KAYE GROUP INC.

                     1999 EQUITY INCENTIVE COMPENSATION PLAN

1.  Purpose.  The  purposes  of this  Kaye  Group  Inc.  1999  Equity  Incentive
Compensation  Plan (the "Plan") are to promote the  interests of Kaye Group Inc.
(the "Company") and its  stockholders  by (i) attracting and retaining  officers
and other employees of the Company and its Subsidiaries (as defined below); (ii)
motivating  such  individuals  by means  of  performance-related  incentives  to
achieve  longer-range  performance goals; and (iii) enabling such individuals to
participate in the long-term growth and financial success of the Company.

2. Definitions. As used in the Plan, the following terms shall have the meanings
set forth  below:

     "Affiliate"  shall mean (i) any entity  that,  directly or  indirectly,  is
controlled  by, or controls,  or is under common  control with,  the Company and
(ii) any entity in which the  Company  has a  significant  equity  interest,  in
either case as determined by the Committee.

     "Award" shall mean any award of Restricted  Stock.

     "Award  Agreement"  shall mean any written  agreement,  contract,  or other
instrument  or  document  evidencing  any  Award,  which may,  but need not,  be
executed or acknowledged by a Participant.

     "Board" shall mean the Board of Directors of the Company.

     "Change in Control" For  purposes of the Plan, a "Change in Control"  shall
mean the  occurrence of any of the  following:  (a) the direct or indirect sale,
lease,  exchange or other transfer of all or substantially  all of the assets of
the  Company  to any  "person"  or "group"  (as such terms are used in  Sections
13(d)(3) and 14(d)(2) of the Exchange Act); (b) the merger or  consolidation  of
the  Company  with or into  another  corporation  with the effect  that the then
existing  stockholders  of the Company hold less than 60% of the combined voting
power of the then  outstanding  securities of the surviving  corporation of such
merger or the corporation  resulting from such consolidation having the right to
vote in the  election of  directors;  (c) the  replacement  of a majority of the
Board over a two-year period from the directors who constituted the Board at the
beginning of such period,  and such replacement  shall not have been approved by
the Board as  constituted  at the  beginning of such  period;  (d) a "person" or
"group"  (other  than an  employee  stock  ownership  plan of the Company or any
"person" or "group"  that is the  beneficial  owner  (within the meaning of Rule
13d-3 under the Exchange Act) of 5% or more of the combined  voting power of the
Company's securities on the date on which the Plan was approved by the Board) as
a result  of a tender  or  exchange  offer,  open  market  purchases,  privately
negotiated  purchases  or  otherwise,  shall have  become the  beneficial  owner
(within the meaning of Rule 13d-3 under the Exchange  Act) of  securities of the
Company  representing  30% or more of the  combined  voting  power  of the  then
outstanding  securities of the Company  having the right to vote in the election
of  directors;  or (e) the adoption by the Board and  approval by the  Company's
stockholders of a plan of liquidation or dissolution of the Company.



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     "Code" shall mean the Internal Revenue Code of 1986, as amended.

     "Committee" shall mean the Compensation Committee of the Board.

     "Company"  shall mean Kaye Group  Inc.,  a  Delaware  corporation,  and any
successor thereto.

     "Exchange Act" shall mean the  Securities  Exchange Act of 1934, as amended
from time to time.

     "Fair Market  Value" shall mean,  with respect to a Share,  as of any date,
(A) if the principal  market for the Shares is a national  securities  exchange,
the closing sales price per Share on such day as reported by such exchange or on
a composite tape reflecting  transactions on such exchange, (B) if the principal
market for the Shares is not a national  securities  exchange and the Shares are
quoted on The Nasdaq  Stock  Market  ("Nasdaq"),  and (I) if actual  sales price
information is available with respect to the Shares, the closing sales price per
Share on such day on Nasdaq,  or (II) if such information is not available,  the
average  of the  highest  bid and lowest  asked  prices per Share on such day on
Nasdaq,  or (C)  if the  principal  market  for  the  Shares  is not a  national
securities  exchange and the Shares are not quoted on Nasdaq, the average of the
highest bid and lowest asked prices per Share on such day as reported on the OTC
Bulletin  Board  Service or by  National  Quotation  Bureau,  Incorporated  or a
comparable service; provided,  however, that if clauses (A), (B) and (C) of this
paragraph  are all  inapplicable,  or if no trades have been made, no quotes are
available for such day, or, in the reasonable judgment of the Committee, none of
the foregoing  fairly  represents Fair Market Value,  the fair market value of a
Share  shall be  determined  by the  Committee  by any  method  consistent  with
applicable  regulations  adopted  by the  Treasury  Department  relating  to the
valuation of stock, stock options or other forms of compensation.

     "Participant"  shall mean any  officer or other  employee of the Company or
its Subsidiaries  eligible for an Award under Section 5 of the Plan and selected
by the Committee to receive an Award under the Plan.

     "Performance  Compensation  Award" shall mean any Award  designated  by the
Committee as a Performance  Compensation  Award  pursuant to Section 6(d) of the
Plan.

     "Performance  Criteria"  shall  mean the  criterion  or  criteria  that the
Committee shall select for purposes of establishing the Performance  Goals for a
Performance Period with respect to any Performance  Compensation Award under the
Plan. The  Performance  Criteria that will be used to establish the  Performance
Goals shall be based on the attainment of specific  levels of performance of the
Company (or Subsidiary,  Affiliate, division or operational unit of the Company)
and  shall  be  limited  to the  following:  return  on net  assets,  return  on
stockholders' equity, return on assets, return on capital,  stockholder returns,
profit margin, earnings per share, net earnings,  operating earnings, book value
per share,  Fair Market Value per share and sales or market share. To the extent
required  under  Section  162(m) of the Code,  the Committee  shall,  within the
maximum period allowed under Section 162(m) of the Code,  define in an objective
fashion the manner of calculating the Performance Criteria it selects to use for
such  Performance  Period.

     "Performance Formula" shall mean, for a Performance Period, the one or more

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objective  formulas applied against the relevant  Performance Goal to determine,
with regard to the Performance  Compensation Award of a particular  Participant,
whether  all,  some  portion  but  less  than  all,  or none of the  Performance
Compensation Award has been earned for the Performance Period.

     "Performance  Goals" shall mean, for a Performance  Period, the one or more
goals  established  by the Committee for the  Performance  Period based upon the
Performance  Criteria.  The Committee is authorized at any time during the first
90 days of a  Performance  Period,  or at any time  thereafter  (but only to the
extent the exercise of such  authority  after the first 90 days of a Performance
Period  would not cause  the  Performance  Compensation  Awards  granted  to any
Participant for the Performance Period to fail to qualify as  "performance-based
compensation"  under  Section  162(m)  of the  Code),  in its sole and  absolute
discretion,  to adjust or modify the calculation of a Performance  Goal for such
Performance  Period to the extent  permitted under Section 162(m) of the Code in
order to prevent the dilution or enlargement of the rights of Participant (i) in
the event of, or in  anticipation  of, any  unusual or  extraordinary  corporate
item,  transaction,  event or  development  affecting  the  Company;  or (ii) in
recognition of, or in anticipation  of, any other unusual or nonrecurring  event
affecting  the  Company,  or the  financial  statements  of the  Company,  or in
response to, or in  anticipation  of, changes in applicable  laws,  regulations,
accounting principles, or business conditions.

     "Performance Period" shall mean the one or more periods of time of at least
one year in duration,  as the Committee may select, over which the attainment of
one or more Performance  Goals will be measured for the purpose of determining a
Participant's  right to and the  payment of a  Performance  Compensation  Award.

     "Person" shall mean any individual, corporation,  partnership, association,
joint-stock company, trust, unincorporated organization, government or political
subdivision thereof or other entity.

     "Plan" shall mean this Kaye Group Inc. 1999 Equity  Incentive  Compensation
Plan, as amended from time to time.

     "Restricted  Stock"  shall mean any Share  granted (or a right to receive a
Share granted) by the Committee under Section 6 of the Plan.

     "Rule 16b-3" shall mean Rule 16b-3 as  promulgated  under the Exchange Act,
or any successor rule or regulation thereto as in effect from time to time.

     "SEC" shall mean the  Securities  and Exchange  Commission or any successor
thereto and shall include the Staff thereof.

     "Shares"  shall mean the common  shares of the Company,  $.0l par value per
share, or such other securities of the Company (i) into which such common shares
shall  be  changed  by  reason  of a  recapitalization,  merger,  consolidation,
split-up,  combination,  exchange of shares or other similar transaction or (ii)
as may be determined by the Committee pursuant to Section 4(b) of the Plan.



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<PAGE>

     "Subsidiary"  shall mean (i) any entity that,  directly or  indirectly,  is
controlled  by the  Company  and (ii) any  entity  in which  the  Company  has a
significant equity interest, in either case as determined by the Committee.

     "Substitute Awards" shall have the meaning specified in Section 4(c) of the
Plan.

3.   Administration.

     a.   The Plan shall be administered by the Committee.  Subject to the terms
          of the Plan and  applicable  law,  and in  addition  to other  express
          powers and authorizations  conferred on the Committee by the Plan, the
          Committee  shall  have full  power and  authority  to:  (i)  designate
          Participants; (ii) determine the number of Shares to be covered by, or
          with respect to which  payments,  rights,  or other  matters are to be
          calculated in connection with,  Awards;  (iii) determine the terms and
          conditions of any Award; (iv) determine  whether,  to what extent, and
          under  what  circumstances  Awards  may  be  canceled,  forfeited,  or
          suspended  and the method or methods by which  Awards may be canceled,
          forfeited,  or suspended;  (v)  interpret,  administer,  reconcile any
          inconsistency, correct any default, or supply any omission in the Plan
          and any  instrument  or agreement  relating to an Award made under the
          Plan;  (vi)  establish,  amend,  suspend,  or  waive  such  rules  and
          regulations  and appoint such agents as it shall deem  appropriate for
          the administration of the Plan; and (vii) make any other determination
          and take any  other  action  that the  Committee  deems  necessary  or
          desirable for the administration of the Plan.

     b.   Unless  otherwise  expressly  provided in the Plan, all  designations,
          determinations,  interpretations  and  other  decisions  under or with
          respect to the Plan or any Award  shall be within the sole  discretion
          of the  Committee,  may be  made  at any  time  and  shall  be  final,
          conclusive  and binding upon all Persons,  including the Company,  any
          Affiliate, any Participant, any holder or beneficiary of any Award.

     c.   No  member  of the  Committee  shall  be  liable  for  any  action  or
          determination made in good faith with respect to the Plan or any Award
          hereunder.

4.   Shares Available for Awards.

     a.   Shares  Available.  Subject to adjustment as provided in Section 4(b),
          the  aggregate  number of Shares with  respect to which  Awards may be
          granted under the Plan shall be 375,000.  If, after the effective date
          of the Plan,  any Share covered by an Award granted under the Plan, or
          to which  such an Award  relates,  is  forfeited,  or if an Award  has
          expired,  terminated or been canceled for any reason whatsoever (other
          than by reason of  vesting),  then the  Shares  covered  by such Award
          shall again be, or shall  become,  Shares with respect to which Awards
          may be granted hereunder.

     b.   Adjustments.  In the  event  that the  Committee  determines  that any
          dividend or other  distribution  (whether in the form of cash, Shares,
          other securities, or other property),  recapitalization,  stock split,
          reverse stock split, reorganization, merger, consolidation,


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<PAGE>

          split-up, spin-off, combination,  repurchase, or exchange of Shares or
          other securities of the Company,  issuance of warrants or other rights
          to  purchase  Shares  or other  securities  of the  Company,  or other
          similar corporate transaction or event affects the Shares such that an
          adjustment  is  determined  by the  Committee in its  discretion to be
          appropriate  in  order  to  prevent  dilution  or  enlargement  of the
          benefits or potential benefits intended to be made available under the
          Plan, then the Committee may, in such manner as it may deem equitable,
          adjust any or all of (i) the number of Shares or other  securities  of
          the Company (or the number and kind of other  securities  or property)
          with respect to which Awards may be granted, (ii) the number of Shares
          or other  securities  of the  Company (or the number and kind of other
          securities or property)  subject to outstanding  Awards,  and (iii) if
          deemed appropriate, make provision for a cash payment to the holder of
          an outstanding  Award in  consideration  for the  cancellation of such
          Award.

     c.   Substitute Awards. Awards may, in the discretion of the Committee,  be
          made  under  the  Plan  in  substitution   (to  the  extent  otherwise
          permitted) for outstanding awards previously granted by the Company or
          its  Affiliates or by a company  acquired by the Company or with which
          the  Company  combines  ("Substitute  Awards").  The  number of Shares
          underlying any Substitute Award shall be counted against the aggregate
          number of Shares available for Awards under the Plan.

     d.   Sources of Shares  Deliverable  Under  Awards.  Any  Shares  delivered
          pursuant to an Award may consist,  in whole or in part,  of authorized
          and unissued Shares or of treasury Shares.

5.   Eligibility.  Any  officer or other  employee  of the Company or any of its
     Subsidiaries  (including  any  prospective  officer or  employee)  shall be
     eligible to be designated a Participant.

6.   Restricted Stock.

     a.   Grant. Subject to the provisions of the Plan, the Committee shall have
          sole and  complete  authority to determine  the  Participants  to whom
          Shares of Restricted  Stock shall be granted,  the number of shares of
          Restricted  Stock to be granted to each  Participant,  the duration of
          the  period  during  which,   and  the  conditions  under  which,  the
          Restricted Stock may vest,  including,  without  limitation,  that the
          Fair Market  Value  exceed a targeted  Share price and the effect,  if
          any, of a Change in Control upon the vesting of the Restricted  Stock,
          and the other terms and conditions of such Awards.

     b.   Transfer  Restrictions.  Shares of  Restricted  Stock (or any interest
          therein) may not be sold, assigned, transferred,  pledged or otherwise
          encumbered,  except,  in the case of  Restricted  Stock,  as otherwise
          provided in the Plan or the applicable Award Agreement (including, but
          not  limited  to,   provisions  in  the  Applicable   Award  Agreement
          permitting  certain transfers to immediate family members,  trusts for
          the benefit of immediate family members or the  Participant,  or other
          similar  arrangements).  Certificates  issued in  respect of shares of
          Restricted  Stock shall be registered  in the name of the  Participant
          and retained by the Company.  Each Participant  shall deposit with the
          Company a stock  power  duly  endorsed  in blank  with  respect to all
          certificates issued in respect of shares of Restricted Stock. Upon the
          lapse of the restrictions applicable to such Shares, the Company shall
          deliver a certificate in respect of the applicable number of shares to
          the Participant or the Participant's legal representative.


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<PAGE>


     c.   Dividends  or  Dividend  Equivalents.   An  Award  shall  provide  the
          Participant with dividends or dividend  equivalents,  payable in cash,
          Shares,  other  securities or other  property on a current or deferred
          basis.

     d.   Performance Compensation Awards.

          i.   General.  The Committee shall have the authority,  at the time of
               grant of any Award,  to  designate  such  Award as a  Performance
               Compensation   Award   in  order  to   qualify   such   Award  as
               "performance-based  compensation"  under  Section  162(m)  of the
               Code.

          ii.  Eligibility.   The  Committee  will,  in  its  sole   discretion,
               designate  within the maximum period allowed under Section 162(m)
               of the  Code  which  Participants  will be  eligible  to  receive
               Performance  Compensation  Awards in respect of such  Performance
               Period. However, designation of a Participant eligible to receive
               an Award  hereunder  for a  Performance  Period  shall not in any
               manner entitle the  Participant to receive  payment in respect of
               any Performance  Compensation Award for such Performance  Period.
               The  determination as to whether or not such Participant  becomes
               entitled  to payment in respect of any  Performance  Compensation
               Award shall be decided  solely in accordance  with the provisions
               of this  paragraph  (d).  Moreover,  designation of a Participant
               eligible  to  receive  an  Award   hereunder   for  a  particular
               Performance   Period  shall  not  require   designation  of  such
               Participant  eligible  to  receive  an  Award  hereunder  in  any
               subsequent  Performance Period and designation of one Person as a
               Participant  eligible  to  receive an Award  hereunder  shall not
               require designation of any other Person as a Participant eligible
               to  receive  an Award  hereunder  in such  period or in any other
               period.

          iii. Discretion of Committee with Respect to Performance  Compensation
               Awards.  With  regard to a  particular  Performance  Period,  the
               Committee shall have full discretion to select the length of such
               Performance Period, the Performance Criteria that will be used to
               establish  the  Performance  Goals,  the kinds and  levels of the
               Performance  Goals  that  are to  apply  to the  Company  and the
               Performance Formula. Within the within the maximum period allowed
               under  Section  162(m) of the Code,  the  Committee  shall,  with
               regard to the  Performance  Compensation  Awards to be issued for
               such Performance Period,  exercise its discretion with respect to
               each  of the  matters  enumerated  in the  immediately  preceding
               sentence of this paragraph (d) and record the same in writing.

          iv.  Payment of Performance Compensation Awards.

               (a)  Condition to Receipt of Payment.  Unless otherwise  provided
                    in the applicable  Award  Agreement,  a Participant  must be
                    employed  by the  Company  on the last day of a  Performance
                    Period to be eligible to receive  Shares or other payment in
                    respect  of  a  Performance   Compensation  Award  for  such
                    Performance Period.

               (b)  Limitation.  A  Participant  shall be  eligible  to  receive
                    payment in


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<PAGE>

                    respect  of a  Performance  Compensation  Award  only to the
                    extent that: (A) the  Performance  Goals for such period are
                    achieved; and (B) the Performance Formula as applied against
                    such  Performance  Goals determines that all or some portion
                    of such Participant's  Performance Award has been earned for
                    the Performance Period.

               (c)  Certification.  Following  the  completion  of a Performance
                    Period,  the  Committee  shall meet to review and certify in
                    writing whether,  and to what extent,  the Performance Goals
                    for the Performance Period have been achieved and, if so, to
                    calculate   and  certify  in  writing  that  amount  of  the
                    Performance  Compensation Awards earned for the period based
                    upon the  Performance  Formula.  The  Committee  shall  then
                    determine the actual size of each Participant's  Performance
                    Compensation Award for the Performance Period.

               (d)  Maximum  Award   Payable.   Notwithstanding   any  provision
                    contained  in  this  Plan  to  the  contrary,   the  maximum
                    Performance   Compensation   Award   payable   to  any   one
                    Participant  under the Plan for a Performance  Period is the
                    Fair  Market  Value  of such  Shares  on the last day of the
                    Performance Period to which such Award relates.

7.   Amendment and Termination.

     a.   Amendments  to  the  Plan.  The  Board  may  amend,  alter,   suspend,
          discontinue, or terminate the Plan or any portion thereof at any time;
          provided,  however,  that no such amendment,  alteration,  suspension,
          discontinuation  or  termination  shall  be made  without  stockholder
          approval  if such  approval  is  necessary  to comply  with any tax or
          regulatory requirement applicable to the Plan and, provided,  further,
          that any such amendment,  alteration,  suspension,  discontinuance  or
          termination  that would  impair the rights of any  Participant  or any
          holder or  beneficiary of any Award  theretofore  granted shall not to
          that  extent  be  effective   without  the  consent  of  the  affected
          Participant, holder or beneficiary.

     b.   Amendments to Awards. The Committee may waive any conditions or rights
          under,   amend  any  terms   (including,   but  not  limited  to,  the
          acceleration  of the  vesting  of an Award in the case of a Change  in
          Control) of, or alter, suspend, discontinue,  cancel or terminate, any
          Award theretofore granted,  prospectively or retroactively;  provided,
          however,  that any such  waiver,  amendment,  alteration,  suspension,
          discontinuance,  cancellation  or  termination  that would  impair the
          rights of any  Participant  or any holder or  beneficiary of any Award
          theretofore  granted shall not to that extent be effective without the
          consent of the affected Participant, holder or beneficiary.

     c.   Adjustment  of  Awards  Upon the  Occurrence  of  Certain  Unusual  or
          Nonrecurring  Events.  The  Committee  is  hereby  authorized  to make
          adjustments in the terms and conditions of, and the criteria  included
          in,  Awards in  recognition  of (i)  unusual  or  nonrecurring  events
          (including,  without limitation,  the events described in Section 4(b)
          of the Plan)  affecting the Company,  any Affiliate,  or the financial
          statements  of the  Company  or any  Affiliate,  or  (ii)  changes  in
          applicable laws, regulations,  or accounting principles,  whenever, in
          any  such  case,  the  Committee   determines  such   adjustments  are
          appropriate  in  order  to  prevent  dilution  or  enlargement  of the
          benefits or potential  benefits that are intended to be made available
          under the Plan, or otherwise.

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8.   General Provisions.

     a.   Nontransferability.  Except as  otherwise  provided in the Plan or the
          Applicable Award Agreement (including,  but not limited to, provisions
          in the Applicable  Award Agreement  permitting  transfers to immediate
          family members,  trusts for the benefit of immediate family members or
          the  Participant,  or other  similar  arrangements),  no Award  may be
          assigned,  alienated, pledged, attached, sold or otherwise transferred
          or encumbered by a Participant  otherwise  than by will or by the laws
          of  descent  and  distribution,  and any  such  purported  assignment,
          alienation, pledge, attachment, sale, transfer or encumbrance shall be
          void and unenforceable against the Company or any Affiliate; provided,
          however, that the designation of a beneficiary shall not constitute an
          assignment,   alienation,   pledge,  attachment,   sale,  transfer  or
          encumbrance.

     b.   No Rights to Awards.  No  Participant  or other  Person shall have any
          claim  to be  granted  any  Award,  and  there  is no  obligation  for
          uniformity of treatment of Participants or holders or beneficiaries of
          Awards.  The  terms  and  conditions  of  Awards  and the  Committee's
          determinations  and  interpretations  with respect thereto need not be
          the  same  with  respect  to each  Participant  (whether  or not  such
          Participants are similarly situated).

     c.   Share Certificates. All certificates for Shares or other securities of
          the Company or any Affiliate  delivered under the Plan pursuant to any
          Award  shall  be  subject  to such  stop  transfer  orders  and  other
          restrictions as the Committee may deem advisable under the Plan or the
          rules,  regulations,  and  other  requirements  of the SEC,  any stock
          exchange upon which such Shares or other  securities  are then listed,
          and any applicable  Federal or state laws, and the Committee may cause
          a  legend  or  legends  to be put on any  such  certificates  to  make
          appropriate reference to such restrictions.

     d.   Withholding.  A  Participant  may be required to pay to the Company or
          any Affiliates,  and the Company or any Affiliate shall have the right
          and is hereby  authorized to withhold from any Award, from any payment
          due or  transfer  made  under  any Award or under the Plan or from any
          compensation  or other amount owing to a  Participant,  the amount (in
          cash,  Shares,  other  securities,  other Awards or other  property as
          determined by the Committee in its sole  discretion) of any applicable
          withholding  taxes or other amounts in respect of an Award and to take
          such other action as may be necessary in the opinion of the Company to
          satisfy all obligations for the payment of such taxes and amounts. The
          Committee  may  provide  for  additional  cash  payments to holders of
          Awards to defray or offset any tax  arising  from the grant or vesting
          of any Award.

     e.   Award Agreements.  Each Award hereunder shall be evidenced by an Award
          Agreement  which  shall be  delivered  to the  Participant  and  shall
          specify the terms and conditions of the Award and any rules applicable
          thereto,  including,  but not  limited to, the effect on such Award of
          the death,  disability  or  termination  of employment or service of a
          Participant  and the effect,  if any,  of such other  events as may be
          determined by the Committee.

     f.   No Limit on Other Compensation Arrangements.  Nothing contained in the
          Plan shall  prevent  the  Company or any  Affiliate  from  adopting or
          continuing  in  effect  other  compensation  arrangements,   and  such
          arrangements may be either generally  applicable or applicable only in
          specific cases.

     g.   No Right to  Employment.  The grant of an Award shall not be construed
          as giving a



                                      B-8
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          Participant  the  right to be  retained  in the  employ  of, or in any
          consulting relationship with, the Company or any Affiliate.

     h.   No Rights as Stockholder.  Subject to the provisions of the applicable
          Award, no  Participant,  holder or beneficiary of any Award shall have
          any rights as a  stockholder  with respect to any shares of Restricted
          Stock to be distributed under the Plan until such shares of Restricted
          Stock  shall be issued in  accordance  with this Plan and the terms of
          the applicable  Award  Agreement.  From and after the date of original
          issuance,  a  Participant  shall  have the right to vote the shares of
          Restricted  Stock  and to  receive  and to retain  all cash  dividends
          payable or distributable to holders of Shares of record. In connection
          with each grant of Restricted  Stock  hereunder,  the applicable Award
          Agreement shall specify if and to what extent the Participant shall be
          entitled  to  other  rights  of  a  stockholder  in  respect  of  such
          Restricted Stock.

     i.   Governing Law. The validity,  construction, and effect of the Plan and
          any rules and regulations relating to the Plan and any Award Agreement
          shall be determined  in  accordance  with the laws of the State of New
          York.

     j.   Severability.  If any provision of the Plan or any Award is or becomes
          or  is  deemed  to  be  invalid,  illegal,  or  unenforceable  in  any
          jurisdiction  or as to any Person or Award,  or would  disqualify  the
          Plan or any Award under any law deemed  applicable  by the  Committee,
          such  provision  shall be construed  or deemed  amended to conform the
          applicable  laws,  or if it cannot  be  construed  or  deemed  amended
          without,  in the determination of the Committee,  materially  altering
          the intent of the Plan or the Award,  such provision shall be stricken
          as to such jurisdiction, Person or Award and the remainder of the Plan
          and any such Award shall remain in full force and effect.

     k.   Other Laws.  The  Committee may refuse to issue or transfer any Shares
          or  other  consideration  under  an  Award  if,  acting  in  its  sole
          discretion, it determines that the issuance or transfer of such Shares
          or such  other  consideration  might  violate  any  applicable  law or
          regulation  or entitle the  Company to recover the same under  Section
          16(b) of the Exchange  Act.  Without  limiting the  generality  of the
          foregoing,  no Award granted  hereunder shall be construed as an offer
          to  sell  securities  of the  Company,  and no  such  offer  shall  be
          outstanding, unless and until the Committee in its sole discretion has
          determined that any such offer,  if made,  would be in compliance with
          all applicable requirements of the U.S. federal securities laws.

     l.   No Trust or Fund Created.  Neither the Plan nor any Award shall create
          or be  construed  to create a trust or separate  fund of any kind or a
          fiduciary  relationship  between  the Company or any  Affiliate  and a
          Participant  or any  other  Person.  To the  extent  that  any  Person
          acquires a right to receive payments from the Company or any Affiliate
          pursuant to an Award, such right shall be no greater than the right of
          any unsecured general creditor of the Company or any Affiliate.

     m.   No  Fractional  Shares.  No  fractional  Shares  shall  be  issued  or
          delivered  pursuant to the Plan or any Award,  and the Committee shall
          determine whether cash, other  securities,  or other property shall be
          paid or transferred  in lieu of any fractional  Shares or whether such
          fractional Shares or any rights thereto shall be canceled, terminated,
          or otherwise eliminated.

     n.   Headings.  Headings are given to the Sections and  subsections  of the
          Plan solely as a convenience  to facilitate  reference.  Such headings
          shall not be deemed in any way


                                      B-9
<PAGE>

          material or relevant to the construction or interpretation of the Plan
          or any provision thereof.

9.   Term of the Plan.

     a.   Effective Date. The Plan shall become  effective as of the date of its
          approval  by the  Board;  provided,  however,  that no Award  shall be
          exercisable  unless the Plan is  approved by the  stockholders  of the
          Company.

     b.   Expiration. The Plan shall terminate 10 years after the earlier of the
          date on which it becomes  effective and the date it is approved by the
          stockholders of the Company. Notwithstanding the foregoing, all Awards
          made under the Plan  prior to such  termination  date shall  remain in
          effect  until  such  Awards  have  been  satisfied  or  terminated  in
          accordance  with  the  terms  and  provisions  of  the  Plan  and  the
          applicable Award Agreement.


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