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                                GALOOB TOYS, INC.
                            1996 SHARE INCENTIVE PLAN

         1. Purpose. Galoob Toys, Inc. 1996 Share Incentive Plan (the "Plan") is
intended to provide incentives which will attract, retain and motivate highly
competent persons as key employees of Galoob Toys, Inc. (the "Company") and of
any subsidiary corporation now existing or hereafter formed or acquired, by
providing them opportunities to acquire shares of the common stock, par value
$.01 per share, of the Company ("Common Stock") or to receive monetary payments
based on the value of such shares pursuant to the Benefits (as defined below)
described herein. Furthermore, the Plan is intended to assist in aligning the
interests of the Company's key employees to those of its stockholders.

         2. Administration.

                  (a) The Plan will be administered by a committee (the
         "Committee") appointed by the Board of Directors of the Company from
         among its members (which may be the Compensation Committee), and shall
         be comprised solely of not less than two members who shall be (i)
         "Non-Employee Directors" within the meaning of Rule 16b-3(b)(3) (or any
         successor rule) promulgated under the Securities Exchange Act of 1934,
         as amended (the "Exchange Act"), and (ii) unless otherwise determined
         by the Board of Directors, "outside directors" within the meaning of
         Section 162(m) of the Internal Revenue Code of 1986, as amended (the
         "Code"). The Committee is authorized, subject to the provisions of the
         Plan, to establish such rules and regulations as it deems necessary for
         the proper administration of the Plan and to make such determinations
         and interpretations and to take such action in connection with the Plan
         and any Benefits (as defined below) granted hereunder as it deems
         necessary or advisable. All determinations and interpretations made by
         the Committee shall be binding and conclusive on all participants and
         their legal representatives. No member of the Board of the Directors,
         no member of the Committee and no employee of the Company shall be
         liable for any act or failure to act hereunder, except in circumstances
         involving his or her bad faith, gross negligence or willful misconduct,
         or for any act or failure to act hereunder by any other member or
         employee or by any agent to whom duties in connection with the
         administration of this




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         Plan have been delegated. The Company shall indemnify members of the
         Committee and any agent of the Committee who is an employee of the
         Company, against any and all liabilities or expenses to which they may
         be subjected by reason of any act or failure to act with respect to
         their duties on behalf of the Plan, except in circumstances involving
         such person's bad faith, gross negligence or willful misconduct.

                  (b) The Committee may delegate to one or more of its members,
         or to one or more agents, such administrative duties as it may deem
         advisable, and the Committee, or any person to whom it has delegated
         duties as aforesaid, may employ one or more persons to render advice
         with respect to any responsibility the Committee or such person may
         have under the Plan. The Committee may employ such legal or other
         counsel, consultants and agents as it may deem desirable for the
         administration of the Plan and may rely upon any opinion or computation
         received from any such counsel, consultant or agent. Expenses incurred
         by the Committee in the engagement of such counsel, consultant or agent
         shall be paid by the Company, or the subsidiary or affiliate whose
         employees have benefitted from the Plan, as determined by the
         Committee.

         3. Participants. Participants will consist of such key employees of the
Company and any subsidiary corporation of the Company as the Committee in its
sole discretion determines to be significantly responsible for the success and
future growth and profitability of the Company and whom the Committee may
designate from time to time to receive Benefits under the Plan. Designation of a
participant in any year shall not require the Committee to designate such person
to receive a Benefit in any other year or, once designated, to receive the same
type or amount of Benefit as granted to the participant in any other year. The
Committee shall consider such factors as it deems pertinent in selecting
participants and in determining the type and amount of their respective
Benefits.

         4. Type of Benefits. Benefits under the Plan may be granted in any one
or a combination of (a) Stock Options, (b) Stock Appreciation Rights, (c) Stock
Awards, (d) Performance Awards and (e) Stock Units (each as described below, and
collectively, the "Benefits"). Stock Awards, Performance Awards and Stock Units
may, as determined by the Committee in its discretion, constitute
Performance-Based



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Awards, as described in Section 11 below. Benefits shall be evidenced by
agreements (which need not be identical) in such forms as the Committee may from
time to time approve; provided, however, that in the event of any conflict
between the provisions of the Plan and any such agreements, the provisions of
the Plan shall prevail.

         5. Common Stock Available Under the Plan. The aggregate number of
shares of Common Stock that may be subject to Benefits, including Stock Options,
granted under this Plan shall be 1,850,000 shares of Common Stock, which may be
authorized and unissued or treasury shares, subject to any adjustments made in
accordance with Section 12 hereof. The maximum number of shares of Common Stock
with respect to which Benefits may be granted or measured to any individual
participant under the Plan during the term of the Plan shall not exceed 500,000,
provided, however, that the maximum number of shares of Common Stock with
respect to which Stock Options and Stock Appreciation Rights may be granted to
an individual participant under the Plan during the term of the Plan shall not
exceed 500,000 (in each case, subject to adjustments made in accordance with
Section 12 hereof). Other than those shares of Common Stock subject to Benefits
that are cancelled or terminated as a result of the Committee's exercise of its
discretion with respect to Performance-Based Awards as provided for in Section
11, any shares of Common Stock subject to a Stock Option or Stock Appreciation
Right which for any reason is cancelled or terminated without having been
exercised, any shares subject to Stock Awards, Performance Awards or Stock Units
which are forfeited, any shares subject to Performance Awards settled in cash or
any shares delivered to the Company as part of full payment for the exercise of
a Stock Option or Stock Appreciation Right shall again be available for Benefits
under the Plan. The preceding sentence shall apply only for purposes of
determining the aggregate number of shares of Common Stock subject to Benefits
and shall not apply for purposes of determining the maximum number of shares of
Common Stock subject to Benefits (including the maximum number of shares of
Common Stock subject to Stock Options and Stock Appreciation Rights) that any
individual participant may receive.

         6. Stock Options. Stock Options will consist of awards from the Company
that will enable the holder to purchase a specific number of shares of Common
Stock, at set terms and at a fixed purchase price. Stock Options may be
"incentive stock options" ("Incentive Stock Options"), within the



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meaning of Section 422 of the Code, or Stock Options which do not constitute
Incentive Stock Options ("Nonqualified Stock Options"). The Committee will have
the authority to grant to any participant one or more Incentive Stock Options,
Nonqualified Stock Options, or both types of Stock Options (in each case with or
without Stock Appreciation Rights). Each Stock Option shall be subject to such
terms and conditions consistent with the Plan as the Committee may impose from
time to time, subject to the following limitations:

                  (a) Exercise Price. Each Stock Option granted hereunder shall
         have such per-share exercise price as the Committee may determine at
         the date of grant; provided, however, subject to subsection (d) below,
         that the per-share exercise price shall not be less than 100% of the
         Fair Market Value (as defined below) of the Common Stock on the date
         the option is granted.

                  (b) Payment of Exercise Price. The option exercise price may
         be paid in cash or, in the discretion of the Committee determined at
         the date of grant, by the delivery of shares of Common Stock of the
         Company then owned by the participant, by the withholding of shares of
         Common Stock for which a Stock Option is exercisable, or by a
         combination of these methods. In the discretion of the Committee
         determined at the date of grant, payment may also be made by delivering
         a properly executed exercise notice to the Company together with a copy
         of irrevocable instructions to a broker to deliver promptly to the
         Company the amount of sale or loan proceeds to pay the exercise price.
         To facilitate the foregoing, the Company may enter into agreements for
         coordinated procedures with one or more brokerage firms. The Committee
         may prescribe any other method of paying the exercise price that it
         determines to be consistent with applicable law and the purpose of the
         Plan, including, without limitation, in lieu of the exercise of a Stock
         Option by delivery of shares of Common Stock of the Company then owned
         by a participant, providing the Company with a notarized statement
         attesting to the number of shares owned, where, upon verification by
         the Company, the Company would issue to the participant only the number
         of incremental shares to which the participant is entitled upon
         exercise of the Stock Option. In determining which methods a
         participant may utilize to pay the exercise



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         price, the Committee may consider such factors as it determines are
         appropriate.

                  (c) Exercise Period. Stock Options granted under the Plan
         shall be exercisable at such time or times and subject to such terms
         and conditions as shall be determined by the Committee; provided,
         however, that no Stock Option shall be exercisable later than ten years
         after the date it is granted. All Stock Options shall terminate at such
         earlier times and upon such conditions or circumstances as the
         Committee shall in its discretion set forth in such option agreement at
         the date of grant.

                  (d) Limitations on Incentive Stock Options. Incentive Stock
         Options may be granted only to participants who are key employees of
         the Company or subsidiary corporation of the Company at the date of
         grant. The aggregate market value (determined as of the time the option
         is granted) of the Common Stock with respect to which Incentive Stock
         Options are exercisable for the first time by a participant during any
         calendar year (under all option plans of the Company) shall not exceed
         $100,000. For purposes of the preceding sentence, (i) Incentive Stock
         Options will be taken into account in the order in which they are
         granted and (ii) Incentive Stock Options granted before 1987 shall not
         be taken into account. Incentive Stock Options may not be granted to
         any participant who, at the time of grant, owns stock possessing (after
         the application of the attribution rules of Section 424(d) of the Code)
         more than 10% of the total combined voting power of all outstanding
         classes of stock of the Company or any subsidiary corporation of the
         Company, unless the option price is fixed at not less than 110% of the
         Fair Market Value of the Common Stock on the date of grant and the
         exercise of such option is prohibited by its terms after the expiration
         of five years from the date of grant of such option. Notwithstanding
         anything to the contrary contained herein, no Incentive Stock Option
         may be exercised later than ten years after the date it is granted.

         7. Stock Appreciation Rights. The Committee may, in its discretion,
grant Stock Appreciation Rights to the holders of any Stock Options granted
hereunder. In addition, Stock Appreciation Rights may be granted independently
of, and without relation to, options. A Stock Appreciation Right



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means a right to receive a payment, in cash, Common Stock or a combination
thereof, in an amount equal to the excess of (x) the Fair Market Value, or other
specified valuation, of a specified number of shares of Common Stock on the date
the right is exercised over (y) the Fair Market Value, or other specified
valuation (which shall be no less than the Fair Market Value), of such shares of
Common Stock on the date the right is granted, all as determined by the
Committee; provided, however, that if a Stock Appreciation Right is granted
retroactively in tandem with or in substitution for a Stock Option, the
designated Fair Market Value in the award agreement may be the Fair Market Value
on the date such Stock Option was granted. Each Stock Appreciation Right shall
be subject to such terms and conditions as the Committee shall impose from time
to time.

         8. Stock Awards. The Committee may, in its discretion, grant Stock
Awards (which may include mandatory payment of bonus incentive compensation in
stock) consisting of Common Stock issued or transferred to participants with or
without other payments therefor as additional compensation for services to the
Company. Stock Awards may be subject to such terms and conditions as the
Committee determines appropriate, including, without limitation, restrictions on
the sale or other disposition of such shares, the right of the Company to
reacquire such shares for no consideration upon termination of the participant's
employment within specified periods, and may constitute Performance-Based
Awards, as described below. The Committee may require the participant to deliver
a duly signed stock power, endorsed in blank, relating to the Common Stock
covered by such an Award. The Committee may also require that the stock
certificates evidencing such shares be held in custody or bear restrictive
legends until the restrictions thereon shall have lapsed. The Stock Award shall
specify whether the participant shall have, with respect to the shares of Common
Stock subject to a Stock Award, all of the rights of a holder of shares of
Common Stock of the Company, including the right to receive dividends and to
vote the shares.

         9. Performance Awards.

                  (a) Performance Awards may be granted to participants at any
         time and from time to time, as shall be determined by the Committee.
         Performance Awards may, as determined by the Committee in its sole
         discretion, constitute Performance-Based Awards. The Committee shall
         have complete discretion in determining



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         the number, amount and timing of awards granted to each participant.
         Such Performance Awards may be in the form of shares of Common Stock or
         Stock Units. Performance Awards may be awarded as short-term or
         long-term incentives. With respect to those Performance Awards that are
         intended to constitute Performance-Based Awards, the Committee shall
         set performance targets at its discretion which, depending on the
         extent to which they are met, will determine the number and/or value of
         Performance Awards that will be paid out to the participants, and may
         attach to such Performance Awards one or more restrictions. Performance
         targets may be based upon, without limitation, Company-wide, divisional
         and/or individual performance.

                  (b) With respect to those Performance Awards that are not
         intended to constitute Performance-Based Awards, the Committee shall
         have the authority at any time to make adjustments to performance
         targets for any outstanding Performance Awards which the Committee
         deems necessary or desirable unless at the time of establishment of
         goals the Committee shall have precluded its authority to make such
         adjustments.

                  (c) Payment of earned Performance Awards shall be made in
         accordance with terms and conditions prescribed or authorized by the
         Committee. The participant may elect to defer, or the Committee may
         require or permit the deferral of, the receipt of Performance Awards
         upon such terms as the Committee deems appropriate.

         10. Stock Units.

                  (a) The Committee may, in its discretion, grant Stock Units to
         participants hereunder. Stock Units may, as determined by the Committee
         in its sole discretion, constitute Performance-Based Awards. The
         Committee shall determine the criteria for the vesting of Stock Units.
         A Stock Unit granted by the Committee shall provide payment in shares
         of Common Stock at such time as the award agreement shall specify.
         Shares of Common Stock issued pursuant to this Section 10 may be issued
         with or without other payments therefor as may be required by
         applicable law or such other consideration as may be determined by the
         Committee. The Committee shall determine whether a participant granted
         a Stock Unit shall be entitled to a Dividend Equivalent Right (as
         defined below).



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                  (b) Upon vesting of a Stock Unit, unless the Committee has
         determined to defer payment with respect to such unit or a Participant
         has elected to defer payment under subsection (c) below, shares of
         Common Stock representing the Stock Units shall be distributed to the
         participant unless the Committee, with the consent of the participant,
         provides for the payment of the Stock Units in cash or partly in cash
         and partly in shares of Common Stock equal to the value of the shares
         of Common Stock which would otherwise be distributed to the
         participant.

                  (c) Prior to the year with respect to which a Stock Unit may
         vest, the participant may elect not to receive Common Stock upon the
         vesting of such Stock Unit and for the Company to continue to maintain
         the Stock Unit on its books of account. In such event, the value of a
         Stock Unit shall be payable in shares of Common Stock pursuant to the
         agreement of deferral.

                  (d) A "Stock Unit" means a notational account representing one
         share of Common Stock. A "Dividend Equivalent Right" means the right to
         receive the amount of any dividend paid on the share of Common Stock
         underlying a Stock Unit, which shall be payable in cash or in the form
         of additional Stock Units.

         11. Performance-Based Awards. Certain Benefits granted under the Plan
may be granted in a manner such that the Benefits qualify for the
performance-based compensation exemption of Section 162(m) of the Code
("Performance-Based Awards"). As determined by the Committee in its sole
discretion, either the granting or vesting of such Performance-Based Awards are
to be based upon one or more of the following factors: net sales, pretax income
before allocation of corporate overhead and bonus, budget, earnings per share,
net income, division, group or corporate financial goals, return on
stockholders' equity, return on assets, attainment of strategic and operational
initiatives, appreciation in and/or maintenance of the price of the Common Stock
or any other publicly-traded securities of the Company, market share, gross
profits, earnings before interest and taxes, earnings before interest, taxes,
dividends and amortization, economic value-added models and comparisons with
various stock market indices, reductions in costs or any combination of the
foregoing. With respect to Performance-Based Awards, (i) the Committee shall
establish in writing (x) the objective performance-based goals



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applicable to a given period and (y) the individual employees or class of
employees to which such performance-based goals apply no later than 90 days
after the commencement of such period (but in no event after 25% of such period
has elapsed) and (ii) no Performance-Based Awards shall be payable to or vest
with respect to, as the case may be, any participant for a given period until
the Committee certifies in writing that the objective performance goals (and any
other material terms) applicable to such period have been satisfied. With
respect to any Benefits intended to qualify as Performance-Based Awards, after
establishment of a performance goal, the Committee shall not revise such
performance goal or increase the amount of compensation payable thereunder (as
determined in accordance with Section 162(m) of the Code) upon the attainment of
such performance goal. Notwithstanding the preceding sentence, the Committee may
reduce or eliminate the number of shares of Common Stock or cash granted or the
number of shares of Common Stock vested upon the attainment of such performance
goal.

         12. Adjustment Provisions; Change in Control.

                  (a) If there shall be any change in the Common Stock of the
         Company, through merger, consolidation, reorganization,
         recapitalization, stock dividend, stock split, reverse stock split,
         split up, spinoff, combination of shares, exchange of shares, dividend
         in kind or other like change in capital structure or distribution
         (other than normal cash dividends) to stockholders of the Company, an
         adjustment shall be made to each outstanding Stock Option and Stock
         Appreciation Right such that each such Stock Option and Stock
         Appreciation Right shall thereafter be exercisable for such securities,
         cash and/or other property as would have been received in respect of
         the Common Stock subject to such Stock Option or Stock Appreciation
         Right had such Stock Option or Stock Appreciation Right been exercised
         in full immediately prior to such change or distribution, and such an
         adjustment shall be made successively each time any such change shall
         occur. In addition, in the event of any such change or distribution, in
         order to prevent dilution or enlargement of participants' rights under
         the Plan, the Committee will have authority to adjust, in an equitable
         manner, the number and kind of shares that may be issued under the
         Plan, the exercisability and vesting provisions of such Benefits, the
         number and



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         kind of shares subject to outstanding Benefits, the exercise price
         applicable to outstanding Benefits, and the Fair Market Value of the
         Common Stock and other value determinations applicable to outstanding
         Benefits. Appropriate adjustments may also be made by the Committee in
         the terms of any Benefits under the Plan to reflect such changes or
         distributions and to modify any other terms of outstanding Benefits on
         an equitable basis, including modifications of performance targets and
         changes in the length of performance periods. In addition, other than
         with respect to Stock Options, Stock Appreciation Rights and other
         awards intended to constitute Performance-Based Awards, the Committee
         is authorized to make adjustments to the terms and conditions of, and
         the criteria included in, Benefits in recognition of unusual or
         nonrecurring events affecting the Company or the financial statements
         of the Company, or in response to changes in applicable laws,
         regulations, or accounting principles. Notwithstanding the foregoing,
         (i) any adjustment with respect to an Incentive Stock Option shall
         comply with the rules of Section 424(a) of the Code, and (ii) in no
         event shall any adjustment be made which would render any Incentive
         Stock Option granted hereunder other than an incentive stock option for
         purposes of Section 422 of the Code.

                  (b) In the event of a Change in Control (as defined below),
         the Committee, in its discretion, may take such actions as it deems
         appropriate with respect to outstanding Benefits, including, without
         limitation, accelerating the exercisability or vesting of such
         Benefits.

         The Committee, in its discretion, may determine that, upon the
occurrence of a Change in Control of the Company, each Stock Option and Stock
Appreciation Right outstanding hereunder shall terminate within a specified
number of days after notice to the holder, and such holder shall receive, with
respect to each share of Common Stock subject to such Stock Option or Stock
Appreciation Right, an amount equal to the excess of the Fair Market Value of
such shares of Common Stock immediately prior to the occurrence of such Change
in Control over the exercise price per share of such Stock Option or Stock
Appreciation Right; such amount to be payable in cash, in one or more kinds of
property (including the property, if any, payable in the transaction) or in a



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combination thereof, as the Committee, in its discretion, shall determine.

         For purposes of this Section 12(b), a "Change in Control" of the
Company shall be deemed to have occurred upon any of the following events:

                  (A) A person or entity or group of persons or entities, acting
         in concert, shall become the direct or indirect beneficial owner
         (within the meaning of Rule 13d-3 of the Exchange Act) of securities of
         the Company representing twenty-five percent (25%) or more of the
         combined voting power of the issued and outstanding common stock of the
         Company (a "Significant Owner"), unless such shares are originally
         issued to such Significant Owner by the Company; or

                  (B) The majority of the Company's Board of Directors is no
         longer comprised of the incumbent directors who constitute the Board of
         Directors on the Effective Date (as hereinafter defined) and any other
         individual(s) who becomes a director subsequent to the date of this
         Agreement whose initial election or nomination for election as a
         director, as the case may be, was approved by at least a majority of
         the directors who comprised the incumbent directors as of the date of
         such election or nomination; or

                  (C) The Company's Common Stock shall cease to be publicly
         traded; or

                  (D) A sale of all or substantially all of the assets of the
         Company; or

                  (E) The Board of Directors shall approve any merger,
         consolidation, or like business combination or reorganization of the
         Company, the consummation of which would result in the occurrence of
         any event described in clause (B) or (C) above, and such transaction
         shall have been consummated.

         13. Transferability. Each Benefit granted under the Plan to a
participant shall not be transferable otherwise than by will or the laws of
descent and distribution, and shall be exercisable, during the participant's
lifetime, only by the participant. In the event of the death of a participant,
each Stock Option or Stock Appreciation Right theretofore granted to him or her
shall be exercisable



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during such period after his or her death as the Committee shall in its
discretion set forth in such option or right at the date of grant and then only
by the executor or administrator of the estate of the deceased participant or
the person or persons to whom the deceased participant's rights under the Stock
Option or Stock Appreciation Right shall pass by will or the laws of descent and
distribution. Notwithstanding the foregoing, at the discretion of the Committee,
an award of a Benefit other than an Incentive Stock Option may permit the
transferability of a Benefit by a participant solely to the participant's
spouse, siblings, parents, children and grandchildren or trusts for the benefit
of such persons or partnerships, corporations, limited liability companies or
other entities owned solely by such persons, including trusts for such persons,
subject to any restriction included in the award of the Benefit.

         14. Other Provisions. The award of any Benefit under the Plan may also
be subject to such other provisions (whether or not applicable to the Benefit
awarded to any other participant) as the Committee determines, at the date of
grant, appropriate, including, without limitation, for the installment purchase
of Common Stock under Stock Options, for the installment exercise of Stock
Appreciation Rights, to assist the participant in financing the acquisition of
Common Stock, for the forfeiture of, or restrictions on resale or other
disposition of, Common Stock acquired under any form of Benefit, for the
acceleration of exercisability or vesting of Benefits in the event of a change
in control of the Company, for the payment of the value of Benefits to
participants in the event of a change in control of the Company, or to comply
with federal and state securities laws, or understandings or conditions as to
the participant's employment in addition to those specifically provided for
under the Plan.

         15. Fair Market Value. For purposes of this Plan and any Benefits
awarded hereunder, Fair Market Value shall be the closing price of the Company's
Common Stock on the date of calculation (or on the last preceding trading date
if Common Stock was not traded on such date) if the Company's Common Stock is
readily tradeable on a national securities exchange or other market system, and
if the Company's Common Stock is not readily tradeable, Fair Market Value shall
mean the amount determined in good faith by the Committee as the fair market
value of the Common Stock of the Company.




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<PAGE>   13









         16. Withholding. All payments or distributions of Benefits made
pursuant to the Plan shall be net of any amounts required to be withheld
pursuant to applicable federal, state and local tax withholding requirements. If
the Company proposes or is required to distribute Common Stock pursuant to the
Plan, it may require the recipient to remit to it or to the corporation that
employs such recipient an amount sufficient to satisfy such tax withholding
requirements prior to the delivery of any certificates for such Common Stock. In
lieu thereof, the Company or the employing corporation shall have the right to
withhold the amount of such taxes from any other sums due or to become due from
such corporation to the recipient as the Committee shall prescribe. The
Committee may, in its discretion and subject to such rules as it may adopt
(including any as may be required to satisfy applicable tax and/or non-tax
regulatory requirements), permit an optionee or award or right holder to pay all
or a portion of the federal, state and local withholding taxes arising in
connection with any Benefit consisting of shares of Common Stock by electing to
have the Company withhold shares of Common Stock having a Fair Market Value
equal to the amount of tax to be withheld, such tax calculated at rates required
by statute or regulation.

         17. Tenure. A participant's right, if any, to continue to serve the
Company as a director, officer, employee, or otherwise, shall not be enlarged or
otherwise affected by his or her designation as a participant under the Plan.

         18. Unfunded Plan. Participants shall have no right, title, or interest
whatsoever in or to any investments which the Company may make to aid it in
meeting its obligations under the Plan. Nothing contained in the Plan, and no
action taken pursuant to its provisions, shall create or be construed to create
a trust of any kind, or a fiduciary relationship between the Company and any
participant, beneficiary, legal representative or any other person. To the
extent that any person acquires a right to receive payments from the Company
under the Plan, such right shall be no greater than the right of an unsecured
general creditor of the Company. All payments to be made hereunder shall be paid
from the general funds of the Company and no special or separate fund shall be
established and no segregation of assets shall be made to assure payment of such
amounts except as expressly set forth in the Plan. The Plan is not intended to
be subject to the Employee Retirement Income Security Act of 1974, as amended.



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         19. No Fractional Shares. No fractional shares of Common Stock shall be
issued or delivered pursuant to the Plan or any Benefit. The Committee shall
determine whether cash, or Benefits, or other property shall be issued or paid
in lieu of fractional shares or whether such fractional shares or any rights
thereto shall be forfeited or otherwise eliminated.

         20. Duration, Amendment and Termination. No Benefit shall be granted
more than ten years after the Effective Date; provided, however, that the terms
and conditions applicable to any Benefit granted prior to such date may
thereafter be amended or modified by mutual agreement between the Company and
the participant or such other persons as may then have an interest therein.
Also, by mutual agreement between the Company and a participant hereunder, under
this Plan or under any other present or future plan of the Company, Benefits may
be granted to such participant in substitution and exchange for, and in
cancellation of, any Benefits previously granted such participant under this
Plan, or any other present or future plan of the Company. The Committee may
amend the Plan from time to time or suspend or terminate the Plan at any time.
However, no action authorized by this Section 20 shall reduce the amount of any
existing Benefit or change the terms and conditions thereof without the
participant's consent. No amendment of the Plan shall, without approval of the
stockholders of the Company, (i) increase the total number of shares which may
be issued under the Plan or the maximum number of shares with respect to Stock
Options, Stock Appreciation Rights and other Benefits that may be granted to any
individual under the Plan or (ii) modify the requirements as to eligibility for
Benefits under the Plan; provided, however, that no amendment may be made
without approval of the stockholders of the Company if the amendment will
disqualify any Incentive Stock Options granted hereunder.

         21. Governing Law. This Plan, Benefits granted hereunder and actions
taken in connection herewith shall be governed and construed in accordance with
the laws of the State of Delaware (regardless of the law that might otherwise
govern under applicable Delaware principles of conflict of laws).



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<PAGE>   15



         22. Effective Date.

                  (a) The Plan shall be effective as of July 29, 1996, the date
         on which the Plan was adopted by the Committee (the "Effective Date"),
         provided that the Plan is approved by the stockholders of the Company
         at an annual meeting or any special meeting of stockholders of the
         Company within 12 months of the Effective Date, and such approval of
         stockholders shall be a condition to the right of each participant to
         receive any Benefits hereunder. Any Benefits granted under the Plan
         prior to such approval of stockholders shall be effective as of the
         date of grant (unless, with respect to any Benefit, the Committee
         specifies otherwise at the time of grant), but no such Benefit may be
         exercised or settled and no restrictions relating to any Benefit may
         lapse prior to such stockholder approval, and if stockholders fail to
         approve the Plan as specified hereunder, any such Benefit shall be
         cancelled.

                  (b) This Plan shall terminate on July 28, 2006 (unless sooner
         terminated by the Committee).




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