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                                                                    EXHIBIT 10.7
                                                                    ------------




                             CAPITAL HOLDINGS, INC.


                      LONG-TERM INCENTIVE COMPENSATION PLAN


                        EFFECTIVE DATE: DECEMBER 14, 1999


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                                    SECTION I
                                     PURPOSE


1.1      Purpose. The purpose of the Capital Holdings, Inc. Long-Term Incentive
         Compensation Plan (the "Plan") is to provide competitive Long-Term
         Incentive Compensation to Participants that aligns their interests with
         shareholder interests through share ownership and investment in the
         Company, and to encourage long-term growth in shareholder value through
         the achievement of specified financial objectives.

1.2      Rule 16b-3 Plan. With respect to persons subject to Section 16 of the
         Act ("Section 16 Persons"), transactions under this Plan are intended
         to comply with all applicable conditions of Rule 16b-3 or its
         successors promulgated under the Act. To the extent any provision of
         the Plan or action by the Committee fails to so comply, it shall be
         deemed null and void, to the extent permitted by law and deemed
         advisable by the Committee. Moreover, in the event the Plan does not
         include a provision required by Rule 16b-3 to be stated therein, such
         provision (other than one relating to eligibility requirements, or the
         price and amount of Awards) shall be deemed automatically to be
         incorporated by reference into the Plan insofar as Participants who are
         Section 16 Persons are concerned, to the extent permitted by law and
         deemed advisable by the Committee.

1.3      Effectiveness of the Plan. The Plan will be effective upon adoption by
         the Board. Nonqualified options granted under the plan on or after the
         Effective Date are not subject to shareholder approval and shall be
         binding upon the Company in accordance with the terms of the Plan and
         such option's Option Agreement. Incentive Stock Options granted on or
         after the Effective Date are subject to shareholder approval of the
         Plan and shall automatically convert to a Nonqualified Stock Option in
         the event the shareholders of the Company shall fail to approve the
         Plan within one year of the Effective Date. In the event shareholders
         of the Company shall not approve the Plan within one year of the
         Effective Date the Plan shall immediately terminate. In the event the
         Shareholders approve the Plan within one year of the Effective Date the
         Plan will remain in effect until the earlier of the termination date
         set forth in Section 12.2 hereof or such time as it is amended or
         terminated by the Board in accordance with the terms of Section 12.2
         hereof, except that no Incentive Stock Option may be granted under the
         Plan on or after ten years from the Effective Date of the Plan.


                                   SECTION II
                                   DEFINITIONS


Unless the context clearly indicates otherwise, the following terms have the
meanings set forth below:

2.1      "Act" means the Securities and Exchange Act of 1934, as amended.

2.2      "Award" means Options, Restricted Stock or Stock Awards granted
         pursuant to the Plan.

2.3      "Board" means the Board of Directors of the Company.



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2.4      "Cause" means, with respect to any certain Participant:

         (a)      the willful and continued failure by such Participant to
                  substantially perform his or her duties with respect to the
                  Company (other than any such failure resulting from his or her
                  incapacity due to physical or mental illness), or

         (b)      the willful engaging by such Participant in conduct which is
                  demonstrably and materially injurious to the Company,
                  monetarily or otherwise. For purposes of this Section 2.4, no
                  act or failure to act shall be deemed "willful" if done by the
                  Participant either in good faith and in the reasonable belief
                  that such act or omission was in the best interest of the
                  Company, or before the Board provides the Participant with a
                  written notice and reasonable opportunity to cure the actions
                  or omissions that the Board considers to be grounds for a
                  finding of Cause for purposes of this Plan.

2.5      "Change in Control" means the occurrence of any of the following
events:

         (a)      Any person or group (as such terms are used in connection with
                  Sections 13(d) and 14(d) of the Securities Exchange Act of
                  1934, "Exchange Act") is or becomes the "beneficial owner" (as
                  defined in Rule 13(d)(3) and 13(d)(5) under the Exchange Act),
                  directly or indirectly, of securities of Capital Holdings,
                  Inc. representing 35% or more of the combined voting power of
                  Capital Holdings, Inc.'s then outstanding securities; or

         (b)      Capital Holdings, Inc. is a party to a merger, consolidation,
                  sale of assets or other reorganization, or a proxy contest, as
                  a consequence of which members of the Board in office
                  immediately prior to such transaction or event constitute less
                  than a majority of the Board thereafter; or

         (c)      During any period of 24 consecutive months, individuals who at
                  the beginning of such period constitute the Board (including
                  for this purpose any new director whose election or nomination
                  for election by Capital Holdings, Inc.'s stockholders was
                  approved by a vote of at least one-half of the directors then
                  still in office who were directors at the beginning of such
                  period) cease for any reason to constitute at least a majority
                  of the Board.

         (d)      Capital Holdings, Inc. is party to a merger, consolidation or
                  reorganization with any other corporation in which the
                  shareholders of Capital Holdings, Inc. immediately prior to
                  the merger, consolidation or reorganization do not immediately
                  thereafter directly or indirectly own more than fifty percent
                  (50%) of the combined voting power of the voting securities
                  entitled to vote in the selection of directors of the merged,
                  consolidated or reorganized entity.

         Notwithstanding the foregoing, no trust department or designated
         fiduciary or other trustee of such trust department of Capital
         Holdings, Inc. or a subsidiary of Capital Holdings, Inc., or other
         similar fiduciary capacity of Capital Holdings, Inc. with direct voting
         control of the stock shall be treated as a person or group within the
         meaning of subsection (a) hereof. Further, no profit-sharing, employee
         stock ownership, employee stock purchase and savings, employee pension,
         or other employee benefit plan of Capital Holdings, Inc. or any of its
         subsidiaries, and no Trustee of any such plan in its capacity as such
         Trustee, shall be treated as a person or group within the meaning of
         subsection (a) hereof.



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2.6      "Code" means the Internal Revenue Code of 1986, as amended.

2.7      "Committee" means the members of the Compensation Committee as
         appointed and maintained by the Board who are not employees of the
         Company.

2.8      "Common Shares" means the Common Shares, no par value per share, of the
         Company, which the Company may authorize and issue from time to time,
         and as may be made subject to this Plan in the sole discretion of the
         Board.

2.9      "Company" means collectively Capital Holdings, Inc., an Ohio
         corporation, and any successor entity in a merger or consolidation, and
         any of its Subsidiaries, which elects to participate in the Plan with
         the approval of the Board.

2.10     "Director" means a member of the Board of the Company.

2.11     "Disability" means permanent and total disability as defined under
         Section 22(e)(3) of the Code.

2.12     "Effective Date" means the date the Plan becomes effective.

2.13     "Fair Market Value" as of a certain date means the fair market value of
         the Common Shares as determined by the Committee in its sole
         discretion. In making such determination, the Committee will comply
         with the valuation methods defined in Treasury Regulation Section
         1.421-7(e)(2).

2.14     "Grant Date" as used with respect to Options, means the date as of
         which such Options are granted by the Committee, as applicable,
         pursuant to the Plan.

2.15     "Incentive Stock Option" or "ISO" means an Option conforming to the
         requirements of Section 422 of the Code.

2.16     "Nonqualified Stock Option" or "NQO" means an Option granted pursuant
         to the Plan other than an Incentive Stock Option.

2.17     "Option" means an option to purchase Common Shares granted by the
         Committee pursuant to the Plan, which may be designated as either an
         "Incentive Stock Option" or a "Nonqualified Stock Option."

2.18     "Participant" means an employee of the Company or non-employee director
         as described in Section V hereof.

2.19     "Plan" means the Capital Holdings, Inc. Long-Term Incentive
         Compensation Plan as set forth herein and as may be amended from time
         to time, subject to Section 12.1 hereof.

2.20     "Retirement" means a Participant's voluntarily leaving the employment
         of the Company upon the attainment of the minimum age of sixty-two
         (62).



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2.21     "Restricted Stock Award" or "Restricted Stock" means an award of Common
         Shares with restrictions placed on the sale, transfer or pledging of
         the shares, and a risk of forfeiture during the restriction period.

2.22     "Stock Award" means an award of the Common Shares.

2.23     "Subsidiary" means a subsidiary corporation as defined in Section
         424(f) of the Code.

                                   SECTION III
                           ADMINISTRATION OF THE PLAN


3.1      The Committee. The Plan shall be administered by the Committee and
         shall act only by the vote or written consent of at least a majority of
         its members. The members of the Committee shall be appointed from time
         to time by, and shall serve at the discretion of the Board. It is the
         intent of the Committee to administer the Plan in a manner that
         qualifies awards, to the extent possible, as excludable from the
         deduction limit set forth under Section 162(m) of the Code.

3.2.     Authority of the Committee. The Committee shall have all powers and
         discretion necessary or appropriate to administer the Plan and to
         control its operation, including, but not limited to, the power (a) to
         determine which employees shall be granted Awards, (b) to prescribe the
         terms, conditions and vesting schedule, if any, of such Awards, (c) to
         determine the amount and form of Awards granted to Participants, (d) to
         interpret the Plan and the Awards, (e) to adopt rules for the
         administration, interpretation and application of the Plan as are
         consistent therewith, and (f) to interpret, amend or revoke any such
         rules subject to Section 12.1 hereof.

         The Committee, in their sole discretion and on such terms and
         conditions as they may provide, may delegate their duties in order to
         provide for the day-to-day administration of the Plan. The Committee
         shall control the general administration of the Plan with all powers
         necessary to enable it to carry out its duties in that respect;
         provided, however, that the Committee may not delegate its authority
         and powers (a) with respect to those individuals under Section 16, or
         (b) in any way which is impermissible under Code Section 162(m) or the
         rules and regulations promulgated thereunder.

3.3      Decisions Binding. All determinations and decisions made by the
         Committee shall be final, conclusive, and binding on all parties, and
         shall be given the maximum deference permitted by law.


                                   SECTION IV
                           SHARES SUBJECT TO THE PLAN


4.1      Shares Subject to Plan. The Company shall reserve 750,000 Common Shares
         for issuance under this Plan, subject to adjustment pursuant to Section
         4.2 hereof. Common Shares may be now or hereafter authorized yet
         unissued or Common Shares already authorized, issued and owned or
         purchased by the Company or a trust as to which the Company is a
         grantor. If and to the extent that any rights with respect to Common
         Shares shall not be exercised by any Participant for any reason or if
         such rights shall terminate as provided herein, Common Shares that have
         not been allocated to such Participant under the Plan shall again
         become available for allocation to Participants as provided herein.



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4.2      Change in Capitalization. In the event of a change in the
         capitalization of the Company due to a share split, share dividend,
         recapitalization, merger, consolidation, combination, or similar event
         or as the Committee shall in its sole discretion deem appropriate, the
         aggregate number of Common Shares and the terms of any existing Awards
         shall be adjusted by the Committee to reflect such change.

                                    SECTION V
                                   ELIGIBILITY


The Committee shall have the discretion to select directors, officers,
executives, managers, and other key employees of the Company for participation
in the Plan. The discretion of the Committee to select such Participants shall
be absolute and no person otherwise eligible for participation shall have any
right to participate. Only persons so selected shall be deemed "Participants"
for purposes hereof.


                                   SECTION VI
                                  STOCK OPTIONS


6.1      Grant of Options. Options may be granted to Participants, subject to
         the provisions of the Plan, at any time and from time to time, as
         determined in the sole discretion of the Committee. The Committee, as
         applicable, shall in its sole discretion, determine the number of
         Options granted to each Participant; provided, however, that in any one
         calendar year, no one Participant shall be granted Options to purchase
         a number of Common Shares in excess of 90,000, adjusted for any stock
         dividends, stock splits, reverse stock splits, recapitalization mergers
         or consolidations. Options granted may be ISOs to employees, NQOs to
         employees or non-employee Directors, or a combination thereof.

6.2      Option Agreement. Each Option shall be evidenced by a written option
         agreement (an "Option Agreement") that shall specify the Option price,
         the expiration date of the Option, the number of shares to which the
         Option pertains, any conditions to exercise of the Option, and such
         other terms and conditions as the Committee, in its discretion, shall
         determine. The Option Agreement also shall specify whether the Option
         is intended to be an ISO or an NQO.

6.3      Option Price. The price for each Common Share deliverable upon the
         exercise of an Option (the "Option Price") shall be determined at the
         discretion of the Committee; provided, however, that with respect to
         ISOs, the Option Price shall not be less than the Fair Market Value at
         the date of grant. If at the time that an ISO is granted, the
         Participant owns shares possessing more than 10% of the total combined
         voting power of all classes of the Company's or any of its
         Subsidiaries' capital shares, the Option Price of an ISO shall not be
         less than one hundred and ten percent (110%) of the Fair Market Value
         of a share on the date that the ISO is granted and any ISO so granted
         must be exercised not later than five (5) years from the date it is
         granted.



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6.4      Exercise of Options. Options granted under the Plan shall be
         exercisable at such times, and subject to such restrictions and
         conditions, as the Committee shall determine in its sole discretion,
         except that any outstanding Options at the time of a Change in Control,
         or a Participant's Death, Disability or Retirement will be immediately
         exercisable without regard to any vesting restrictions attached to such
         Options. A Participant electing to exercise an Option shall give
         written notice of such election to the Company in such form as the
         Committee may require.

6.5      Expiration of Options. Each Option belonging to a Participant shall
         terminate upon the first to occur of the events listed in this section.

(a)      Employees

                  (i)      The date for termination of such Option set forth in
                           the Option Agreement applicable to such Option.

                  (ii)     The expiration of ten (10) years from the date such
                           Option was granted, except as outlined in 6.3.

                  (iii)    The expiration of one year from the date of the
                           Optionee's termination of employment for reason other
                           than Retirement or termination for Cause, it being
                           understood that the exercise of an Incentive Stock
                           Option at any time after ninety (90) days from the
                           date of such termination of employment for reason
                           other than death or Disability shall convert to a
                           Nonqualified Stock Option.

                  (iv)     The expiration of one year from the later of the
                           Optionee's Retirement with the Company or termination
                           of service on the Board for a reason other than for
                           Cause.

                  (v)      Termination of employment for Cause.

(b)                        Non-Employee Directors

                  (i)      The date for termination of such Option set forth in
                           the Option Agreement applicable to such Option.

                  (ii)     The expiration of ten (10) years from the date such
                           Option was granted.

                  (iii)    The expiration of one year following the non-employee
                           Director's termination of service on the Board for a
                           reason other than for Cause.

                  (iv)     Termination of a non-employee Director's service on
                           the Board for Cause.

6.6      Payment. The Option Price upon exercise of any Option shall be payable
         to the Company in full in cash. The Committee also may, in its sole
         discretion, permit exercise (a) by tendering previously acquired Common
         Shares having an aggregate Fair Market Value at the time of exercise
         equal to the total Option Price (provided that the Common Shares which
         are



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<PAGE>   8

         tendered must have been held by the Participant or his or her
         Permissible Transferees (as defined in 6.7) for at least six (6) months
         prior to their tender to satisfy the Option Price), or (b) by any other
         means which the Committee determines, in its sole discretion, to both
         provide legal consideration for the Common Shares and to be consistent
         with the purposes of the Plan.

         As soon as practicable after receipt of a written notification of
         exercise and full payment for the Common Shares purchased, the Company
         shall deliver to the Participant, or his or her Permissible Transferee,
         the certificates (in the Participant's or such Permissible Transferee's
         name) representing such Common Shares.

6.7      Nontransferability of Options. No Option granted under the Plan shall
         be assignable or transferable by the Participant other than by will or
         the laws of descent and distribution. During the lifetime of a
         Participant, the Option shall be exercisable only by such Participant,
         except: (a) in the event of the disability of the Participant resulting
         in the appointment, by a court of competent jurisdiction, of a legal
         guardian or personal representative with appropriate authority, then by
         such person in the name of Participant; or (b) in the name of the
         Participant pursuant to a power of attorney, acceptable in form and
         substance to Capital Holdings, Inc.

         Notwithstanding the above, a Participant may, with respect to any
         Nonqualified Stock Option: (a) designate in writing a beneficiary to
         exercise his or her Option after the Participant's death; (b) transfer
         an Option to a revocable inter vivos trust as to which the Optionee is
         the settlor; and (c) transfer an Option for no consideration to any of
         the following Permissible Transferees (each a "Permissible
         Transferee"): (i) any member of the Immediate Family of the Participant
         to whom such Option was granted, (ii) any trust solely for the benefit
         of members of the Participant's Immediate Family, or (iii) any
         partnership whose only partners are members of the Participant's
         Immediate Family; and further provided that: (1) the Transferee shall
         remain subject to all of the terms and conditions applicable to such
         Options prior to and after such transfer; and (2) any such transfer
         shall be subject to and in accordance with the rules and regulations
         prescribed by the Committee. Any such transfer to a Permissible
         Transferee shall consist of one or more options covering a minimum of
         one hundred (100) option shares. An Option may not be re-transferred by
         a Permissible Transferee except by will or the laws of descent and
         distribution and then only to another Permissible Transferee. In the
         case of (b) and (c), the Option shall only be exercisable by the
         trustee or Permissible Transferee, as applicable. For the purposes
         hereof, "Immediate Family" means, with respect to a particular
         Participant, such Participant's child, stepchild, grandchild, parent,
         stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
         son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and
         shall include adoptive relationships.

6.8      Certain Additional Provisions for Incentive Stock Options.

         (a)      The aggregate Fair Market Value (determined at the time the
                  Option is granted) of the Common Shares with respect to which
                  ISOs are exercisable for the first time by any Participant
                  during any calendar year shall not exceed $100,000.

         (b)      ISOs may be granted only to persons who are employees of the
                  Company at the time of grant.



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<PAGE>   9


         (c)      No ISO may be exercised after the expiration of ten years from
                  the date such ISO was granted; provided, however, that if the
                  ISO is granted to a Participant who, together with Persons
                  whose Common Share ownership is attributed to the Participant
                  pursuant to Section 424(d) of the Code, owns shares possessing
                  more than 10% of the total combined voting power of all
                  classes of the Company's or any of its Subsidiaries' capital
                  shares, the ISO may not be exercised after the expiration of
                  five years from the date that it was granted.


                                   SECTION VII
                             RESTRICTED STOCK AWARD


7.1      Award of Restricted Stock. Restricted Stock may be granted to
         Participants, subject to the provisions of the Plan, at any time and
         from time to time, as determined in the sole discretion of the
         Committee. The Committee shall in its sole discretion, determine the
         number of shares of Restricted Stock granted to each Participant and
         the terms and conditions of such grant.

         Each Restricted Stock Award under the Plan shall be evidenced by a
         stock certificate of the Company, registered in the name of the
         Participant, accompanied by an agreement in such form as the Committee
         shall prescribe from time to time. The Restricted Stock Awards shall
         comply with such other terms and conditions not inconsistent with the
         terms of this Plan as the Committee, in its discretion, shall
         establish.

7.2      Stock Legends; Prohibition on Disposition. Certificates for shares of
         Restricted Stock shall bear an appropriate legend referring to the
         restrictions to which they are subject, and any attempt to dispose of
         any such shares of stock in contravention of such restrictions shall be
         null and void and without effect. The certificates representing shares
         of Restricted Stock shall be held by the Company until the restrictions
         are satisfied.

7.3      Termination of Service. The Committee shall determine the extent to
         which the restrictions on any Restricted Stock Award shall lapse upon
         the termination of the Participant's service to the Company and its
         subsidiaries, due to death, Disability, Retirement or for any other
         reason. If the restrictions on all or any portion of a Restricted Stock
         Award shall not lapse, the Participant, or in the event of his death,
         his personal representative, shall deliver to the Secretary of the
         Company such instruments of transfer, if any, as may reasonably be
         required to transfer the shares back to the Company.

7.4      Change in Control. Upon the occurrence of a Change in Control of the
         Company, as determined in Section 2.5 of this Plan, all restrictions
         then outstanding with respect to shares of Restricted Stock shall
         automatically expire and be of no further force and effect and all
         certificates representing such shares of Restricted Stock shall be
         delivered to the Participant.

7.5      Effect of Attempted Transfer. No benefit payable or interest in any
         Restricted Stock Award shall be subject in any manner to anticipation,
         alienation, sale, transfer, assignment, pledge, encumbrance or charge
         and any such attempted action shall be void and no such interest in any
         Restricted Stock Award shall be in any manner liable for or subject to
         debts, contracts, liabilities, engagements or torts of any Participant
         or his beneficiary. If any Participant or beneficiary shall become
         bankrupt



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<PAGE>   10


         or shall attempt to anticipate, alienate, sell, transfer, assign,
         pledge, encumber or charge any benefit payable under or interest in any
         Restricted Stock Award, then the Committee, in its discretion, may hold
         or apply such benefit or interest or any part thereof to or for the
         benefit of such Participant or his beneficiary, his spouse, children,
         or other dependents, in any such manner and such proportions as the
         Committee may consider proper.

7.6      Dividends. Dividends, other than stock dividends, paid on Restricted
         Stock, shall be either paid at the dividend payment date in cash, in
         shares of unrestricted stock having a Fair Market Value equal to the
         amount of such dividends, or the amount or value thereof automatically
         reinvested in additional Restricted Stock or other investment vehicles,
         as the Committee shall determine in its sole discretion. Stock
         distributed in connection with a stock split or stock dividend, and
         other property distributed as a dividend, shall be subject to
         restrictions and a risk of forfeiture to the same extent as the
         Restricted Stock with respect to which such stock or other property has
         been distributed, unless otherwise determined by the Committee.

7.7      Rights as a Stockholder. A Participant shall have the right to receive
         dividends, as described in Section 7.6, on Common Shares subject to the
         Restricted Stock Award during the applicable restricted period, to vote
         the Common Shares subject to the Award and to enjoy all other
         stockholder rights, except that the employee shall not be entitled to
         delivery of the stock certificate until the applicable Restricted
         Period shall have lapsed (if at all).

                                  SECTION VIII
                                  STOCK AWARDS


8.1      Stock Awards. The Committee may, at any time and from time to time,
         designate an Award of Common Shares to any Participant, which is
         subject to one or more conditions established by the Committee, in its
         sole discretion. If the Award is subject to the achievement of certain
         performance objectives (as that term is used for purposes of Code
         Section 162(m)), then the performance objectives shall be determined by
         the Committee at their full discretion.

8.2      Effect of Change in Control. The effect of a Change in Control upon an
         Award of Common Shares subject to this Section VIII shall be determined
         by the Committee at such time as the Committee establishes the terms
         and conditions that will apply to an Award of Common Shares.


                                   SECTION IX
         PAYMENT OF STOCK OR STOCK OPTIONS IN LIEU OF CASH COMPENSATION


The Committee may, at any time and from time to time, at the request of a
Participant, designate that a portion of a Participant's compensation otherwise
payable in cash be payable in Common Shares or as Stock Options. The Committee,
as applicable, shall have the sole discretion to determine the terms and
conditions under which such Common Shares or Stock Options shall be issued to
eligible employees or non-employee directors.



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<PAGE>   11


                                    SECTION X
                        NO RIGHT TO CONTINUED EMPLOYMENT


Participation in the Plan shall confer no rights to continued employment with
the Company, nor shall it restrict the rights of the Company to terminate a
Participant's employment relationship at any time for Cause or without Cause.


                                   SECTION XI
                                WITHHOLDING TAXES


As a condition of delivery of cash or Common Shares upon exercise of an Option,
the issuance of Common Shares or the grant of Options in lieu of cash
compensation, or the payment of a Performance Award, the Company shall require
that the Participant and/or his or her permitted transferees (without regard to
whether the Participant has transferred the Award in accordance with the Plan)
satisfy federal, state and local tax withholding requirements as follows:

         (a)      Cash Remittance. Whenever Common Shares are to be issued upon
                  the exercise of an Option or payment of Award, the Participant
                  and/or his or her permitted transferees shall remit to the
                  Company in cash an amount sufficient to satisfy federal, state
                  and local withholding tax requirements, if any, attributable
                  to such exercise or payment, prior to the delivery of any
                  certificate or certificates for such shares. In addition, the
                  Company shall have the right to withhold from any cash payment
                  required to be made pursuant thereto an amount sufficient to
                  satisfy the federal, state and local withholding tax
                  requirements.

         (b)      Share Withholding or Remittance. In lieu of the remittance
                  required by Section X(a) hereof a Participant who is granted
                  an Award may, to the extent approved by the Committee,
                  irrevocably elect by written notice to the Company at the
                  office of the Company designated for that purpose, to (i) have
                  the Company withhold Common Shares from any Award hereunder,
                  or (ii) deliver other previously owned Common Shares, the Fair
                  Market Value of which as of the date on which any such tax is
                  determined shall be equal to, the required tax withholding
                  amount, if any, rounded down to the nearest whole share
                  attributable to such exercise, occurrence or grant; provided,
                  however, that no election to have Common Shares withheld from
                  any Award shall be in excess of the minimum statutory
                  withholding tax or shall be effective with respect to an Award
                  which was transferred by such Participant to a Permitted
                  Transferee or otherwise.


                                   SECTION XII
                      AMENDMENT OR TERMINATION OF THE PLAN


12.1     Amendment. The Board or Committee may alter, amend or suspend the Plan
         at any time or alter and amend Awards granted hereunder; provided,
         however, that no such amendment may, without the consent of any
         Participant to whom an Option shall theretofore have been granted or to
         whom a Restricted Stock Award shall theretofore have been issued,
         adversely affect the right of such Participant under such Award.



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<PAGE>   12

12.2     Termination. The Plan shall terminate ten years from the Effective Date
         of the Plan; provided, however, that the Plan shall be subject to
         termination prior to such date on the date set forth in a resolution of
         the Board terminating the Plan. No termination of the Plan shall
         materially alter or impair the right of any Participant to receive
         Awards previously granted hereunder without such Participant's consent.
         In the event of a termination of the Plan, all Options granted
         hereunder shall continue to be valid and binding obligations of the
         Company going forward on the same terms and conditions as set forth
         herein and in the applicable Option Agreements.

12.3     Change in Control. 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 Awards, if applicable, that were
         granted hereunder and that are outstanding on the date of such event
         shall, on such terms as may be approved by the Board or the Committee
         prior to such event, be assumed by the surviving or continuing
         corporation or canceled in exchange for property (including cash) in
         amounts determined by the Board or the Committee.



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