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                                                                    EXHIBIT 10.3

          AMERICAN GENERAL CORPORATION 1997 STOCK AND INCENTIVE PLAN
                AS AMENDED AND RESTATED AS OF FEBRUARY 1, 1998

                                        
1. PURPOSE


  The purpose of the American General Corporation 1997 Stock and Incentive Plan
(the "Plan") is to provide a means through which American General Corporation,
a Texas corporation, and its subsidiaries (collectively, the "Company") may
attract able persons to enter the employ or become directors of the Company and
to provide a means whereby those persons upon whom the responsibilities of the
successful administration and management of the Company rest, and whose present
and potential contributions to the welfare of the Company are of importance, can
acquire and maintain stock ownership, thereby strengthening their concern for
the welfare of the Company and their desire to remain in its employ or as
directors. A further purpose of the Plan is to provide such persons with
additional incentive and reward opportunities designed to enhance the profitable
growth of the Company. So that the maximum incentive can be provided, the Plan
provides for granting Incentive Stock Options, Non-Qualified Options, Restricted
Stock Awards, Performance Awards, and Incentive Awards, or any combination of
the foregoing, as is best suited to the circumstances of the particular person.



2. DEFINITIONS


   The following definitions shall be applicable throughout the Plan:



   (a) "Award" means, individually or collectively, any Option, Restricted Stock
Award, Performance Award, or Incentive Award.

   (b) "Board" means the Board of Directors of American General Corporation.

   (c) "Code" means the Internal Revenue Code of 1986, as amended from time to
time. Reference in the Plan to any section of the Code shall be deemed to
include any amendments or successor provisions to such section and any
regulations under such section.

   (d) "Committee" means a committee of the Board that is selected by the Board
as provided in Section 4(a).

   (e) "Common Stock" means the common stock of American General Corporation.

   (f) "Company" means, collectively, American General Corporation and its
subsidiaries, except that, in Section 14 hereof, "Company" means only American
General Corporation.

   (g) "Director" means an individual elected to the Board by the shareholders
of American General Corporation or by the Board under applicable corporate law.

 
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   (h) "Employee" means any person (including a Director) in an employment
relationship with the Company or any parent or subsidiary corporation (as
defined in section 424 of the Code).

   (i) "Fair Market Value" means, as of any specified date, the average of the
highest and lowest quoted selling prices of the Common Stock as reported on the
Composite Tape for issues listed on the New York Stock Exchange on the specified
date, or, if no sales were reported on the Composite Tape on such specified
date, the average of the highest and lowest quoted selling prices of the Common
Stock on the nearest dates before and after such specified date on which sales
of the Common Stock were so reported.

   (j) "Grant Document" means the document or documents evidencing an Award
under the Plan, which may be either an agreement between the Company and the
Holder as to the Award or a notice of grant of the Award from the Company to the
Holder (including any attached statement of the terms and conditions of the
Award).

   (k) "Holder" means an employee or a non-employee Director who has been
granted an Option, a Restricted Stock Award, a Performance Award, or an
Incentive Award.

   (l) "Incentive Award" means an Award granted under Section 10 of the Plan.

   (m) "Incentive Stock Option" means an incentive stock option within the
meaning of section 422(b) of the Code.

   (n) "Immediate Family" means, with respect to a Holder, the Holder's spouse,
children or grandchildren (including adopted and step children and
grandchildren).

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

   (p) "Non-Qualified Option" means an Option that is not an Incentive Stock
Option.

   (q) "Option" means an Award under Section 7 of the Plan and includes both
Non-Qualified Options and Incentive Stock Options to purchase Common Stock.

   (r) "Performance Award" means an Award granted under Section 9 of the Plan.

   (s) "Personal Representative" means the person who upon the death,
disability, or incompetency of a Holder shall have acquired, by will or by the
laws of descent and distribution or by other legal proceedings, the right to
exercise an Option or the right to any Restricted Stock Award, Performance
Award, or Incentive Award theretofore granted or made to such Holder.

   (t) "Plan" means the American General Corporation 1997 Stock and Incentive
Plan, as amended from time to time.


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   (u) "Restricted Stock Award" means an Award granted under Section 8 of the
Plan.

   (v) "Rule 16b-3" means Securities and Exchange Commission Rule 16b-3
promulgated under the 1934 Act, as such may be amended from time to time, and
any successor rule, regulation, or statute fulfilling the same or similar
function.

3. EFFECTIVE DATE AND DURATION OF THE PLAN

   The Plan shall become effective on February 6, 1997, following adoption by
the Board, provided the Plan is approved by the shareholders of American General
Corporation within twelve months thereafter. Notwithstanding any provision in
the Plan or in any Grant Document under the Plan, no Option shall be exercisable
and no Award shall vest prior to such shareholder approval. No further Awards
may be granted under the Plan after ten years from the date the Plan becomes
effective. The Plan shall remain in effect until all Options granted under the
Plan have been exercised or expired by reason of lapse of time, all restrictions
imposed upon Restricted Stock Awards have been eliminated or the Restricted
Stock Awards have been forfeited, and all Performance Awards and Incentive
Awards have been satisfied or have terminated.

4. ADMINISTRATION

   (a) Composition of Committee. The Plan shall be administered by a committee
of, and appointed by, the Board, and such Committee shall be comprised solely of
two or more outside Directors of American General Corporation (within the
meaning of section 162(m) of the Code and applicable interpretive authority
thereunder) who are also non-employee Directors (within the meaning of Rule 16b-
3). A majority of the Committee shall constitute a quorum. The Committee shall
act by majority action at a meeting, except that action permitted to be taken at
a meeting may be taken without a meeting if written consent thereto is given by
all members of the Committee.

   (b) Powers. Subject to the express provisions of the Plan and except as
otherwise provided below with respect to non-employee Directors, the Committee
shall have authority, in its discretion, to determine which Employees or
Directors of the Company shall receive an Award, the time or times when such
Award shall be made, whether an Incentive Stock Option or Non-Qualified Option
shall be granted, the number of shares to be subject to each Option and
Restricted Stock Award, and the value of each Performance Award and Incentive
Award. In making such determinations, the Committee shall take into account the
nature of the services rendered by the respective Employees or Directors, their
present and potential contribution to the Company's success, and such other
factors as the Committee shall deem relevant. Notwithstanding the foregoing, the
Board shall have authority, in its discretion, to make the determinations set
forth above with respect to non-employee Directors.

   (c) Additional Powers. The Committee shall have such additional powers as are
delegated to it by the other provisions of the Plan. Subject to the express
provisions of the Plan and except as 


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otherwise provided below with respect to non-employee Directors, this shall
include the power to construe the Plan and the respective Grant Documents
thereunder, to prescribe rules and regulations relating to the Plan and to
determine the terms, restrictions, and provisions of the Grant Document for each
Award, including such terms, restrictions, and provisions as shall be requisite
in the judgment of the Committee to cause designated Options to qualify as
Incentive Stock Options, to ensure that the grants of Awards are exempt under
Rule 16b-3, and to make all other determinations necessary or advisable for
administering the Plan. Without limiting the generality of the foregoing, Grant
Documents providing for Awards under the Plan may contain such provisions
covering a change of control (sometimes called a "change in control") of the
Company, as defined by the Committee in its sole discretion, as the Committee
may approve, not inconsistent with the terms of this Plan, including without
limitation provisions for the acceleration of, vesting of, or the payment of
cash in lieu of, any Award. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any Grant Document
relating to an Award in the manner and to the extent it shall deem expedient to
carry it into effect. The Committee may delegate to other persons the
responsibility of performing ministerial acts in furtherance of the Plan's
purposes. The determinations of the Committee on the matters referred to in this
Section 4 shall be conclusive. Notwithstanding the foregoing, the Board, in its
discretion, shall have the power to determine the terms, restrictions, and
provisions of the Grant Document for each Award with respect to non-employee
Directors.

5. GRANT OF OPTIONS, RESTRICTED STOCK AWARDS, PERFORMANCE AWARDS, AND INCENTIVE
   AWARDS; SHARES SUBJECT TO THE PLAN

   (a) Stock Grant Limit. The Committee may from time to time grant Awards to
one or more Employees or Directors determined by it to be eligible for
participation in the Plan in accordance with the provisions of Section 6.
Subject to adjustment in the same manner as provided in Section 11 with respect
to shares of Common Stock subject to Awards then outstanding, the aggregate
number of shares of Common Stock that may be issued under the Plan shall not
exceed 7,000,000. Shares shall be deemed to have been issued under the Plan only
to the extent actually issued and delivered pursuant to an Award. To the extent
that an Award lapses or the rights of its Holder terminate or the Award is paid
in cash, any shares of Common Stock subject to such Award shall again be
available for the grant of an Award. The separate limitations contained in
Sections 7, 8, and 9 with respect to specific types of Awards shall be applied
in a manner which will permit compensation generated under the Plan which is
intended to constitute "performance-based" compensation for purposes of section
162(m) of the Code to be treated as such "performance-based" compensation.

   (b) Stock Offered. The stock to be offered pursuant to the grant of an Award
may be authorized but unissued Common Stock or Common Stock previously issued
and outstanding and reacquired by the Company.


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6. ELIGIBILITY
 
   Awards may be granted only to persons who, at the time of grant, are key
Employees of the Company or Directors. Awards may not be granted to any person
who immediately after such grant is the owner, directly or indirectly, of more
than 10% of the total combined voting power of all classes of stock of the
Company. An Award may be granted on more than one occasion to the same person,
and such Award may include an Incentive Stock Option, Non-Qualified Option,
Restricted Stock Award, Performance Award, Incentive Award, or any combination
thereof.

7. STOCK OPTIONS

   (a) Limitations on Awards. The maximum number of shares of Common Stock that
may be subject to Option Awards granted to any one individual during any
calendar year may not exceed 500,000 shares of Common Stock (subject to
adjustment in the same manner as provided in Section 11 with respect to shares
of Common Stock subject to Options then outstanding).

   (b) Option Period. The term of each Option shall be as specified by the
Committee at the date of grant but shall not exceed ten years.

   (c) Limitations on Exercise of Option. An Option shall be exercisable in
whole or in such installments and at such times, commencing not earlier than six
months from the date of grant, as determined by the Committee.

   (d) Stock Option Grant Document. Each Option shall be evidenced by an Option
Grant Document in such form and containing such provisions not inconsistent with
the provisions of the Plan as the Committee from time to time shall approve,
including, without limitation, provisions to qualify as an Incentive Stock
Option under section 422 of the Code.

   (e) Option Price and Payment. The price at which a share of Common Stock may
be purchased upon exercise of an Option shall be determined by the Committee,
but, subject to adjustment in the same manner as provided in Section 11, shall
not be less than the Fair Market Value of a share of Common Stock at the date
such Option is granted.  Notwithstanding the foregoing, Non-Qualified Options
granted pursuant to the Letter Agreement dated February 12, 1997, between USLIFE
Corporation and American General Corporation respecting Non-Qualified Options to
be granted following the `Effective Time' of  the `Merger Agreement' as
referenced in such Letter Agreement, may be at a price less than the Fair Market
Value of a share of Common Stock at the date such Non-Qualified Options are
granted. The Option or portion thereof may be exercised by delivery of an
irrevocable notice of exercise to the Company. The purchase price of the Option
or portion thereof shall be paid in full in the manner prescribed by the
Committee.

   (f) Shareholder Rights and Privileges. The Holder shall be entitled to all
the privileges and rights of a shareholder only with respect to such shares of
Common Stock as have been purchased under the Option, for which certificates of
stock have been registered in the Holder's name, and as to which the Grant
Document for the respective Option requires no further restrictions.


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   (g) Special Limitations on Incentive Stock Options. An Incentive Stock Option
may be granted only to an individual who is an Employee at the time the Option
is granted. In the case of Incentive Stock Options, the value of shares of stock
for which such Options are exercisable for the first time in any one calendar
year cannot exceed $100,000 based on the Fair Market Value of the stock at the
date of grant according to section 422(d)(1) of the Code (or such other
individual limit as may be in effect under the Code on the date of grant). An
Incentive Stock Option shall not be transferable or assignable otherwise than by
will or the laws of descent and distribution.

   (h) Stock Appreciation Rights. The Committee (concurrently with the grant of
an Option or subsequent to such grant) may, in its sole discretion, grant to any
Holder of an Option stock appreciation rights ("SARs"). SARs may give the
Holder of an Option the right, upon written request, to surrender any
exercisable Option or portion thereof in exchange for cash, whole shares of
Common Stock, or a combination thereof, as determined by the Committee, with a
value equal to the excess of the Fair Market Value, as of the date of such
request, of one share of Common Stock over the Option price for such share
multiplied by the number of shares covered by the Option or portion thereof to
be surrendered. In the case of any SAR which is granted in connection with an
Incentive Stock Option, such SAR shall be exercisable only when the Fair Market
Value of the Common Stock exceeds the price specified therefor in the Option or
portion thereof to be surrendered. In the event of the exercise of any SAR
granted hereunder, the number of shares reserved for issuance under the Plan
shall be reduced only to the extent that shares of Common Stock are actually
issued in connection with the exercise of such SAR. Additional terms and
conditions governing any such SARs may from time to time be prescribed by the
Committee in its sole discretion.

8. RESTRICTED STOCK AWARDS

   (a) Limitations on Awards. The maximum number of shares of Common Stock that
may be subject to Restricted Stock Awards granted to any one individual during
any calendar year may not exceed 50,000 shares of Common Stock (subject to
adjustment in the same manner as provided in Section 11 with respect to shares
of Common Stock subject to Restricted Stock Awards then outstanding). Subject to
adjustment in the same manner as provided in Section 11 with respect to shares
of Common Stock subject to Restricted Stock Awards then outstanding, the
aggregate number of shares of Common Stock that may be issued under the Plan
with respect to Restricted Stock Awards shall not exceed 700,000.

   (b) Restriction Period to be Established by the Committee. At the time a
Restricted Stock Award is made, the Committee shall establish a period of time
(the "Restriction Period") applicable to such Award. Each Restricted Stock
Award may have a different Restriction Period, in the discretion of the
Committee.

   (c) Forfeiture Restrictions to be Established by the Committee. Shares of
Common Stock that are the subject of a Restricted Stock Award shall be subject
to restrictions on disposition by the Holder and an obligation of the Holder to
forfeit and surrender the shares to the Company under 


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certain circumstances (the "Forfeiture Restrictions"). The Forfeiture
Restrictions shall be determined by the Committee in its sole discretion, and
the Committee may provide that the Forfeiture Restrictions shall lapse upon (i)
the attainment of one or more performance measures established by the Committee
that are based on (1) the price of a share of Common Stock, (2) net income, (3)
market share, (4) return on shareholders' equity, (5) the payment of cash
dividends, (6) operating income, (7) operating return on shareholders' equity,
(8) finance receivables, (9) premium growth, or (10) total shareholder return,
(ii) the Holder's continued employment with the Company or continued service as
a Director for a specified period of time, (iii) the occurrence of any event or
the satisfaction of any other condition specified by the Committee in its sole
discretion, or (iv) a combination of any of the foregoing. The performance
measures may be subject to adjustment for specified significant extraordinary
items or events, and may be absolute, relative to one or more other companies,
or relative to one or more indexes, and may be contingent upon future
performance of the Company or any subsidiary, division, or department thereof by
or in which the Holder is employed during the performance period. Each
Restricted Stock Award may have different Forfeiture Restrictions, in the
discretion of the Committee.

   (d) Other Terms and Conditions. Common Stock awarded pursuant to a Restricted
Stock Award shall be represented by a stock certificate registered in the name
of the Holder of such Restricted Stock Award. The Holder shall have the right to
receive dividends during the Restriction Period, to vote Common Stock subject
thereto, and to enjoy all other shareholder rights, except that (i) the Holder
shall not be entitled to delivery of the stock certificate until the Restriction
Period shall have expired, (ii) the Company shall retain custody of the stock
during the Restriction Period, (iii) the Holder may not sell, transfer, pledge,
exchange, hypothecate, or otherwise dispose of the stock during the Restriction
Period, and (iv) a breach of the terms and conditions established by the
Committee pursuant to the Restricted Stock Award shall cause a forfeiture of the
Restricted Stock Award.

   (e) Payment for Restricted Stock. A Holder shall not be required to make any
payment for Common Stock received pursuant to a Restricted Stock Award, except
to the extent otherwise required by law or the Committee.

9. PERFORMANCE AWARDS

   (a) Limitations on Awards. The maximum number of shares of Common Stock that
may be subject to Performance Awards granted to any one individual during any
calendar year may not exceed 100,000 shares of Common Stock, subject to
adjustment in the same manner as provided in Section 11 with respect to shares
of Common Stock subject to Performance Awards then outstanding.

   (b) Performance Period. The Committee shall establish, with respect to and at
the time of each Performance Award, a performance period over which the
performance of the Holder shall be measured.


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    (c) Performance Measures. A Performance Award shall be awarded to a Holder
contingent upon future performance of the Company or any subsidiary, division,
or department thereof by or in which such Holder is employed during the
performance period. The Committee shall establish the performance measures
applicable to such performance prior to the beginning of the performance period;
provided such measures may be made subject to adjustment for specified
significant extraordinary items or events. The performance measures may be
absolute, relative to one or more other companies, or relative to one or more
indexes. The performance measures established by the Committee may be based upon
(i) the price of a share of Common Stock, (ii) net income, (iii) market share,
(iv) return on shareholders' equity, (v) the payment of cash dividends, (vi)
operating income, (vii) operating return on shareholders' equity, (viii) finance
receivables, (ix) premium growth, (x) total shareholder return, or (xi) a
combination of any of the foregoing. The Committee, in its sole discretion, may
provide for an adjustable Performance Award value based upon the level of
achievement of performance measures.

    (d) Awards Criteria. In determining the value of Performance Awards, the
Committee shall take into account a Holder's responsibility level, performance,
potential, other Awards, and such other considerations as it deems appropriate.
The Committee, in its sole discretion, may provide for a reduction in the value
of a Holder's Performance Award during the performance period.

    (e) Payment. Following the end of the performance period, the Holder of a
Performance Award shall be entitled to receive payment of an amount not
exceeding the maximum value of the Performance Award, based on the achievement
of the performance measures for such performance period, as determined by the
Committee. Payment of a Performance Award may be made in cash, Common Stock, or
a combination thereof, as determined by the Committee. Payment shall be made in
a lump sum or in installments as prescribed by the Committee. Any payment to be
made in cash shall be based on the Fair Market Value of the Common Stock on the
payment date.

    (f) Termination of Employment. A Performance Award shall terminate if the
Holder does not remain continuously in the employ (or in service as a Director)
of the Company at all times during the applicable performance period, except as
may be determined by the Committee.

10. INCENTIVE AWARDS

    (a) Incentive Awards. Incentive Awards are rights to receive shares of
Common Stock (or the Fair Market Value thereof), or rights to receive an amount
equal to any appreciation or increase in the Fair Market Value of Common Stock
over a specified period of time, which vest over a period of time as established
by the Committee, without satisfaction of any performance criteria or
objectives. The Committee may, in its discretion, require payment or other
conditions of the Holder respecting any Incentive Award.

    (b) Award Period. The Committee shall establish, with respect to and at the
time of each Incentive Award, a period over which the Award shall vest with
respect to the Holder.


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    (c) Awards Criteria. In determining the value of Incentive Awards, the
Committee shall take into account a Holder's responsibility level, performance,
potential, other Awards, and such other considerations as it deems appropriate.

    (d) Payment. Following the end of the vesting period for an Incentive Award,
the Holder of an Incentive Award shall be entitled to receive payment of an
amount, not exceeding the maximum value of the Incentive Award, based on the
then vested value of the Award. Payment of an Incentive Award may be made in
cash, Common Stock, or a combination thereof as determined by the Committee.
Payment shall be made in a lump sum or in installments as prescribed by the
Committee. Any payment to be made in cash shall be based on the Fair Market
Value of the Common Stock on the payment date. Cash dividend equivalents may be
paid during or after the vesting period with respect to an Incentive Award, as
determined by the Committee.

    (e) Termination of Employment. An Incentive Award shall terminate if the
Holder does not remain continuously in the employ (or in service as a Director)
of the Company at all times during the applicable vesting period, except as may
be otherwise determined by the Committee.

11. EQUITABLE ADJUSTMENTS

    Subject to any required action by the Company's shareholders, upon the
occurrence of any event which affects the shares of Common Stock in such a way
that an adjustment of outstanding Awards is appropriate in order to prevent the
dilution or enlargement of rights under the Awards (including, without
limitation, any extraordinary dividend or other distribution (whether in cash or
in kind), recapitalization, stock split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event), the Committee shall make appropriate
equitable adjustments, which may include, without limitation, adjustments to any
or all of the number and kind of shares of stock (or other securities) which may
thereafter be issued in connection with such outstanding Awards and adjustments
to any exercise price specified in the outstanding Awards and shall also make
appropriate equitable adjustments to the number and kind of shares of stock (or
other securities) authorized by or to be granted under the Plan.  Further, the
Committee, in its sole discretion, may make appropriate equitable adjustments,
including, without limitation, those described in the immediately preceding
sentence, in any other circumstances under which the Committee deems such
adjustments to be desirable.  Any adjustment made to an Incentive Stock Option
hereunder, with respect to either (i) the number or price of shares of stock
subject to Incentive Stock Options or (ii) the aggregate number of shares which
may be issued pursuant to Incentive Stock Options, shall be made in a manner
which will permit such option to continue to constitute an Incentive Stock
Option within the meaning of section 422 of the Code.

12. AMENDMENT AND TERMINATION OF THE PLAN

    The Board may amend the Plan at any time and the Committee may amend any
Award (and its

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related Grant Document) at any time, except as otherwise specifically provided
in such Grant Document; provided that no change in any Award theretofore granted
may be made that would impair the rights of the Holder of any Award under the
Plan without the consent of the Holder, and provided, further, that the Board
may not, without approval of the shareholders, amend the Plan (a) to increase
the maximum aggregate number of shares which may be issued under the Plan or (b)
to change the class of individuals eligible to receive Awards under the Plan.
The Board, in its discretion, may terminate the Plan at any time with respect to
any shares of Common Stock for which Awards have not theretofore been granted.

13. EFFECT OF THE PLAN

    (a) No Right to an Award. Neither the adoption of the Plan nor any action of
the Board or of the Committee shall be deemed to give an Employee or Director
any right to an Award except as may be evidenced by a written instrument from
the Company reflecting a grant by the Company of an Award and setting forth the
terms and conditions thereof. The Plan shall be unfunded. The Company shall not
be required to establish any special or separate fund or to make any other
segregation of funds or assets to assure the payment of any Award.

    (b) No Employment/Membership Rights Conferred. Nothing contained in the Plan
shall (i) confer upon any employee any right with respect to continuation of
employment with the Company or (ii) interfere in any way with the right of the
Company to terminate his or her employment at any time. Nothing contained in the
Plan shall confer upon any Director any right with respect to continuation of
membership on the Board.

    (c) Other Laws; Withholding. The Company shall not be obligated to issue any
shares of Common Stock until there has been compliance with such laws and
regulations as the Company may deem applicable. No fractional shares of Common
Stock shall be delivered. The Company shall have the right to deduct in
connection with all Awards any taxes required by law to be withheld and to
require any payments required to enable it to satisfy its withholding
obligations.

    (d) No Restriction on Corporate Action. Nothing contained in the Plan shall
be construed to prevent the Company from taking any corporate action which is
deemed by the Company to be appropriate or in its best interests, whether or not
such action would have an adverse effect on the Plan or any Award made under the
Plan. No Employee, Director, beneficiary, or other person shall have any claim
against the Company as a result of any such action.

    (e) Restrictions on Transfer. An Award (other than an Incentive Stock
Option, which shall be subject to the transfer restrictions set forth in Section
7(g)) shall not be transferable or assignable otherwise than (i) by will or the
laws of descent and distribution, (ii) pursuant to a "qualified domestic
relations order" (as defined by the Code), (iii) with respect to Awards of Non-
Qualified Options, if such transfer is permitted in the sole discretion of the
Committee, by transfer by a Holder to a member of the Holder's Immediate Family,
to a trust solely for the benefit of the Holder and the 


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Holder's Immediate Family, or to a partnership or limited liability company
whose only partners or shareholders are the Holder and members of the Holder's
Immediate Family, or (iv) with the consent of the Committee.

    (f) Section 162(m). It is intended that the Plan comply fully with and meet
all the requirements of section 162(m) of the Code so that Options and
Performance Awards granted hereunder and, if determined by the Committee,
Restricted Stock Awards shall constitute "performance-based" compensation
within the meaning of such section. If any provision of the Plan would
disqualify the Plan or would not otherwise permit the Plan to comply with
section 162(m) as so intended, such provision shall be construed or deemed
amended to conform to the requirements or provisions of section 162(m); provided
that no such construction or amendment shall have an adverse effect on the
economic value to a Holder of any Award previously granted hereunder.

    (g) Governing Law. This Plan shall be construed in accordance with the laws
of the State of Texas.

14. MODIFICATION OF OUTSTANDING AWARDS

    Except as specified in this Section 14, notwithstanding the provisions of
any Grant Document evidencing any Award outstanding hereunder on February 1,
1998, if such Grant Document contains provisions with respect to the effect of a
"Change of Control" upon such Award, certain of those provisions shall be deemed
modified as follows (subject to any consent of the Holder specifically required
by the Grant Document):

    (a) Any provision in the applicable Grant Document which states that a
Change of Control shall be deemed to have occurred in circumstances described
substantially as follows:

    "the Company shall (i) merge or consolidate with or into another corporation
    or entity or enter into a share exchange between shareholders of the Company
    and another corporation or entity pursuant to Article 5.02 of the Texas
    Business Corporation Act and as a result of such merger, consolidation or
    share exchange less than seventy percent (70%) of the outstanding voting
    securities of the surviving or resulting corporation or entity shall then be
    owned in the aggregate by the former shareholders of the Company, other than
    (x) affiliates (within the meaning of the Securities Exchange Act of 1934,
    as amended (the "Exchange Act")) of the Company or (y) any party to such
    merger, consolidation or share exchange or (ii) sell, lease, exchange or
    otherwise dispose of all or substantially all of the Company's property and
    assets in one transaction or a series of related transactions to one or more
    other corporations or entities that are not subsidiaries of the Company;"

shall be modified to provide that a Change of Control shall be deemed to have
occurred if:

    "(i) the Company or any direct or indirect subsidiary of the Company shall
    merge or consolidate 


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    with or into another corporation or entity or enter into a share exchange
    between shareholders of the Company or any direct or indirect subsidiary of
    the Company and another corporation or entity pursuant to Article 5.02 of
    the Texas Business Corporation Act and as a result of such merger,
    consolidation or share exchange less than seventy percent (70%) of the
    outstanding voting securities of the surviving or resulting corporation or
    entity or any parent thereof shall then be owned in the aggregate by the
    former shareholders of the Company, other than (x) affiliates (within the
    meaning of the Securities Exchange Act of 1934, as amended (the "Exchange
    Act")) of the Company or (y) any party to such merger, consolidation or
    share exchange or (ii) the Company shall sell, lease, exchange or otherwise
    dispose of all or substantially all of the Company's property and assets in
    one transaction or a series of related transactions to one or more other
    corporations or entities that are not subsidiaries of the Company;"

    (b) Any provisions in the Grant Document of a stock option which would
require the payment of the "Merger Spread" in connection with the automatic
surrender and cancellation of the stock option when a Change of Control occurs
because of a merger, consolidation or share exchange shall be deemed modified by
the addition of the following provision:

    "Notwithstanding any other provision hereof, if a Change of Control occurs
    which would otherwise require the payment to the Holder of the Merger Spread
    and the automatic surrender and cancellation of the option hereunder, there
    shall be no payment of the Merger Spread and no automatic surrender and
    cancellation of the option. Instead, immediately prior to the occurrence of
    that particular type of Change of Control, the option shall become fully
    vested and exercisable. As used in the immediately preceding sentence,
    "immediately prior" to the Change of Control shall mean sufficiently in
    advance of the Change of Control to permit the Holder to take all steps
    reasonably necessary to exercise the option fully and to deal with the
    shares purchased under the option so that those shares may be treated in the
    same manner in connection with the Change of Control as the shares of Stock
    of other shareholders."

    (c) Any provision in a Grant Document which might limit the Change-of-
Control vesting of, or the Change-of-Control lapse of Forfeiture Restrictions
with respect to, the Award under the Grant Document in the event that such
vesting or lapse might constitute a "parachute payment" shall not apply if the
Holder of the Award also holds, immediately prior to any such Change of Control,
an individual employment or severance agreement with the Company pursuant to
which the Company undertakes to pay the excise tax which might otherwise be
imposed upon the Holder under section 280G of the Code in connection with such
vesting or lapse.


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