VARLEN CORPORATION
                1989 INCENTIVE STOCK OPTION PLAN
                (as amended on November 20, 1998)

                            ARTICLE I
                             PURPOSE

          SECTION 1:  Statement of Policy.  The Board of
Directors of VARLEN CORPORATION believes that the maximum
advantage to the Corporation can be secured by establishing as
close an identity as is feasible between the interests of the
Corporation and its Subsidiaries, and those of its or their
respective employees. The Board believes that it would be in the
best interests of the Corporation to adopt a 1989 Incentive Stock
Option Plan which will provide for the granting of both Incentive
Stock Options (as defined in Section 2 of this Plan) and Non-
Qualified Stock Options (as defined in Section 2 of this Plan)
and which will serve the function of providing a closer
identification of certain employees with the Corporation.
Furthermore it will serve to retain these employees in the
service of the Corporation or its Subsidiaries and to induce new
executives and other key employees to become associated with the
Corporation or its Subsidiaries. It is the intent of the Board
that the grant of such Incentive Stock Options and Non-Qualified
Stock Options shall be in addition to any other compensation
granted. It is for the accomplishment of these several objectives
that this Plan is formulated and adopted.
         
          SECTION 2: Definitions.  When used in this Plan, unless
the context otherwise requires:

          (a)  Affiliate.  "Affiliate" shall mean any
     individual, corporation, partnership, association, joint-
     stock company trust, unincorporated association or other
     entity (other than the Corporation) that directly, or
     indirectly through one or more intermediaries, controls, or
     is controlled by, or is under common control with the
     Corporation.

          (b)  Code.  "Code" shall mean the United States
     Internal Revenue Code of 1986, as amended from time to time,
     or any statutes succeeding thereto.

          (c)  Committee.  "Committee" shall mean the
     Compensation Committee hereinafter described in Section 3 of
     this Plan.

          (d)  Common Stock.  "Common Stock" and "Stock" shall
     each mean the Common Stock of the Corporation of the par
     value of $.10 per share.

          (e)  Corporation.  "Corporation" shall mean VARLEN
     CORPORATION, a Delaware corporation.

          (f)  Directors.  "Directors" and "Board of Directors"
     shall each mean the Board of Directors if the Corporation as
     constituted from time to time.

          (g)  Disinterested Person.  "Disinterested Person"
     shall mean an individual who is not at the time he exercises
     discretion in administering this Plan eligible and has not
     at any time within one (1) year prior thereto been eligible
     for selection as a person to whom stock options may be
     granted pursuant to this Plan or to whom stock may be
     allocated or to whom stock options or stock appreciation
     rights may be granted pursuant to any other plan of the
     Corporation or any of its Affiliates entitling the
     participants therein to acquire stock, stock options or
     stock appreciation rights of the Corporation or any of its
     Affiliates.

          (h)  Exchange Act.  "Exchange Act" shall mean the
     Securities Exchange Act of 1934, as amended, and the rules
     and regulations promulgated pursuant thereto.

          (i)  Incentive Stock Options.  "Incentive Stock
     Options" shall mean options which meet the requirements for
     Incentive Stock Options in Section 422A of the Code.

          (j)  Non-Qualified Stock Options.  "Non-Qualified Stock
     Options" shall mean stock options which do not meet the
     requirements for Incentive Stock Options, as defined in
     Paragraph (i) of this Section 2, and stock options which do
     meet such requirements but which the Committee designates as
     Non-Qualified Stock Options.

          (k)  Option Agreement.  "Option Agreement" shall mean
     each Agreement referred to in Section 12 of this Plan
     between the Corporation and any person to whom an option is
     granted.

          (l)  Optionees.  "Optionees" shall mean those persons
     who receive Options under this Plan.

          (m)  Options.  "Options" shall mean options granted
     under this Plan.

          (n)  Plan.  "Plan" shall mean this 1989 Incentive
     Stock Option Plan adopted by the Board of Directors, as such
     Plan from time to time may be amended as herein provided.

          (o)  Securities Act.  "Securities Act" shall mean the
     Securities Act of 1933, as amended, and the rules and
     regulations promulgated pursuant thereto.

          (p) Subsidiary. "Subsidiary" shall mean any
     corporation (other than the Corporation) in an unbroken
     chain of corporations beginning with the Corporation if each
     of the corporations other than the last corporation in the
     unbroken chain owns stock possessing fifty percent (50%) or
     more of the total combined voting power of all classes of
     stock in one of the other corporations in such chain.

                           ARTICLE II
                         ADMINISTRATION

          SECTION 3: Committee.

          (a)  This Plan shall be administered by a Compensation
Committee, or any other successor committee appointed by the
Board of Directors, which shall consist of such number (not less
than three) of directors as the Board of Directors shall
determine, all of whom shall be Disinterested Persons. The
Committee shall have plenary authority in its discretion, but
subject to the express provisions of this Plan, (i) to determine
the key employees to whom and the time or times at which Options
shall be granted, the number of shares to be covered by each
Option, and whether an Option shall be an Incentive Stock Option
or a Non-Qualified Stock Option; (ii) to interpret this Plan and
to prescribe, amend and rescind the rules and regulations
relating to it; (iii) to determine the terms and provisions of
the respective Option Agreements (which need not be identical),
including without limitation such terms and provisions as may be
requisite in the judgment of the Committee (A) to cause the grant
of the Options, and the issuance of Common Stock upon exercise of
the Options, pursuant to this Plan to comply with the Securities
Act and the applicable rules and regulations thereunder,
including, without limitation, to cause this Plan and the Options
and Common Stock to be registered on Form S-8 promulgated
thereunder, or any other appropriate form, (B) to provide for the
reimbursement of the Corporation for taxes paid or advanced in
respect of the grant to employees of Options or the issuance of
Common Stock upon exercise of Options under this Plan and (C) to
set forth the form of restrictive legends, if any, to be placed
on certificates representing shares of Common Stock to be issued
pursuant to Options relating to obligations of the holders under,
or to provide notice of the applicability to such Common Stock
of, the Federal and State securities laws and the Code; and (iv)
to make all other determinations deemed necessary or advisable
for the administration of this Plan.

          (b)  Paragraph (a) of this Section 3 notwithstanding,
the authority vested in the Committee to administer this Plan may
be exercised by the Board of Directors as a whole acting in
accordance with the By-laws of the Corporation if, and only if,
at the time such authority is exercised: (i) all members of the
Board of Directors are Disinterested Persons, (ii) a majority of
the members of the Board of Directors and a majority of directors
acting on Plan matters are Disinterested Persons or (iii) the
Corporation is not the issuer of any "equity security" (as such
term is defined in the Exchange Act) subject to the registration
requirements of Section 12 of the Exchange Act.

          SECTION 4:  Vacancies.  If a member of the Committee
for any reason shall cease to serve, the vacancy may be filled by
the Board of Directors.

          SECTION 5:  Removal.  Any member of the Committee may
be removed at any time, with or without cause, by the Board of
Directors.

          SECTION 6:  Chairman.  The Board of Directors or the
Committee may select one of the members of the Committee as its
Chairman.

          SECTION 7:  Meetings.  The Committee shall hold its
meetings at such times and places as it shall deem advisable. A
majority of its members shall constitute a quorum. All
determinations of the Committee shall be made by a majority of
its members. Any decision or determination reduced to writing and
signed by all the members of the Committee shall be fully as
effective as if it had been made by the affirmative vote of a
majority of its members at a meeting duly called and held. The
Committee may appoint a Secretary, shall keep minutes of its
meetings and shall make such rules and regulations for the
conduct of its business as it shall deem advisable.

                           ARTICLE III
                             OPTIONS

          SECTION 8:  Shares Available.  The Committee may, but
shall not be required to, allocate in accordance with this Plan
both Incentive Stock Options and Non-Qualified Stock Options to
purchase not more than, in the aggregate, 200,000 shares of the
Common Stock. Such shares may be authorized and unissued shares
or issued shares held in the Corporation's treasury. Such 200,000
shares shall be computed prior to any adjustment resulting from
stock dividends, split-ups, reorganization, or other
substitutions of securities for the present Common Stock of the
Corporation and upon the occurrence of any of the foregoing, the
aggregate number of shares available for allocation in accordance
with this Plan shall be appropriately and equitably adjusted in a
manner similar to that set forth in Section 25 hereof to make
available for issuance under this Plan the number of shares of
Common Stock which would have been available had allocation of an
aggregate of 200,000 shares been made immediately prior to such
event.

          SECTION 9:  Time for Granting of Options.  Options may
be granted by the Committee pursuant to this Plan from time to
time for a period beginning May 1, 1989 and ending April 30,
1999. Nothing herein shall be construed to prohibit the granting
of Options at different times to the same persons.

          SECTION 10:  Persons Eligible.  Persons eligible to
receive Options shall be such key employees (which term as used
herein includes, without limitation, officers) of the Corporation
and its Subsidiaries as the Committee in its sole discretion may
select. However, a director of the Corporation or of a Subsidiary
who is not also an employee of the Corporation or one of its
Subsidiaries shall not be eligible to receive Options.

          SECTION 11:  Number of Shares to be Optioned and Nature
of Option.  Subject to Section 10 of this Plan, the total number
of shares to be optioned to any eligible person and whether an
Option shall be an Incentive Stock Option or a Non-Qualified
Stock Option shall be determined by the Committee in its sole
discretion.

          SECTION 12:  Form of Option Agreements.  An Option
Agreement signed by the President, the Senior Vice President or a
Vice President of the Corporation, and attested by the Treasurer
or Assistant Treasurer or Secretary or Assistant Secretary of the
Corporation, shall be issued to each person to whom an Option is
granted. The form and provisions of each Option Agreement shall
be determined by the Committee in accordance with the terms of
this Plan. If any employee does not execute an Option Agreement
in the form prescribed by the Committee within the later of (a)
thirty (30) days from the grant thereof or (b) ten (10) days
after the receipt from the Corporation of an Option Agreement for
execution, the action of the Committee with respect to the Option
granted to such employee shall be of no further force or effect.

          SECTION 13:  Duration of Options.  The duration of each
Option shall be for such time as the Committee, in its sole
discretion, may fix upon the occasion of granting an Option;
provided, however, an Option, whether an Incentive Stock Option
or a Non-Qualified Stock Option, by its terms will not under any
circumstances be exercisable more than ten (10) years (or such
shorter period, if any, as may be necessary to comply with the
requirements of state securities laws) from the date such Option
is granted, except that, to the extent provided in Section 18 of
this Plan, a Non-Qualified Stock Option shall be exercisable for
a maximum of one (1) year following the death of an Optionee, or
the date on which he is determined to have a permanent physical
or mental disability, regardless of its original term.

          SECTION 14:  Assignability of Options.  Options and all
rights thereunder shall by their terms be non-assignable and non-
transferable by the holder of the option otherwise than by will
or the laws of descent and distribution, and shall be exercisable
during the lifetime of the holder only by the holder or his
guardian or legal representative. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of any
Option contrary to the provisions of this Plan and any levy or
any other attachment or similar process upon an Option shall be
null and void and without effect, and the Board of Directors may,
in its discretion, upon the happening of any such event,
terminate the Option forthwith.  Nothing contained herein shall
be deemed inconsistent with the provisions hereinafter set forth
pertaining to the exercise of an Option by the estate of a
deceased holder.

          SECTION 15:  Option Price.  The option price of the
Stock subject to an Incentive Stock Option shall not be less than
the fair market value of the Stock at the time the Incentive
Stock Option is granted. The option price of the Stock subject to
a Non-Qualified Stock Option shall not be less than fifty percent
(50%) of the fair market value of the Stock at the time such Non-
Qualified Stock Option is granted; provided, however, that if
such option price is less than the fair market value of the Stock
at the time such Non-Qualified Stock Option is granted, the
option price shall not be less than the book value of the Stock
at the time such Non-Qualified Stock Option is granted as
determined by the Committee.  For the purposes of this Section
15, the "fair market value" of the Stock shall be its fair market
value determined as of the business day prior to the date of
grant of the Option by the Committee in its good faith
discretion.

                           ARTICLE IV
                       EXERCISE OF OPTIONS

          SECTION 16: Terms of Exercise.

         (a)  Each Option shall be exercisable in whole or in
part as set forth in the Option Agreement; provided, however,
that no Option shall be exercised as to less than twenty-five
(25) shares of Common Stock at any one time, unless the balance
subject thereto at the time is less than twenty-five (25) shares
of Common Stock.

         (b)  Although each Option Agreement may contain
provisions providing for the exercisability of various portions
of the Option granted thereunder at different time periods, each
Option shall be exercisable prior to its expiration in accordance
with the provisions of this Plan to the full extent thereof
simultaneously with or at any time after:

     (i)  the sale by the Corporation of substantially all of its
assets;

     (ii)  the occurrence of one of the following events if,
     immediately following such event, a majority of the members
     of the Board of Directors consists of persons who were not
     members of the Board of Directors immediately prior to the
     date of such event:

          (A) the sale of fifty percent (50%) or more of the
     outstanding shares of Common Stock of the Corporation in a
     single transaction,

          (B) the consummation of a tender offer (by a party
     other than the Corporation) for more than fifty percent
     (50%) of the outstanding shares of Common Stock of the
     Corporation, or

          (C)  the consummation of a merger or consolidation involving the
              Corporation; or

     (iii)  an election of new members of the Board of Directors
     if immediately following such election a majority of the
     members of the Board of Directors consists of persons who
     were not nominated by management to stand for election as
     directors in such election.

          (c)  Notwithstanding the provisions of Section 16(b) of
this Plan, in the event of a merger or consolidation in which the
Corporation is a party but not the surviving corporation, at the
discretion of the Committee, each Option shall either become
fully exercisable with respect to all shares of Common Stock
subject to such Option immediately prior to (but subject to) the
consummation of the merger or consolidation, and shall remain so
until the expiration of the Option or as otherwise provided in
Section 18 of this Plan, or the agreement with respect to such
merger or consolidation shall include a provision that would
automatically amend such Option to enable the Optionee, had such
Option been exercised in full immediately prior to the
effectiveness of such merger or consolidation, to acquire the
same merger consideration in respect of the shares of Common
Stock issued upon exercise of the Option as a holder of Common
Stock of the Corporation immediately prior to such merger or
consolidation would have been entitled to receive.


          SECTION 17:  Termination of Employment.  In the event
of the termination for any reason of the employment of an
Optionee (other than as provided in Section 18 of this Plan), all
Options granted to such Optionee which have not been exercised by
him prior to the time of such termination shall be then
terminated and thereafter may not be exercised.  Options granted
under this Plan, however, shall not be affected by any change of
employment so long as the holder of the Option continues to be an
employee of the Corporation or a Subsidiary of the Corporation.

          SECTION 18:  Death, Disability, Retirement or
Termination of Employment with Consent.  As used herein, an
Optionee's employment with the Corporation shall be deemed to
have been terminated "with consent" if the Corporation or a
Subsidiary has provided its express written consent to the
exercise of the Optionee's options following such termination.
Notwithstanding the provisions of Section 17 of this Plan,
Options granted to an Optionee may be exercised as follows:

          (a)In the event of the termination of the optionee's
employment with consent, then such Optionee's Option may be
exercised, regardless of tax consequences, to the extent then
exercisable as provided in the Option Agreement applicable to
such Option (or, if so determined by the Committee in its sole
discretion, up to the full extent thereof) at any time (i) within
90 days following such termination if exercise by such Optionee
during such period would not violate Section 16(b) of the
Exchange Act, or (ii) within 190 days following such termination
if exercise by such Optionee within 90 days following such
termination would violate Section 16(b) of the Exchange Act, but
in any event not thereafter.

          (b)  In the event of the termination of the Optionee's
employment resulting from the Optionee's retirement under one or
more of the Corporation's retirement plans including, without
limitation, any early retirement permitted under such plans, then
such Optionee's Options may be exercised, regardless of tax
consequences, to the full extent thereof at any time (i) within
90 days following such termination if exercise by such Optionee
during such period would not violate Section 16(b) of the
Exchange Act, or (ii) within 190 days following such termination
if exercise by such Optionee within 90 days following such
termination would violate Section 16(b) of the Exchange Act, but
in any event not thereafter, or (iii) at such later date as
determined in the discretion of the Committee.

          (c)  In the event of the death or the permanent
physical or mental disability (as such disability shall be
determined by a physician selected by the Corporation) of the
Optionee either (i) while employed by the Corporation or a
Subsidiary, or (ii) (with respect to a Non-Qualified Stock Option
only) while eligible to exercise his Option pursuant to Section
18(a) or (b) of this Plan following the termination of his
employment, then such Optionee's Option may be exercised, to the
full extent thereof, at any time within one (1) year following
the Optionee's death or such determination of physical or mental
disability, by the Optionee, the executors or administrators of
the Optionee or by any person who shall have acquired the Option
from the Optionee by bequest or inheritance.

          (d)  Notwithstanding the foregoing provisions, in no
event may an Option be exercised subsequent to the expiration of
its term, except that a Non-Qualified Stock Option shall be
exercisable, to the extent provided in Section 18(c) of this
Plan, for a maximum of one (1) year following the death of an
Optionee, or the date on which he is determined to have a
permanent physical or mental disability, regardless of its
original term.

          SECTION 19:  How Exercisable.

          (a)  An Option shall be exercisable by delivery of a
duly signed notice in writing to such effect and the full
purchase price of the Stock purchased pursuant to the exercise of
the Option to the Treasurer of the Corporation or to any other
officer of the Corporation appointed by the Committee for the
purpose of receiving the same; provided, however, that no Option
issued pursuant to this Plan may be exercised at any time when
the Option or the granting or the exercise thereof violates any
law or governmental order or regulation. Delivery of the full
purchase price shall be satisfied either: (i) by payment in cash
of the full purchase price, (ii) by tender of such number of
shares of Common Stock owned either (x) by the Optionee prior to
exercise of the Option or (y) with the consent of the Committee,
by the Optionee as a result of the exercise of the Option, as is
equal in value (such value to be the fair market value of such
Stock, determined as of the business day prior to the date of
exercise of the Option by the Committee in its good faith
discretion) to the full purchase price or (iii) by delivery of
any combination of cash and such shares of Common Stock (valued
as set forth above) which, in the aggregate, is equal in value to
the full purchase price, subject to compliance with applicable
securities laws.

          (b) An Option shall also be exercisable by Optionees
(to the extent such exercise would not violate Section 16(b) of
the Exchange Act) by delivery of a duly signed notice in writing
to such effect (the "Exercise Notice") which shall include
irrevocable instructions to the Corporation to deliver the stock
certificates issuable in respect of such option exercise directly
to a broker named therein which has agreed to participate in a
"cashless" exercise on behalf of the Optionee. In connection
therewith, the Corporation shall acknowledge and, notwithstanding
the provisions of Section 20 hereof, forward a copy of the
Exercise Notice to such broker and the Corporation shall be
authorized and entitled to deliver such stock certificates
directly to such broker against receipt of the exercise price and
any withholding taxes due in respect of such option exercise. The
Committee shall have the right to adopt such rules and
regulations with respect to the provisions of this paragraph as
it deems appropriate.

         (c)  In addition, the Committee shall have the right to
require a cash payment upon the exercise of any option in
connection with any obligation of the Corporation or a Subsidiary
of the Corporation to withhold Federal, state or local taxes (a
"Withholding Obligation"). An Optionee may irrevocably elect (the
"Election"), subject to approval or disapproval by the Committee
or the Board of Directors and subject to the right of the
Committee or the Board of Directors to revoke its advance
approval, to satisfy any Withholding Obligation in connection
with the exercise of the option granted to him by tender of such
number of shares of the Corporation's Common Stock (valued as set
forth above) owned either (x) by such Optionee prior to exercise
of the Option or (y) with the consent of the Committee, by the
Optionee as a result of the exercise of the Option, or a
combination of such Common Stock (valued as set forth above) and
cash, which has a value equal to the full amount of the
Withholding Obligation, subject to compliance with applicable
securities law; provided, however, if required to permit
compliance with Section 16(b) of the Exchange Act, that (i) the
Election is made either (A) no later than six (6) months prior to
the date on which exercise of such Option becomes taxable to the
Optionee (the "Tax Recognition Date"), (B) during the ten-day
period beginning on the third business day following, and ending
on the twelfth business day following, the date of release for
publication of the Corporation's quarterly or annual summary
statements of sales and earnings, or (C) during such other period
as may be instead provided in Rule l6b-3(e)(3)(iii) promulgated
pursuant to the Exchange Act (or any successor rule) and (ii) the
Election shall not be available with respect to such Option to
any extent during the first six (6) months of the term thereof,
except in the event death or disability of the Optionee occurs
prior to the expiration of such six-month period. If the Tax
Recognition Date with respect to the exercise of a Non-Qualified
Stock Option will be a date other than the date on which the
Option is exercised, then (A) the Committee with the cooperation
of the Optionee shall estimate in good faith the amount of the
Withholding Obligation (the "Estimated Amount"), (B) the optionee
shall deliver (in conformity with any applicable Election) to the
Corporation, on the date the Optionee exercises the Option, cash,
such number of shares of Common Stock (valued as set forth above)
or such combination of cash and Common Stock (valued as set forth
above) as is equal in value to the Estimated Amount, (C) the
Committee shall notify the Optionee in writing, within fifteen
(15) days after the Tax Recognition Date with respect to the
exercise of the Option of the amount of income recognized by the
optionee and of the date which is the Tax Recognition Date, (D)
promptly after providing such notice, the Corporation shall
deliver to the Optionee (using the same method of payment as was
used with respect to payment of the Estimated Amount and in
conformity with any applicable Election) either (1) cash, shares
of the Corporation's Common Stock or a combination of cash and
shares of the Corporation's Common Stock as is equal in value to
the amount, if any, by which the Estimated Amount exceeds the
actual Withholding Obligation, or (2) written notice of the
amount, if any, by which such actual Withholding Obligation
exceeds the Estimated Amount, or (3) written notice that the
Estimated Amount and the amount of such actual Withholding
Obligation are equal, (E) the Optionee shall deliver (in
conformity with any applicable Election) to the Corporation
within fifteen (15) days after the date of the notice, if any,
described in the preceding clause (D) (2) above, cash, shares of
the Corporation's Common Stock or a combination of cash and
shares of such Common Stock as is equal in value to the excess
amount specified in such notice, and (F) the value of any shares
of the Corporation's Common Stock delivered by the Corporation or
the Optionee pursuant to the preceding clauses (D) or (E) shall
be the fair market value of such shares, determined, as of the
business day immediately prior to the Tax Recognition Date, by
the Committee in its good faith discretion.

          (d) Whenever all or any portion of (i) the purchase
price payable upon exercise of an Option or (ii) the Withholding
Obligation of the Corporation or a Subsidiary of the Corporation
is paid by the delivery of shares of the Corporation's Common
Stock, tender of such shares shall be accompanied by a duly
executed stock power and by payment of the requisite stock
transfer tax, if any.  The Committee may also require the
Optionee to make such representations as to his title, authority
to transfer such title and any other facts as it may deem
appropriate.
          
          SECTION 20:  Issuance of Shares.  Within a reasonable
time after the exercise of an Option in accordance with its
terms, the Corporation shall cause to be delivered to the
purchaser a certificate for the shares of Stock purchased
pursuant to the exercise of the Option.

          SECTION 21:  Stockholder Rights of Optionee.  No person
entitled to exercise any Option granted under this Plan shall
have any rights or privileges of a stockholder of the Corporation
in respect of any shares issuable upon exercise of such Option
until certificates representing such shares shall have been
issued and delivered.

          SECTION 22:  Termination of Options.  Any Option not
exercised within the period fixed for its exercise in Section 13
of this Plan and this Article IV shall terminate and become null
and void.

          SECTION 23:  Unexercised Options.  Stock covered by
Options which have terminated in accordance with the provision of
this Plan, to the extent to which such Options have not been
exercised, may be treated by the Committee as Stock which is
eligible for other and further granting of Options in accordance
with the terms of this Plan.

                            ARTICLE V
                   NOT AN EMPLOYMENT CONTRACT

          SECTION 24:  Not an Employment Contract.  Nothing in
this Plan or in any Option granted pursuant to this Plan shall
confer on an individual any right to continue in the employ of
the Corporation or any Subsidiary or interfere in any way with
the right of the Corporation or such Subsidiary at any time to
terminate or modify the terms or conditions of the employment of
the holder of the Option.

                           ARTICLE VI
                    RECAPITALIZATION, MERGER,
                CONSOLIDATION AND REORGANIZATION

          SECTION 25:  Change in Common Stock.

          (a)  Appropriate and equitable adjustment shall be
made in the number of shares of Common Stock subject to each
outstanding Option, or the option prices or both, in the event of
any changes in the outstanding Common Stock by reason of Stock
dividends, stock splits, recapitalizations, reorganizations,
mergers, consolidations, sales or exchanges of assets,
combinations or exchanges of shares or offerings of subscription
rights, it being the purpose of this provision to insure that an
Option shall be adjusted to give the Optionee, upon exercise of
his Option, rights equivalent to the rights of a person who had
held shares of Common Stock in the amount subject to the Option
at the time the Option is granted. In applying this provision, an
adjustment shall be made for any changes occurring after May 1,
1989, the effective date of this Plan.

          (b)  In the event of a change in the Common Stock of
the Corporation as presently constituted, which is limited to a
change of the par value status of any or all of its authorized
shares, the shares resulting from any such change shall be deemed
to be Common Stock or Stock within the meaning of this Plan.

          (c)  To the extent that the foregoing adjustments
relate to stock or securities of the Corporation, such
adjustments shall be made by the Committee, whose determination
in that respect shall be final, binding and conclusive.

          SECTION 26:  Dissolution or Liquidation.  A dissolution
or liquidation of the Corporation shall cause each outstanding
Option to terminate except as provided in any Option Agreement.

          SECTION 27:  Rights of Optionees and the Corporation.

          (a)  Except as hereinbefore expressly provided in this
Article VI, an Optionee shall have no rights by reason of any
subdivision or consolidation of shares of stock of any class or
the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class or by
reason of any dissolution, liquidation, merger, or consolidation
or spinoff of assets or stock of another corporation, and any
issue by the Corporation of shares of stock of any class or
securities convertible into shares of stock of any class shall
not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock
subject to any Option.

         (b)  The grant of an Option pursuant to this Plan shall
not affect in any way the right or power of the Corporation to
make adjustments, reclassifications, reorganizations or changes
in its capital or business structure or to merge or to
consolidate or to dissolve, liquidate or sell or transfer all or
any part of its business or assets.

         SECTION 28:  Compliance With Securities Act.  The
Corporation may postpone the issuance and delivery of shares upon
any exercise of any Option until (a) the admission of such shares
to listing on any stock exchange on which shares of the
Corporation of the same class are then listed and the completion
of such registration or other qualification of such shares under
any state or Federal law, rule or regulation as the Corporation
shall determine to be necessary or advisable, (b) insofar as any
local Blue Sky law might affect the issuance of such shares,
either the local Blue Sky Commission shall have ruled or counsel
to the Corporation shall have advised that the issue is not
subject to such local law or that such shares shall have been
qualified under such law, (c) counsel to the Corporation shall
have advised either that the issuance of such shares does not
require registration under any Federal securities act or that any
such registration as may be required shall be effective as of the
time of issuance of such shares, (d) the employee to whom the
Option is granted shall have represented and agreed in writing
that any shares purchased pursuant to the Option are being
purchased for investment and not with a view to the distribution
or resale thereof; provided, however, that an Optionee making
such representation and agreement may be released by the
Corporation at its discretion from such representation and
agreement upon the shares being registered or qualified in such
manner as may be legally required at any time, and (e) the
Committee shall have been advised by counsel that all applicable
legal requirements pertaining to the issuance of such shares,
including any requirements of the Securities Act, have been
complied with.  Any person exercising an option shall make such
representations and furnish such information as may be
appropriate to permit the Corporation, in the light of the then
existence or nonexistence of an effective Registration Statement
under the Securities Act, with respect to such shares, to issue
the shares in compliance with the provisions of that or any
comparable law.  The Corporation shall not have any liability
with respect to any Option the exercise of which is prevented by
the provisions of this Section 28.

                           ARTICLE VII
            AMENDMENT, TERMINATION AND INTERPRETATION

          SECTION 29:  Amendment and Termination.  This Plan
shall terminate on April 30, 1999. The Board of Directors or the
Committee may at any time prior to that date terminate or from
time to time amend this Plan and the terms and conditions thereof
as to Stock which is not then the subject matter of Options
granted pursuant to the terms of this Plan; and the Board of
Directors or the Committee, with the written consent of the
affected holders of any Options granted pursuant to this Plan,
may at any time terminate or from time to time amend this Plan
and the terms and conditions of this Plan as it regards any such
Options held by any such consenting Optionees; provided, however,
that if required by law or by the applicable provisions of the
securities exchange upon which the Common Stock is listed, such
amendments shall be conditioned upon obtaining the approval of
the stockholders of the Corporation.
          
          SECTION 30:  Interpretation:  A determination of the
Committee as to any question which may arise with respect to the
interpretation of the provisions of this Plan and of any Option
or Option Agreement shall be final.

          SECTION 31:  Rules and Regulations.  The Committee may
authorize and establish such rules, regulations and revisions
thereof not inconsistent with the provisions of this Plan as it
may determine advisable to make this Plan and the Options
effective and provide for their administration, and may take such
other actions with regard to this Plan and the Options as it
shall deem desirable to effect their purposes.

          SECTION 32:  Evidence of Each Option.  The Committee
may include in each agreement or document it may issue to the
holder of any Option, evidencing the existence of such Option
given or granted pursuant to the terms of this Plan, the text of
this Plan by reference thereto in such certificate or document;
and in such event, all the terms of this Plan as it may exist and
as it may be amended from time to time shall be deemed included
in such certificate or document with the same force and effect as
though this Plan were set forth in its entirety in such agreement
or document.

                          ARTICLE VIII
                          EFFECTIVENESS

          SECTION 33:  Effectiveness of Plan.  This Plan shall
become effective on May 1, 1989, subject, however, to approval by
the stockholders of the Corporation.

                           ARTICLE IX
                          MISCELLANEOUS

          SECTION 34:  Substituted Options.  Subject to the
limitation in Section 8 of this Plan on total shares available
for Options, Options to purchase shares of the Corporation's
Common Stock may be granted under this Plan on terms and
conditions which differ from or conflict with the terms and
conditions set forth herein, provided that such Options are
granted in substitution for outstanding options held by persons
who have become employees of the Corporation or any of its
Subsidiaries by reason of a corporate merger, consolidation,
acquisition of property or capital stock, separation,
reorganization or liquidation occurring after the date of
adoption of this Plan.

          Nothing contained in this Plan shall be construed to
limit the authority of the Corporation to exercise its corporate
rights and powers, including, but not by way of limitation, the
right of the Corporation to grant or assume options for proper
corporate purposes other than under this Plan with respect to any
employee or other person, firm, corporation or association.