means disability as determined under
procedures established by the Committee for purposes of the Plan.

                  (i) "Effective Date" means the date set forth in Section 13.1
below.

                  (j) "Fair Market Value," unless otherwise required by any
applicable provision of the Code or any regulations issued thereunder, means, as
of any given date: (i) if the Common Stock is listed on a national securities
exchange or quoted on the Nasdaq National Market or Nasdaq Small Cap Market, the
last sale price of the Common Stock in the principal trading market for the
Common Stock on the last trading day preceding the date of grant of an award
hereunder, as reported by the exchange or Nasdaq, as the case may be: (ii) if
the Common Stock is not listed on a national securities exchange or quoted on
the Nasdaq National Market or Nasdaq SmallCap Market, but is traded in the
over-the-counter market, the closing bid price for the Common Stock on the last
trading day preceding the date of grant of an award hereunder for which such
quotations are reported by the OTC Bulletin Board or the National Quotation
Bureau, Incorporated or similar publisher of such quotations; and (iii) if the
fair market value of the Common Stock cannot be determined pursuant to clause
(i) or (ii) above, such price as the Committee shall determine, in good faith.

                  (k) "Holder" means a person who has received an award under
the Plan.

                  (l) "Incentive Stock Option" means any Stock Option intended
to be and designated as an "incentive stock option" within the meaning of
Section 422 of the Code.

                  (m) "Nonqualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.

                  (n) "Normal Retirement" means retirement from active
employment with the Company of any Subsidiary on or after age 65.

                  (o) "Other Stock-Based Award" means an award under Section 10
below, that is valued in whole or in part by reference to, or is otherwise based
upon, Stock.

                  (p) "Parent" means any present or future parent corporation of
the Company, as such term is defined in section 424(e) of the Code.

                  (q) "Plan" means the Ladenburg Thalmann Financial Services
Inc. 1999 Performance Equity Plan, as hereinafter amended from time to time.

                  (r) "Repurchase Value" shall mean the Fair Market Value in the
event the award to be settled under Section 2.2(h) or repurchased under Section
14.12 is comprised of shares of Common Stock and the difference between Fair
Market Value and the Exercise Price (if lower than Fair Market Value) in the
event the award is a Stock Option or Stock Appreciation Right; in each case,
multiplied by the number of shares subject to the award.

                  (s) "Restricted Stock" means Stock, received under an award
made pursuant to Section 8 below, that is subject to restrictions under said
Section 8.

                  (t) "SAR Value" means the excess of the Fair Market Value (on
the exercise date) of the number of shares for which the Stock Appreciation
Right is exercised over the exercise price that the participant would have
otherwise had to pay to exercise the related Stock Option and purchase the
relevant shares.



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                  (u) "Stock" means the Common Stock of the Company, no par
value per share.

                  (v) "Stock Appreciation Right" means the right to receive from
the Company, on surrender of all or part of the related Stock Option, without a
cash payment to the Company, a number of shares of Common Stock equal to the SAR
Value divided by the exercise price of the Stock Option.

                  (w) "Stock Option" or "Option" means any option to purchase
shares of Stock which is granted pursuant to the Plan.

                  (x) "Stock Reload Option" means any option granted under
Section 6.3 below, as a result of the payment of the exercise price of a Stock
Option and/or the withholding tax related thereto in the form of Stock owned by
the Holder or the withholding of Stock by the Company.

                  (y) "Subsidiary" means any present or future subsidiary
corporation of the Company, as such term is defined in Section 424(f) of the
Code.

                                   ARTICLE II

                                 ADMINISTRATION.

         2.1 COMMITTEE MEMBERSHIP. The Plan shall be administered by the Board
or a Committee. Committee members shall serve for such term as the Board may in
each case determine, and shall be subject to removal at any time by the Board.
The Committee members, to the extent possible, shall be "non-employees" as
defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and "outside directors" within the meaning of
Section 162(m) of the Code.

         2.2 POWERS OF COMMITTEE. The Committee shall have full authority to
award, pursuant to the terms of the Plan: (i) Stock Options; (ii) Stock
Appreciation Rights, (iii) Restricted Stock, (iv) Deferred Stock, (v) Stock
Reload Options and/or (vi) Other Stock-Based Awards. For purposes of
illustration and not of limitation, the Committee shall have the authority
(subject to the express provisions of this Plan):

                  (a) To select the officers, key employees, directors and
consultants of the Company or any Subsidiary to whom Stock Options, Stock
Appreciation Rights, Restricted Stock, Deferred Stock, Reload Stock Options
and/or Other Stock-Based Awards may from time to time be awarded hereunder.

                  (b) To determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including, but not
limited to, number of shares, share price or other consideration, such as other
securities of the Company or other property, any restrictions or limitations,
and any vesting, exchange, surrender, cancellation, acceleration, termination,
exercise or forfeiture provisions, as the Committee shall determine).

                  (c) To determine any specified performance goals or such other
factors or criteria which need to be attained for the vesting of an award
granted hereunder.

                  (d) To determine the terms and conditions under which awards
granted hereunder are to operate on a tandem basis and/or in conjunction with or
apart from other equity awarded under this Plan and cash awards made by the
Company or any Subsidiary outside of this Plan.



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                  (e) To permit a Holder to elect to defer a payment under the
Plan under such rules and procedures as the Committee may establish, including
the crediting of interest on deferred amounts denominated in cash and of
dividend equivalents on deferred amounts denominated in Stock.

                  (f) To determine the extent and circumstances under which
Stock and other amounts payable with respect to an award hereunder shall be
deferred which may be either automatic or at the election of the Holder.

                  (g) To substitute (i) new Stock Options for previously granted
Stock Options, which previously granted Stock Options have higher option
exercise prices and/or contain other less favorable terms, and (ii) new awards
of any other type for previously granted awards of the same type, which
previously granted awards are upon less favorable terms.

                  (h) To make payments and distributions with respect to awards
(I.E., to "settle" awards) through cash payments in an amount equal to the
Repurchase Value.

                  Notwithstanding anything contained herein to the contrary, the
Committee shall not grant to any one Holder in any one calendar year awards for
more then 1,000,000 shares in the aggregate.

         2.3 INTERPRETATION OF PLAN.

                  (a) COMMITTEE AUTHORITY. Subject to Section 12 below, the
Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any award issued under the Plan (and to determine the form and
substance of all Agreements relating thereto), and to otherwise supervise the
administration of the Plan. Subject to Section 12 below, all decisions made by
the Committee pursuant to the provisions of the Plan shall be made in the
Committee's sole discretion and shall be final and binding upon all persons,
including the Company, its Subsidiaries and Holders.

                  (b) INCENTIVE STOCK OPTIONS. Anything in the Plan to the
contrary notwithstanding, no term or provision of the Plan relating to Incentive
Stock Options (including, but not limited to, Stock Reload Options or Stock
Appreciation Rights granted in conjunction with an Incentive Stock Option) or
any Agreement providing for Incentive Stock Options shall be interpreted,
amended or altered, nor shall any discretion or authority granted under the Plan
be so exercised, so as to disqualify the Plan under Section 422 of the Code, or,
without the consent of the Holder(s) affected, to disqualify any Incentive Stock
Option under such Section 422.

                  (c) SECTION 162(M) LIMITATIONS. Anything in the Plan to the
contrary notwithstanding, no term or provision of the Plan or any Agreement
providing for awards hereunder shall be interpreted, amended, or altered, nor
should any discretion or authority granted under the Plan be exercised, so as to
disqualify the Plan under Section 162(m) of the Code."


                                   ARTICLE III

                             STOCK SUBJECT TO PLAN.

         3.1 NUMBER OF SHARES. The total number of shares of Common Stock
reserved and available for distribution under the Plan shall be 10,000,000
shares. Shares of Common Stock under the Plan may consist, in whole or in part,
of authorized and unissued shares or treasury shares. If any shares of Stock
that have been granted pursuant to a Stock Option cease to be subject to a Stock
Option, or if any shares




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of Stock that are subject to any Stock Appreciation Right, Restricted Stock,
Deferred Stock award, Reload Stock Option or Other Stock-Based Award granted
hereunder are forfeited or any such award otherwise terminates without a payment
being made to the Holder in the form of Stock, such shares shall again be
available for distribution in connection with future grants and awards under the
Plan. Only net shares issued upon a stock-for-stock exercise (including stock
used for withholding taxes) shall be counted against the number of shares
available under the Plan.

         3.2 ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC. In the event of any
change in the shares of Common Stock of the Company as a whole occurring as the
result of a stock split, reverse stock split, stock dividend payable on shares
of Common Stock, combination or exchange of shares, or other extraordinary or
unusual event occurring after the grant of an Award, the Committee shall
determine, in its sole discretion, whether such change equitably requires an
adjustment in the terms of any Award or the aggregate number of shares reserved
for issuance under the Plan. Any such adjustments will be made by the Committee,
whose determination will be final, binding and conclusive.

                                   ARTICLE IV

                                  ELIGIBILITY.

         Awards may be made or granted to key employees, officers, directors and
consultants who are deemed to have rendered or to be able to render significant
services to the Company or its Subsidiaries and who are deemed to have
contributed or to have the potential to contribute to the success of the
Company. No Incentive Stock Option shall be granted to any person who is not an
employee of the Company or a Subsidiary at the time of grant. Notwithstanding
the foregoing, an award may be made or granted to a person in connection with
his hiring or retention, or at any time on or after the date he reaches an
agreement (oral or written) with the Company with respect to such hiring or
retention, even though it may be prior to the date the person first performs
services for the Company or its Subsidiaries; PROVIDED, HOWEVER, that no portion
of any such award shall vest prior to the date the person first performs such
services.

                                    ARTICLE V

                              Intentionally Omitted


                                   ARTICLE VI

                                 STOCK OPTIONS.

         6.1 GRANT AND EXERCISE. Stock Options granted under the Plan may be of
two types (i) Incentive Stock Options, and (ii) Nonqualified Stock Options. Any
Stock Option granted under the Plan shall contain such terms, not inconsistent
with this Plan, or with respect to Incentive Stock Options, not inconsistent
with the Plan and the Code, as the Committee may from time to time approve. The
committee shall have the authority to grant Incentive Stock Options,
Non-Qualified Stock Options, or both types of Stock Options and which may be
granted alone or in addition to other awards granted under the Plan. To the
extent that any Stock Option intended to qualify as an Incentive Stock Option
does not so qualify, it shall constitute a separate Nonqualified Stock Option.
An Incentive Stock Option may be granted only within the ten year period
commencing from the Effective Date and may only be exercised within ten years of
the date of grant (or five years in the case of an Incentive Stock Option
granted to an optionee ("10% Shareholder") who, at the time of grant, owns Stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company.



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         6.2 TERMS AND CONDITIONS. Stock Options granted under the Plan shall be
subject to the following terms and conditions:

                  (a) EXERCISE PRICE. The exercise price per share of Stock
purchasable under a Stock Option shall be determined by the Committee at the
time of grant and may not be less than 100% of the Fair Market Value of the
Stock as defined above; PROVIDED, HOWEVER, that the exercise price of an
Incentive Stock Option granted to a 10% Shareholder shall not be less than 110%
of the Fair Market Value of the Stock.

                  (b) OPTION TERM. Subject to the limitations in Section 6.1
above, the term of each Stock Option shall be fixed by the Committee.

                  (c) EXERCISABILITY. Stock Options shall be exercisable at such
time or times and subject to each terms and conditions as shall be determined by
the Committee and as set forth in Section 11 below. If the Committee provides,
in its discretion, that any Stock Option is exercisable only in installments,
i.e., that it vests over time, the Committee may waive such installment exercise
provisions at any time at or after the time of grant in whole or in part, based
upon such factors as the Committee shall determine.

                  (d) METHOD OF EXERCISE. Subject to whatever installment,
exercise and waiting period provisions are applicable in a particular case,
Stock Options may be exercised in whole or in part at any time during the term
of the Option, by giving written notice of exercise to the Company specifying
the number of shares of Stock to be purchased. Such notice shall be accompanied
by payment in full of the purchase price, which shall be in cash or, if provided
in the Agreement, either in shares of Stock (including Restricted Stock and
other contingent awards under this Plan) or partly in cash and partly in such
Stock, or such other means which the Committee determines are consistent with
the Plan's purpose and applicable law. Cash payments shall be made by wire
transfer, certified or bank check or personal check, in each case payable to the
order of the Company; PROVIDED, HOWEVER, that the Company shall not be required
to deliver certificates for shares of Stock with respect to which an Option is
exercised until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof. Payments in the form of Stock
shall be valued at the Fair Market Value of a share of Stock on the date prior
to the date of exercise. Such payments shall be made by delivery of stock
certificates in negotiable form which are effective to transfer good and valid
title thereto to the Company, free of any liens or encumbrances. Subject to the
terms of the Agreement, the Committee may, in its sole discretion, at the
request of the Holder, delivery upon the exercise of a Nonqualified Stock Option
a combination of shares of Deferred Stock and Common Stock; PROVIDED, HOWEVER,
that, notwithstanding the provisions of Section 9 of the Plan, such Deferred
Stock shall be fully vested and not subject to forfeiture. A Holder shall have
none of the rights of a Shareholder with respect to the shares subject to the
Option until such shares shall be transferred to the Holder upon the exercise of
the Option. The Committee may permit a Holder to elect to pay the Exercise Price
upon the exercise of a Stock Option by irrevocably authorizing a third party to
sell shares of Common Stock (or a sufficient portion of the shares) acquired
upon exercise of the Stock Option and remit to the Company a sufficient portion
of the sale proceeds to pay the entire Exercise Price and any tax withholding
resulting from such exercise.

                  (e) TRANSFERABILITY. Except as may be set forth in the next
sentence of this Section or in the Agreement, no Stock Option shall be
transferable by the Holder other than by will or by the laws of descent and
distribution, and all Stock Options shall be exercisable, during the Holder's
lifetime, only by the Holder (or, to the extent of legal incapacity or
incompetency, the Holder's guardian or legal representative). Notwithstanding
the foregoing, a Holder, with the approval of the Committee, may transfer a
Stock Option (i) (A) by gift, for no consideration, or (B) pursuant to a
domestic relations order,




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in either case, to or for the benefit of the Holder's "Immediate Family" (as
defined below), or (ii) to an entity in which the Holder and/or members of
Holder's Immediate Family own more than fifty percent of the voting interest, in
exchange for an interest in that entity, provided that such transfer is being
made for estate, tax and/or personal planning purposes and will not have adverse
tax consequences to the Company and subject to such limits as the Committee may
establish and the execution of such documents as the Committee may require. In
such event, the transferee shall remain subject to all the terms and conditions
applicable to the Stock Option prior to such transfer. The term "Immediate
Family" shall mean any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law,
including adoptive relationships, any person sharing the Holder's household
(other than a tenant or employee), a trust in which these persons have more than
fifty percent beneficial interest, and a foundation in which these persons (or
the Holder) control the management of the assets.

                  (f) TERMINATION BY REASON OF DEATH. If a Holder's employment
by the Company or a Subsidiary terminates by Reason of Death, any Stock Option
held by such Holder, unless otherwise determined by the Committee at the time of
grant and set forth in the Agreement, shall be fully vested and may thereafter
be exercised by the legal representative of the estate or by the legatee of the
Holder under the will of the Holder, for a period of one year (or such other
greater or lesser period as the Committee may specify at grant) from the date of
such death or until the expiration of the stated term of such Stock Option,
whichever period is the shorter.

                  (g) TERMINATION BY REASON OF DISABILITY. If a Holder's
employment by the Company or any Subsidiary terminates by Reason of Disability,
any Stock Option held by such Holder unless otherwise determined by the
Committee at the time of grant and set forth in the Agreement, shall be fully
vested and may thereafter be exercised by the Holder for a period of one year
(or such other greater or lesser period as the Committee may specify at the time
of grant) from the date of such termination of employment or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter.

                  (h) OTHER TERMINATION. Subject to the provisions of Section
14.3 below, and unless otherwise determined by the Committee at the time of
grant and set forth in the Agreement, if a Holder is an employee of the Company
or a Subsidiary at the time of grant and if such Holder's employment by the
Company or any Subsidiary terminates for any reason other than Death or
Disability, the Stock Option shall thereupon automatically terminate, except
that if the Holder's employment is terminated by the Company or a Subsidiary
without cause or due to Normal Retirement, then the portion of such Stock Option
which has vested on the date of termination of employment may be exercised for
the lesser of three months after termination of employment or the balance of
such Stock Option's term.

                  (i) ADDITIONAL INCENTIVE OPTION LIMITATION. In the case of an
Incentive Stock Option, the aggregate Fair Market Value of Stock (determined at
the time of grant of the Option) with respect to which Incentive Stock Options
become exercisable by a Holder during any calendar year (under all such plans of
the Company and its Parent and Subsidiary) shall not exceed $100,000.

                  (j) BUYOUT AND SETTLEMENT PROVISIONS. The Committee may, at
any time, in its sole discretion, offer to buy out a Stock Option previously
granted, based upon such terms and conditions as the committee shall establish
and communicate to the Holder at the time that such offer is made.

                  (k) STOCK OPTION AGREEMENT. Each grant of a Stock Option shall
be confirmed by, and shall be subject to the terms of the Agreement executed by
the Company and the Holder.

         6.3 STOCK RELOAD OPTION. The Committee may also grant to the Holder
(concurrently with the




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grant of an Incentive Stock Option and at or after the time of grant in the case
of a Nonqualified Stock Option) a Stock Reload Option up to the amount of shares
of Stock held by the Holder for a least six months and used to pay all or part
of the exercise price of an Option and, if any, withheld by the Company as
payment for withholding taxes. Such Stock Reload Option shall have an exercise
price equal to the Fair Market Value as of the date of the Stock Reload Option
grant. Unless the Committee determines otherwise, a Stock Reload Option may be
exercised commencing one year after it is granted and shall expire on the date
of expiration of the Option to which the Reload Option is related.

                                   ARTICLE VII

                           STOCK APPRECIATION RIGHTS.

         7.1 GRANT AND EXERCISE. The committee may grant Stock Appreciation
Rights to participants who have been or are being granted Options under the Plan
as a means of allowing such participants to exercise their Options without the
need to pay the exercise price in cash. In the case of a Nonqualified Stock
Option, a Stock Appreciation Right may be granted either at or after the time of
the grant of such Nonqualified Stock Option. In the case of an Incentive Stock
Option, a Stock Appreciation Right may be granted only at the time of the grant
of such Incentive Stock Option.

         7.2 TERMS AND CONDITIONS. Stock Appreciation Rights shall be subject to
the following terms and conditions:

                  (a) EXERCISABILITY. Stock Appreciation Rights shall be
exercisable as shall be determined by the Committee and as set forth in the
Agreement, subject to the limitations, if any, imposed by the Code, with respect
to related Incentive Stock Options.

                  (b) TERMINATION. A Stock Appreciate Right shall terminate and
shall no longer be exercisable upon the termination or exercise of the related
Stock Option.

                  (c) METHOD OF EXERCISE. Stock Appreciation Rights shall be
exercisable upon such terms and conditions as shall be determined by the
Committee and set forth in the Agreement and by surrendering the applicable
portion of the related Stock Option. Upon such exercise and surrender, the
Holder shall be entitled to receive a number of Option Shares equal to the SAR
Value divided by the exercise price of the Option.

                  (d) SHARES AFFECTED UPON PLAN. The granting of a Stock
Appreciation Right shall not affect the number of shares of Stock available
under awards under the Plan. The number of shares available for awards under the
Plan will, however, be reduced by the number of shares of Stock acquirable upon
exercise of the Stock Option to which such Stock Appreciation Right relates.

                                  ARTICLE VIII

                                RESTRICTED STOCK.

         8.1 GRANT. Shares of Restricted Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the eligible persons to whom, and the time or times at which grants or
Restricted Stock will be awarded, the number of shares to be awarded, the price
(if any) to be paid by the Holder, the time or times within which such awards
may be subject to forfeiture ("Restricted Period"), the vesting schedule and
rights to acceleration thereof, and all other terms and conditions of the
awards.



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         8.2 TERMS AND CONDITIONS. Each Restricted Stock award shall be subject
to the following terms and conditions:

                  (a) CERTIFICATES. Restricted Stock, when issued, will be
represented by a stock certificate or certificates registered in the name of the
Holder to whom such Restricted Stock shall have been awarded. During the
Restriction Period, certificates representing the Restricted Stock and any
securities constituting Retained Distributions (as defined below) shall bear a
legend to the effect that ownership of the Restricted Stock (and such Retained
distributions), and the enjoyment of all rights appurtenant thereto, are subject
to the restrictions, terms and conditions provided in the Plan and the
Agreement. Such certificates shall be deposited by the Holder with the Company,
together with stock powers or other instruments of assignment, each endorsed in
blank, which will permit transfer to the Company of all or any portion of the
Restricted Stock and any securities constituting Retained Distributions that
shall be forfeited or that shall not become vested in accordance with the Plan
and the Agreement.

                  (b) RIGHTS OF HOLDER. Restricted Stock shall constitute issued
and outstanding shares of Common Stock for all corporate purposes. The Holder
will have the right to vote such Restricted Stock, to receive and retain all
regular cash dividends and other cash equivalent distributions as the Board may
in its sole discretion designate, pay or distribute on such Restricted Stock and
to exercise all other rights, powers and privileges of a holder of Common Stock
with respect to such Restricted Stock, with the exceptions that (i) the Holder
will not be entitled to delivery of the stock certificate or certificates
representing such Restricted Notes until the Restriction Period shall have
expired and unless all other vesting requirements with respect thereto shall
have been fulfilled; (ii) the Company will retain custody of the stock
certificate or certificates representing the Restricted Stock during the
Restriction Period; (iii) other than regular cash dividends and other cash
equivalent distributions as the Board may in its sole discretion designate, pay
or distribute, the Company will retain custody of all distributions ("Retained
Distributions") made or declared with respect to the Restricted Stock (and such
Retained Distributions will be subject to the same restrictions, terms and
conditions as are applicable to the Restricted Stock) until such time, if ever,
as the Restricted Stock with respect to which such Retained Distributions shall
have been made, paid or declared shall have become vested and with respect to
which the Restricted Period shall have expired; (iv) a breach of any of the
restrictions, terms or conditions contained in this Plan or the Agreement or
otherwise established by the Committee with respect to any Restricted Stock or
Retained Distributions will cause a forfeiture of such Restricted Stock and any
Retained Distributions with respect thereto.

                  (c) VESTING; FORFEITURES. Upon the expiration of the
Restriction Period with respect to each award of Restricted Stock and the
satisfaction of any other applicable restrictions, terms and conditions (i) all
or part of such Restricted Stock shall become vested in accordance with terms of
the Agreement, subject to Section 11 below, and (ii) any Retained Distributions
with respect to such Restricted Stock shall become vested to the extent that the
Restricted Stock related thereto shall have become vested, subject to Section 11
below. Any such Restricted Stock and Retained Distributions that do not vest
shall be forfeited to the Company and the Holder shall not thereafter have any
rights with respect to such Restricted Stock and Retained Distributions that
shall have been so forfeited.

                                   ARTICLE IX

                                 DEFERRED STOCK.

         9.1 GRANT. Shares of Deferred Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the eligible persons to whom and the time



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or times at which grants of Deferred Stock will be awarded, the number of shares
of Deferred Stock to be awarded to any person, the duration of the period (the
"Deferral Period") during which, and the conditions under which, receipt of the
shares will be deferred, and all other terms and conditions of the awards.

         9.2 TERMS AND CONDITIONS. Each Deferred Stock award shall be subject to
the following terms and conditions.

                  (a) CERTIFICATES. At the expiration of the Deferral Period (or
the Additional Deferral Period referred to in Section 9.2(d) below, where
applicable), share certificates shall be issued and delivered to the Holder, or
his legal representative, representing the number equal to the shares covered by
the Deferred Stock award.

                  (b) RIGHTS OF HOLDER. A person entitled to receive Deferred
Stock shall not have any rights of a Shareholder by virtue of such award until
the expiration of the applicable Deferral Period and the issuance and delivery
of the certificates representing such Stock. The shares of Stock issuable upon
expiration of the Deferral Period shall not be deemed outstanding by the Company
until the expiration of such Deferral Period and the issuance and delivery of
such Stock to the Holder.

                  (c) VESTING; FORFEITURES. Upon the expiration of the Deferral
Period with respect to each award of Deferred Stock and the satisfaction of any
other applicable restrictions, terms and conditions all or part of such Deferred
Stock shall become vested in accordance with the terms of the Agreement, subject
to Section 11 below. Any such Deferred Stock that does not vest shall be
forfeited to the Company and the Holder shall not thereafter have any rights
with respect to such Deferred Stock.

                  (d) ADDITIONAL DEFERRAL PERIOD. A Holder may request to, and
the Committee may at any time defer the receipt of an award (or an installment
of an award) for an additional specified period or until a specified event
("Additional Deferral Period"). Subject to any exceptions adopted by the
Committee, such request must generally be made at least one year prior to
expiration of the Deferral Period for such Deferred Stock award (or such
installment).

                                    ARTICLE X

                            OTHER STOCK-BASED AWARDS.

         10.1 GRANT AND EXERCISE. Other Stock-Based Awards may be awarded,
subject to limitations under applicable law, that are denominated or payable in,
valued in whole or in part by reference to, or otherwise based on, or related
to, shares of Common Stock, as deemed by the Committee to be consistent with the
purposes of the Plan, including, without limitation, purchase rights, shares of
Common Stock awarded which are not subject to any restrictions or conditions,
convertible or exchangeable debentures, or other rights convertible into shares
of Common Stock and awards valued by reference to the value of securities of or
the performance of specified Subsidiaries. Other Stock-Based Awards may be
awarded either alone or in addition to or in tandem with any other awards under
this Plan or any other plan of the Company.

         10.2 ELIGIBILITY FOR OTHER STOCK-BASED AWARDS. The Committee shall
determine the eligible persons to whom and the time or times at which grants of
such other stock-based awards shall be made, the number of shares of Common
Stock to be awarded pursuant to such awards, and all other terms and conditions
of the awards.

         10.3 TERMS AND CONDITIONS. Each Other Stock-Based Award shall be
subject to such terms and conditions as may be determined by the Committee and
to Section 11 below.




                                       10
<PAGE>

                                   ARTICLE XI

                     ACCELERATED VESTING AND EXERCISABILITY.

         11.1 NON-APPROVED TRANSACTIONS. Except as otherwise expressly provided
in the Agreement, if any "person" (as such term is used in Section 13(d) and
14(d) of the Exchange Act), is or becomes the "beneficial owner" (as referred to
in Rule 13-3) under the Exchange Act), directly or indirectly, of securities of
the Company representing 25% or more of the combined voting power of the
Company's then outstanding securities in one or more transactions, and the Board
does not authorize or otherwise approve such acquisition, then, the vesting
periods of any and all Options and other Awards granted and outstanding under
the Plan shall be accelerated and all such Options and Awards will immediately
and entirely vest, and the respective holders thereof will have the immediate
right to purchase and/or receive any and all Common Stock subject to such
Options and awards on the terms set forth in this Plan and the respective
agreements respecting such Options and Awards.

         11.2. APPROVED TRANSACTIONS. Except as otherwise expressly provided in
the Agreement, the Committee may, in the event of an acquisition of
substantially all of the Company's assets or at least 50% of the combined voting
power of the Company's then outstanding securities in one or more transactions
(including by way of merger or reorganization) which has been approved by the
Company's Board of Directors, accelerate the vesting of any and all Stock
Options and other awards granted and outstanding under the Plan.

                                   ARTICLE XII

                           AMENDMENT AND TERMINATION.

         The Board may at any time, and from time to time, amend, alter, suspend
or discontinue any of the provisions of the Plan, but no amendment, alteration,
suspension or discontinuance shall be made which would impair the rights of a
Holder under any Agreement theretofore entered into hereunder, without the
Holder's consent.

                                  ARTICLE XIII

                                  TERM OF PLAN.

         13.1 EFFECTIVE DATE. The Plan shall be effective as of May 27, 1999
(the "Effective Date"), subject to the approval of the Plan by the Company's
shareholders within one year after the Effective Date. Any awards granted under
the Plan prior to such approval shall be effective when made (unless otherwise
specified by the Committee at the time of grant), but shall be conditioned upon,
and subject to, such approval of the Plan by the Company's shareholders and no
awards shall vest or otherwise become free or restrictions prior to such
approval.

         13.2 TERMINATION DATE. Unless terminated by the Board, this Plan shall
continue to remain effective until such time no further awards may be granted
and all awards granted under the Plan are no longer outstanding. Notwithstanding
the foregoing, grants of Incentive Stock Options may only be made during the ten
year period following the Effective Date.




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<PAGE>

                                   ARTICLE XIV

                               GENERAL PROVISIONS.

         14.1 WRITTEN AGREEMENTS. Each award granted under the Plan shall be
confirmed by, and shall be subject to the terms of the Agreement executed by the
Company and the Holder. The Committee may terminate any award made under the
Plan if the Agreement relating thereto is not executed and returned to the
Company within ten (10) days after the Agreement has been delivered to the
Holder for his or her execution.

         14.2 UNFUNDED STATUS OF PLAN. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Holder by the Company, nothing contained herein shall
give any such Holder any rights that are greater than those of a general
creditor of the Company.

         14.3 EMPLOYEES:

                  (a) ENGAGING IN COMPETITION WITH THE COMPANY; SOLICITATION OF
CUSTOMERS AND EMPLOYEES; DISCLOSURE OF CONFIDENTIAL INFORMATION. Except as
otherwise expressly provided in the Agreement, in the event a Holder's
employment with the Company or a Subsidiary is terminated for any reason
whatsoever, and within eighteen (18) months after the date thereof such Holder
either (i) accepts employment with any competitor of, or otherwise engages in
competition with, the Company or any of its Subsidiaries, (ii) solicits any
customers or employees of the Company or any of its Subsidiaries to do business
with or render services to the Holder or any business with which the Holder
becomes affiliated or to which the Holder renders services or (iii) discloses to
anyone outside the Company or uses any confidential information or material of
the Company or any of its Subsidiaries in violation of the Company's policies or
any agreement between the Holder and the Company or any of its Subsidiaries, the
Committee, in its sole discretion, may require such Holder to return to the
Company the economic value of any Shares that was realized or obtained by such
Holder at any time during the period beginning on the date that is 6 months
prior to the date such Holder's employment with the Company is terminated. In
such event, Holder agrees to remit to the Company, in cash, an amount equal to
the difference between the Fair Market Value of the Shares on the date of
termination (or the sales price of such Shares if the Shares were sold during
such 6 month period) and the price the Holder paid the Company for such Shares,
the Committee, in its sole discretion, may require such Holder to return to the
Company the economic value of any award which was realized or obtained by such
Holder at any time during the period beginning on that date which is six (6)
months prior to the date of such Holder's termination of employment with the
Company.

                  (b) TERMINATION FOR CAUSE. Except as otherwise expressly
provided in the Agreement, the Committee may, in the event of a Holder's
employment with the Company or a Subsidiary is terminated for cause, annul any
award granted under this Plan to such employee and, in such event, the
Committee, in its sole discretion, may require such Holder to return to the
Company the economic value of any award which was realized or obtained by such
Holder at any time during the period beginning on that date which is six (6)
months prior to the date of such Holder's termination of employment with the
Company.

                  (c) NO RIGHT OF EMPLOYMENT. Nothing contained in the Plan or
in any award hereunder shall be deemed to confer upon any Holder who is an
employee of the Company or any Subsidiary any right to continued employment with
the Company or any Subsidiary, nor shall it interfere



                                       12
<PAGE>

in any way with the right of the Company or any Subsidiary to terminate the
employment of any Holder who is an employee at any time.

                  (d) INVESTMENT REPRESENTATIONS. The Committee may require each
person acquiring shares of Stock pursuant to a Stock Option or other award under
the Plan to represent to and agree with the Company in writing that the Holder
is acquiring the shares for investment without a view to distribution thereof.
Each person acquiring shares of Common Stock pursuant to a Stock Option or other
award under the Plan shall be required to abide by all policies of the Company
in effect at the time of such acquisition and thereafter with respect to the
ownership and trading of the Company's securities.

         14.4 ADDITIONAL INCENTIVE ARRANGEMENTS. Nothing contained in the Plan
shall prevent the Board from adopting such other or additional Incentive
arrangements as it may deemed desirable, including, but not limited to, the
granting of Stock Options and the awarding of stock and cash otherwise than
under the Plan; and such arrangements may be either generally applicable or
applicable only in specified cases.

         14.5 WITHHOLDING TAXES. Not later than the date as of which an amount
must first be included in the gross income of the Holder for Federal income tax
purposes with respect to any option or other award under the Plan, the Holder
shall pay to the Company, or make arrangements satisfactory to the Committee
regarding the payment of, any Federal, state and local taxes of any kind
required by law to be withheld or paid with respect to such amount. If permitted
by the Committee, tax withholding or payment obligations may be settled with
Common Stock, including Common Stock that is part of the award that gives rise
to the withholding requirement. The obligations of the Company under the Plan
shall be conditioned upon such payment or arrangements and the Company or the
Holder's employer (if not the Company) shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the Holder from the Company or any Subsidiary.

         14.6 GOVERNING LAW. The Plan and all awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of New York (without regard to choice of law provisions).

         14.7 OTHER BENEFIT PLANS. Any award granted under the Plan shall not be
deemed compensation for purposes of computing benefits under any retirement plan
of the Company or any Subsidiary and shall not affect any benefits under any
other benefit plan nor or subsequently in effect under which the availability or
amount of benefits is related to the level of compensation (unless required by
specific reference in any such other plan to awards under this Plan).

         14.8 NON-TRANSFERABILITY. Except as otherwise expressly provided in the
Plan or the Agreement, no right or benefit under the Plan may be alienated,
sold, assigned, hypothecated, pledged, exchanged, transferred, encumbranced or
charged, and any attempt to alienate, sell, assign, hypothecate, pledge,
exchange, transfer, encumber or charge the same shall be void.

         14.9 APPLICABLE LAWS. The obligations of the Company with respect to
all Stock Options and awards under the Plan shall be subject to (i) all
applicable laws, rules and regulations and such approvals by any governmental
agencies as may be required, including, without limitation, the Securities Act
of 1933, as amended, and (ii) the rules and regulations of any securities
exchange on which the Stock may be listed.

         14.10 CONFLICTS. If any of the terms or provisions of the Plan or an
Agreement (with respect to Incentive Stock Options) conflict with the
requirements of Sections 162(m) or 422 of the Code, then such terms or
provisions shall be deemed inoperative to the extent they so conflict with the
requirements of



                                       13
<PAGE>

said Sections 162(m) or 422 of the Code. Additionally, if this Plan or any
Agreement does not contain any provision required to be included herein under
Sections 162(m) or 422 of the Code, such provision shall be deemed to be
incorporated herein and therein with the same force and effect as if such
provision had been set out at length herein and therein. If any of the terms or
provisions of any Agreement conflict with any terms or provision of the Plan,
then such terms or provisions shall be deemed inoperative to the extent they so
conflict with the requirements of the Plan. Additionally, if any Agreement does
not contain any provision required to be included therein under the Plan, such
provision shall be deemed to be incorporated therein with the same force and
effect as if such provision had been set out at length therein.

         14.11 NON-REGISTERED STOCK. The shares of Stock to be distributed under
this Plan have not been, as of the Effective Date, registered under the
Securities Act of 1933, as amended, or any applicable state or foreign
securities laws and the Company has no obligation to any Holder to register the
Stock or to assist the Holder in obtaining an exemption from the various
registration requirements, or to list the Stock on a national securities
exchange.

         14.12 REPURCHASE OF STOCK. Except as otherwise expressly provided in
the Agreement, the Committee may, in the event of an acquisition of
substantially all of the Company's assets or at least 50% of the combined voting
power of the Company's then outstanding securities in one or more transactions
(including by way of merger or reorganization) which has been approved by the
Company's Board of Directors, require a Holder of any award granted under this
Plan to relinquish such award to the Company upon the tender by the Company to
Holder of cash in an amount equal to the Repurchase Value of such award.




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