<PAGE>

                  AMENDED AND RESTATED HINES HORTICULTURE, INC.
                      1998 LONG-TERM EQUITY INCENTIVE PLAN,
                                   AS AMENDED
1

                                                                    Exhibit 10.3


1. Purpose.

         This plan shall be known as the Hines Horticulture, Inc. Amended and
Restated 1998 Long-Term Equity Incentive Plan, as amended (the "Plan"). The
purpose of the Plan shall be to promote the long-term growth and profitability
of Hines Horticulture, Inc. (the "Company") and its Subsidiaries by (i)
providing certain directors, officers and employees of the Company and its
Subsidiaries with incentives to maximize stockholder value and otherwise
contribute to the success of the Company and (ii) enabling the Company to
attract, retain and reward the best available persons for positions of
responsibility. Grants of incentive or nonqualified stock options, stock
appreciation rights ("SARs"), either alone or in tandem with options, restricted
stock, performance awards, or any combination of the foregoing may be made under
the Plan.

2. Definitions.

         (a) "Board of Directors" and "Board" mean the board of directors of
Hines Horticulture, Inc.

         (b) "Cause" means the occurrence of one of the following events:

                  (i) a felony involving the property of the Company or a
         Subsidiary; or

                  (ii) Conduct that has caused demonstrable and serious injury
         to the Company or a Subsidiary, monetary or otherwise; or

                  (iii) Willful refusal to perform or substantial disregard of
         duties properly assigned, as determined by the Company; or

                  (iv) Breach of duty of loyalty to the Company or a Subsidiary
         or other act of fraud or dishonesty with respect to the Company or a
         Subsidiary.

         (c) "Change in Control" means the occurrence of one of the following
events:


                                       1
<PAGE>

                  (i) if any "person" or "group" as those terms are used in
         Sections 13(d) and 14(d) of the Exchange Act, other than an Exempt
         Person, is or becomes the "beneficial owner" (as defined in Rule 13d-3
         under the Exchange Act), directly or indirectly, of securities of the
         Company representing 50% or more of the combined voting power of the
         Company's then outstanding securities; or

                  (ii) during any period of two consecutive years, individuals
         who at the beginning of such period constitute the Board and any new
         directors whose election by the Board or nomination for election by the
         Company's stockholders was approved by at least two-thirds of the
         directors then still in office who either were directors at the
         beginning of the period or whose election was previously so approved,
         cease for any reason to constitute a majority thereof; or

                  (iii) the stockholders of the Company approve a merger or
         consolidation of the Company with any other corporation, other than a
         merger or consolidation (A) which would result in all or a portion of
         the voting securities of the Company outstanding immediately prior
         thereto continuing to represent (either by remaining outstanding or by
         being converted into voting securities of the surviving entity) more
         than 50% of the combined voting power of the voting securities of the
         Company or such surviving entity outstanding immediately after such
         merger or consolidation or (B) by which the corporate existence of the
         Company is not affected and following which the Company's chief
         executive officer and directors retain their positions with the Company
         (and constitute at least a majority of the Board); or

                  (iv) the stockholders of the Company approve a plan of
         complete liquidation of the Company or an agreement for the sale or
         disposition by the Company of all or substantially all the Company's
         assets, other than a sale to an Exempt Person.

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

         (e) "Committee" means the Compensation Committee of the Board. The
membership of the Committee shall be constituted so as to comply at all times
with the applicable requirements of Rule 16b-3 under the Exchange Act.

         (f) "Common Stock" means the Common Stock, par value $.01 per share, of
the Company, and any other shares into which such stock may be changed by reason
of a recapitalization, reorganization, merger, consolidation or any other change
in the corporate structure or capital stock of the Company.


                                       2
<PAGE>

         (g) "Competition" is deemed to occur if a person whose employment with
the Company or its Subsidiaries has terminated obtains a position as a full-time
or part-time employee of, as a member of the board of directors of, or as a
consultant or advisor with or to, or acquires an ownership interest in excess of
5% of, a corporation, partnership, firm or other entity that engages in any of
the businesses of the Company or any Subsidiary with which the person was
involved in a management role at any time during his or her last five years of
employment with or other service for the Company or any Subsidiaries.

         (h) "Disability" means a disability that would entitle an eligible
participant to payment of monthly disability payments under any Company
disability plan or as otherwise determined by the Committee.

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

         (j) "Exempt Person" means (i) Madison Dearborn Capital Partners, L.P.,
(ii) any person, entity or group under the control of any party included in
clause (i), or (iii) any employee benefit plan of the Company or a trustee or
other administrator or fiduciary holding securities under an employee benefit
plan of the Company.

         (k) "Fair Market Value" of a share of Common Stock of the Company
means, as of the date in question, the officially-quoted closing selling price
of the stock on the principal securities exchange on which the Common Stock is
then listed for trading (including for this purpose the Nasdaq National Market)
(the "Market") on the immediately preceding trading day or, if the Common Stock
is not then listed or quoted in the Market, the Fair Market Value shall be the
fair value of the Common Stock determined in good faith by the Board; provided,
however, that when shares received upon exercise of an option are immediately
sold in the open market, the net sale price received may be used to determine
the Fair Market Value of any shares used to pay the exercise price or
withholding taxes and to compute the withholding taxes.

         (l) "Incentive Stock Option" means an option conforming to the
requirements of Section 422 of the Code and any successor thereto.

         (m) "Non-Employee Director" has the meaning given to such term in Rule
16b-3 under the Exchange Act.

         (n) "Nonqualified Stock Option" means any stock option other than an
Incentive Stock Option.


                                       3
<PAGE>

         (o) "Other Company Securities" mean securities of the Company other
than Common Stock, which may include, without limitation, unbundled stock units
or components thereof, debentures, preferred stock, warrants and securities
convertible into or exchangeable for Common Stock or other property.

         (p) "Retirement" means retirement as defined under any Company pension
plan or retirement program or termination of one's employment on retirement with
the approval of the Committee.

         (q) "Subsidiary" means a corporation or other entity of which
outstanding shares or ownership interests representing 50% or more of the
combined voting power of such corporation or other entity entitled to elect the
management thereof, or such lesser percentage as may be approved by the
Committee, are owned directly or indirectly by the Company.

3. Administration.

        The Plan shall be administered by the Committee; provided that the
Board may, in its discretion, at any time and from time to time, resolve to
administer the Plan, in which case the term "Committee" shall be deemed to mean
the Board for all purposes herein. The Committee shall consist of at least two
directors. Subject to the provisions. of the Plan, the Committee shall be
authorized to (i) select persons to participate in the Plan, (ii) determine the
form and substance of grants made under the Plan to each participant, and the
conditions and restrictions, if any, subject to which such grants will be made,
(iii) modify the terms of grants made under the Plan, (iv) interpret the Plan
and grants made thereunder, (v) make any adjustments necessary or desirable in
connection with grants made under-the Plan to eligible participants located
outside the United States and (vi) adopt, amend, or rescind such rules and
regulations, and make such other determinations, for carrying out the Plan as it
may deem appropriate. Decisions of the Committee on all matters relating to the
Plan shall be in the Committee's sole discretion and shall be conclusive and
binding on all parties. The validity, construction and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in accordance
with applicable federal and state laws and rules and regulations promulgated
pursuant thereto. No member of the Committee and no officer of the Company shall
be liable for any action taken or omitted to be taken by such member, by any
other member of the Committee or by any officer of the Company in connection
with the performance of duties under the Plan, except for such person's own
willful misconduct or as expressly provided by statute.


                                       4
<PAGE>

         The expenses of the Plan shall be borne by the Company. The Plan shall
not be required to establish any special or separate fund or make any other
segregation of assets to assume the payment of any award under the Plan, and
rights to the payment of such awards shall be no greater than the rights of the
Company's general creditors.

4. Shares Available for the Plan.

         Subject to adjustments as provided in Section 15, an aggregate of
3,589,210 shares of Common Stock (the "Shares") may be issued pursuant to the
Plan. Such Shares may be in whole or in part authorized and unissued, or shares
which are held by the Company as treasury shares. If any grant under the Plan
expires or terminates unexercised, becomes unexercisable or is forfeited as to
any Shares, such unpurchased or forfeited Shares shall thereafter be available
for further grants under the Plan unless, in the case of options granted under
the Plan, related SARs are exercised.

         Without limiting the generality of the foregoing provisions of this
Section 4 or the generality of the provisions of Sections 3, 6 or 17 or any
other section of this Plan, the Committee may, at any time or from time to time,
and on such terms and conditions (that are consistent with and not in
contravention of the other provisions of this Plan) as the Committee may, in its
sole discretion, determine, enter into agreements (or take other actions with
respect to the options) for new options containing terms (including exercise
prices) more (or less) favorable than the outstanding options.

5. Participation.

         Participation in the Plan shall be limited to those directors
(including Non-Employee Directors), officers (including non-employee officers)
and employees of the Company and its Subsidiaries selected by the Committee
(including participants located outside the United States). Nothing in the Plan
or in any grant thereunder shall confer any right on a participant to continue
in the employ of or the performance of services for the Company or shall
interfere in any way with the right of the Company to terminate the employment
or performance of services of a participant at any time. By accepting any award
under the Plan, each participant and each person claiming under or through him
or her shall be conclusively deemed to have indicated his or her acceptance and
ratification of, and consent to, any action taken under the Plan by the Company,
the Board or the Committee.


                                       5
<PAGE>

         Incentive Stock Options or Nonqualified Stock Options, SARs, alone or
in tandem with options, restricted stock awards, performance awards, or any
combination thereof, may be granted to such persons and for such number of
Shares as the Committee shall determine (such individuals to whom grants are
made being sometimes herein called "optionees" or "grantees," as the case may
be). Determinations made by the Committee under the Plan need not be uniform and
may be made selectively among eligible individuals under the Plan, whether or
not such individuals are similarly situated. A grant of any type made hereunder
in any one year to an eligible participant shall neither guarantee nor preclude
a further grant of that or any other type to such participant in that year or
subsequent years.

6. Incentive and Nonqualified Options.

         The Committee may from time to time grant to eligible participants
Incentive Stock Options, Nonqualified Stock Options, or any combination thereof,
provided that the Committee may grant Incentive Stock Options only to eligible
employees of the Company or its subsidiaries (as defined for this purpose in
Section 424(f) of the Code). In any one calendar year, the Committee shall not
grant to any one participant, options or SARs to purchase a number of shares of
Common Stock in excess of 20% of the shares authorized under the Plan. The
options granted shall take such form as the Committee shall determine, subject
to the following terms and conditions.

         It is the Company's intent that Nonqualified Stock Options granted
under the Plan not be classified as Incentive Stock Options, that Incentive
Stock Options be consistent with and contain or be deemed to contain all
provisions required under Section 422 of the Code and any successor thereto, and
that any ambiguities in construction be interpreted in order to effectuate such
intent. If an Incentive Stock Option granted under the Plan does not qualify as
such for any reason, then to the extent of such nonqualification, the stock
option represented thereby shall be regarded as a Nonqualified Stock Option duly
granted under the Plan, provided that such stock option otherwise meets the
Plan's requirements for Nonqualified Stock Options.

         (a) Price. The price per Share deliverable upon the exercise of each
option ("exercise price") shall be established by the Committee, except that the
exercise price of any option may not be less than 100% of the Fair Market Value
of a share of Common Stock as of the date of grant of the option, and in the
case of the grant of any Incentive Stock Option to an employee who, at the time
of the grant, owns more than 10% of the total combined voting power of all
classes of stock of the Company or any of its Subsidiaries, the exercise price
may not be less that 110% of the Fair Market Value of a share of Common Stock as
of the date of grant of the option, in each case unless otherwise permitted by
Section 422 of the Code.


                                       6
<PAGE>

         (b) Payment. Options may be exercised, in whole or in part, upon
payment of the exercise price of the Shares to be acquired. Unless otherwise
determined by the Committee, payment shall be made (i) in cash (including check,
bank draft or money order), (ii) by delivery of outstanding shares of Common
Stock with a Fair Market Value on the date of exercise equal to the aggregate
exercise price payable with respect to the options' exercise, (iii) by
simultaneous sale through a broker reasonably acceptable to the Committee of
Shares acquired on exercise, as permitted under Regulation T of the Federal
Reserve Board, (iv) by authorizing the Company to withhold from issuance a
number of Shares issuable upon exercise of the options which, when multiplied by
the Fair Market Value of a share of Common Stock on the date of exercise is
equal to the aggregate exercise price payable with respect to the options so
exercised or (v) by any combination of the foregoing. Options may also be
exercised upon payment of the exercise price of the Shares to be acquired by
delivery of the optionee's promissory note, but only to the extent specifically
approved by and in accordance with the policies of the Committee.

         In the event a grantee elects to pay the exercise price payable with
respect to an option pursuant to clause (ii) above, (A) only a whole number of
share(s) of Common Stock (and not fractional shares of Common Stock) may be
tendered in payment, (B) such grantee must present evidence acceptable to the
Company that he or she has owned any such shares of Common Stock tendered in
payment of the exercise price (and that such tendered shares of Common Stock
have not been subject to any substantial risk of forfeiture) for at least six
months prior to the date of exercise, and (C) Common Stock must be delivered to
the Company. Delivery for this purpose may, at the election of the grantee, be
made either by (A) physical delivery of the certificate(s) for all such shares
of Common Stock tendered in payment of the price, accompanied by duly executed
instruments of transfer in a form acceptable to the Company, or (B) direction to
the grantee's broker to transfer, by book entry, such shares of Common Stock
from a brokerage account of the grantee to a brokerage account specified by the
Company. When payment of the exercise price is made by delivery of Common Stock,
the difference, if any, between the aggregate exercise price payable with
respect to the option being exercised and the Fair Market Value of the share(s)
of Common Stock tendered in payment (plus any applicable taxes) shall be paid in
cash. No grantee may tender shares of Common Stock having a Fair Market Value
exceeding the aggregate exercise price payable with respect to the option being
exercised (plus any applicable taxes).


                                       7
<PAGE>

         In the event a grantee elects to pay the exercise price payable with
respect to an option pursuant to clause (iv) above, (A) only a whole number of
Share(s) (and not fractional Shares) may be withheld in payment and (B) such
grantee must present evidence acceptable to the Company that he or she has owned
a number of shares of Common Stock at least equal to the number of Shares to be
withheld in payment of the exercise price (and that such owned shares of Common
Stock have not been subject to any substantial risk of forfeiture) for at least
six months prior to the date of exercise. When payment of the exercise price is
made by withholding of Shares, the difference, if any, between the aggregate
exercise price payable with respect to the option being exercised and the Fair
Market Value of the Share(s) withheld in payment (plus any applicable taxes)
shall be paid in cash. No grantee may authorize the withholding of Shares having
a Fair Market Value exceeding the aggregate exercise price payable with respect
to the option being exercised (plus any applicable taxes). Any withheld Shares
shall no longer be issuable under such option.

         (c) Terms of Options. The term during which each option may be
exercised shall be determined by the Committee, but, except as otherwise
provided herein, in no event shall an option be exercisable in whole or in part,
in the case of a Nonqualified Stock Option or an Incentive Stock Option (other
than as described below), more than ten years from the date it is granted or, in
the case of an Incentive Stock Option granted to an employee who at the time of
the grant owns more than 10% of the total combined voting power of all classes
of stock of the Company or any of its Subsidiaries, if required by the Code,
more than five years from the date it is granted. All rights to purchase Shares
pursuant to an option shall, unless sooner terminated, expire at the date
designated. by the Committee. The Committee shall determine the date on which
each option shall become exercisable and may provide that an option shall become
exercisable in installments. The Shares constituting each installment may be
purchased in whole or in part at any time after such installment becomes
exercisable, subject to such minimum exercise requirements as may be designated
by the Committee. Unless otherwise provided herein or in the terms of the
related grant, an optionee may exercise an option only if he or she is, and has
continuously since the date the option was granted, been a director, officer or
employee of the Company or a Subsidiary. Prior to the exercise of an option and
delivery of the Shares represented thereby, the optionee shall have no rights as
a stockholder with respect to any Shares covered by such outstanding option
(including any dividend or voting rights).

         (d) Limitations on Grants. If required by the Code, the aggregate Fair
Market Value (determined as of the grant date) of Shares for which an Incentive
Stock Option is exercisable for the first time during any calendar year under
all equity incentive plans of the Company and its subsidiaries (as defined in
Section 422 of the Code) may not exceed $100,000.


                                       8
<PAGE>

         (e) Termination; Change in Control.

                  (i) If a participant ceases to be a director, officer or
         employee of the Company or any Subsidiary due to death or Disability,
         all of the participant's options and SARs shall become fully vested and
         exercisable and shall remain so for a period of one year from the date
         of such death or Disability, but in no event after the expiration date
         of the options or SARs. Notwithstanding the foregoing, if the
         Disability giving rise to the termination of employment is not a
         disability within the meaning of Section 22(e)(3) of the Code,
         Incentive Stock Options not exercised by such participant within 90
         days after the date of termination of employment will cease to qualify
         as Incentive Stock Options and will be treated as Nonqualified Stock
         Options under the Plan if required to be so treated under the Code.

                  (ii) If a participant ceases to be a director, officer or
         employee of the Company or any Subsidiary upon the occurrence of his or
         her Retirement, (A) all of the participant's options and SARs that were
         exercisable on the date of Retirement shall remain exercisable for, and
         shall otherwise terminate at the end of, a period of up to three years
         after the date of Retirement, but in no event after the expiration date
         of the options or SARs ; provided that the participant does not engage
         in Competition during such three-year period unless he or she receives
         written consent to do so from the Board or the Committee, and (B) all
         of the participant's options and SARs that were not exercisable on the
         date of Retirement shall be forfeited immediately upon such Retirement,
         provided, however, that such options may become fully vested and
         exercisable in the discretion of the Committee. Notwithstanding the
         foregoing, Incentive Stock Options not exercised by such participant
         within 90 days after Retirement will cease to qualify as Incentive
         Stock Options and will be treated as Nonqualified Stock Options under
         the Plan if required to be so treated under the Code.

                  (iii) If a participant ceases to be a director, officer or
         employee of the Company or a Subsidiary due to Cause, all of the
         participant's options and SARs shall be forfeited immediately upon such
         cessation, whether or not then exercisable.

                  (iv) Unless otherwise determined by the Committee, if a
         participant ceases to be a director, officer or employee of the Company
         or a Subsidiary for any reason other than death, Disability, Retirement
         or Cause, (A) all of the participant's options and SARs that were
         exercisable on the date of such cessation shall remain exercisable for,


                                       9
<PAGE>

         and shall otherwise terminate at the end of, a period of 90 days after
         the date of such cessation, but in no event after the expiration date
         of the options or SARs; provided that the participant does not engage
         in Competition during such 90-day period unless he or she receives
         written consent to do so from the Board or the Committee, and (B) all
         of the participant's options and SARs that were not exercisable on the
         date of such cessation shall be forfeited immediately upon such
         cessation.

                  (v) If there is a Change in Control of the Company and a
         grantee is terminated from being a director, officer or employee of the
         Company or its Subsidiaries within one year thereafter, all of the
         participant's options and SARs shall become fully vested and
         exercisable immediately prior to such termination and shall remain so
         for one year after the date of termination. In addition, the Committee
         shall have the authority to grant options that become fully vested and
         exercisable automatically upon a Change in Control, whether or not the
         grantee is subsequently terminated thereafter.

         (f) Grant of Reload Options. The Committee may provide (either at the
time of grant or exercise of an option), in its discretion, for the grant to a
grantee who exercises all or any portion of an option ("Exercised Options") and
who pays all or part of such exercise price with shares of Common Stock, of an
additional option (a "Reload Option") for a number of shares of Common Stock
equal to the sum (the "Reload Number") of the number of shares of Common Stock
tendered or withheld in payment of such exercise price for the Exercised Options
plus, if so provided by the Committee, the number of shares of Common Stock, if
any, tendered or withheld by the grantee or withheld by the Company in
connection with the exercise of the Exercised Options to satisfy any federal,
state or local tax withholding requirements. The terms of each Reload Option,
including the date of its expiration and the terms and conditions of its
exercisability and transferability, shall be the same as the terms of the
Exercised Option to which it relates, except that (i) the grant date for each
Reload Option shall be the date of exercise of the Exercised Option to which it
relates and (ii) the exercise price for each Reload Option shall be the Fair
Market Value of the Common Stock on the grant date of the Reload Option.

7. Stock Appreciation Rights.

         The Committee shall have the authority to grant SARs under this Plan,
either alone or to any optionee in tandem with options (either at the time of
grant of the related option or thereafter by amendment to an outstanding
option). SARs shall be subject to such terms and conditions as the Committee may
specify.


                                       10
<PAGE>

         No SAR may be exercised unless the Fair Market Value of a share of
Common Stock of the Company on the date of exercise exceeds the exercise price
of the SAR or, in the case of SARs granted in tandem with options, the exercise
price of any options to which the SARs correspond. Prior to the exercise of the
SAR and delivery of the cash and/or Shares represented thereby, the participant
shall have no rights as a stockholder with respect to Shares covered by such
outstanding SAR (including any dividend or voting rights).

         SARs granted in tandem with options shall be exercisable only when, to
the extent and on the conditions that any related option is exercisable. The
exercise of an option shall result in an immediate forfeiture of any related SAR
to the extent the option is exercised, and the exercise of an SAR shall cause an
immediate forfeiture of any related option to the extent the SAR is exercised.

         Upon the exercise of an SAR, the participant shall be entitled to a
distribution in an amount equal to the difference between the Fair Market Value
of a share of Common Stock on the date of exercise and the exercise price of the
SAR or, in the case of SARs granted in tandem with options, the exercise price
of any option to which the SAR is related, multiplied by the number of Shares as
to which the SAR is exercised. The Committee shall decide whether such
distribution shall be in cash, in Shares having a Fair Market Value equal to
such amount, in Other Company Securities having a Fair Market Value equal to
such amount or in a combination thereof.

         All SARs will be exercised automatically on the last day prior to the
expiration date of the SAR or, in the case of SARs granted in tandem with
options, the expiration date of any related option, so long as the Fair Market
Value of a share of Common Stock on that date exceeds the exercise price of the
SAR or any related option, as applicable. An SAR granted in tandem with options
shall expire at the same time as any related option expires and shall be
transferable only when, and under the same conditions as, any related option is
transferable.

8. Restricted Stock.

         The Committee may at any time and from time to time grant Shares of
restricted stock under the Plan to such participants and in such amounts as it
determines. Each grant of restricted stock shall specify the applicable
restrictions on such Shares, the duration of such restrictions (which shall be
at least six months except as otherwise provided in the third paragraph of this
Section 8), and the time or times at which such restrictions shall lapse with
respect to all or a specified number of Shares that are part of the grant.


                                       11
<PAGE>

         The participant will be required to pay the Company the aggregate par
value of any Shares of restricted stock (or such larger amount as the Board may
determine to constitute capital under Section 154 of the Delaware General
Corporation Law, as amended) within ten days of the date of grant, unless such
Shares of restricted stock are treasury shares. Unless otherwise determined by
the Committee, certificates representing Shares of restricted stock granted
under the Plan will be held in escrow by the Company on the participant's behalf
during any period of restriction thereon and will bear an appropriate legend
specifying the applicable restrictions thereon, and the participant will be
required to execute a blank stock power therefor. Except as otherwise provided
by the Committee, during such period of restriction the participant shall have
all of the rights of a holder of Common Stock, including but not limited to the
rights to receive dividends and to vote, and any stock or other securities
received as a distribution with respect to such participant's restricted stock
shall be subject to the same restrictions as then in effect for the restricted
stock.

         Except as otherwise provided by the Committee, all restrictions on a
grantee's restricted stock will lapse at such time as the grantee ceases to be a
director, officer or employee of the Company or a Subsidiary, if such cessation
occurs due to a termination within one year after a Change in Control or due to
death, Disability or (in the discretion of the Committee) Retirement. At such
time as a participant ceases to be a director, officer or employee of the
Company or its Subsidiaries for any other reason, all Shares of restricted stock
granted to such participant on which the restrictions have not lapsed shall be
immediately forfeited to the Company.

9. Performance Awards.

         Performance awards may be granted to participants at any time and from
time to time as determined by the Committee. The Committee shall have complete
discretion in determining the size and composition of performance awards so
granted to a participant and the appropriate period over which performance is to
be measured (a "performance cycle"). Performance awards may include (i) specific
dollar-value target awards (ii) performance units, the value of each such unit
being determined by the Committee at the time of issuance, and/or (iii)
performance Shares, the value of each such Share being equal to the Fair Market
Value of a share of Common Stock.

         The value of each performance award may be fixed or it may be permitted
to fluctuate based on a performance factor (e.g., return on equity) selected by
the Committee.


                                       12
<PAGE>

         The Committee shall establish performance goals and objectives for each
performance cycle on the basis of such criteria and objectives as the Committee
may select from time to time, including, without limitation, the performance of
the participant, the Company, one or more of its Subsidiaries or divisions or
any combination of the foregoing. During any performance cycle, the Committee
shall have the authority to adjust the performance goals and objectives for such
cycle for such reasons as it deems equitable.

         The Committee shall determine the portion of each performance award
that is earned by a participant on the basis of the Company's performance over
the performance cycle in relation to the performance goals for such cycle. The
earned portion of a performance award may be paid out in Shares, cash, Other
Company Securities, or any combination thereof, as the Committee may determine.

         A participant must be a director, officer or employee of the Company or
its Subsidiaries at the end of the performance cycle in order to be entitled to
payment of a performance award issued in respect of such cycle; provided,
however, that, except as otherwise determined by the Committee, if a participant
ceases to be a director, officer or employee of the Company and its Subsidiaries
prior to the end of the performance cycle and if such cessation occurs due to
termination within one year after a Change in Control or due to death,
Disability or Retirement, the participant shall earn a proportionate portion of
the performance award based upon the elapsed portion of the performance cycle
and the Company's performance over that portion of such cycle.

10. Withholding Taxes.

         (a) Participant Election. Unless otherwise determined by the Committee,
a participant may elect to deliver shares of Common Stock (or have the Company
withhold shares acquired upon exercise of an option or SAR or deliverable upon
grant or vesting of restricted stock, as the case may be) to satisfy, in whole
or in part, the amount the Company is required to withhold for taxes in
connection with the exercise of an option or SAR or the delivery of restricted
stock upon grant or vesting, as the case may be. Such election must be made on
or before the date the amount of tax to be withheld is determined. Once made,
the election shall be irrevocable. The fair market value of the shares to be
withheld or delivered will be the Fair Market Value as of the date the amount of
tax to be withheld is determined. In the event a participant elects to deliver
shares of Common Stock pursuant to this Section 10(a), such delivery must be
made subject to the conditions and pursuant to the procedures set forth in
Section 6(b) with respect to the delivery of Common Stock in payment of the
exercise price of options.


                                       13
<PAGE>

         (b) Company Requirement. The Company may require, as a condition to any
grant or exercise under the Plan or to the delivery of certificates for Shares
issued hereunder, that the grantee make provision for the payment to the
Company, either pursuant to Section 10(a) or this Section 10(b), of any foreign,
federal, state or local taxes of any kind required by law to be withheld with
respect to any grant or any delivery of Shares. The Company, to the extent
permitted or required by law, shall have the right to deduct from any payment of
any kind (including salary or bonus) otherwise due to a grantee, an amount equal
to any foreign, federal, state or local taxes of any kind required by law to be
withheld with respect to any grant or to the delivery of Shares under the Plan,
or to retain or sell without notice a sufficient number of the Shares to be
issued to such grantee to cover any such taxes, the payment of which has not
otherwise been provided for in accordance with the terms of the Plan, provided
that the Company shall not sell any such Shares if such sale would be considered
a sale by such grantee for purposes of Section 16 of the Exchange Act that is
not exempt from matching thereunder.

11. Written Agreement; Vesting.

         Each employee to whom a grant is made under the Plan shall enter into a
written agreement with the Company that shall contain such provisions,
including, without limitation, vesting requirements, consistent with the
provisions of the Plan, as may be approved by the Committee. Unless the
Committee determines otherwise and except as otherwise provided in Sections 6,
7, 8 and 9 in connection with a Change in Control or certain occurrences of
termination, no grant under this Plan may be exercised, and no restrictions
relating thereto may lapse, within six months of the date such grant is made.

12. Transferability.

         Unless the Committee determines otherwise, no option, SAR, performance
award, or restricted stock granted under the Plan shall be transferable by a
participant otherwise than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code. Unless
the Committee determines otherwise, an option, SAR or performance award may be
exercised only by the optionee or grantee thereof or his guardian or legal
representative; provided that Incentive Stock Options may be exercised by such
guardian or legal representative only if permitted by the Code and any
regulations promulgated thereunder.


                                       14
<PAGE>

13. Listing, Registration and Qualification.

         If the Committee determines that the listing, registration or
qualification upon any securities exchange or under any law of Shares subject to
any option, SAR, performance award or restricted stock grant is necessary or
desirable as a condition of, or in connection with, the granting of same or the
issue or purchase of Shares thereunder, no such option or SAR may be exercised
in whole or in part, no such performance award may be paid out and no Shares may
be issued unless such listing, registration or qualification is effected free of
any conditions not acceptable to the Committee.

         It is the intent of the Company that awards made hereunder comply in
all respects with Rule 16b-3 under the Exchange Act, that any ambiguities or
inconsistencies in construction of the Plan be interpreted to give effect to
such intention.

14. Transfer of Employee.

         The transfer of an employee from the Company to a Subsidiary, from a
Subsidiary to the Company, or from one Subsidiary to another shall not be
considered a termination of employment; nor shall it be considered a termination
of employment if an employee is placed on military or sick leave or such other
leave of absence which is considered by the Committee as continuing intact the
employment relationship.

15. Adjustments.

         In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, distribution of assets,
or any other change in the corporate structure or shares of the Company, the
Committee shall make such adjustment as it deems appropriate in the number and
kind of Shares or other property reserved for issuance under the Plan, in the
number and kind of Shares or other property covered by grants previously made
under the Plan, and in the exercise price of outstanding options and SARs. Any
such adjustment shall be final, conclusive and binding for all purposes of the
Plan. In the event of any merger, consolidation or other reorganization in which
the Company is not the surviving or continuing corporation or in which a Change
in Control is to occur, all of the Company's obligations regarding options, SARs
performance awards and restricted stock that were granted hereunder and that are
outstanding on the date of such event shall, on such terms as may be approved by
the Committee prior to such event, be assumed by the surviving or continuing
corporation or canceled in exchange for property (including cash).


                                       15
<PAGE>

         Without limitation of the foregoing, in connection with any transaction
of the type specified by clause (iii) of the definition of a Change in Control
in Section 2(c), the Committee may, in its discretion, (i) cancel any or all
outstanding options under the Plan in consideration for payment to the holders
thereof of an amount equal to the portion of the consideration that would have
been payable to such holders pursuant to such transaction if their options had
been fully exercised immediately prior to such transaction, less the aggregate
exercise price that would have been payable therefor, or (ii) if the amount that
would have been payable to the option holders pursuant to such transaction if
their options had been fully exercised immediately prior thereto would be less
than the aggregate exercise price that would have been payable therefor, cancel
any or all such options for no consideration or payment of any kind. Payment of
any amount payable pursuant to the preceding sentence may be made in cash or, in
the event that the consideration to be received in such transaction includes
securities or other property, in cash and/or securities or other property in the
Committee's discretion.

16. Termination and Modification of the Plan.

         The Board of Directors or the Committee, without approval of the
stockholders, may modify or terminate the Plan, except that no modification
shall become effective without prior approval of the stockholders of the Company
if stockholder approval would be required for any listing requirement of the
principal stock exchange on which the Common Stock is then listed.

17. Amendment or Substitution of Awards under the Plan.

         The terms of any outstanding award under the Plan may be amended from
time to time by the Committee in its discretion in any manner that it deems
appropriate (including, but not limited to, acceleration of the date of exercise
of any award and/or payments thereunder or of the date of lapse of restrictions
on Shares); provided that, except as otherwise provided in Section 15, no such
amendment shall adversely affect in a material manner any right of a participant
under the award without his or her written consent. The Committee may, in its
discretion, permit holders of awards under the Plan to surrender outstanding
awards in order to exercise or realize rights under other awards, or in exchange
for the grant of new awards, or require holders of awards to surrender
outstanding awards as a condition precedent to the grant of new awards under the
Plan.


                                       16
<PAGE>

18. Commencement Date; Termination Date.

         The date of commencement of the Plan shall be June 22, 1998, subject to
approval by the shareholders of the Company. Unless previously terminated upon
the adoption of a resolution of the Board terminating the Plan, the Plan shall
terminate at the close of business on June 22, 2008; provided that the Board
may, prior to such termination, extend the term of the Plan for up to five years
for the grant of awards other than Incentive Stock Options. No termination of
the Plan shall materially and adversely affect any of the rights or obligations
of any person, without his or her consent, under any grant of options or other
incentives theretofore granted under the Plan.

19. Governing Law.

         The Plan shall be governed by the corporate laws of the State of
Delaware without giving effect to any choice of law provisions.


                                       17