<PAGE>   1
                                                                  EXHIBIT 10.85




                              AMENDED AND RESTATED
                           GREENFIELD INDUSTRIES, INC.
                           EMPLOYEE STOCK OPTION PLAN

                                                                              
                                   ARTICLE I
                                  INTRODUCTION

1.   Adoption and Purpose.
     ---------------------

     a. Greenfield  Industries,  Inc., a Delaware  corporation  (the "Company"),
hereby adopts this Greenfield  Industries,  Inc. Employee Stock Option Plan (the
"Plan"), dated July 1, 1993 and reserves from the authorized but unissued shares
of its Common Stock, par value $0.01 per share (the "Common Stock"),  a total of
2,000,000  shares (the  number of such shares  being  subject to  adjustment  as
provided in Article III hereof) for  issuance  pursuant to the Plan,  all on the
terms set forth in the Plan.

     b. The  purpose of the Plan is to provide  selected  key  employees  of the
Company,  key employees of any subsidiary  corporation or parent  corporation of
the Company now existing or hereafter formed or acquired, upon whose efforts the
Company is dependent for the successful conduct of its business,  an opportunity
to obtain a proprietary  interest in the Company,  to increase such  proprietary
interest,  or to benefit from the appreciation in the value of the Common Stock.
The Plan will provide a means for such selected key employees to purchase shares
of Common Stock  pursuant to  non-qualified  stock  options (the  "Non-Qualified
Options") and for such key employees to purchase shares of common stock pursuant
to incentive  stock options (the  "Incentive  Options,"  and,  together with the
Non-Qualified Options, the "Options"). Incentive Options are intended to qualify
as options  described  in Section 422 of the Internal  Revenue Code of 1986,  as
amended (the "Code"),  but the Company makes no warranty as to the qualification
of any Option as an Incentive Option.

     c. As used in the Plan,  the terms  "subsidiary  corporation"  and  "parent
corporation"  shall  mean,   respectively,   a  corporation  coming  within  the
definition of such terms contained in Sections 424(f) and 424(e) of the Code.

     d.   Shares   issued   pursuant  to  the  Plan  shall  be  fully  paid  and
nonassessable.

2.   Administration.
     --------------

     a. The Plan shall be  administered  by the Board of Directors (the "Board")
or such committee  thereof as may be appointed from time to time by the Board of
Directors. Any such committee shall consist of two or more individuals who shall
be  members  of the Board and shall be  comprised  solely of  directors  who are
"Non-Employee  Directors" within the meaning of Rule 16b-3 promulgated under the
Securities  Exchange Act of 1934, as amended (the "Exchange Act"). Any reference
to the Board of Directors  contained herein shall mean and include any such duly
authorized committee thereof.

     b. Subject to the terms and  conditions  of the Plan,  the Board shall have
full and complete  discretionary  authority:  (i) to construe and  interpret the
Plan;  (ii) to define  the terms  used  herein;  (iii) to  prescribe,  amend and
rescind  rules  and  regulations  relating  to the  Plan;  (iv)  subject  to the
conditions set forth in the Plan, to determine the individuals,  if any, to whom
Options shall be granted (the  "Optionees"),  the time or times at which Options
shall be granted,  the period or periods of exercisability  of each Option,  the
number of shares to be subject to each Option,  and the Option price; and (v) to
make all other  determinations  necessary or advisable for the administration of
the Plan.  All  determinations  and  interpretations  made by the Board shall be
binding and conclusive on all Optionees and on their legal  representatives  and
beneficiaries.

     c. In making any  determination as to the individuals to whom Options shall
be granted  under the Plan and as to the number of shares of Common  Stock to be
covered by such  Options,  the Board  shall take into  account the duties of the
respective individuals, their length of service, their amount of earnings, their
present and  potential  contributions  to the success of the  Company,  and such
other factors as the Board shall deem relevant in connection with  accomplishing
the  purposes  of the Plan;  provided,  however,  that no  participant  shall be
granted  Incentive  Options in any calendar year to purchase  shares of stock in
the  Company  or in any  subsidiary  corporation  or parent  corporation  of the
Company in excess of the maximum allotment  described in Section 5 of Article II
of the Plan.


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     d. No member or former  member of the Board  shall be liable for any action
or  determination  made in good  faith  with  respect  to the Plan or any Option
granted hereunder.



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                                   ARTICLE II
                                  STOCK OPTIONS
                                  -------------

1.   Eligibility; Participation; Special Limitations.
     -----------------------------------------------

     a. Key employees of the Company, or of any subsidiary corporation or parent
corporation of the Company,  including  directors who are  employees,  except as
otherwise  provided in the Plan, shall be eligible to receive  Non-Qualified and
Incentive  Options under the Plan.  The Board may  determine by resolution  that
certain  employees or classes of employees  are not eligible to receive  Options
under the Plan. An  individual  who has been granted an Option may, if otherwise
eligible,  be  granted  additional  Options  if the  Board  shall so  determine,
provided,  however,  the number of Incentive  Options which may be granted to an
individual shall not exceed the maximum allotment described in the Plan.

     b. At the time a Non-Qualified Option is granted,  there shall be a written
non-qualified   stock  option   agreement  (the   "Non-Qualified   Stock  Option
Agreement")  between the participant and the Company setting forth the terms and
exercise periods with respect to the Non-Qualified Options granted.

     c. At the time an  Incentive  Option is  granted,  there shall be a written
incentive  stock option  agreement  (the  "Incentive  Stock  Option  Agreement")
between the  participant  and the Company  setting  forth the terms and exercise
periods with respect to the Incentive Options granted.

     d.  Nothing  contained  in the Plan or in any  resolution  adopted or to be
adopted by the Board or the shareholders of the Company,  and no action taken by
the Board,  shall  entitle a person to  receive  or have a right to receive  any
Option unless and until the Optionee has executed and delivered to the Company a
Non-Qualified Stock Option Agreement or an Incentive Stock Option Agreement with
respect to such option.

2.   Option Price.
     ------------

     a. The initial per share option price of any Non-Qualified  Option shall be
established by the Board,  provided that the option price shall not be less than
the fair market value of the Common Stock on the date of grant.

     b. The per share exercise  price of any Incentive  Option shall not be less
than the fair market value of the Common  Stock on the date of grant;  provided,
however, that, in the case of a participant who owns more than ten percent (10%)
of the total combined voting power of all classes of stock in the Company, or to
the extent applicable,  any subsidiary  corporation or parent corporation of the
Company at the time an Incentive  Option is granted to the  participant  (a "10%
Shareholder"),  the  initial per share  option  price shall not be less than one
hundred ten percent  (110%) of the fair market  value of the Common Stock on the
date of grant.

     c. For the  purposes of this  Section,  the fair market value of a share of
Common  Stock on any date shall be equal to the closing sale price of a share of
the Common  Stock as published  by a national  securities  exchange on which the
shares of the  Common  Stock are  traded on such date or, if there is no sale of
the Common  Stock on such date,  the average of the bid and asked prices on such
exchange at the close of trading on such date or, if shares of Common  Stock are
not listed on a national securities exchange on such date but are authorized for
quotation in the National  Association of Securities Dealers Automated Quotation
System ("NASDAQ") National Market System ("NMS"), the last transaction price per
share as reported  by NASDAQ NMS on such date or, if shares of Common  Stock are
not  authorized for quotation in NASDAQ NMS on such date, the average of the bid
and asked  prices in the over the counter  market or, if the Common Stock is not
listed on a national securities exchange,  quoted in NASDAQ NMS or quoted in the
over the counter market, the fair market value of a share of the Common Stock on
such date as shall be  determined  in good faith by the Board.  In rendering its
determination  of the Common  Stock's fair market value,  the Board shall comply
with Section  422(b)(4) of the Code and the applicable  regulations  promulgated
thereunder.

     d. For  purposes of the Plan,  the  determination  of the Board of the fair
market value of a share shall be conclusive.

3.   Term During Which Options May Be Granted.
     ----------------------------------------

     No Option may be  granted  after the date on which  Options  granted to all
Optionees  shall  equal  2,000,000  shares of Common  Stock (the  number of such
shares being  subject to  adjustment  as provided in Article III hereof).  If an
Option shall  expire or terminate  without  having been  exercised in full,  any

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shares of Common  Stock  covered by that Option which are not  purchased  may be
added to the shares  otherwise  available for Options to be granted  pursuant to
the Plan.  Notwithstanding any other provision of this Plan to the contrary, any
Option granted  pursuant to this Plan must be granted within ten (10) years from
the  earlier  of the  date  the  Plan is  adopted  by the  Board  or the date of
shareholder approval described in Section 4 of Article IV.

4.   Term During Which Options May be Exercised.
     ------------------------------------------

     Participants  shall be  granted  Options  for such term as the Board  shall
determine.  The term of any Option which is an Incentive Option shall not exceed
ten (10) years from the date of the granting thereof; provided,  however, in the
case of a participant who is a 10%  Shareholder at the time an Incentive  Option
is granted to the  participant,  the term with respect to such Incentive  Option
shall not be in excess of five (5) years from the granting thereof.

5.   Maximum Allotment of Incentive Options.
     --------------------------------------

     The aggregate  fair market value of the shares of Common Stock  (determined
on the date of grant) for which a participant may be granted  Incentive  Options
which  are  exercisable  for the  first  time in any  particular  calendar  year
(whether  under  the  terms of the Plan or any other  stock  option  plan of the
Company, its parent corporation or any subsidiary  corporation) shall not exceed
$100,000.  To the extent any Option which is intended to be an Incentive  Option
is granted to any participant fails to satisfy the requirements of this Section,
the Incentive  Option shall be treated as a Non-Qualified  Option.  This Section
shall be applied by taking  Options  into account in the order in which they are
granted.

6.   Exercise of Options.
     -------------------

     a. A participant  may exercise each Option  granted to the  participant  in
such installments as the Board shall determine at the time of the grant thereof.

     b.  Except  as  otherwise   set  forth  in  the  Plan  or  the   applicable
Non-Qualified  Stock Option  Agreement or Incentive Stock Option  Agreement,  an
Option may be exercised in whole or in part at any time or from time to time.

     c. An  option  may be  exercised  only by a  written  notice  of  intent to
exercise such Option with respect to a specified  number of shares of the Common
Stock and  payment to the  Company  of the  amount of the  Option  price for the
number of shares of the Common Stock so specified:  provided,  however, that, if
the Board shall in its sole  discretion so determine at the time of the grant or
exercise of any Option,  all or any portion of such  payment may be made in kind
by the delivery of shares of the Common Stock having a fair market value, on the
date of delivery (as  determined in the manner set forth in Section 2(c) of this
Article),  equal to the  portion of the Option  price so paid.  Options  granted
pursuant to the Plan shall be exercised by the Optionee as to all or part of the
shares covered  thereby by giving written notice of the exercise  thereof to the
corporate  secretary  of the  Company at the  principal  business  office of the
Company,  specifying  the number of shares to be purchased  and  accompanied  by
payment of the full  purchase  price  therefor:  (i) in cash or by  certified or
official bank check,  (ii) if the Board in its sole discretion  determines under
this Section 6(c) of Article II of the Plan, in shares of Common  Stock,  valued
as of the date of  exercise,  of the same  class as those to be  granted  by the
exercise of the Option, or (iii) if the Board in its sole discretion determines,
in a  combination  of the methods  described in (i) and (ii) above.  The Company
will deliver the shares being purchased  within five business days of receipt of
notice,  payment and any other items  required under this Plan or the applicable
Non-Qualified  Stock Option  Agreement or  Incentive  Stock Option  Agreement to
exercise Options by an Optionee.

     d. An Option may, in the  discretion  of the Board,  include a reload stock
option  right which shall  entitle the  Optionee,  upon (i) the exercise of such
original  Option prior to the  Optionee's  termination  of  employment  and (ii)
payment of the  appropriate  exercise  price in shares of Common Stock that have
been  owned  by such  Optionee  for at  least  six  months  prior to the date of
exercise, to receive a new option (the "Reload Option") to purchase, at the fair
market value on the date of the exercise of the original  Option,  the number of
shares of Common  Stock  equal to the number of whole  shares  delivered  by the
Optionee in payment of the exercise  price of the original  Option.  Such Reload
Option shall be subject to the same terms and conditions,  including  expiration
date, and shall be exercisable at the same time or times as the original  Option
with  respect to which it is granted,  except that in no event shall such Reload
Option be exercisable within six months of its date of grant.

     e. To the  extent  that an Option is not  exercised  within  the  period of
exercisability  specified in the applicable Non-Qualified Stock Option Agreement

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or Incentive Stock Option Agreement,  it shall expire as to the then unexercised
part.

     f. In no event shall an Option  granted  pursuant to this Plan be exercised
for a fraction of a share.

7.   Transferability.
     ---------------

     An  Option  granted  pursuant  to  the  Plan  shall  not be  assignable  or
transferable by the Optionee,  either  voluntarily or by operation of law, other
than by will or by the laws of descent and distribution.  Each Option granted to
the  Optionee  may be  exercised  only by the  Optionee,  and after the death of
Optionee,  only by the person or persons  to whom the rights  under such  Option
pass by the laws of descent and distribution, all in accordance with this Plan.

8.   Termination of Employment.
     -------------------------

     a. Upon  termination of employment of any participant  with the Company and
all subsidiary  corporations and parent corporations of the Company,  any Option
previously granted to the participant,  unless otherwise specified by the Board,
shall,  to the extent not  previously  exercised,  terminate and become null and
void provided that:

     (i) if any participant shall die while in the employ of such corporation or
during  either  the  three  (3)  month  or one (1)  year  period,  whichever  is
applicable,  specified in clause (ii) below and at a time when such  participant
was entitled to exercise an Option as herein provided,  the legal representative
of such  participant,  or such  person who  acquired  such  Option by bequest or
inheritance  or by reason of the death of the  participant,  may, not later than
one (1) year from the date of death,  exercise  such Option with  respect to the
number of shares as to which such option was  exercisable  on the date of death,
to the extent the Option has not been exercised with respect to all such shares;

     (ii) if the  employment of any  participant  to whom such Option shall have
been granted shall terminate by reason of the participant's  retirement (at such
age or upon such conditions as shall be specified by the Board),  disability (as
described in Section  22(e)(3) of the Code) or  dismissal by the employer  other
than for cause (as defined below),  and such participant is entitled to exercise
such Option on the date of death,  retirement,  disability  or  dismissal,  such
participant  shall have the right to exercise  such  Option so  granted,  to the
extent  the  Option  has not been  exercised,  in  respect of any or all of such
number of shares to which such Option has not been  exercised  at any time up to
and  including  (A)  three (3)  months  after  the date of such  termination  of
employment in the case of termination by reason of retirement or dismissal other
than for cause and (B) one (1) year after the date of  termination of employment
in the case of termination by reason of disability.

     b. If an  employee  voluntarily  terminates  his or her  employment,  or is
discharged  for cause,  any Option granted  hereunder  shall,  unless  otherwise
specified by the Board,  immediately  terminate with respect to any  unexercised
portion  thereof.  For the purposes of the plan, the term "for cause" shall mean
(i) with respect to an employee who is a party to a written  agreement  with, or
alternatively,  participates in a compensation or benefit plan of the Company or
a subsidiary  corporation or parent corporation of the Company,  which agreement
or plan  contains  a  definition  of "for  cause" or  "cause"  (or words of like
import) for purposes of termination  of employment  thereunder by the Company or
such subsidiary corporation or parent corporation of the Company, "for cause" or
"cause" as defined in the most recent of such  agreements  or plans,  or (ii) in
all other cases,  as  determined by the Board in its sole  discretion,  the term
"for cause" shall mean: (A) the willful  commission by an employee of a criminal
or other act that causes or is likely to cause  substantial  economic  damage to
the Company or a subsidiary  corporation or parent corporation of the Company or
substantial  injury to the  business  reputation  of the Company or a subsidiary
corporation  or parent  corporation  of the Company;  (B) the  commission  by an
employee  of an act of fraud in the  performance  of such  employee's  duties on
behalf of the Company or a subsidiary  corporation or parent  corporation of the
Company;  or (C) the  continuing  willful  failure of an employee to perform the
duties of such  employee to the Company or a  subsidiary  corporation  or parent
corporation  of  the  Company  (other  than  such  failure  resulting  from  the
employee's  incapacity  due to physical or mental  illness) after written notice
thereof  (specifying  the  particulars  thereof  in  reasonable  detail)  and  a
reasonable  opportunity  to be heard  and cure  such  failure  are  given to the
employee by the Board.  For purposes of the Plan,  no act, or failure to act, on
the employee's part shall be considered  "willful"  unless done or omitted to be
done by the  employee  not in good  faith  without  reasonable  belief  that the
employee's  action or  omission  was in the best  interest  of the  Company or a
subsidiary corporation or parent corporation of the Company.

     c. For the purposes of the Plan, an employment relationship shall be deemed

<PAGE>   6

to  exist  between  an  individual  and a  corporation  if,  at the  time of the
determination, the individual was an "employee" of such corporation for purposes
of Section 422 of the Code. If an individual is on military, sick leave or other
bona fide leave of absence such individual shall be considered an "employee" for
purposes of the  exercise  of an option and shall be  entitled to exercise  such
Option  during  such  leave if the period of such leave does not exceed 90 days,
or,  if  longer,  so long as the  individual's  right to  reemployment  with the
Company  (or a  related  corporation)  is  guaranteed  either by  statute  or by
contract.  If the  period of leave  exceeds  ninety  (90) days,  the  employment
relationship  shall be deemed to have terminated on the ninety-first  (91st) day
of such leave,  unless the  individual's  right to reemployment is guaranteed by
statute or contract.

     d. A termination  of  employment  shall not be deemed to occur by reason of
(i) the transfer of an employee from  employment by the Company to employment by
a  subsidiary  corporation  or a parent  corporation  of the Company or (ii) the
transfer of an employee from employment by a subsidiary  corporation or a parent
corporation of the Company to employment by the Company or by another subsidiary
corporation or parent corporation of the Company.

     e.  Notwithstanding  anything  contained in this Plan to the  contrary,  no
person   shall  be  entitled  to  exercise   any  Option  after  the  period  of
exercisability of such Option as specified in the applicable Non-Qualified Stock
Option Agreement or Incentive Stock Option Agreement.

     f. The  Board  may in its  discretion  extend  the  period  during  which a
Non-Qualified  Option may be exercised to such period, not to exceed three years
following  the  termination  of a  participant's  employment or service with the
Company or subsidiary  corporation or parent corporation of the Company,  as the
Committee may determine in its  discretion to be  appropriate  in any particular
instance.

9.   Change of Position; Disclaimer of Rights
     ----------------------------------------

     Except as otherwise  provided in a Non-Qualified  Stock Option Agreement or
Incentive  Stock  Option  Agreement,  any  change  of an  Optionee's  duties  or
positions  with  the  Company  or with  any  subsidiary  corporation  or  parent
corporation  of the Company  shall not affect the  Optionee's  right to exercise
Options granted pursuant to the Plan;  provided,  however,  that no provision in
the Plan or any Option  shall be construed to confer upon the Optionee any right
to  be  employed  by  the  Company  or  any  subsidiary  corporation  or  parent
corporation  of the  Company,  or to  interfere  in any way with the  right  and
authority of the Company or any subsidiary  corporation or parent corporation of
the Company either to increase or decrease the compensation of the Optionee,  at
any time, or to terminate any  relationship  or employment  between the Optionee
and the  Company or any  subsidiary  corporation  or parent  corporation  of the
Company.

10.  Compliance with Law.
     -------------------

     Any  person  exercising  an  Option  shall  make such  representations  and
agreements and furnish such  information as the Board may in its discretion deem
necessary or desirable to assure compliance by the Company,  on terms acceptable
to the Company,  with the  provisions of the  Securities Act of 1933, as amended
(the "Securities Act"), and any other applicable legal requirements.

11.  Issuance of Certificates; Legends.
     ---------------------------------

     a. Upon any  exercise  of an  Option  which may be  granted  hereunder  and
payment of the Option's  purchase  price, a certificate for the shares of Common
Stock as to which the Option has been  exercised  shall be issued by the Company
in the name of the person  exercising  the Option and shall be  delivered  to or
upon the order of such person or persons. The Company may endorse such legend or
legends  upon the  certificates  for shares  issued  upon  exercise of an Option
granted  hereunder  and may  issue  such  "stop  transfer"  instructions  to its
transfer agent in respect of such shares as, in its discretion, it determines to
be  necessary  or  appropriate  to (i) prevent a violation  of, or to perfect an
exemption  from,  the  registration  requirements  of the  Securities  Act, (ii)
implement the  provisions of the Plan and any agreement  between the Company and
the  Optionee  with  respect to such  shares,  or (iii)  permit  the  Company to
determine the occurrence of a disqualifying disposition, as described in Section
421(b) of the Code, of shares  transferred  upon exercise of an Incentive Option
granted under the Plan.

     b. The Company  shall pay all issue or transfer  taxes with  respect to the
issuance or transfer of shares of Common Stock, as well as all fees and expenses
necessarily  incurred  by the  Company  in  connection  with  such  issuance  or
transfer.


<PAGE>   7

     c. The Company,  in its discretion,  may postpone the issuance and delivery
of shares of Common Stock upon any exercise of an Option until  completion  of a
securities  exchange  listing or  registration  or other  qualification  of such
shares under any state or federal  law,  rule or  regulation  as the Company may
consider appropriate.

12.  Listing of Shares and Related Matters.
     -------------------------------------

     If at any  time  the  Board  shall  determine  in its  discretion  that the
listing,  registration or qualification of the shares of Common Stock covered by
the Plan upon any  national  securities  exchange  or under any state or federal
law,  or the  consent  or  approval  of any  governmental  regulatory  body,  is
necessary or desirable as a condition  of, or in  connection  with,  the sale or
purchase of shares  under the Plan,  no Option may be  exercised  in whole or in
part  unless and until such  listing,  registration,  qualification,  consent or
approval shall have been effected or obtained,  or otherwise  provided for, free
of any conditions not acceptable to the Board.


                                  ARTICLE III
                                STOCK ADJUSTMENTS

     1. The provisions of this Article shall be applicable to any  Non-Qualified
Option or Incentive Option awarded to any individual pursuant to Article II. Any
adjustment of an Incentive Stock Option under this Article shall be made in such
manner as not to  constitute  a  "modification"  within  the  meaning of Section
424(h)(3) of the Code.

     2. In the event that at any time after the  effective  date of the Plan the
outstanding shares of Common Stock are changed into or exchanged for a different
number or kind of shares or other securities of the Company by reason of merger,
consolidation, recapitalization,  reclassification, stock split, stock dividend,
combination  of shares or the like,  the Board  shall  make an  appropriate  and
equitable  adjustment  in  the  number  and  kind  of  shares  as to  which  all
outstanding  Options  granted  pursuant to the Plan,  or portions  thereof  then
unexercised,  shall be exercisable,  to the end that after such event the shares
subject  to the  Plan  and  each  Optionee's  proportionate  interest  shall  be
maintained as before the occurrence of such event.  Any such  adjustment made by
the Board shall be final and binding upon all  Optionees,  the Company,  and all
other interested persons.

     3.  Adjustments  under this  Article III shall be made by the Board,  whose
determination  as to what  adjustments  shall be made,  and the extent  thereof,
shall be final, binding, and conclusive. No fractional shares of Common Stock or
units of other securities  shall be issued pursuant to any such adjustment,  and
any fractions  resulting  from any such  adjustment  shall be eliminated in each
case by rounding downward to the nearest whole share.

                                   ARTICLE IV
                                  MISCELLANEOUS

1.   Amendment and Termination of Plan.
     ---------------------------------

     a. The Board may, in its  discretion,  at any time suspend or terminate the
Plan.  The Board may also at any time  amend or revise  the terms of the Plan or
any Option granted under the Plan.

     b. No amendment,  suspension,  or termination of the Plan shall, subject to
Article III hereof,  alter or impair any rights or obligations  under any Option
granted under the Plan without the consent of the Optionee.

2.   Fees and Expenses.
     -----------------

     Except as otherwise provided in this Plan, the Company will pay any and all
fees and expenses  necessarily  incurred by the Company in  connection  with the
administration of the Plan.

3.   Withholding for Taxes.
     ---------------------

     Any  issuance of Common  Stock  pursuant to the exercise of an Option under
the Plan shall not be made until  appropriate  arrangements  satisfactory to the
Board have been made for the payment of any tax amounts (federal,  state,  local
or other)  that may be  required  to be  withheld or paid by the Company (or any
subsidiary or parent thereof) with respect to such Optionee.  Such  arrangements
may, at the discretion of the Board,  include allowing the Optionee to tender to
the  Company  shares  of  Common  Stock  owned by the  Optionee,  which  have an

<PAGE>   8

aggregate fair market value per share as of the date of such withholding that is
not greater than the sum of all tax amounts to be withheld with respect thereto,
together with payment of any remaining portion of such tax amounts in cash or by
check payable and acceptable to the Board.

     Notwithstanding the foregoing,  if on the date of an event giving rise to a
tax withholding obligation on the part of the Company the Optionee is an officer
or individual subject to Rule 16b-3, such tax withholding shall be automatically
effectuated by the Company  withholding the necessary number of shares of Common
Stock (at the highest  applicable  marginal tax rate for individuals)  from such
Option exercise.

4.   Adoption and Effectiveness of Plan.
     ----------------------------------

     The Plan shall be adopted by resolution  of the Company's  Board on July 1,
1993,  and shall be effective as of such date or a subsequent  date set forth in
such  resolution,  subject to  approval  by the  holders  of a  majority  of the
outstanding  shares of Common  Stock of the Company  within one (1) year of such
adoption.  Prior to such shareholder approval,  Options may be granted under the
Plan,  but any such Option by its terms shall not be  exercisable  prior to such
approval.  If the Plan is not approved by the  shareholders of the Company,  the
Plan shall terminate, and all Options granted under the Plan shall terminate and
become null and void.

5.   No Obligation to Exercise Option.
     --------------------------------

     The  granting of an Option shall  impose no  obligation  on the Optionee to
exercise such Option.

6.   Number; Gender.
     --------------

     Whenever used herein,  nouns in the singular shall include the plural,  and
the masculine pronoun shall include the feminine gender.

7.   Partial Invalidity.
     ------------------

     The invalidity of any provision  contained in the Plan or any Non-Qualified
Stock Option Agreement,  Incentive Stock Option Agreement or any other documents
or instrument evidencing the granting of an Option shall not be deemed to affect
the  validity of any other  provision  contained  in the Plan or the  applicable
document.

8.   Governing Law.
     -------------

     The Plan and any related  documents  or  instruments  shall be governed and
construed in accordance with the laws of the State of Delaware.

     IN WITNESS WHEREOF,  the Company has caused the Plan to be duly executed by
its authorized officers as of the 1st day of July, 1993, as amended and restated
on November 12, 1996 and as further amended on February 18, 1997.