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                                                                  EXHIBIT 10(EE)

                                                               1992 STOCK OPTION
                                                              AND INCENTIVE PLAN


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                              COLTEC INDUSTRIES INC
                      1992 STOCK OPTION AND INCENTIVE PLAN

1.       Purpose. The purpose of the Plan is to provide an additional incentive
         to officers and other eligible key employees, upon whom
         responsibilities for the successful operation, administration and
         management of Coltec Industries Inc (the "Corporation") rest and whose
         present or potential contributions are important to the continued
         success of the Corporation, and to enable the Corporation to attract
         and retain in its employ highly qualified persons for the successful
         conduct of its business. It is intended that this purpose will be
         effected through the granting of Incentive Stock Rights, Stock Options,
         Stock Appreciation Rights, Restricted Stock and Dividend Equivalents,
         as provided herein, and the making of loans to accomplish the purposes
         of the Plan.

2.       Definitions. For purposes of this Plan:

         a)       "Award" means an Incentive Stock Right, Stock Option, Stock
                  Appreciation Right, Restricted Stock grant and/or Dividend
                  Equivalent.

         b)       "Award Agreement" means an agreement granting an Award.

         c)       "Board of Directors" means the Board of the Directors of the
                  Corporation.

         d)       "Change in Control" means the occurrence of an event described
                  in Section 13(a) hereof.

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

         f)       "Committee" means the Stock Option and Compensation Committee
                  appointed by the Board of Directors to administer the Plan.

         g)       "Common Stock" means the Common Stock, par value $.01 per
                  share, of the Corporation.

         h)       "Corporation" means Coltec Industries Inc, a Pennsylvania
                  corporation.

         i)       "Dividend Equivalent" means the right to receive, on a current
                  or deferred basis, and subject to such conditions as may be
                  imposed by the Board of Directors, cash payments from the
                  Corporation equal to the amount which would have been received
                  had a person owned a specified number of shares of Common
                  Stock.

         j)       "Exercise Date" means the date upon which a Stock Option or
                  Stock Appreciation Right is exercised.

         k)       "Fair Market Value" means the fair market value of the Common
                  Stock as determined by the Committee in its sole discretion;
                  provided, however, that (A) if


Restated as of May 7, 1998                                                     1
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                  the Common Stock is admitted to trading on a national
                  securities exchange, Fair Market Value on any date shall be
                  the last sale price reported for the Common Stock on such
                  exchange on such date or on the last date preceding such date
                  on which a sale was reported; (B) if the Common Stock is
                  admitted to quotation on the National Association of
                  Securities Dealers Automated Quotation System ("NASDAQ") or
                  other comparable quotation system and has been designated as a
                  National market System ("NMS") security, Fair Market Value on
                  any date shall be the last sale price reported for the Common
                  Stock on such system on such date or, if no sale occurred on
                  such date, on the last day preceding such date on which a sale
                  was reported, or (C) if the Common Stock is admitted to
                  quotation on NASDAQ and has not been designated a NMS
                  security, Fair Market Value on any date shall be the average
                  of the highest bid and lowest asked prices of Common Stock on
                  such system on such date.

         l)       "Incentive Stock Option" means an option to acquire stock
                  within the meaning of Section 422 of the Code.

         m)       "Incentive Stock Right" means the right to receive, without
                  payment to the Corporation, shares of Common Stock, subject to
                  the terms, conditions and restrictions described in Section 8
                  hereof.

         n)       "Nonqualified Stock Option" means a Stock Option, which is not
                  an Incentive Stock Option.

         o)       "Public Offering" means the initial underwritten public
                  offering of Common Stock.

         p)       "Restricted Stock" means shares of Common Stock issued to a
                  participant, without payment to the Corporation, subject to
                  the terms, conditions and restrictions described in Section 10
                  hereof.

         q)       "Right" means a Stock Appreciation Right or an Incentive Stock
                  Right.

         r)       "Stock Appreciation Right" means a right to receive, without
                  payment to the Corporation, a number of shares of Common Stock
                  and/or cash, determined pursuant to a formula based upon the
                  difference between a price determined in accordance with
                  Section 9(b)(ii) and the Fair Market Value of a share of
                  Common Stock on the date of exercise of such Stock
                  Appreciation Right.

         s)       "Stock Option" means an Incentive Stock Option or Nonqualified
                  Stock Option providing the holder thereof with the right to
                  purchase Common Stock at a price to be determined in
                  accordance with Section 9(a)(i) of the Plan.

         t)       "Subsidiary" means any future or present corporation which
                  would be a "subsidiary corporation" of the Corporation as the
                  term is defined in Section 424 of the Code.


Restated as of May 7, 1998                                                     2
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3.       Duration of Plan. The Plan shall remain in effect until terminated by
         the Board of Directors and thereafter until all Incentive Stock Rights,
         Stock Options, Stock Appreciation Rights, Restricted Stock and Dividend
         Equivalents granted under the Plan are satisfied by the issuance of
         shares of Common Stock or the payment of cash or are terminated under
         the terms of the Plan or under the Award Agreements entered into in
         connection with the grant thereof.

4.       Shares of Stock Subject to the Plan. The number of shares of Common
         Stock under the Plan that may be issued pursuant to Incentive Stock
         Rights, Stock Options (including any Stock Options granted pursuant to
         Section 12(b) hereof), Stock Appreciation Rights and Restricted Stock
         grants shall not exceed, in the aggregate, 12,160,000 shares of the
         Common Stock. Such shares may be in whole or in part as the Board of
         Directors shall from time to time determine authorized and unissued
         shares or issued shares, which may have been reacquired by the
         Corporation. In no event shall the number of shares of Restricted Stock
         issued hereunder after May 6, 1998 be in excess of forty percent (40%)
         of any increase in the number of shares authorized to be issued under
         the plan above 7,360,000 shares. Any share subject to an Incentive
         Stock Right, Stock Option, Stock Appreciation Right or Restricted Stock
         grant which for any reason is forfeited due to expiration, cancellation
         or termination while unexercised may again be available for purposes of
         the Plan if the forfeiting participant received no benefit of ownership
         (not including voting rights) from such shares. The number of Dividend
         Equivalents which may be granted under the Plan will be as determined
         by the Committee in its discretion.

5.       Awards Under the Plan. Awards under the Plan may be of five types,
         namely, "Incentive Stock Rights", "Stock Options", "Stock Appreciation
         Rights", "Restricted Stock" and "Dividend Equivalents". Awards may be
         granted in conjunction with each other, at the same time or at
         different times, and may provide for the exercise of one to reduce
         proportionately or cancel the other.

6.       Eligible Employees. Awards may be granted only to salaried employees
         who are officers or who are employed in an executive, administrative,
         operational, sales or professional capacity by the Corporation or its
         Subsidiaries. Awards may be granted to a director of the Corporation
         provided that the director is also an officer or salaried employee of
         the Corporation or Subsidiary. In determining the employees to whom
         Awards shall be granted and the number of such Awards to be granted,
         the Committee shall take into account the duties of the employees,
         their present and potential contributions to the success of the
         Corporation, their other compensation provided pursuant to any plan or
         as salary or otherwise and such other factors as it shall deem relevant
         in connection with accomplishing the purposes of the Plan.

         Awards shall not be affected by any change of duties or positions so
         long as the holder continues to be an employee of the Corporation or of
         a Subsidiary. Nothing in the plan or in any Award or in any agreement
         with respect thereto entered into pursuant to the Plan shall confer
         upon any employee any right to continue in the


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         employ of the Corporation or of any of its Subsidiaries, or interfere
         in any way with the right of the Corporation or any such Subsidiary to
         terminate such employee's employment at any time.

7.       Administration of the Plan. Within the limitations described herein,
         the Committee shall administer the Plan, select the employees to whom
         Awards will be granted, determine the number of Awards to be granted to
         each such employee and interpret, construe and implement the provisions
         of the Plan. The Committee shall consist of no fewer than two members
         of the Board of Directors who shall serve at the pleasure of the Board
         of Directors. The Committee shall have authority to adopt rules and
         regulations for administering the Plan. Decisions of the Committee
         shall be binding on the Corporation and on all employees eligible to
         participate in the Plan. The Board of Directors may from time to time
         appoint members of the Committee in substitution for or in addition to
         members previously appointed and may fill vacancies, however caused, in
         the Committee. All determinations of the Committee at a meeting shall
         be made by a majority of the members in attendance. Any decision or
         determination reduced to writing and signed by all the members shall be
         fully as effective as if it had been made by a majority vote at a
         meeting duly called and held. No member of the Committee shall be
         personally liable for any action, determination or interpretation made
         in good faith with respect to the Plan, and all members of the
         Committee shall be fully indemnified by the Corporation with respect to
         any such action, determination or interpretation. No employee may be
         granted Stock Options or Stock Appreciation Rights under the Plan in
         any thirty-six month period beginning on or after January 1, 1994 with
         respect to a number of shares of Common Stock which is in excess of
         twenty-five percent (25%) of the total number of shares of Common Stock
         authorized to be issued pursuant to the Plan immediately following the
         date of the annual meeting of shareholders in 1994.

8.       Incentive Stock Rights. Incentive Stock Rights shall be evidenced by
         Incentive Stock Rights Agreements in such form and not inconsistent
         with the Plan as the Committee shall approve from time to time, which
         Award Agreements shall contain in substance the following terms and
         conditions:

         a)       Number of Shares, Incentive Period.

                  An Incentive Stock Rights Agreement shall specify the number
                  of shares of Common Stock to which it pertains and shall
                  specify that the holder is entitled to receive, without
                  payment to the Corporation, such shares of Common Stock in
                  consideration for services performed for the Corporation or
                  for its benefit by the person receiving the Right upon the
                  lapse of a specified period of time (the "Incentive Period")
                  and upon compliance with any other terms contained in such
                  Award Agreement.

         b)       Termination of Employment, Leave of Absence. The Incentive
                  Stock Rights Agreement shall contain such provisions
                  concerning termination of employment (by reason of death,
                  disability or otherwise) and leaves of absence as shall be


Restated as of May 7, 1998                                                     4
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                  determined by the Committee. Such provisions may include, but
                  are not limited to, granting the right to receive all or a
                  portion of the shares of Common Stock covered by the Incentive
                  Stock Rights, partial or complete acceleration of the time
                  periods in relation to which the right to receive shares is
                  granted, the waiver of forfeiture provisions for leaves of
                  absence and other periods when not employed by the Corporation
                  and the receipt of shares by personal representatives, heirs
                  or legatees.

         c)       Issuance of Shares. Upon the lapse of an Incentive Period, the
                  Corporation shall, without transfer or issue tax to the person
                  entitled to receive the shares of Common Stock, deliver to
                  such person a certificate or certificates for the number of
                  shares as to which such Incentive Period has lapsed.

9.       Stock Options and Stock Appreciation Rights.

         a)       Stock Options. Stock Options shall be evidenced by Stock
                  Option Agreements in such form and not inconsistent with the
                  Plan as the Committee shall approve from time to time, which
                  Award Agreements shall contain in substance the following
                  terms and conditions:

                  i.       Price. The purchase price per share of Common Stock
                           deliverable upon the exercise of a Stock Option shall
                           be the Fair Market Value of such Common Stock on the
                           date the Stock Option is granted, but in no event
                           less than the par value of such Common Stock (the
                           "Exercise Price").

                  ii.      Number of Shares, Exercise Period. The Stock Option
                           Agreement shall specify the number of shares of
                           Common Stock to which it pertains. The number of
                           shares subject to a Stock Option shall be reduced on
                           a share-for-share basis to the extent that shares
                           under such Stock Option are used to calculate the
                           shares of Common Stock or cash to be received by
                           exercise of a related Stock Appreciation Right, if
                           any. At the time a Stock Option is granted, the
                           Committee shall fix the terms and conditions upon
                           which Stock Options can be exercised, including
                           fixing the periods during which such Stock Option or
                           any portion thereof may be exercised, which period
                           shall not be more than 10 years nor less than one
                           year (such period referred to as the "Exercise
                           Period"). The Committee, in the Stock Option
                           Agreement or otherwise, may allow partial exercise
                           from time to time during the Exercise Period.

                  iii.     Method of Exercise, Medium and Time of Payment. An
                           Option shall be exercised by giving written notice of
                           such exercise to the Corporation. The purchase price
                           of shares of Common Stock purchased pursuant to a
                           Stock Option Agreement shall be paid for at the time
                           of purchase in full in cash or, in the discretion of
                           the Committee, in whole shares of Common Stock with a
                           Fair Market Value (as of the date immediately
                           preceding the Exercise Date) at least equal to the
                           purchase price (or in a combination of


Restated as of May 7, 1998                                                     5
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                           cash and whole shares of Common Stock). Such whole
                           shares of Common Stock may be previously owned shares
                           or shares, which would otherwise have been received
                           upon exercise of the Stock Option. In its discretion,
                           the Committee may also provide for a cashless
                           exercise procedure to exercise Stock Options (whereby
                           cash would be transmitted to the Corporation by a
                           broker or other entity). Upon receipt of payment, the
                           Corporation shall, without transfer or issue tax to
                           the optionee or other person entitled to exercise the
                           Stock Option, deliver to such person a certificate or
                           certificates for such shares.

                  iv.      Termination of Employment, Leave of Absence. Each
                           Stock Option Agreement shall contain such provisions
                           concerning termination of employment (by reason of
                           death, disability or otherwise) and leaves of absence
                           as shall be determined by the Committee. Such
                           provisions may include, but are not limited to,
                           granting the right to make a partial exercise of a
                           Stock Option, partial or complete acceleration of any
                           time periods in relation to which the exercisability
                           of a Stock Option is calculated, waiver of forfeiture
                           provisions for leaves of absence and other periods
                           when not employed by the Corporation and the
                           extension of any Exercise Periods to cover such
                           leaves of absence or periods when not employed by the
                           Corporation and exercise by personal representatives,
                           heirs or legatees.

                  v.       Incentive Stock Options. No optionee shall be granted
                           Incentive Stock Options hereunder that in the
                           aggregate with all other Incentive Stock Options
                           granted to such optionee (under all plans of the
                           Corporation or any of its Subsidiaries) entitle the
                           optionee to purchase in any year through the exercise
                           of those such options which first became exercisable
                           in such year (whether under their original terms or
                           as a result of the occurrence of Change in Control),
                           stock of the Corporation or any subsidiary of the
                           Corporation having in the aggregate a Fair Market
                           Value (determined in the case of each such option as
                           of the time such option was granted) in excess of
                           $100,000. The previous sentence shall not apply to
                           the extent the United States Internal Revenue Service
                           publicly issues a private ruling to the Corporation,
                           any optionee of the Corporation, or any legatee,
                           personal representative or distributee of an optionee
                           or states in proposed, temporary or final
                           regulations, provisions which allow that the exercise
                           of an optionee's Incentive Stock Options upon the
                           occurrence of a Change in Control do not violate
                           Section 422(d)(1) of the Code.

         b)       Stock Appreciation Rights. The Committee, in its discretion,
                  may grant Stock Appreciation Rights to an eligible employee
                  whether or not such employee is also granted Stock Options
                  under the Plan. Such Stock Appreciation Rights shall be
                  evidenced by stock Appreciation Right Agreements in such form
                  and not inconsistent with this Plan as the Committee shall
                  approve from time to time, which Award Agreements shall
                  contain in substance the following terms and conditions:


Restated as of May 7, 1998                                                     6
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                  i.       Exercise. A Stock Appreciation Right shall entitle a
                           holder thereof, to the extent he or she so designates
                           from time to time, to receive without payment to the
                           Corporation, a number of shares of Common Stock,
                           cash, or a combination of cash and shares as elected
                           by the Committee, as determined under subsection
                           (ii). Such shares and/or cash shall be issued or paid
                           in consideration of services performed for the
                           Corporation or for its benefit by the holder of such
                           Stock Appreciation Right. A holder wishing to
                           exercise a Stock Appreciation Right shall give
                           written notice of such exercise to the Corporation.
                           Upon receipt of such notice, the Corporation shall:
                           (a) without transfer or issue tax to such person,
                           deliver to the person exercising the Stock
                           Appreciation Right a certificate or certificates for
                           shares of Common Stock and/or (b) pay cash.

                  ii.      Number of Shares or Amount of Cash. The number of
                           shares of Common Stock which shall be issued pursuant
                           to the exercise of a Stock Appreciation Right shall
                           be determined by dividing,

                           1)       that portion, as elected by the holder of
                                    the Stock Appreciation Right, of the total
                                    number of shares in relation to which such
                                    Stock Appreciation Right was granted,
                                    multiplied by the amount (if any) by which
                                    the Fair Market Value of a share of Common
                                    Stock on the Exercise Date exceeds an amount
                                    equal to the Fair Market Value of a share of
                                    Common Stock on the date that such Stock
                                    Appreciation Right is granted, which may not
                                    be less than the par value of such Common
                                    Stock, determined by the Committee in
                                    connection with such grant, by

                           2)       the Fair Market Value of a share of Common
                                    Stock on the Exercise Date.

                                    In lieu of issuing shares of Common Stock on
                                    the exercise of a Stock Appreciation Right,
                                    the Committee may elect to pay the cash
                                    equivalent of the Fair Market Value on the
                                    Exercise Date of any or all the shares,
                                    which would otherwise be issuable. No
                                    fractional shares shall be issued under this
                                    subsection (ii); instead, a cash adjustment
                                    equal to the same fraction of the fair
                                    market value per share of Common Stock on
                                    the Exercise Date shall be made.

                  iii.     Additional Terms. At the time a Stock Appreciation
                           Right is granted, the Committee shall set the terms
                           and conditions upon which such Stock Appreciation
                           Right may be exercised and the number of shares of
                           Common Stock in relation to which such Stock
                           Appreciation Right is granted and may provide that
                           the Stock Appreciation Right is being granted in
                           connection with a related Stock Option. Each Stock
                           Appreciation Right Agreement shall contain such
                           provisions concerning


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                           termination of employment (by reason of death,
                           disability or otherwise) and leaves of absence as
                           shall be determined by the Committee. Such provisions
                           may include, but are not limited to, granting the
                           right to partially exercise a Stock Appreciation
                           Right, partial or complete acceleration of any time
                           periods in relation to which the exercisability of a
                           Stock Appreciation Right is calculated, waiver of
                           forfeiture provisions for leaves of absence and other
                           periods when not employed by the Corporation and the
                           extension of any period during which such Stock
                           Appreciation Right or any portion thereof may be
                           exercised to cover such leaves of absence or periods
                           when not employed by the Corporation and exercise by
                           personal representatives, heirs or legatees.

                  iv.      Stock Appreciation Rights Granted in Connection with
                           Stock Options. If the Committee has provided that a
                           Stock Appreciation Right has been granted in
                           connection with a Stock Option, the amounts
                           determined by the Committee as the purchase price per
                           share of Common Stock upon the exercise of a Stock
                           Option under Section 9(a)(i) and the amount
                           determined by the Committee under Section 9(b)(ii)(1)
                           shall be the same, the exercise of a Stock
                           Appreciation Right shall cancel the related Stock
                           Option to the extent of the number of shares as to
                           which such Stock Appreciation was exercised and the
                           exercise of a Stock Option shall cancel the related
                           Stock Appreciation Right to the extent of the number
                           of shares as to which such Stock Option was
                           exercised.

10.      Restricted Stock. Restricted Stock shall be evidenced by Restricted
         Stock Agreements in such form and not inconsistent with the Plan as the
         Committee shall approve from time to time, which Award Agreements shall
         contain in substance the following terms and conditions:

                  i.       Number of Shares, Restricted Period. A Restricted
                           Stock Agreement shall specify the number of shares of
                           Common Stock to which it pertains and shall specify
                           that the holder is entitled to receive, without
                           payment to the Corporation, such shares of Common
                           Stock in consideration for services performed for the
                           Corporation or for its benefit by the person
                           receiving the right upon (x) the achievement of
                           certain performance goals measuring performance over
                           a period of time of at least one year subsequent to
                           the date of such Restricted Stock Agreement, or (y)
                           the lapse of a specified period of time, which period
                           of time shall in no event be shorter than three years
                           (the "Restricted Period") and upon compliance with
                           any other terms contained in such Award Agreement.

                  ii.      Termination of Employment, Leave of Absence. The
                           Restricted Stock Agreement shall contain such
                           provisions concerning termination of employment (by
                           reason of death, disability or otherwise) and leaves
                           of absence as shall be determined by the Committee.
                           Such provisions may include, but are not limited to,
                           granting the right to receive all or a portion


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                           of the shares of Common Stock covered by the
                           Restricted Stock Agreement, partial or complete
                           acceleration of the time periods in relation to which
                           the right to receive shares is granted, the waiver of
                           forfeiture provisions for leaves of absence and other
                           periods when not employed by the Corporation and the
                           receipt of shares by personal representatives, heirs
                           or legatees.

                  iii.     Issuance of Shares. Upon the lapse of a Restricted
                           Period, the Corporation shall, without transfer or
                           issue tax to the person entitled to receive the
                           shares of Common Stock, deliver to such person a
                           certificate or certificates for the number of shares
                           as to which such Restricted Period has lapsed.

                  iv.      Dividends, Voting. The Restricted Stock Agreement
                           shall contain such provisions concerning dividends
                           and voting with respect to Restricted Stock as
                           determined by the Committee.

11.      Dividend Equivalents. The Committee, in its discretion, may grant to
         eligible employees Dividend Equivalents. Dividend Equivalents shall be
         evidenced by Dividend Equivalent Agreements in such form and not
         inconsistent with the Plan as the Committee shall approve from time to
         time, which agreements shall contain in substance the following terms
         and conditions:

                  i.       Number of Shares, Duration. A Dividend Equivalent
                           Agreement shall specify the number of shares of
                           Common Stock to which it relates and provide that the
                           holder of a Dividend Equivalent shall be entitled to
                           receive from the Corporation cash payments, either
                           current or deferred and subject to such conditions as
                           may be imposed, in the same amounts (or such lesser
                           fraction of such amounts as may be specifically set
                           forth therein) that the holder of record of such
                           number of shares of Common Stock would be entitled to
                           receive as cash dividends on such Common Stock unless
                           otherwise limited in the Dividend Equivalent
                           Agreement. The Dividend Equivalent Agreement shall
                           state the expiration date for such Dividend
                           Equivalents. The right to cash payment in respect of
                           a Dividend Equivalent shall apply to all dividends
                           the record date for which occurs at any time during
                           the period commencing on the date the Dividend
                           Equivalent is granted and ending on the date such
                           Dividend Equivalent expires or is terminated,
                           whichever occurs first.

                  ii.      Dividend Equivalents Granted in Conjunction with
                           Incentive Stock Rights, Stock Options or Stock
                           Appreciation Rights. The Committee may, in its
                           discretion, grant Dividend Equivalents in conjunction
                           with the grant of Incentive Stock Rights, Stock
                           Options or Stock Appreciation Rights. In such event,
                           the Dividend Equivalent Agreements entered into shall
                           provide that the holder thereof is entitled to
                           receive from the Corporation cash payments either
                           current or deferred in the same amounts (or such


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                           lesser fraction of such amounts as may be
                           specifically set forth in the Dividend Equivalent
                           Agreement) that the holder of record of a number of
                           shares of Common Stock equal to the number of shares
                           covered by such Stock Option or Right would be
                           entitled to receive as dividends on such Common Stock
                           unless otherwise limited in the Dividend Equivalent
                           Agreement. Such right to cash payment shall apply to,
                           and such Dividend Equivalents shall remain
                           outstanding in respect of all cash dividends, the
                           record date for which occurs at any time during the
                           period commencing on the date the related Stock
                           Option or Right is granted and ending on the date
                           that such Stock Option or Right is exercised, expires
                           or terminates, whichever occurs first.

                  iii.     Termination of Employment, Leaves of Absence. The
                           Dividend Equivalent Agreement shall contain such
                           provisions, concerning termination of employment (by
                           reason of death, disability or otherwise) and leaves
                           of absence as shall be determined by the Committee.

12.      Corporate Transactions.

         a)       Change in Shares of Common Stock. If the outstanding shares of
                  Common Stock of the Corporation are increased, decreased or
                  exchanged for different securities through reorganization,
                  merger, consolidation, recapitalization, reclassification,
                  stock split, stock dividend or similar capital adjustment, the
                  number of shares of Common Stock available under the Plan
                  shall be increased or decreased proportionately, as the case
                  may be, and the number of shares deliverable upon the exercise
                  thereafter, or in relation to which benefits are calculated,
                  of any Stock Option or Stock Appreciation Right or upon
                  distribution pursuant to Incentive Stock Rights or Restricted
                  Stock theretofore granted shall be increased or decreased
                  proportionately, as the case may be, without change in the
                  aggregate purchase price (where applicable) and the number of
                  shares in relation to which the amount of cash distributable
                  under Dividend Equivalents is calculated shall also be
                  increased or decreased proportionately.

         b)       Assumption of Stock Options. If the Corporation (or a direct
                  or indirect Subsidiary) acquires another corporation or merges
                  or engages in a similar transaction contemplated by Section
                  424 of the Code, the Corporation may assume stock options held
                  by employees of the other corporation in accordance with such
                  Section 424. Upon any such assumption, the Corporation may
                  grant Stock Options in a manner not inconsistent with the
                  Plan, provided that no Stock Option so granted shall be
                  granted to any person who is then a director or officer of the
                  Corporation.

13.      Change in Control.

         a)       Definition of Change in Control. For purposes of the Plan, a
                  "Change in Control of the Corporation" shall be deemed to have
                  occurred if:


Restated as of May 7, 1998                                                    10
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                  i.       any "person" (as defined in Sections 13(d) and 14(d)
                           of the Exchange Act), other than the Corporation, any
                           trustee or other fiduciary holding securities under
                           an employee benefit plan of the Corporation, or any
                           corporation owned, directly or indirectly, by the
                           shareholders of the Corporation in substantially the
                           same proportions as their ownership of stock of the
                           Corporation, acquires "beneficial ownership" (as
                           defined in Rule 13d-3 under the Exchange Act) of
                           securities representing more than 35% of the combined
                           voting power of the Company; or

                  ii.      during any period of two consecutive years,
                           individuals who at the beginning of such period
                           constitute the Board of Directors and any new
                           director (other than a director designated by a
                           person who has entered into an agreement with the
                           Corporation to effect a transaction described in
                           subsections 13(a)(i), 13(a)(iii) or 13(a)(iv)) whose
                           election by the Board of Directors or nomination for
                           election by the Corporation's shareholders was
                           approved by a vote of at least two-thirds (2/3) of
                           the directors then still in office who either were
                           directors at the beginning of the period or whose
                           election or nomination for election was previously so
                           approved, cease for any reason to constitute a
                           majority thereof; or

                  iii.     the shareholders of the Corporation approve a merger
                           other than (i) a merger which would result in the
                           voting securities of the Corporation outstanding
                           immediately prior thereto continuing to represent
                           (either by remaining outstanding or by being
                           converted into voting securities of the surviving
                           entity), in combination with ownership of any trustee
                           or other fiduciary holding securities under an
                           employee benefit plan of the Corporation, at least
                           67% of the combined voting power of the voting
                           securities of the Corporation or such surviving
                           entity outstanding immediately after such merger or
                           (ii) a merger effected to implement a
                           recapitalization of the Corporation (or similar
                           transaction) in which no person acquires more than
                           50% of the combined voting power of the Corporation's
                           then outstanding securities; or

                  iv.      the shareholders of the Corporation approve a plan of
                           complete liquidation of the Corporation or a sale of
                           substantially all of the Corporation's assets.

         b)       Effect of Change in Control Upon Awards. Upon a Change in
                  Control of the Corporation, the Committee, in order to protect
                  the holders of Awards granted under this Plan, in its sole
                  discretion may (i) accelerate any time periods relating to the
                  exercise or realization of such Awards so that such Awards may
                  be exercised or realized in full on or before a date fixed by
                  the Committee, (ii) provide for the purchase of such Awards
                  for an amount of cash equal to the amount which could have
                  been attained upon the exercise or realization of such Awards
                  had such Awards been currently exercisable (which in the event
                  of a Change in Control set forth in Section 13(a)(i) shall be
                  based upon the


Restated as of May 7, 1998                                                    11
<PAGE>

                  amount of cash and the Fair Market Value of other
                  consideration tendered for such outstanding shares), (iii)
                  make such adjustment to the rights then outstanding as the
                  Committee deems appropriate to reflect such transaction or
                  change or (iv) cause the Awards then outstanding to be
                  assumed, or new Awards substituted therefor, by the surviving
                  corporation in such change. The Committee may, in its
                  discretion, include such further provisions and limitations in
                  any Award Agreement as it may deem equitable and in the best
                  interests of the Corporation.

14.      Loans to Plan Participants. On such terms and conditions as shall be
         approved by the Committee, the Corporation or any Subsidiary may
         directly or indirectly lend money to any employee or other person to
         accomplish the purposes of this Plan, including to assist such person
         to acquire or carry shares of Common Stock acquired upon the exercise
         of Stock Options granted hereunder, and separately to lend money to any
         employee or other person to pay taxes with respect to any of the
         transactions contemplated by this Plan.

15.      General Restriction. Each Award shall be subject to the requirement,
         that, if at any time the Committee shall determine, in its discretion,
         that the listing, registration or qualification of the shares or other
         securities subject to such Award upon any securities exchange or under
         any state or Federal law, or the consent or approval of any government
         regulatory body, is necessary or desirable as a condition of, or in
         connection with, the granting thereof or the issue or purchase of
         shares or payments of any amounts thereunder, such Award may not be
         exercised in whole or in part and no amounts may be received thereunder
         or under such Dividend Equivalents unless such listing, registration,
         qualification, consent or approval shall have been effected or obtained
         free of any conditions not acceptable to the Committee.

16.      Rights as a Shareholder. The holder of an Award shall have no rights as
         a shareholder with respect to any shares covered thereof except as
         expressly contained or provided for in the Award Agreement or the Plan
         until the date of issuance of a stock certificate to him or her for any
         such shares issued pursuant to any Award. Except as otherwise expressly
         provided in the Plan or an Award Agreement, no adjustment shall be made
         for dividends or other rights for which the record date is prior to the
         date such stock certificate is issued.

17.      Non-Assignability of Awards. No Award shall be assignable or
         transferable by the recipient except by will or by the laws of descent
         and distribution. An Award shall be exercisable only by the recipient
         or his or her personal representatives, heirs or legatees.
         Notwithstanding the foregoing, the Committee in its discretion, after
         making suitable provision with the employee to provide for the payment
         of any required withholding upon the option's exercise, may authorize a
         recipient who is an employee of the Corporation or one of its
         Subsidiaries to transfer a Nonqualified Stock Option to any member of
         the employee's immediate family, to a trust established solely for the
         benefit of one or more members of the employee's immediate family or to
         a partnership of which the only individuals or entities who are


Restated as of May 7, 1998                                                    12
<PAGE>

         or could be partners are members of the employee's immediate family
         and/or a trust established solely for the benefit of one or more
         members of the employee's immediate family (collectively, `Permitted
         Transferee'). For this purpose, `immediate family' shall mean the
         employee's spouse, children, present or former stepchildren,
         grandchildren, present or former stepgrandchildren, parents, present or
         former stepparents, grandparents, siblings (including half- brothers
         and sisters), in-laws and relationships arising due to legal adoption.
         The Committee's authorization to allow such a transfer must be
         evidenced by the written Stock Option Agreement pursuant to which the
         Nonqualified Stock Option is awarded, or by a written amendment
         thereto. In the event of a transfer, the Permitted Transferee may
         exercise the Nonqualified Stock Option generally in accordance with the
         terms of this Plan and the Stock Option Agreement, but may not
         subsequently assign or transfer the Nonqualified Stock Option except by
         will or by the laws of descent and distribution. The foregoing sentence
         shall not be interpreted to prohibit a Permitted Transferee that is
         either a trust or partnership from modifying or expanding its
         beneficiaries or partners, respectively, provided that such
         beneficiaries or partners also independently would be considered
         Permitted Transferees.

         No Option shall be exercisable and no transfer of the shares of Common
         Stock underlying such Option (the "Underlying Shares") may be made to
         any Permitted Transferee; and any attempt to exercise any Option or to
         transfer any Underlying Shares to any Permitted Transferee shall be
         void and of no effect, unless and until (i) a registration statement
         under the Securities Act of 1933, as amended (the "Securities Act"),
         has been duly filed and declared effective pertaining to the Underlying
         Shares and the Underlying Shares have been duly qualified under
         applicable state securities or blue sky laws or (ii) the Board, in its
         sole discretion after securing the advice of counsel, determines, or
         the Permitted Transferee provides an opinion of counsel satisfactory to
         the Board, that such registration or qualification is not required as a
         result of the availability of an exemption from registration or
         qualification under such laws.

18.      Withholding Taxes. Whenever under the Plan shares are to be issued in
         satisfaction of Awards, the Corporation shall have the right to require
         the employee (or if the employee is not then living, the employee's
         estate) to remit to the Corporation an amount sufficient to satisfy
         Federal, state and local withholding tax requirements prior to the
         delivery of any certificate or certificates for such shares. Whenever
         under the Plan payments are to be made in cash, such payments shall
         include an amount sufficient to satisfy Federal, state and local
         withholding tax requirements.

19.      Amendment of the Plan. The Board of Directors may at any time and from
         time to time terminate, modify, or amend the Plan in any respect,
         except that no termination, modification or amendment shall be
         effective without shareholder approval if such approval is required to
         comply with Rule 16b-3 under the Exchange Act or to comply with any
         other law, regulation or stock exchange rule. The termination or any
         modification or amendment of the Plan shall not, without the consent of
         an employee, affect his or her rights under an Award previously granted
         to him or her. With the


Restated as of May 7, 1998                                                    13
<PAGE>

         consent of the employee affected, the Committee may amend outstanding
         Award Agreements in a manner not inconsistent with the Plan. The
         Committee may not, however, amend any outstanding Award Agreements to
         decrease the Exercise Price set forth in such Award Agreements.

20.      Effectiveness of the Plan. The Plan shall become effective immediately
         prior to the consummation of the Public Offering, subject to approval
         by the shareholders of the Corporation.

21.      Nonexclusively of the Plan. Neither the adoption of the Plan by the
         Board of Directors and the shareholders of the Corporation nor any
         provision of the Plan shall be construed as creating any limitations on
         the power of the Board of Directors to adopt such additional
         compensation arrangements as it may deem desirable and such
         arrangements may be either generally applicable or applicable only in
         specific cases nor shall the Plan be construed as restricting the
         Committee's ability to grant any rights under the Plan to any person by
         reason of such person holding or being granted rights or options or
         participating in any other plans, arrangements or agreements.

22.      Additional Incentive Benefits. In addition to the Awards described in
         the Plan which may be granted by the Committee, the Board of Directors
         may, at its discretion, create and permit the Committee to grant such
         other incentive benefits ("Incentive Benefits") under the Plan as it
         believes are desirable (including, without limitation, stock bonus
         awards), provided that:

         i.       any such Incentive Benefits shall be governed by the terms of
                  the Plan as in effect on the date of grant of such Incentive
                  Benefits, and for such purposes, notwithstanding the
                  provisions of Section 19, the Board of Directors may amend the
                  Plan to create and describe such Incentive Benefits and the
                  governing terms thereof;

         ii.      the creation of such Incentive Benefits may not, without
                  shareholder approval (1) increase the total number of shares
                  of Common Stock issuable under the Plan, or (2) materially
                  modify the requirements as to eligibility for participation in
                  the Plan; and

         iii.     the Board of Directors shall not have the power to create and
                  grant Incentive Benefits which would result in the grant of a
                  prohibited tandem stock option or other prohibited tandem
                  arrangement, with respect to any Incentive Stock Options
                  granted under the Plan, as described in applicable regulations
                  under Section 422 of the Code.


Restated as of May 7, 1998                                                    14