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                                                                   EXHIBIT 10(a)
 
                             GENERAL RE CORPORATION
 
                        1995 LONG-TERM COMPENSATION PLAN
 
                           EFFECTIVE JANUARY 1, 1995
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                             GENERAL RE CORPORATION

                        1995 LONG-TERM COMPENSATION PLAN


1.       PURPOSE.

                 This 1995 Long-Term Compensation Plan (the "Plan") of General
Re Corporation, a Delaware corporation (the "Company") is intended to encourage
stock ownership by certain officers, key employees and Non-Employee Directors
of the Company or any Subsidiary, to encourage such employees to remain in the
employ of the Company or its Subsidiaries and to have a proprietary interest in
the success of the Company.  Toward this objective, the Committee may grant
Awards consisting of Stock Options, Approved Stock Options, Stock Appreciation
Rights, Restricted Stock, Share Units, and Bonuses under the Plan.

2.       DEFINITIONS.

                 For the purposes of this Plan:

                 (a)        "AWARD" means any form of incentive or performance
         award granted under the Plan, whether singly or in combination, to a
         Grantee by the Committee pursuant to such terms, conditions,
         restrictions and/or limitations (if any) as the Committee may
         establish by the Award Notice or otherwise.  Awards granted under the
         Plan may consist of:

                 (1)      "Annual Incentive Bonuses" or "Long-Term Performance
                          Bonuses" (collectively, "Bonuses") granted pursuant
                          to Section 6(c);

                 (2)      "Approved Stock Options" granted under the United
                          Kingdom Sub-Plan of the Plan;

                 (3)      "Restricted Stock" granted pursuant to Section 6(d);

                 (4)      "Share Units" granted pursuant to Section 6(c) and
                          6(e);

                 (5)      "Stock Appreciation Rights" or "SARs" granted
                          pursuant to Section 6(b); and/or
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                 (6)      "Stock Options" granted pursuant to Section 6(a).

                 (b)        "AWARD NOTICE" means the written notice from the
         Committee to a Grantee that establishes the terms, conditions,
         restrictions and/or limitations (if any) applicable to an Award.

                 (c)        "AWARD PERIOD" means the period established by the
         Committee over which the attainment of incentive or performance goals
         shall be measured.  With respect to Annual Incentive Bonuses, such
         Award Period shall be a fiscal year.  With respect to Long-Term
         Performance Bonuses, such Award Period shall consist of not less than
         three nor more than five consecutive fiscal years.

                 (d)        "CHANGE IN CONTROL" occurs if (i) any person,
         including a "group" as defined in Section 13(d)(3) of the Exchange
         Act, shall become the beneficial owner of shares of the Company with
         respect to which 20% or more of the total number of votes for the
         election of the Board of Directors of the Company may be cast; (ii) as
         a result of, or in connection with, any cash tender offer, exchange
         offer, merger or other business combination, sale of assets or
         contested election or combination of the foregoing, the persons who
         were prior to the institution thereof directors of the Company shall
         cease to constitute a majority of the Board of Directors of the
         Company; or (iii) stockholders of the Company shall approve an
         agreement pursuant to which the Company will cease to be an
         independent publicly owned corporation or for a sale or other
         disposition of all or substantially all of the assets of the Company.

                 (e)        "CODE" means the Internal Revenue Code of 1986, as
         amended.

                 (f)        "COMMITTEE" means the Compensation Committee of the
         Board of Directors of the Company, as described in Section 3 hereof.

                 (g)        "COMMON STOCK" means the common stock, par value
         $0.50 per share, of the Company.





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                 (h)         "DISABLED" or "DISABILITY" means having a physical
         or mental condition that renders the Grantee incapable of performing
         the work for which the Grantee was employed or similar work and that
         qualifies the Grantee for benefits under a Company-sponsored or
         Subsidiary-sponsored long-term disability plan.

                 (i)        "EXCHANGE ACT" means the Securities Exchange Act of
         1934, as amended.

                 (j)        "EXERCISE PRICE" means the price at which each
         Incentive Stock Option and Nonqualified Stock Option granted under the
         Plan can be exercised.

                 (k)        "FAIR MARKET VALUE" shall be deemed to be, on a per
         share basis, the mean between the opening and closing sales price of
         Common Stock on the Composite Tape for New York Stock Exchange-listed
         stocks on the date as of which the determination is being made or, if
         no sales were reported on such date, on the next preceding day on
         which there were sales of Common Stock so reported.

                 (l)        "GRANT DATE" shall mean the date on which the Award
         is authorized by the Committee or such later date as may be specified
         by the Committee in such authorization.

                 (m)        "GRANTEE" shall mean any person to whom an Award
         has been granted.

                 (n)        "INCENTIVE STOCK OPTION" means an Award granted
         pursuant to Section 6(a) hereof consisting of an option which meets
         the requirements of Section 422 of the Code.

                 (o)        "NON-EMPLOYEE DIRECTOR" shall mean each member of
         the Board of Directors of the Company who is not also an employee of
         the Company.

                 (p)        "NON-QUALIFIED STOCK OPTION" means an Award granted
         pursuant to Section 6(a) hereof consisting of an option which is not
         an Incentive Stock Option nor an Approved Stock Option.

                 (q)        "PARENTAL LEAVE OF ABSENCE" means a leave of absence
         by an employee from active employment, due to the





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         birth of a child, placement of a child with the employee in connection
         with adoption of such child by the employee, or caring for a child
         immediately following such birth or placement for adoption, provided
         that the absence from employment does not exceed twelve (12)
         consecutive months, excluding the period of absence in which the
         employee is on short-term disability due to pregnancy.

                 (r)         "RELATIVE TOTAL RETURN TO SHAREHOLDERS" means
         the comparison of the total return to shareholders including
         reinvestment of dividends on General Re Corporation Common Stock versus
         the total return an individual could have received if the individual
         had invested in an index comprised of the Standard & Poors 500 and a
         group of property/casualty, multiline insurance and/or reinsurance
         companies as determined from time to time by the Committee.

                 (s)        "REPORTING PERSON" means a Grantee who is subject
         to the reporting requirements of Section 16(a) of the Exchange Act.

                 (t)        "SHARE UNIT" means the accounting entry maintained
         by the Company for the purpose of reflecting the Company's unsecured
         and unfunded promise to deliver one share of Common Stock to the
         Grantee at the time and on the conditions set forth in Section 6(e).

                 (u)        "RESTRICTED STOCK OPTION" means any Stock Option
         where the Common Stock issuable thereunder is subject to such
         restrictions as to the transfer and sale thereof as shall be set forth
         in the Award Notice.

                 (v)        "SUBSIDIARY" means any corporation of which at
         least 50% of the voting stock is owned, directly or indirectly, by the
         Company.

                 (w)        "TERMINATION OF EMPLOYMENT"  means the earliest
         date on which an employee shall no longer be employed by the Company
         or any Subsidiary.  Whether an authorized leave of absence or absence
         on military or government service shall constitute Termination of
         Employment for purposes of this Plan shall be determined by the
         Committee.  Unless otherwise specified hereunder, retirement shall be
         considered to mean any retirement pursuant to any applicable
         retirement plan of





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         the Company or any of its Subsidiaries.  A Parental Leave of Absence
         shall not constitute Termination of Employment for purposes of this
         Plan provided that the employee returns to active employment with the
         Company or any Subsidiary within twelve (12) consecutive months after
         the date the Parental Leave of Absence began.  In the event that an
         employee does not return to active employment on or before the twelve
         (12) month anniversary date of the date the Parental Leave of Absence
         began, the employee shall have three (3) months following the
         anniversary date of the Parental Leave of Absence within which to
         exercise all Stock Options that are exercisable through the employee's
         date of termination.

                 For purposes of the Plan, discharge for cause shall mean
         Termination of Employment by the Employer which the Committee, in its
         discretion, determines to be for cause, including any separation from
         service by the Grantee from his employer which is effected by reason
         of fraud, deceit, or other gross misconduct by the Grantee performed
         within the scope of his employment.  "Termination for good reason"
         means any separation from service because of the involuntary
         assignment of the Grantee to duties materially different from his
         position prior to such Change in Control, a reduction of the Grantee's
         salary which is greater than ten percent of the Grantee's salary at
         the annual rate in effect at the time of the Change in Control, or the
         relocation of the Grantee's regular assigned workplace by more than 25
         additional miles from residence.

                 (x)        "UNITED KINGDOM SUB-PLAN" means that portion of the
         Plan applicable to persons described in Section 4(b) hereof.  The
         United Kingdom Sub-Plan is attached hereto as Appendix A.





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3.       ADMINISTRATION.

                 (a)        THE COMMITTEE.  The Plan shall be administered by
         the Committee.  The Committee shall consist of not less than three
         members of the Company's Board of Directors who shall be ineligible to
         receive Awards under the Plan or stock options or rights under any
         other plan of the Company or any of its Subsidiaries (unless the Board
         of Directors determines that such options or rights can be granted
         pursuant to the Plan or under another plan without adversely affecting
         the Committee's status as "disinterested" for purposes of Rule 16b-3
         under the Exchange Act) and who shall qualify as "outside directors"
         for purposes of Section 162(m) of the Code.  The Board of Directors
         may fill any Committee vacancy and may remove any member of the
         Committee at any time with or without cause.

                 (b)        AUTHORITY OF THE COMMITTEE.  The Committee shall
         have the authority to (1) interpret the Plan; (2) establish such rules
         and regulations as it deems necessary for the proper operations and
         administration of the Plan; (3) select key executive and managerial
         employees to receive Awards under the Plan; (4) establish and
         administer performance objectives in connection with Awards made under
         the Plan, and certify that such performance objectives have been met;
         (5) determine the form of an Award, the number of shares of Common
         Stock or Share Units subject to the Award, all the terms, conditions,
         restrictions and/or limitations, if any, of an Award, including the
         time and conditions of exercise or vesting, and the terms of any Award
         Notice, which may include the waiver or amendment of prior terms and
         conditions or acceleration or early vesting or payment of an Award
         under certain circumstances determined by the Committee; (6) determine
         whether Awards would be granted singly, in combination or in tandem;
         (7) grant waivers of Plan terms, conditions, restrictions, and
         limitations; (8) accelerate the vesting, exercise, or payment of an
         Award or the Award Period when such action or actions would be in the
         best interest of the Company; (9) reduce the amount of any Award based
         upon any additional corporate performance, individual performance or
         other factors, circumstances or events which the Committee deems
         relevant; (10) prescribe, amend and rescind rules and regulations
         relating to the Plan; and (11) take any and all other action it deems





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         necessary or advisable for the proper operation or administration of
         the Plan.  All determinations of the Committee shall be made by a
         majority of its members, and its determinations shall be final,
         binding and conclusive.  No member of the Committee shall be liable
         for any action, interpretation or construction made in good faith with
         respect to the Plan or any Award thereunder.  The Committee, in its
         discretion, may delegate its authority and duties under the Plan to
         the Chief Executive Officer and/or to other senior officers of the
         Company under such conditions and/or subject to such limitations as
         the Committee may establish; provided, however, that only the
         Committee may select, grant and certify Awards to Reporting Persons
         and to persons whose compensation is subject to Section 162(m) of the
         Code.

4.       ELIGIBILITY.

                 (a)        The persons who shall be eligible to receive Awards
         pursuant to this Plan are:

                 (1)      key executive and managerial employees (including
                          officers, whether or not they are directors) of the
                          Company or of any Subsidiary, as the Committee shall
                          from time to time select;

                 (2)      each Non-Employee Director of the Company who
                          qualifies for automatic grants of Nonqualified Stock
                          Options pursuant to Section 6(a)(2) and Restricted
                          Stock pursuant to Section 6(d);

                 (b)        Employees described in subsection (a) whose
         remuneration is liable to income tax in the United Kingdom under
         Schedule E (i.e., employees who are resident and ordinarily resident
         in the United Kingdom and whose duties are performed there) shall also
         be eligible to receive Awards pursuant to the United Kingdom Sub-Plan.





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5.       PARTICIPATION.

                 The Committee shall select, from time to time, Grantees from
those persons eligible under Section 4 above who, in the opinion of the
Committee, further the Plan's purposes.

6.       FORM OF AWARDS, AND TERMS AND CONDITIONS THEREOF.

                  The terms and conditions of the Awards granted under the Plan
shall be as set forth in the Award Notice and as follows:

                 (a)      STOCK OPTIONS.  Stock Options granted under the Plan
         may, in the discretion of the Committee, be Incentive Stock Options,
         Nonqualified Stock Options and Approved Stock Options.  The terms and
         conditions of Approved Stock Options are not set forth in the main
         portion of this Plan but are instead set forth in Appendix A hereto.

                 (1)      Amount of Award.  The aggregate Fair Market Value
                          (determined at the time an Incentive Stock Option is
                          granted) of the stock with respect to which Incentive
                          Stock Options first become exercisable during any
                          calendar year under the terms of this Plan for any
                          Grantee may not exceed $100,000.  For purposes of
                          this $100,000 limit, the Grantee's Incentive Stock
                          Options under this Plan and all plans maintained by
                          the Grantee's employer corporation and its parent and
                          subsidiary corporations shall be aggregated.

                          The total number of shares of Common Stock with
                          respect to which Nonqualified Stock Options or SARs
                          may be granted to any one individual under the Plan
                          through December 31, 1999 may equal but shall not
                          exceed ten percent (10%) of the aggregate number of
                          shares of Common Stock that may be issued under the
                          Plan.

                 (2)      Automatic Grants to Non-Employee Directors.  Each
                          Non-Employee Director will automatically





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                          receive a Nonqualified Stock Option to acquire 500
                          shares of Common Stock on the first business day of
                          1995 and of each calendar year thereafter during
                          which such Non-Employee Director shall serve on the
                          Company's Board of Directors.

                 (3)      Exercise Price.  The Exercise Price of any Stock
                          Option shall be the Fair Market Value of Common Stock
                          on the Grant Date; provided, however, that the
                          Exercise Price of any Incentive Stock Option granted
                          to any employee who on the Grant Date owns more than
                          10 percent of the total combined voting power of all
                          classes of stock of the Company shall not be less
                          than 110 percent of the Fair Market Value of such
                          shares on the Grant Date.

                          The Exercise Price shall be payable in United States
                          dollars in cash or by certified check, bank draft or
                          postal or express money order.  The Committee may, at
                          the request of a Grantee

                          (A)     accept payment of the Exercise Price from
                                  residents of a foreign country in currency of
                                  that country;

                          (B)     arrange short-term outside financing for the
                                  purpose of financing the Exercise Price of
                                  the option;

                          (C)     approve and comply with any procedures
                                  necessary to allow a broker to sell and remit
                                  to the Company the sale proceeds of the
                                  portion of the shares to be acquired upon
                                  exercise with a Fair Market Value equal to
                                  the sum of the Exercise Price and any tax
                                  withholding required; or





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                          (D)     accept prior acquired shares of Common Stock
                                  which have been held by the Grantee for at
                                  least six (6) months in partial or full
                                  payment of the Exercise Price.  Common Stock
                                  so accepted shall be valued at its Fair
                                  Market Value on the date the Incentive Stock
                                  Option or Nonqualified Stock Option is
                                  exercised.

                 (4)      Term of Stock Options and Timing of Exercise.

                          (A)     In General.  Each Stock Option granted under
                                  the Plan shall be exercisable in whole or in
                                  part at such time or times as the Committee
                                  in its sole discretion may determine;
                                  provided, however, that

                          (i)              Nonqualified Stock Options issued to
                                           Non-Employee Directors shall be first
                                           exercisable six (6) months from the
                                           Grant Date;

                          (ii)             Incentive Stock Options granted to
                                           an employee who, on the Grant Date,
                                           owns more than 10 percent of the
                                           combined voting power of all
                                           classes, shall not be exercisable
                                           after the expiration of five (5) 
                                           years from the Grant Date;

                          (iii)            No Stock Option awarded to any
                                           Grantee shall be exercisable after
                                           the expiration of ten (10) years 
                                           from the Grant Date;

                          (iv)             No Stock Option or SAR held by a
                                           Grantee who is a Reporting Person
                                           shall be exercisable during the
                                           first six (6) months of its term.





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                          (B)     Termination of Employment, Termination of
                                  Board Service or Death.  If a Grantee's
                                  employment or membership on the Company's
                                  Board of Directors terminates on account of
                                  death, Disability or retirement, the Stock
                                  Options otherwise exercisable by the Grantee
                                  through the date of such termination may be
                                  exercised within five years of such date;
                                  provided, however, that no Stock Option may
                                  be exercised after the expiration date
                                  thereof.  Any Stock Option exercisable after
                                  death may be exercised by the decedent's
                                  legal representatives.

                                  In the event a Grantee's employment or
                                  service on the Company's Board of Directors
                                  shall terminate on account of resignation,
                                  discharge not for cause or expiration of
                                  elected term, the Stock Options otherwise
                                  exercisable by the Grantee through the date
                                  of such termination may be exercised by the
                                  Grantee no later than three (3) months
                                  following the date of such termination except
                                  that in the case of employee Nonqualified
                                  Stock Options, the Committee may, in its sole
                                  discretion, provide for a later date;
                                  provided, however, that no Stock Option may
                                  be exercised after the expiration date
                                  thereof.

                                  If a Grantee's employment shall terminate on
                                  account of discharge for cause, the Grantee
                                  shall forfeit all outstanding Stock Options
                                  as of the date of termination.





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                                  To the extent not then exercisable in
                                  accordance with this Section, unless the
                                  Committee shall, in its discretion, determine
                                  otherwise, the Stock Options of a Grantee who
                                  resigns or whose employment terminates shall,
                                  except as set forth in Section 8, terminate
                                  on the date his employment terminates.

                 (5)      Replacement Options.  In the event a Grantee
                          exercises a Nonqualified Stock Option by using shares
                          of Common Stock, which the Grantee has owned for at
                          least six (6) months, in partial or full payment of
                          the Exercise Price, the Grantee shall automatically
                          be granted a new Nonqualified Stock Option to
                          purchase a number of shares of Common Stock equal to
                          the number of shares of Common Stock used in payment
                          of the Exercise Price (the "Replacement Option").
                          Replacement Options shall be granted with respect to
                          only the number of shares of Common Stock issuable
                          under the original Award.

                          Notwithstanding any provision of this Plan to the
                          contrary, (a) the Replacement Option shall become
                          first exercisable one year after the Grant Date
                          thereof provided that, as of that date, the Grantee
                          owns shares of Common Stock acquired as a result of
                          the exercise of the original Nonqualified Stock Option
                          equal to the excess of the shares received on exercise
                          of the original Nonqualified Stock Option less the sum
                          of the exercise price of the original Nonqualified
                          Stock Option plus any income tax due as a result of
                          the exercise of the original Nonqualified Stock
                          Option, and (b) the Replacement Option shall expire on
                          the same date that the original Nonqualified Stock
                          Option (with respect to which the Replacement Option
                          was granted)




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                          would have expired by its terms.  All other provisions
                          of this Plan pertaining to Nonqualified Stock Options
                          shall apply to Replacement Options.

                 (b)      STOCK APPRECIATION RIGHTS.

                 (1)      In General.  SARs may be granted by the Committee
                          with respect to any Stock Option granted pursuant to
                          the Plan.  Such SARs shall be granted at the time of
                          the grant of the related Stock Option.  Each such
                          related SAR shall be subject to the same terms and
                          conditions (and any such additional terms and
                          conditions as the Committee may deem appropriate) as
                          the Stock Option to which it relates.  Upon the
                          exercise of all or a portion of a related SAR, all or
                          such portion of the Option related to the SAR which
                          has been exercised shall terminate.  On the exercise
                          of all or a portion of a Stock Option which is
                          related to a SAR, all or such portion of the SAR
                          which is related to the Option which has been
                          exercised shall terminate.

                 (2)      SARs Related to Incentive Stock Options.  With
                          respect to SARs related to an Incentive Stock Option,
                          the following conditions shall apply to such related
                          SAR:

                          (A)     The SAR shall expire no later than the
                                  underlying Incentive Stock Option;

                          (B)     The SAR shall be for no more than 100% of the
                                  difference between the Exercise Price of the
                                  underlying Incentive Stock Option and the
                                  Fair Market Value of the stock subject to the
                                  underlying Incentive Stock at the time the
                                  SAR is exercised;





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                          (C)     The SAR shall be transferable only when the
                                  underlying Incentive Stock Option is
                                  transferable, and under the same conditions;

                          (D)     The SAR may be exercised only when the
                                  underlying Incentive Stock Option is eligible
                                  to be exercised and only when the Fair Market
                                  Value of the stock subject to the underlying
                                  Incentive Stock Option exceeds the Exercise
                                  Price.

                 (3)      Exercise of SARs.  The Exercise Price of a SAR
                          related to an Option, regardless of when issued,
                          shall be the same as the Exercise Price of the
                          Incentive Stock Option or Nonqualified Stock Option
                          to which it relates.

                          Upon exercise of a SAR, unless subject to Section
                          6(b)(4), the Grantee shall be entitled to receive an
                          amount equal to the product of:

                          (x)     the amount by which the Fair Market Value of
                                  Common Stock on the date of exercise of the
                                  SAR exceeds the Exercise Price per share
                                  specified in the SAR, multiplied by

                          (y)     the number of shares of Common Stock in
                                  respect of which the SAR shall have been
                                  exercised.

                 (4)      Form and Time of Payment of Related SARs.  The amount
                          to which a Grantee is entitled on exercise of a
                          related SAR may be satisfied in Common Stock, in cash
                          or in a combination of both, as determined by the
                          Committee, in its discretion.  If the Committee
                          determines to satisfy all or part of the amount due
                          the Grantee in Common Stock, the number of shares





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                          of Common Stock to which the Grantee is entitled
                          shall be the largest whole number obtained by
                          dividing the dollar amount to be satisfied in Common
                          Stock pursuant to the exercise of the related SAR by
                          the Fair Market Value of Common Stock, on the date of
                          exercise.  Fractional shares shall be distributed on
                          exercise of any related SAR in cash.

                 (c)      ANNUAL INCENTIVE BONUSES AND LONG-TERM PERFORMANCE
BONUSES.

                 (1)      Performance Objective.  Prior to the commencement of
                          each Award Period (or during the first 90 days of
                          such Award Period to the extent permitted under
                          regulations issued by the U.S.  Department of
                          Treasury under Section 162(m) of the Code), the
                          Committee shall determine, in writing, for each
                          Grantee or group of Grantees a "Performance
                          Objective" as determined under Section 6(c)(2).
                          Notwithstanding the foregoing, in the event of an
                          adjustment in the accounting standards applicable to
                          the Performance Objective, such Performance Objective
                          may be revised by the Committee in a manner
                          consistent with such adjustment.  Also prior to the
                          commencement of an Award Period (or during the 90-day
                          period described above), the Committee shall
                          determine the distributable percentage to be applied
                          to the Bonus opportunity in the event the Performance
                          Objective for the Award Period is not fully achieved
                          or is exceeded.  Notwithstanding the amount of any
                          Bonus granted hereunder, the Committee retains the
                          discretion to award a Bonus that is less than the
                          amount otherwise payable for the Award Period.  The
                          Committee shall issue an Award Notice to each Grantee
                          which states his Performance Objective and Bonus
                          opportunity as soon as practicable after such grant.





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                 (2)      Amount and Form of Bonus.

                          (A)     Annual Incentive Bonus.  The Committee shall
                                  determine an annual Performance Objective for
                                  the Company and its Subsidiaries for each
                                  Award Period, shall select Grantees and shall
                                  determine the percentage of the Grantee's
                                  salary rate (as of the end of the fiscal year)
                                  which would be paid to a Grantee as an Annual
                                  Incentive Bonus based upon such criteria as
                                  shall be determined by the Committee in its
                                  sole discretion. Performance Objectives
                                  applicable to an Annual Incentive Bonus may be
                                  measured by the Company's statutory
                                  underwriting combined ratio, a targeted
                                  improvement in the Company's statutory
                                  underwriting combined ratio, the Company's
                                  statutory underwriting combined ratio relative
                                  to the cumulative statutory underwriting
                                  combined ratio of the companies reporting to
                                  the Reinsurance Association of America
                                  (excluding the General Re Group companies),
                                  the total return on various company investment
                                  portfolios and other measures the Committee
                                  deems appropriate.  To the extent such Annual
                                  Incentive Bonus Award is made to a Grantee who
                                  is a Reporting Person, no such Award may be
                                  paid unless the Committee has certified, in
                                  writing, that the Performance Objective for
                                  the Award Period has been met.  Subject to the
                                  Committee's certification, the Committee shall
                                  award an Annual Incentive Bonus to all
                                  Grantees who are Reporting Persons not to
                                  exceed, in the aggregate, 1% of the
                                  consolidated net income of the Company and its
                                  Subsidiaries; provided, however, that no such
                                  Grantee may receive an Annual





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                                  Incentive Award in excess of $1,500,000.

                          (B)     Long-Term Performance Bonuses.  The Committee
                                  shall designate Award Periods of not less than
                                  three nor more than five (5) consecutive 
                                  fiscal years, the first Award Period to 
                                  commence January 1, 1995, with respect to 
                                  which Long-Term Performance Bonuses shall be
                                  awarded.  The Performance Objective applicable
                                  to a Long-Term Performance Bonus shall be
                                  based on the relative total return to
                                  stockholders over the Award Period.  Such
                                  Bonus shall be determined as a target
                                  percentage of the Grantee's paid salary for
                                  the final year of the Award Period, but in no
                                  event may a Grantee receive a Long-Term
                                  Performance Bonus in excess of $1,500,000.
                                  Prior to the commencement of each Award Period
                                  (or during the 90-day period described 
                                  above), the Committee shall determine, in
                                  writing, for each Grantee or group of Grantees
                                  a Performance Objective based on Relative
                                  Total Return to Shareholders over the Award
                                  Period and may range from 0-200% of the
                                  Grantee's target. In the case of an Award
                                  Period consisting of five (5) consecutive 
                                  fiscal years, during the first three (3) such
                                  years the Committee may, in its discretion, 
                                  select additional employees who are not 
                                  Reporting Persons to receive a Long-Term 
                                  Performance Bonus, determine for each such 
                                  Grantee a Performance Objective based on his 
                                  entry into the Plan as of January 1 of the 
                                  year following his selection and the pro rata
                                  amount of his Long-Term Performance Bonus 
                                  opportunity, and determine the distributable 
                                  percentage to be applied to the Long-Term 
                                  Performance Bonus opportunity in the event 
                                  the Performance Objective for





                                      -17-
<PAGE>   19
                                  the shorter Award Period is not achieved. The
                                  Committee shall issue an Award Notice to each
                                  Grantee which states his Performance Objective
                                  and Long-Term Performance Bonus opportunity as
                                  soon as practicable after such grant.  To the
                                  extent a Long-Term Performance Bonus Award is
                                  made to a Grantee who is a Reporting Person,
                                  no such Award may be paid unless the Committee
                                  has certified, in writing, that the
                                  Performance Objective for the Award Period has
                                  been met.

                 (3)      Crediting and Payment of Bonuses.  The Committee shall
                          determine, in its sole discretion, to credit, award or
                          pay Annual Incentive Bonuses and Long-Term Performance
                          Bonuses in cash, Common Stock, Share Units or
                          Restricted Stock Options, or some combination thereof,
                          and may, in its sole discretion, offer a Grantee the
                          opportunity to defer the payment of some or all of his
                          Annual Incentive Bonus or Long-Term Performance Bonus
                          into Share Units and Restricted Stock Options,
                          provided that in the case where a Grantee is offered
                          the opportunity to defer the payment of a Bonus such
                          election must be made, in the case of the Annual
                          Incentive Bonus, before the beginning of the
                          applicable Award Period; and in the case of the
                          Long-Term Performance Bonus, before the beginning of
                          the last year in the Award Period.  The terms and
                          conditions of a Restricted Stock Option will be the
                          same as those applicable to Stock Options under
                          Section 6(a) other than such restrictions as the
                          Committee, in its discretion, may approve.

                 (4)      Termination of Employment.  If a Grantee's employment
                          by the Company or a Subsidiary terminates for any of
                          the reasons stated below prior to the end of an Award
                          Period for which he was (a) eligible for an Annual





                                      -18-
<PAGE>   20
                          Incentive Bonus, or (b) awarded a Long-Term
                          Performance Bonus opportunity, the amount of his Bonus
                          shall be determined as follows:

                          (A)     If the Grantee retires under a Company or
                                  Subsidiary pension plan, dies, is Disabled, or
                                  his employment is involuntarily terminated not
                                  for cause or in such other circumstances as
                                  the Committee may in its sole discretion
                                  determine, such Grantee shall receive the
                                  proportion of his Bonus (upon determination by
                                  the Committee of the degree of success in
                                  achieving the Performance Objective) which the
                                  number of full months of active service of the
                                  Grantee during the Award Period bears to the
                                  total number of months in such Award Period;

                          (B)     If the Grantee resigns or is discharged
                                  (whether or not for cause) he will forfeit his
                                  Bonus, provided, however, that if said
                                  Grantee's employment terminates during a
                                  Long-Term Performance Bonus Award Period, such
                                  Grantee shall receive whatever portion of his
                                  Long-Term Performance Bonus as the Committee
                                  in its sole discretion shall determine.

                 (d)      RESTRICTED STOCK.

                 (1)      Transfer of Restricted Stock.  As soon as practicable
                          following the Grant Date, a certificate or
                          certificates for all shares of Restricted Stock
                          granted to a Grantee by the Committee shall be
                          registered in the name of the Grantee and held for the
                          Grantee by the Company.  The Grantee shall thereupon
                          be a stockholder and have all the rights of a





                                      -19-
<PAGE>   21
                          stockholder with respect to such shares, including the
                          right to vote and receive all dividends or other
                          distributions made or paid with respect to such
                          shares.  As the restrictions are released, a
                          certificate (without the legend mentioned below) for
                          the number of shares with respect to which
                          restrictions have been released will be delivered to
                          the Grantee as soon as practicable.

                          Such Restricted Stock, and any new, additional or
                          different securities, cash or other property, the
                          Grantee may become entitled to receive with respect to
                          such Restricted Stock by virtue of the events
                          described in Section 8 shall be subject to the
                          restrictions described in Paragraph (3) below.  In
                          order to enforce such restrictions, the Committee
                          shall cause a legend or legends to make specific
                          reference to such restrictions on all certificates for
                          Restricted Stock.

                 (2)      Automatic Grants to Non-Employee Directors.  Each
                          Non-Employee Director will automatically receive a
                          grant of 65 shares of Restricted Stock pursuant to
                          this Section 6(d) on the first business day following
                          the date the Plan is approved by the Company's
                          stockholders, and the first business day of each
                          calendar year thereafter during which such
                          Non-Employee Director shall serve on the Company's
                          Board of Directors.  Notwithstanding any provision in
                          this Section 6(d) to the contrary, no shares of
                          Restricted Stock held by a Non-Employee Director may
                          be sold, exchanged, transferred, pledged, hypothecated
                          or otherwise disposed of by the Grantee until the
                          later of (i) the expiration of five (5) years from 
                          the Grant Date or (ii) retirement from membership on 
                          the Board of Directors of the Company pursuant to the 
                          By-Laws of the Company.





                                      -20-
<PAGE>   22
                (3)       Specific Restrictions and Release of Restrictions . In
                          addition to such other restrictions that the Committee
                          may deem advisable in its sole discretion, no shares
                          of Restricted Stock held by a Grantee may be sold,
                          exchanged, transferred, pledged, hypothecated, or
                          otherwise disposed of by the Grantee until their
                          release as provided below:

                          (A)     Committee Discretionary Release.  The above
                                  restrictions on the shares of Restricted Stock
                                  shall be released with respect to the
                                  percentage of shares as of such date (or such
                                  dates), as determined by the Committee in its
                                  sole discretion;

                          (B)     Disability or Retirement.  In the event of the
                                  Grantee's termination of employment with the
                                  Company due to (i) Disability or (ii)
                                  retirement on or after normal retirement date
                                  under a Company or Subsidiary pension plan,
                                  all restrictions on the shares of such
                                  Restricted Stock held by the Grantee shall
                                  lapse;

                          (C)     Death.  In the event of the Grantee's
                                  termination of employment due to the Grantee's
                                  death, all restrictions on the shares of such
                                  Restricted Stock held by the Grantee shall
                                  lapse and such shares shall be delivered to
                                  the Grantee's beneficiary.

                          (D)     Other Termination of Employment.  In the event
                                  of the Grantee's termination of employment
                                  after the Grant Date for reasons other than
                                  those stated in subparagraphs (B) and (C)
                                  above and Section 9, the Grantee shall forfeit
                                  all shares of Restricted Stock on which





                                      -21-
<PAGE>   23
                                  restrictions still apply; provided, however,
                                  that the Committee may, at its sole
                                  discretion, determine as to the Grantee the
                                  degree to which restrictions on shares of such
                                  Restricted Stock held by the Grantee shall
                                  lapse.

                 (e)      SHARE UNITS.  The Committee shall award Share Units to
         such Grantees, in such amounts, and subject to such vesting and/or
         acceleration schedules as it shall determine from time to time.  Share
         Units shall vest at the time set forth in the Award Notice.  Shares of
         Common Stock shall in no event be delivered earlier than the fifth
         anniversary of the Grant Date, nor later than the date of the Grantee's
         death, Disability, retirement under a Company or Subsidiary pension
         plan, a Change-in-Control, or as otherwise determined by the Committee
         in its sole discretion.  The value of a Share Unit at Grant Date shall
         be determined by the Committee in its discretion by taking into account
         the illiquidity of the Share Units, the five-year investment risk, the
         absence of voting rights and the risk of forfeiture; provided, however,
         that the value shall in no event be less than 75% of the Fair Market
         Value of a share of Common Stock on the Grant Date.  Additional Share
         Units shall be credited to the Grantee's account to reflect cash
         dividends, as determined by the Committee in its sole discretion.  Any
         new Share Units credited with respect to an original grant of Share
         Units shall be treated as if credited as of such original Grant Date.
         If during the time Share Units are outstanding a Grantee's employment
         is terminated for cause or the Grantee engages in the unauthorized use
         of proprietary information, both of which conditions shall be
         determined by the Committee in its sole discretion, the Grantee shall
         forfeit all Share Units credited to his account.

                 (1)      Termination of Employment.  In the event of the
                          Grantee's termination of employment with the Company
                          due to (i) Disability, (ii) retirement on or after the
                          Grantee's normal retirement date under a Company or
                          Subsidiary pension plan or (iii) death the Grantee's
                          Share Units shall immediately vest (to the extent not
                          otherwise vested) and become





                                      -22-
<PAGE>   24
                          payable.  In the event of the Grantee's termination of
                          employment after the Grant Date for reasons other than
                          those stated in this subparagraph and Section 9, the
                          Grantee shall forfeit all nonvested Share Units
                          provided, however, that the Committee may, at its sole
                          discretion, determine that, as to the Grantee, such
                          Share Units shall vest.

                 (2)      Payment of Share Units.  Share Units shall be payable
                          in shares of Common Stock.   Any fractional share
                          shall be paid in cash based on the Fair Market Value
                          of a share of Common Stock on the appropriate
                          determination date.

7.       STOCK SUBJECT TO THE PLAN.

                 The stock issuable under the Plan shall be shares of the
Company's authorized but unissued Common Stock or Common Stock held in the
Company's treasury.  The total number of shares of Common Stock with respect to
which Awards (including Incentive and Approved Stock Options) may be granted
under the Plan may equal but shall not exceed in the aggregate 5.0 million
shares; provided, however, that from the aggregate limit, (a) the maximum number
of shares of Common Stock with respect to which Restricted Stock and Share Units
may be awarded under the Plan shall not exceed 500,000 shares unless such
Restricted Stock and Share Units are transferred in lieu of cash compensation,
(b) the maximum number of shares available for Stock Options and Restricted
Stock granted to Non-Employee Directors shall not exceed 60,000 shares, and (c)
the maximum number of shares available for Stock Options and SARs to an employee
shall not exceed ten (10) percent of the shares available under the Plan.

                 For purposes of determining the number of shares of Common
Stock remaining available under the Plan, the exercise of a SAR related to such
Option shall be equivalent to the exercise of the related Stock Option.  Any
shares of Common Stock related to Awards which terminate by expiration,
forfeiture, cancellation or otherwise without issuance of shares, are settled in
cash in lieu of Common Stock, or are exchanged in the Committee's discretion for
Awards not involving Common Stock, shall be available again for grant under the
Plan to Grantees who are not Reporting Persons; provided, however, that only the
new number of





                                      -23-
<PAGE>   25
shares of Common Stock actually issued shall be counted where shares of Common
Stock are tendered in payment of the Exercise Price.  An outstanding related SAR
shall not be taken into account in determining the aggregate number of shares
with respect to which Stock Options may thereafter be granted.

                 (a)        Additional Agreements.  The Committee may, as a
         condition precedent to the exercise of any Award, require the Grantee
         thereof (or, in the event of the Grantee's death, his legal
         representatives, legatees or distributees) to enter into such agreement
         or to make such representations as may be required to make lawful the
         transfer of shares of Common Stock to the Grantee upon exercise of a
         Stock Option or otherwise and the ultimate disposition of the shares so
         acquired.

8.       RECAPITALIZATION, MERGER, CONSOLIDATION AND SIMILAR TRANSACTIONS.

                 Subject to any required action by stockholders, the aggregate
number of shares of Common Stock and Restricted Stock issuable under the Plan,
the Exercise Price of any Stock Option or SAR, and the number of Share Units
credited to a Grantee's Bonus account or otherwise granted shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a subdivision or consolidation of shares
or the payment of a stock dividend on Common Stock other than a stock dividend
that is a substitute for a cash dividend or any other increase in the number of
such shares effected without receipt of consideration by the Company; provided
that no such adjustment in Exercise Price may reduce the Exercise Price to an
amount per share which is less than the par value of such share.

                 Subject to any required action by stockholders, in the event of
the dissolution or liquidation of the Company, a merger or consolidation of the
Company, a merger or consolidation in which the Company is not the surviving
corporation, or a merger or consolidation in which the Company is the surviving
corporation but the holders of Common Stock receive securities of another
corporation

                 (a)        any Award granted hereunder shall pertain to and
         apply to the securities, cash or other property





                                      -24-
<PAGE>   26
         (subject to adjustment by cash payment in lieu of fractional interests)
         to which a holder of the number of shares of Common Stock equal to the
         number of shares the Grantee would have been entitled; and

                 (b)        the Committee shall, in its discretion, have the
         power, prior to such event, (i) to cancel any or all Awards which are
         then exercisable and, in consideration of such cancellation, pay to
         each Grantee an amount in cash with respect to each share of Common
         Stock as to which an Award is then exercisable equal to the difference
         between the value per share of the consideration, as determined by the
         Committee in its discretion, received by holders of Common Stock as a
         result of such dissolution, liquidation, merger or consolidation and
         the Exercise Price, and to terminate without consideration all Awards
         not then exercisable; or (ii) if the holders of Common Stock receive
         property other than cash as a result of such dissolution, liquidation,
         merger or consolidation, to provide for the exchange of an Award which
         is then exercisable for a Stock Option or SAR on some or all of such
         property and, incident thereto, make an equitable adjustment, as
         determined by the Committee, in the Exercise Price of each affected
         Award, the number of shares or other property subject to the Award and,
         if appropriate, provide for a cash payment to the Grantees in partial
         consideration for the exchange for their Award and to terminate without
         consideration all Awards not then exercisable.  The foregoing
         adjustment shall be made by the Committee, whose determination in that
         respect shall be final, binding and conclusive.

                 If changes in capitalization of the Company other than those
referred to above shall occur, the Committee may, but need not, make such
adjustments in the number and class of shares of Restricted Stock that may
thereafter be granted or in the number and class of shares of Restricted Stock
then outstanding as the Committee may consider appropriate to prevent dilution
or enlargement of rights.

                 Except as provided herein, the Grantee shall have no rights by
reason of any subdivision or consolidation of shares of stock of any class, the
payment of any stock dividend or any





                                      -25-
<PAGE>   27
other increase or decrease in the number of shares of stock of any class, any
dissolution, liquidation, merger, consolidation or change in control or any
issue by the Company of shares of stock of any class, or securities convertible
into shares of stock of any class and no adjustment by reason thereof shall be
made with respect to the Exercise Price or number of shares of Common Stock
subject to an Award.

                 Notwithstanding anything to the contrary in the Plan, neither
the Board nor the Committee shall have any authority to take any action under
the Plan where such action would affect the Company's ability to account for any
business combination as a "pooling of interests."

9.     CHANGE IN CONTROL.

                 Notwithstanding any other provision to the contrary, upon a
Change in Control

                 (a)    all Stock Options shall become immediately and fully
         exercisable;

                 (b)    all Long-Term Performance Bonuses shall become
         immediately payable or creditable, where applicable, based upon the
         assumption that the Performance Objectives have been fully achieved or,
         if greater, on actual performance achieved; but in no event for an
         amount greater than the proportion of the Bonus which the number of
         months served during the Award Period prior to such occurrence bears to
         the total number of months in the Award Period, and all amounts
         deferred pursuant to Section 6(c)(3), if any, shall be immediately
         payable in a lump sum payment in cash;

                 (c)    all Annual Incentive Bonuses shall become immediately
         payable or creditable, where applicable, based upon the assumption that
         the Performance Objectives have been fully achieved; but in no event
         for an amount greater than the proportion of the Bonus which the number
         of months served during the Award Period prior to such occurrence bears
         to the total number of months in the Award Period, and all amounts
         deferred pursuant to Section 6(c)(3), if any, shall be immediately
         payable in a lump sum payment in cash;





                                      -26-
<PAGE>   28
                 (d)    Restricted Stock Options and Share Units credited
         pursuant to Section 6(c)(3) shall become fully vested (to the extent
         not otherwise vested) and payable;

                 (e)    where the Grantee's employment with the Company
         terminates (other than by reason of death, Disability, retirement on or
         after normal retirement date under a Company or Subsidiary pension
         plan, termination for cause or voluntary termination by the Grantee
         except for good reason) within two years thereafter, all restrictions
         on all shares of Restricted Stock (or cash, securities or other
         property) and Share Units, granted pursuant to Section 6(e), held by
         the Grantee under the Plan shall lapse.  Notwithstanding the foregoing,
         if a Change in Control occurs, the Committee may, at its sole
         discretion, determine that all or some percentage of the restrictions
         shall lapse as to the shares of such Restricted Stock and/or Share
         Units held by the Grantee.

10.      TERM OF PLAN.

                 The Plan shall become effective as of January 1, 1995, subject
to its approval by the Company's shareholders at the 1995 annual meeting.  The
Plan shall remain in effect until December 31, 1999 or until the exercise,
expiration or termination or payment of all Stock Options, Approved Stock
Options, SARs, Long-Term Performance Bonuses and Share Units under the Plan,
whichever is later; provided that Awards shall not be granted under the Plan
after December 31, 1999.

11.      NONTRANSFERABILITY OF AWARDS AND DESIGNATION OF BENEFICIARIES.

                 No Awards under the Plan shall be subject in any manner to
alienation, anticipation, sale, assignment, pledge, encumbrance or transfer,
other than by will or by the laws of descent or distribution or (except with
respect to Incentive Stock Options) pursuant to a qualified domestic relations
order as defined by Section 414(p) of the Code or Section 206(d) of the Employee
Retirement Income Security Act of 1974, as amended, by the Grantee and no other
persons shall otherwise acquire any rights therein.  During the lifetime of a
Grantee, Stock Options and SARs shall be exercisable only by the Grantee and
shall not be assignable or transferable except as provided above.





                                      -27-
<PAGE>   29
                 A Grantee may name one or more beneficiaries to receive any
payment of an Award to which the Grantee may be entitled under the Plan in the
event of the Grantee's death, on a form to be provided by the Committee.  A
participant may change the Grantee's beneficiary designation from time to time
in the same manner.  The last such designation received by the Committee shall
be controlling; provided, however, that no designation, or change or revocation
thereof, shall be effective unless received by the Committee prior to the
Grantee's death, and in no event shall it be effective as of the date prior to
such receipt.

                 If no designated beneficiary is living on the date on which any
payment becomes payable to a participant's beneficiary, such payment will be
payable to the person or persons in the first of the following classes of
successive preference:

                 (a)      widow or widower, if then living,
                 (b)      surviving children, equally,
                 (c)      surviving parents, equally,
                 (d)      surviving brothers and sisters, equally,
                 (e)      executors and administrators,

and the term "beneficiary" as used in the Plan shall include such person or
persons.

12.      REPORTING PERSONS.

                 With respect to all Awards granted to Reporting Persons, the
Award Notice shall provide that:

                 (a)      Awards requiring exercise shall not be exercisable
         until at least six months after the Grant Date of the Award, except in
         the case of the death or Disability of the Grantee; and

                 (b)      Shares of Common Stock issued pursuant to any Award
         may not be sold by the Grantee for at least six months after
         acquisition, except in the case of the death or Disability of the
         Grantee; provided, however, that (unless an Award Notice provides
         otherwise) the limitation of this Section 12 shall apply only if or to
         the extent required by Rule 16b-3 under the Exchange Act. Award Notices
         for Awards to Reporting Persons





                                      -28-
<PAGE>   30
         shall also comply with any future restrictions imposed by such Rule
         16b-3.

3.       WITHHOLDING OF TAXES.

                 No Stock Option may be exercised (A) during the period
beginning on the third business day following the date of release for
publication of the quarterly or annual summary statements of the earnings of the
Company and ending on the twelfth business day following such date, (B) six
months before the Award becomes taxable or (C) during any other period in which
a Withholding Election may be made under the provisions of Rule 16b-3
promulgated pursuant to the Exchange Act.  Any fractional share of Common Stock
required to satisfy such tax obligations shall be disregarded and the amount due
shall be paid in cash by the Grantee.

4.       AMENDMENT OF THE PLAN.

                 The Board of Directors or the Committee or its delegate, may
from time to time and in the event of a Change in Control suspend or discontinue
the Plan or revise or end it in any respect whatsoever except that, without
approval of the Company's stockholders, no such revision or amendment shall
increase the number of shares subject to the Plan, decrease the price at which
Stock Options or SARs may be granted, increase the amount to be received on
exercise of an SAR or Stock Option, materially increase the benefits accruing to
Grantees under the Plan, or materially modify the requirements as to eligibility
for participation in the Plan; and no such suspension, discontinuance, revision
or amendment shall in any manner affect any Stock Option or SAR theretofore
granted without the consent of the Grantee or the transferee of the Stock Option
or SAR.

15.      APPLICATION OF FUNDS.

                 Any cash proceeds received by the Company from the issuance of
Common Stock pursuant to exercised Options will be used for general corporate
purposes.





                                      -29-
<PAGE>   31
16.      NO RIGHT TO CONTINUED EMPLOYMENT OR AWARDS.

                 Eligibility for, or participation in, the Plan shall not give
any employee any right to remain in the employ of the Company or any Subsidiary.
Further, the adoption of this Plan shall not be deemed to give any person any
right to be selected as a Grantee or to be granted an Award.

17.      NO OBLIGATION TO EXERCISE OPTIONS OR SARs.

                 The granting of a Stock Option or SAR shall impose no
obligation upon the Grantee to exercise such Option or SAR.

18.      RIGHTS OF A STOCKHOLDER; STATUS AS A GENERAL CREDITOR.

                 Unless and until such time as Common Stock is deliverable to
the Grantee under the terms of the Plan, a Grantee or a transferee shall have no
rights as a stockholder with respect to any shares covered by his or her Award;
but only a general creditor of the Company.  Except as herein provided, no
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or any other distributions for which the
record date is prior to the date as of which such stock is issued.

19.      INDEMNIFICATION OF COMMITTEE.

                 The Company shall indemnify, to the full extent permitted by
law, each person made or threatened to be made a party to any civil or criminal
action or proceeding by reason of the fact that he, or his testator or
intestate, is or was a member of the Committee.





                                      -30-
<PAGE>   32
20.      COMPLIANCE WITH CERTAIN LAWS.

                 (a)    The Company intends that issuances and exercise of Stock
         Options and SARs under the Plan to persons subject to Section 16(b) of
         the Exchange Act comply with the requirements of Rule 16b-3 under the
         Exchange Act during the term of the Plan, that issuances and exercises
         of Incentive Stock Options comply with Section 422 of the Code, and
         that Awards comply with Section 162(m) of the Code.  Should any
         provision of the Plan not be necessary to comply so with the
         requirements of Rule 16b-3, Section 422 or Section 162(m) or should any
         additional provision be necessary for the Plan and grants and exercises
         thereunder to so comply, the Board of Directors of the Company or
         Committee may amend the Plan to add or modify provisions of the Plan
         accordingly.

                 (b)    Should any option or portion thereof designated or
         granted by the Committee as an Incentive Stock Option fail to meet the
         requirements of Section 422, for any reason whatsoever upon the
         issuance, exercise, sale of shares received on the exercise or
         otherwise, then, in such event, the Grantee shall be deemed for all
         purposes of this Plan to have been granted a Nonqualified Stock Option
         covering the same number of shares, at the same price, with the same
         duration and exercisable on the same terms as the Incentive Stock
         Option or portion thereof which failed to meet the requirements of
         Section 422.

                 (c)    Notwithstanding anything contained in the Plan to the
         contrary, the Company shall have no obligation to issue or deliver
         shares of Common Stock in respect of any Award prior to (1) the
         approval of the Plan by a majority of the stockholders of the Company
         voting, in person or by proxy, at the 1995 Annual Meeting of
         Shareholders, (2) the obtaining of any approval or the satisfaction of
         any waiting period or other condition any governmental agency which the
         Committee shall, in its sole discretion, determine to be necessary or
         advisable, (3) the admission of such shares to listing on the stock
         exchange on which Common Stock may be listed, and (4) the completion of
         any registration or other qualification of said shares under any state
         or federal law or ruling or any governmental body which the Committee
         shall, in its sole discretion, determine to be necessary or advisable.





                                      -31-
<PAGE>   33
21.       GOVERNING LAW.

              The Plan shall be governed by the internal laws of the State of
New York (and not its choice of law provisions) to the extent not superseded by
applicable Federal law.





                                      -32-
<PAGE>   34
                                                                      Appendix A


                             GENERAL RE CORPORATION
                        1995 LONG TERM COMPENSATION PLAN
                         UK APPROVED STOCK OPTION PLAN



                 SPECIAL ADDENDUM FOR THE UK STOCK OPTION PLAN


         This Addendum is supplemental to the 1995 Long-Term Compensation Plan
of General Re Corporation dated January 1, 1995, and all or any variations or
amendments thereto (hereinafter together referred to as "the Main Plan") and
shall apply for the purposes of granting Options to any Employee (as hereinafter
defined) whose remuneration is liable to income tax under Schedule E in the
United Kingdom.  This Addendum shall apply in relation to all Options granted or
to be granted to any such Employee, other than options specifically designated
as not being granted under this Addendum.  For the purposes of this Addendum,
words and phrases herein mentioned shall have the meanings ascribed to them in
Section 11 hereof.

         1.      Purpose

         The Purpose of the U.K. Plan ("this Plan") is to provide a means by
which certain directors, officers and employees of General Re Europe Limited or
General Re Financial Securities, Limited (individually or collectively, the "UK
Companies"), each a United Kingdom company, and their Subsidiaries may be given
an Option to purchase Common Stock of General Re Corporation, a Delaware, U.S.A.
corporation ("the Company"), under a Plan approved by the Board of Inland
Revenue under ICTA 1988 Schedule 9.  This Plan is intended to advance the
interests of the UK Companies and their Subsidiaries (hereinafter collectively
referred to as "the Group") by encouraging stock ownership on the part of
certain directors, officers and employees of companies within the Group
("Employees") by enabling the Group to secure and retain the services of such
Employees, and by providing such individuals with an additional incentive to
advance the success of the Group.  This Plan shall be available for the grant of
Options to different Employees and groups of Employees and in different
jurisdictions in such amounts to such Employees and on such terms as the
Committee (as hereafter defined) shall in their absolute discretion at any time
and from time to time determine this Plan in any way that they think fit
<PAGE>   35
to provide benefits to Employees in any way and to comply with the local tax
laws of any jurisdiction; provided that any such variation shall not extend the
terms of this Plan or the number of shares over which Options may be granted or
otherwise in the opinion of the Committee (whose decision thereupon shall be
conclusive) go outside the bounds, limits, and intent of this Plan.

         The Committee may set out such varied Plan in an addendum to the Main
Plan or in any separate document or set of documents and such plan shall have
effect provided that it is expressed to be supplemental to the Main Plan.

         2.      Shares Subject to Option

         Subject to adjustment as provided in Section 4 hereof and to the
provisions of ICTA 1988, Options may be granted pursuant to the Main Plan
(including grants pursuant to this Plan) by the Company from time to time to
purchase up to an aggregate of 5.0 million shares of its Common Stock.  Common
Stock that is no longer subject to purchase pursuant to an Option granted under
the Main Plan or this Plan, by reason of the expiration of an Option or
otherwise, may be re-optioned under the Main Plan or this Plan. The Company
shall not be required upon the exercise of any Option, to issue or deliver any
Common Stock prior to the completion of such registration or other qualification
of such Common Stock under any national, state or federal law, rule or
regulation as the Compensation Committee shall determine to be necessary or
desirable.

         In the event of any recapitalization, merger, consolidation or similar
transaction, where possible, the number of shares of Common Stock shall be
adjusted in accordance with the provisions of Section 8 of the Main Plan;
provided, however, that they shall first obtain the agreement of the Board of
the Inland Revenue in writing and that the Auditors shall have confirmed in
writing that in their opinion such adjustment is fair and reasonable and that
any Option so adjusted is capable of being exercised after such adjustment as
well as prior to such adjustment in respect of the same proportion of the equity
capital of the Company and provided that no such adjustment shall result in the
issue of Common Stock in consequence of the exercise of an Option at a price per
share which is less than the nominal value thereof.  Notice of any such
adjustment shall be





                                      -2-
<PAGE>   36
given to the Optionee by the Compensation Committee, who may call in Option
Certificates for endorsement.

         Provided that in the period of 10 years commencing at the Adoption Date
or such shorter period as shall be determined by the Main Plan, the aggregate
number of shares of Common Stock over which Options may be granted under the
Main Plan (including grants under this Plan) or the Company or any other plan
that is adopted by the Company shall not exceed 10 percent of the total ordinary
share capital of the Company in issue at the Date of Grant.

         3.      Participants

         Persons eligible to be granted Options under this Plan shall be limited
to such Employees selected by the Committee, provided, however, that no Offer of
an Option shall be made to any Employee if the Date of Grant is less than 2
years before the normal retirement date under the contract of employment by
virtue of which he is eligible to participate in this Plan.  Participation in
this Plan by an Employee is a matter entirely separate from any pension right or
entitlement he may have and from his terms or conditions of employment and
participation in this Plan shall in no respects whatever affect in any way an
Employee's pension rights or entitlement or terms or conditions of employment
and in particular (but without limiting the generality of the foregoing words)
no Employee who ceases to be a director, officer, employee of the Group shall be
entitled to any compensation for any loss of any right or benefit or prospective
right or benefit under this Plan, which he might otherwise have enjoyed whether
such compensation is claimed by way of damages for wrongful dismissal or other
breach of contract or by way of compensation for loss of office or otherwise
howsoever and notwithstanding that he may have been dismissed wrongfully or
unfairly within the meaning of the Employment Protection (Consolidation) Act
1978.

         If there shall be application for Options for more shares of Common
Stock than are available under the Main Plan or any segmented part thereof or
than the Committee shall have decided to grant at any point in time, the
Committee shall scale down the applications or select amongst the applicants as
they shall in their absolute discretion think fit to ensure that no such limit
shall be exceeded.





                                      -3-
<PAGE>   37
         4.      Terms and Conditions of Options

         Options granted pursuant to this Plan shall be evidenced by agreements
in such forms, not inconsistent with this Plan, as the Committee shall from time
to time approve, and shall contain such terms and conditions as the Committee in
its sole discretion shall determine (including, but not limited to, provisions
as to the Option Price, Option Term, sequence to exercise, manner of exercise,
assignability, and provision for death, disability, and termination of
employment, provided that any conditions relating to a performance target to be
satisfied prior to the exercise of an Option shall require the prior approval of
the Inland Revenue) and the following provisions shall apply:

         (a)     Option Price and Material Interests

         The Option Price shall be determined on grant by the Committee and
shall be not less than the greater of (i) Fair Market Value and (ii) the nominal
value of a share of Common Stock on the Grant Date.

         (b)     Term of Option

         Each Option under this Plan shall expire one day prior to the end of
ten years from the date the Option is granted or the date the Plan is
terminated, except that under the circumstances described in Section 4(e),
Options may expire and terminate at an earlier date.

         Except as otherwise provided in this Plan, each Option shall be
exercisable at any time or from time after the third anniversary of the Date of
Grant and prior to termination of the Option unless the Committee shall in their
absolute discretion waive this condition.

         (c)     Time of Granting Options

         The Grant of an Option shall occur only if, within 30 days of the Date
of Grant, an Option Certificate, together with a cheque for such sum (not
exceeding US $1 or its equivalent in any other currency) as the Committee may
prescribe made payable to the Company in consideration of the grant of the
Option, shall





                                      -4-
<PAGE>   38
have been duly executed and delivered by or on behalf of the company and the
Employee to whom such Option shall be granted.  Options may be granted at any
time hereunder provided that no Option shall be granted hereunder which grant
would result or be likely to result in a breach by the Committee or the
Directors or any of them of any provision of (if relevant) the Listing Rules of
the London Stock Exchange.

         (d)     Limitation on Amount of Option

         No Option shall be granted to an Employee if immediately following such
grant he would hold Subsisting Options over Common Stock with an aggregate
Subscription Price exceeding the greater of Pound Sterling 100,000 or four times
the amount of the Employee's Relevant Emoluments for the current or preceding
year of assessment (whichever of those years gives the greater amount) or, if
there were no Relevant Emoluments for the preceding Year of Assessment, four
times the amount of the Relevant Emoluments for the period of twelve months
beginning with the first day during the current Year of Assessment in respect of
which there are Relevant Emoluments.

         For the purposes of this Section, Options shall include all options
granted under this Plan and all options granted under any other plan approved
under Schedule 9 and established by the Company or any member of the Group.

         For the purpose of calculating the limits on aggregate Subscription
Price specified in Section 4(d) hereof, the Option Price of each Option
expressed in US dollars shall be converted into pounds sterling at the middle
spot rate of exchange quoted in New York by any recognized bank, selected by the
Committee, at the close of business on the Date of Grant of each such Option
granted to an Employee, and the sum of such sterling amounts shall be aggregated
to give the aggregate sterling Option Price.

         (e)     Death or Cessation of Employment of Optionee

                 (i)      If an Optionee dies, his legal personal
         representatives may exercise the Option within but not later than 12
         months after the date of his death.  To the extent that any Option so
         exercisable is not exercised within such period it shall forthwith
         cease and determine.





                                      -5-
<PAGE>   39
                 (ii)     If an Optionee ceases to be an Employee by reason of
         injury, sickness, disability (evidenced to the satisfaction of the
         Committee) or redundancy within the meaning of the Employment
         Protection (Consolidation) Act 1978, he may exercise all or any of his
         Options within the later of the periods of:

                          (A)     12 months from such cessation; or

                          (B)     42 months from the Date of Grant.

         To the extent that any Option so exercisable is not exercised within
         such period it shall forthwith cease and determine.

                 (iii)    If an Optionee ceases to be an Employee due to
         retirement at retirement age under his contract of employment he shall
         be entitled to (or where he retires before reaching the retirement age
         under his contract of employment, he may at the absolute discretion of
         the Committee) exercise all or any of his Options within the later of
         the period of:

                          (A)     12 months from such cessation; or

                          (B)     42 months from the Date of Grant.

         To the extent that any Option so exercisable is not exercised within
         such period it shall forthwith cease and determine.

                 (iv)     If an Optionee ceases to be an Employee for any reason
         other than as set out in Section 4(e)(i),(ii), and (iii), he may
         exercise all or any of his Options only at the absolute discretion of
         the Committee and where such exercise is permitted it shall be within
         such period as may be specified by the Committee.

                 (f)      Acceleration of Options Upon Change of Control

         If a Change in Control (as defined in Section 2(d) of the Main Plan)
occurs, all Options shall become immediately exercisable.





                                      -6-
<PAGE>   40
         (g)     Technical Loss of Employment

         If an Optionee ceases to be an Employee by reason only that his office
or employment either is with a company which ceases to be Affiliate or relates
to a business or part of a business which is transferred to a person who is
neither an Affiliate nor an associated company of the Company he may exercise
any Option in whole or in part within three (3) months of his so ceasing
(subject always to any other applicable overall period for exercise of the
Option).  To the extent that any Option so exercisable is not exercised within
such period, it shall cease and determine.

         (h)     Assignment

         No Option nor any right thereunder shall be capable of being
transferred, assigned, charged or otherwise alienated, save that on the death of
an Optionee, an Option may pass to his personal representative.

         (i)     Exercise of Options

                  (i)     Options may be exercised in whole or in part.

                 (ii)     In order to exercise an Option in whole or in part,
         the Optionee (or as the case may be, his personal representative(s))
         must deliver to the Committee a notice in writing specifying the number
         of shares of Common Stock in respect of which the Option is being
         exercised accompanied by payment in full, in cash, for the Common Stock
         in respect of which the Option is exercised.  Such notice shall take
         effect on the day it is delivered and such day shall constitute, for
         all purposes, the date of exercise of such Option. Such notice shall be
         given only in such form as the Committee may from time to time
         prescribe.  In the event of an Option being exercised in part only, the
         balance of the Option not thereby exercised shall continue to be
         exercisable in accordance with this Section 4 and the provisions of
         this rule until such time as it shall lapse in accordance with and
         subject to the rules of this Plan.  The Option Certificate shall also
         be lodged with the Committee on the exercise of any Option or any part
         thereof.





                                      -7-
<PAGE>   41
                 (iii)    As soon as practicable and in any event not less than
         thirty days after receipt by the Committee of such notice, Option
         Certificate and payment, Common Stock in respect of which the Option
         has been exercised shall be issued by the Committee upon definitive
         Stock Certificates. If, under the terms of a resolution passed or an
         announcement made by the Company prior to the date of exercise of an
         Option, a dividend is to be paid or is proposed to be paid to the
         holders of the Common Stock on the register of members in respect of a
         record date prior to such date of exercise, the Common Stock to be
         allotted upon such exercise will not rank for such dividend.  Subject
         as aforesaid the Common Stock so to be allotted shall be identical and
         rank pari passu in all respects with the fully paid Common Stock of the
         same class in issue on the date of such exercise.

                 (iv)     No Option may be exercised by an individual at any
         time when he is precluded by paragraph 8 of Schedule 9 from
         participating in this Plan.

         5.      Administration

         (a)     This Plan shall be administered by the Committee in accordance
with the terms of the Main Plan.

         (b)     Subject to the provisions of this Plan, the Committee shall
have full power to grant Options under this Plan, to construe or interpret this
Plan, to prescribe, amend and rescind rules and regulations relating to it and
to make all other determinations necessary or advisable for its administration.
Provided that no such construction, interpretation, prescription, amendment,
recision, or determination shall either reduce the value of any Option or shares
of Common Stock purchased pursuant to such an Option or take effect if such
action would result in the loss, cancellation, or withdrawal of any relief or
exemption from taxation previously applicable thereto.

         (c)     Subject to the provisions of Sections 3 and 4 hereof, the
Committee may, from time to time, determine which Employees shall be granted
Options under this Plan, the number of shares of Common Stock subject to each
Option, and the time or





                                      -8-
<PAGE>   42
times at which Options shall be granted or exercised, and to grant such Options
under this Plan.

         (d)     No member of the Board of Directors or of the Committee shall
be liable for any action or determination made in good faith with respect to
this Plan or to any Option and service on the Committee shall constitute service
as a director, entitling such Committee member to indemnification and
reimbursement for such service to the same extent as for service rendered as a
director.

         (e)     All allotments and issues of Common Stock shall be subject to
any necessary consents of HM Treasury or other authorities in the United States,
the United Kingdom or elsewhere under enactments or regulations for the time
being in force and it shall be the responsibility and at the expense of the
Company to comply with any requirements to be fulfilled in order to obtain or
obviate the necessity for any such consent.

         (f)     The Company shall at all times keep available for allotment
authorized and unissued or treasury Common Stock of the Company at least
sufficient to satisfy all subsisting Options.

         (g)     Any notice or other document required to be given hereunder to
any Optionee shall be delivered to him or sent by post to him at his home
address according to the records of the Company or such other address as may
appear to the Company to be appropriate.  Any notice or other document required
to be given to the Company shall be delivered or sent by post to the relevant
registered office or offices. Notices sent by post shall be deemed to have been
given on the day but one following the date of posting.

         (h)     Optionees not otherwise entitled thereto shall be sent copies
of all notices and other documents sent by the Company to its ordinary
shareholders generally.

         (i)     The decision of the Compensation Committee in any dispute or
question relating to any Option shall be final and conclusive subject to the
terms of this Plan.

         6.      Adoption Date and Termination

         (a)     The Adoption Date of this Plan is January 1, 1995.





                                      -9-
<PAGE>   43
         (b)     This Plan shall terminate on December 31, 1999, but the
Committee may terminate this Plan at any time prior to ten years from the
Adoption Date of this Plan.  Termination of this Plan shall not alter or
impair, without the consent of the Optionee, any of the rights or obligations
and any Option theretofore granted under this Plan.

         7.      Use of Proceeds

         The proceeds from the sale of shares of Common Stock pursuant to the
exercise of the Options will be used for the Company's general corporate
purpose.

         8.      Amendments

         (1)     The Committee may, with the prior written approval of the Board
    of Inland Revenue, from time to time, alter, amend, suspend, or discontinue
    this Plan, or alter or amend any and all Option agreements granted
    thereunder; provided, however, that no such action of the Compensation
    Committee may alter the provisions of this Plan so as to:

         (a)     Decrease the minimum Option Price;

         (b)     Extend the term of this Plan beyond five years or the maximum
    term of the Options granted beyond ten years;

         (c)     Withdraw the administration of the Plan from the Compensation
    Committee;

         (d)     Permit any member of the Compensation Committee to be eligible
    to receive or hold an Option under this Plan;

         (e)     Alter any outstanding Option Agreement to the detriment of the
    Optionee without his consent;

         (f)     Decrease, directly or indirectly (by cancellation and
    substitution of Options or otherwise), the Option Price applicable to any
    Option granted under this Plan.

         (2)       (a)  Notwithstanding the provisions of this Section 8(2), the
    Compensation Committee may at any time make such alterations (including
    additions) to this Plan as





                                      -10-
<PAGE>   44
    are necessary to secure that this Plan receives initial approval from the
    Board of Inland Revenue under Schedule 9.

            (b)      Subject to Section 8(2)(d) the Directors may, from time to
    time at their absolute discretion, amend, waive, or replace any of the
    provisions of this Plan provided that, except with the prior approval of the
    Company's shareholders,

                     (i)     no amendment, waiver, or replacement to the
            advantage of Optionees shall be made to Sections 1 and 2 or this
            Section 8(2)(b) or 8(2)(d) of the Plan or to the definitions of
            Employee, Common Stock, Option Price, Date of Grant, Market Value or
            Relevant Emoluments; and

                     (ii)    the effect of Sections 3, 4 and 5 of this Plan
            shall not be altered.

            (c)      No amendment, waiver, or replacement to this Plan shall be
    made which would have the effect of abrogating or altering adversely any of
    the subsisting rights of Optionees except with consent on their part.

             (d)      No amendment to this Plan shall be made without the prior
    approval of the Board of Inland Revenue in writing.

             (e)      Written notice of any amendment made or to be made in
    accordance with this Section 8 shall be given to all Optionees.

              9.       Governing Law

              This Plan shall (notwithstanding the law applicable to any other
contract with an Employee) be construed according to the laws of England.

             10.      Inland Revenue Requirements

             The Company shall provide to the Inland Revenue, within such time
as the Inland Revenue may direct, information requested by the Inland Revenue
under paragraph 6 of Schedule 9 and an Optionee shall:





                                      -11-
<PAGE>   45
                 (i)      provide to the Company in timely fashion such
    information as the Company shall reasonably request; and

                 (ii)     consent to the Company providing information
    concerning him to the Inland Revenue,

for the purpose of complying with such a request from the Inland Revenue.

         11.     Definitions

         For the purpose of interpreting and construing this Plan (except where
the context otherwise requires), the following expressions shall have the
meaning ascribed to them as set out below:

         "Adoption Date" - The date on which the U.K. Plan is approved by the
resolution of the shareholders of the Company;

         "Auditors" - The Auditors for the time being of the Company;

         "The Committee" - The Compensation Committee of the Board of Directors
of the Company as described in Section 3(a) of the Main Plan;

         "Date of Grant" - The date on which the Committee resolves to grant an
Option;

         "The Directors" - The Board of Directors of the Company or a duly
authorized committee thereof;

         "Employee" - An employee (other than a director) of a company which is
a member of the Group whose hours of work for such member of the Group exceeds
20 hours per week or a full time director of a company which is a member of the
Group whose hours of work for such member of the Group exceed 25 hours per week
in both cases exclusive of meal breaks, and is not precluded by paragraph 8 of
Schedule 9 from participating in this Plan;

         "Fair Market Value" - The Market Value of a share of Common Stock
subject to the Option Agreement on the dated Grant





                                      -12-
<PAGE>   46
or such earlier date or dates as may be agreed in writing with the Board of
Inland Revenue of the United Kingdom;

         "The Group" - General Reinsurance Limited or any Affiliate for the time
being designated by the Committee as a member of the Group for the purposes of
this Plan or, where the context so permits, any one or more of them;

         "ICTA 1988" - The Income and Corporation Taxes Act 1988 of the United
Kingdom;

         "Market Value" - On any day the market value of a share of Common Stock
determined in accordance with the provisions of Part VIII of the Taxation of
Chargeable Gains Act 1992 of the United Kingdom and as agreed with the Board of
Inland Revenue on or before that day;

         "Option" - A right to subscribe for Common Stock at the Option Price
granted to an Employee under the provisions of this Plan and for the time being
subsisting;

         "Optionee" - Any person who holds an Option or (where the context
admits) his legal personal representatives;

         "Option Certificate" - A certificate issued to an Optionee in
accordance with Section 4;

         "Option Price" - The price per share of common stock of General Re
Corporation, par value $.50 per share which satisfies the conditions specified
in paragraphs 10-14 inclusive of Schedule 9;

         "This Plan" - The Main Plan as varied by this Addendum;

         "Relevant Emoluments" - Emoluments of an Employee of the office or
employment by virtue of which he is eligible to participate in the U.K. Plan as
are liable to be paid under deduction of tax pursuant to Section 203 of ICTA
1988 after deducting therefrom amounts included by virtue of Chapter ii of Part
V of the ICTA 1988;

         "Schedule 9" - Schedule 9 to the ICTA 1988;





                                      -13-
<PAGE>   47
         "Subscription Price" - The amount payable in relation to the exercise
of an Option, being the amount after any adjustment pursuant to Section 2 of the
relevant Option Price multiplied by the number of Shares of Common Stock in
respect of which the Option is exercised;

         "Subsidiaries" - Any subsidiary corporation of General Re Europe
Limited or General Re Financial Securities, Limited, within the meaning of
Section 736 of the Companies Act of 1985 of the United Kingdom;

         "Subsisting Option" - An Option which has neither lapsed nor been
exercised.

         "UK Companies" means General Re Europe Limited and/or General Re
Financial Securities, Limited.

         "Year of Assessment" - a fiscal year from April 6th to April 5th.

         For the purposes of this Plan:

                 (a)   where words denote the masculine gender they shall for
    the purposes of interpretation include the feminine and neuter genders and
    vice versa;

                 (b)   where words denote the singular they shall for the
    purposes of interpretation include the plural and vice versa;

                 (c)   unless the context otherwise requires words have the same
    meanings as in Schedule 9 of Sections 185 and 187 of ICTA 1988;

                 (d)   when referring to any enactment be construed as a
    reference to that enactment as for the tune being amended or re-enacted;

                 (e)   when referring to Sections throughout this Plan be taken
    to refer to the Sections of this Plan.





                                      -14-
<PAGE>   48
                               TABLE OF CONTENTS


                                                                  Page
                                                                  ----

1.       PURPOSE................................................    1

2.       DEFINITIONS............................................    1
        (a)  "AWARD"............................................    2
        (b)  "AWARD NOTICE".....................................    2
        (c)  "AWARD PERIOD".....................................    2
        (d)  "CHANGE IN CONTROL"................................    2
        (e)  "CODE".............................................    2
        (f)  "COMMITTEE"........................................    2
        (g)  "COMMON STOCK".....................................    2
        (h)  "DISABLED" or "DISABILITY".........................    3
        (i)  "EXCHANGE ACT".....................................    3
        (j)  "EXERCISE PRICE"...................................    3
        (k)  "FAIR MARKET VALUE"................................    3
        (l)  "GRANT DATE".......................................    3
        (m)  "GRANTEE"..........................................    3
        (n)  "INCENTIVE STOCK OPTION"...........................    3
        (o)  "NON-EMPLOYEE DIRECTOR"............................    3
        (p)  "NON-QUALIFIED STOCK OPTION".......................    3
        (q)  "PARENTAL LEAVE OF ABSENCE"........................    3
        (r)  "RELATIVE TOTAL RETURN TO SHAREHOLDERS"............    4
        (s)  "REPORTING PERSON".................................    4
        (t)  "SHARE UNIT".......................................    4
        (u)  "RESTRICTED STOCK OPTION"..........................    4
        (v)  "SUBSIDIARY".......................................    4
        (w)  "TERMINATION OF EMPLOYMENT"........................    4
        (x)  "UNITED KINGDOM SUB-PLAN"..........................    5

3.      ADMINISTRATION..........................................    6





                                      -i-
<PAGE>   49
        (a)  THE COMMITTEE........................................   6
        (b)  AUTHORITY OF THE COMMITTEE...........................   6

4.      ELIGIBILITY...............................................   7

5.      PARTICIPATION.............................................   8

6.      FORM OF AWARDS, AND TERMS AND CONDITIONS THEREOF..........   8
        (a)  STOCK OPTIONS........................................   8
             (1)    Amount of Award...............................   8
             (2)    Automatic Grants to Non-Employee Directors....   8
             (3)    Exercise Price................................   9
             (4)    Term of Stock Options and Timing of Exercise..  10
             (A)    In General....................................  10
             (B)    Termination of Employment, Termination of
                    Board Service or Death........................  11
             (5)    Replacement Options...........................  12
        (b)  STOCK APPRECIATION RIGHTS............................  13
             (1)    In General....................................  13
             (2)    SARs Related to Incentive Stock Options.......  13
             (3)    Exercise of SARs..............................  14
             (4)    Form and Time of Payment of Related SARs......  14
        (c)  ANNUAL INCENTIVE BONUSES AND LONG-TERM PERFORMANCE
             BONUSES..............................................  15
             (1)    Performance Objective.........................  15
             (2)    Amount and Form of Bonus......................  16
                    (A)    Annual Incentive Bonus.................  16
                    (B)    Long-Term Performance Bonuses..........  17
             (3)    Crediting and Payment of Bonuses..............  18
             (4)    Termination of Employment.....................  18
        (d)  RESTRICTED STOCK.....................................  19
             (1)    Transfer of Restricted Stock..................  19
             (2)    Automatic Grants to Non-Employee Directors....  20
             (3)    Specific Restrictions and Release of
                    Restrictions..................................  21
                    (A)    Committee Discretionary Release........  21
                    (B)    Disability or Retirement...............  21
                    (C)    Death..................................  21
                    (D)    Other Termination of Employment........  21
         (e)  SHARE UNITS.........................................  22
              (1)    Termination of Employment....................  22
              (2)    Payment of Share Units.......................  23





                                      -ii-
<PAGE>   50
7.      STOCK SUBJECT TO THE PLAN...................................     23
        (a)  Additional Agreements..................................     24

8.      RECAPITALIZATION, MERGER, CONSOLIDATION AND SIMILAR
        TRANSACTIONS................................................     24

9.      CHANGE IN CONTROL...........................................     26

10.     TERM OF PLAN................................................     27

11.     NONTRANSFERABILITY OF AWARDS AND DESIGNATION OF
        BENEFICIARIES...............................................     27

12.     REPORTING PERSONS...........................................     28

13.     WITHHOLDING OF TAXES........................................     29

14.     AMENDMENT OF THE PLAN.......................................     29

15.     APPLICATION OF FUNDS........................................     29

16.     NO RIGHT TO CONTINUED EMPLOYMENT OR AWARDS..................     30

17.     NO OBLIGATION TO EXERCISE OPTIONS OR SARs...................     30

18.     RIGHTS OF A STOCKHOLDER; STATUS AS A GENERAL CREDITOR.......     30

19.     INDEMNIFICATION OF COMMITTEE................................     30

20.     COMPLIANCE WITH CERTAIN LAWS................................     31

21.     GOVERNING LAW...............................................     32

APPENDIX A   SPECIAL ADDENDUM FOR THE UK STOCK OPTION PLAN..........     34





                                     -iii-