CONVERSION TECHNOLOGIES INTERNATIONAL, INC.

                     1996 LONG-TERM EMPLOYEE INCENTIVE PLAN


Article I. Purpose, Adoption and Term of the Plan

     1.01 Purpose.  The purpose of the  Conversion  Technologies  International,
Inc. 1996  Long-Term  Employee  Incentive Plan  (hereinafter  referred to as the
"Plan") is to assist the Company (as hereinafter  defined) and its  subsidiaries
in attracting  and retaining  individuals to serve as officers and key employees
who will  contribute to the success of the Company and its  subsidiaries  and to
provide  incentives to such  individuals to achieve  long-term  objectives which
will inure to the benefit of all stockholders of the Company.

     1.02 Adoption and Term. The Plan has been approved and adopted by the Board
(as hereinafter defined),  acting through its Executive Committee,  effective as
of August 26, 1996 (the  "Effective  Date").  The Plan shall  terminate  without
further action of the Board on the tenth anniversary of the Effective Date.

Article II. Definitions

     For  purposes  of this Plan,  capitalized  terms  shall have the  following
meanings:

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     2.01 Award means any grant to a Participant  of any one or a combination of
Restricted  Shares  described  in Article VI,  Performance  Awards  described in
Article VII or any other award made under the terms of the Plan.

     2.02 Award  Agreement means a written  agreement  between the Company and a
Participant or a written  acknowledgment from the Company  specifically  setting
forth the terms and  conditions of an Award  granted to a Participant  under the
Plan.

     2.03 Award Period means,  with respect to an Award,  the period of time, if
any, set forth in the Award Agreement during which specified target  performance
goals must be achieved or other conditions set forth in the Award Agreement must
be satisfied.

     2.04 Beneficiary means an individual, trust or estate who or which, by will
or the laws of descent and distribution,  succeeds to the rights and obligations
of a Participant  under the Plan and an Award  Agreement upon the  Participant's
death.

     2.05 Board means the Board of Directors of the Company.

     2.06 Business Day means any day on which banking  institutions in the State
of New York are not authorized or obligated by law or executive order to close.


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     2.07 Change in Control  means any of the events set forth below;  provided,
however,  that  the  Committee,  in its  sole  discretion,  may  specify  a more
restrictive definition of Change in Control in any Award Agreement,  which shall
apply to the Award granted under such Award Agreement:

     (a) The  acquisition  in one or more  transactions,  other  than  from  the
Company,  by any  individual,  entity or group (within the meaning of Section 13
(d) (3) or 14 (d) (2) of the Exchange Act) of beneficial  ownership  (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of a number of Company
Voting  Securities in excess of 50% of the Company Voting Securities unless such
acquisition has been approved by the Board; or

     (b)  Any  election  has  occurred  of  persons  to the  Board  that  causes
two-thirds  of the Board to consist of persons  other than (i)  persons who were
members of the Board on August 16, 1996 and (ii) persons who were  nominated for
elections  as  members  of the  board at a time  when  two-thirds  of the  Board
consisted of persons who were members of the Board on August 16, 1996; provided,
however,  that any person  nominated for election by a Board at least two-thirds
of whom constituted  persons  described in clauses (i) and/or (ii) or by persons
who were themselves  nominated by such Board shall, for this purpose,  be deemed
to have been nominated by a Board comprised of persons  described in clause (i);
or

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<PAGE>

     (c) Approval by the stockholders of the Company of a reorganization, merger
or   consolidation,   unless,   following   such   reorganization,   merger   or
consolidation, all or substantially all of the individuals and entities who were
the respective  beneficial  owners of the Outstanding  Shares and Company Voting
Securities  immediately prior to such  reorganization,  merger or consolidation,
following  such  reorganization,   merger  or  consolidation  beneficially  own,
directly or indirectly, more than 50% of, respectively,  of the then outstanding
shares of Common  Stock and the combined  voting  power of the then  outstanding
Company  Voting  Securities  entitled  to  vote  generally  in the  election  of
directors  of  the  entity  resulting  from  such   reorganization,   merger  or
consolidation  in  substantially  the same  proportion as their ownership of the
Outstanding  Shares and  Company  Voting  Securities  immediately  prior to such
reorganization, merger or consolidation, as the case may be; or

     (d)  Approval  by  the  stockholders  of  the  Company  of  (i) a  complete
liquidation or dissolution of the Company or (ii) a sale or other disposition of
all or substantially all the assets of the Company.

     2.08 Code means the Internal  Revenue Code of 1986, as amended from time to
time,  or any  successor  thereto.  References  to a section  of the Code  shall
include  that  

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section and any comparable  section or sections of any future  legislation  that
amends, supplements or supersedes said section.

     2.09 Committee means the Compensation  Committee of the Board or such other
Committee as may be  designated  by the Board or, if the Board shall  administer
this Plan, the term  "Committee"  shall mean the Board. The Committee shall have
the power and authority to administer the Plan in accordance with Section 3.01.

     2.10 Common Stock means the Common Stock,  par value $0.00025 per share, of
the Company.

     2.11  Company  means  Conversion   Technologies   International,   Inc.,  a
corporation  organized  under  the  laws  of the  State  of  Delaware,  and  its
successors.

     2.12  Company  Voting  Securities  means the  combined  voting power of all
outstanding  voting  securities of the Company entitled to vote generally in the
election of the Board.

     2.13 Date of Grant means the date  designated  by the Committee as the date
as of which it grants  an Award,  which  shall not be  earlier  than the date on
which the Committee approves the granting of such Award.


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<PAGE>

     2.14 Disability means any physical or mental impairment or disability which
prevents a Participant from performing the duties of his or her employment for a
period of 180 days in a 360-day period.

     2.15  Disability  Date  means the date  which is 120 days after the date on
which a Participant is first absent from active  employment with the Company (or
any of its subsidiaries) by reason of a Disability.

     2.16 Exchange Act means the Securities Exchange Act of 1934, as amended.

     2.17 Fair Market  Value  means,  as of any given date,  with respect to any
Awards granted hereunder,  the average of the high and low trading prices of the
Common Stock on such date as reported on the New York Stock  Exchange or, if the
Common  Stock is not then traded on the New York Stock  Exchange,  on such other
national securities exchange on which the Common Stock is admitted to trade, or,
if none,  on the Nasdaq Stock Market  ("Nasdaq") if the Common Stock is admitted
for quotation thereon; provided,  however, if there were no sales reported as of
such date,  Fair Market  Value  shall be computed as of the last date  preceding
such  date on which a sale was  reported;  provided,  further,  that if any such
exchange or quotation  system is closed on any day on which Fair Market Value is
to be  determined,  Fair Market Value shall be  determined  as of the first date
immediately  preceding such date on which such exchange or quotation  system was
open for  trading.  In the event the Common  Stock is not admitted to trade on 


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a securities exchange or quoted on Nasdaq, the Fair market Value as of any given
date shall be as determined in good faith by the Committee.

     2.18  Outstanding  Shares means,  at any time,  the issued and  outstanding
shares of Common Stock.

     2.19  Participant  shall  mean any  employee  of the  Company or any of its
subsidiaries  selected  by the  Committee  to receive an Award under the Plan in
accordance with Article V.

     2.20 Performance  Award means an Award,  granted in accordance with Article
VII,  of the right to  receive an award,  payable  in cash or Common  Stock or a
combination of both at the end of a specified performance period.

     2.21 Plan  means  the  Conversion  Technologies  International,  Inc.  1996
Long-Term  Incentive  Plan as set forth  herein,  and as the same may be amended
from time to time.

     2.22 Restricted Shares means shares of Common Stock subject to restrictions
imposed in connection with Awards granted under Article VI.

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<PAGE>

     2.23   Termination  of  Employment   means  the  voluntary  or  involuntary
termination  of a  Participant's  employment  with  the  Company  or  any of its
subsidiaries for any reason, including death,  Disability,  retirement or as the
result of the sale or other  divestiture  of the  Participant's  employer or any
similar transaction in which the Participant's employer ceases to be the Company
or one of its  subsidiaries.  Whether  entering  military  or  other  government
service shall constitute Termination of Employment, and whether a Termination of
Employment  is a result of  Disability,  shall be determined in each case by the
Committee.

Article III. Administration

     3.01  Committee.  The Plan shall be  administered  by the Committee,  which
shall have exclusive and final authority in each  determination,  interpretation
or other action  affecting the Plan and its  Participants.  The Committee  shall
have the sole and absolute  discretion  to interpret  the Plan, to establish and
modify  administrative  rules for the Plan, to select the officers and other key
employees to whom Awards may be granted,  to  determine  all claims for benefits
under the Plan,  to impose  such  conditions  and  restrictions  on Awards as it
determines  appropriate  and to take such steps in connection  with the Plan and
Awards granted hereunder as it may deem necessary or advisable.


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<PAGE>

Article IV. Shares

     4.01  Number of Shares  Issuable.  Subject to  adjustments  as  provided in
Section 9.07, the maximum number of shares of Common Stock  available for Awards
under the Plan shall be 800,000  shares of Common Stock.  Any and all shares may
be issued in  respect  of any of the types of  Awards.  The  Common  Stock to be
offered under the Plan shall be authorized and unissued  Common Stock, or issued
Common  Stock  which shall have been  reacquired  by the Company and held in its
treasury.

     4.02 Shares  Subject to Terminated  Awards.  Any Common Stock  forfeited as
provided in Section  7.02(a) and Common  Stock  subject to any Awards  which are
otherwise  surrendered by the Participant without receiving any payment or other
benefit with respect  thereto may again be subject to new Awards under the Plan.
Common Stock issued in payment of  Performance  Awards which are  denominated in
cash  amounts  shall not again be  available  for the grant of Awards  under the
Plan.

Article V. Participation

     5.01 Eligible Participants. Participants in the Plan shall be such officers
and other key  employees  of the  Company  or its  subsidiaries,  whether or not
Directors, as the Committee, in its sole discretion,  may designate from time to
time. The 

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<PAGE>

Committee's  designation  of a  Participant  in any year shall not  require  the
Committee  to  designate  such  person to receive  Awards or grants in any other
year.  The  designation  of a Participant  to receive Awards or grants under one
portion of the Plan shall not require the Committee to include such  Participant
under other portions of the Plan.  The Committee  shall consider such factors as
it deems  pertinent in selecting  Participants  and in determining  the type and
amount of their respective Awards. More than one type of Award may be granted to
a Participant at one time or at different times.

Article VI. Restricted Shares

     6.01 Restricted Share Awards.  Restricted Shares may be issued either alone
or in addition to other Awards  granted under the Plan.  The Committee may grant
to any Participant an Award of Common Stock in such number,  and subject to such
terms and conditions relating to forfeitability and restrictions on delivery and
transfer  (whether  based  on  performance  standards,  periods  of  service  or
otherwise) as the Committee shall  establish.  The terms of any Restricted Share
Award  granted  under this Plan shall be set forth in an Award  Agreement  which
shall contain  provisions  determined by the Committee and not inconsistent with
this Plan.  The  provisions of Restricted  Share Awards need not be the same for
each Participant receiving such Awards.

     (a) Issuance of Restricted Shares. As soon as practicable after the Date of
Grant of a Restricted  Share Award by the Committee,  the Company shall cause to
be 


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<PAGE>

transferred  on the books of the Company  Common Stock,  registered on behalf of
the  Participant,  evidencing  the Restricted  Shares covered by the Award,  but
subject to  forfeiture  to the  Company  retroactive  to the Date of Grant if an
Award Agreement  delivered to the Participant by the Company with respect to the
Restricted  Shares covered by the Award is not duly executed by the  Participant
and timely  returned to the Company.  All Common  Stock  covered by Awards under
this  Article  VI shall be  subject to the  restrictions,  terms and  conditions
contained  in the Plan and the Award  Agreement  entered into by and between the
Company  and the  Participant.  Until the lapse or release  of all  restrictions
applicable to an Award of Restricted Shares, the stock certificates representing
such Restricted  Shares shall be held in custody by the Company or its designee.
Upon the  lapse or  release  of all  restrictions  with  respect  to an Award as
described in Section 6.01(d), one or more stock certificates,  registered in the
name of the Participant,  for an appropriate number of shares of Common Stock as
provided in Section 6.01 (d), free of any restrictions set forth in the Plan and
the Award Agreement, shall be delivered to the Participant.

     (b)  Stockholder  Rights.  Beginning on the Date of Grant of the Restricted
Share  Award and  subject to  execution  of the Award  Agreement  as provided in
Section 6.01 (a), the Participant shall become a stockholder of the Company with
respect to all Common Stock subject to the Award Agreement and shall have all of
the rights of a  stockholder,  including,  but not limited to, the right to vote
such Common Stock and the right to receive dividends (or dividend  equivalents);
provided,  however, that any 



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<PAGE>

Common  Stock  distributed  as a  dividend  or  otherwise  with  respect  to any
Restricted  Shares as to which the  restrictions  have not yet  lapsed  shall be
subject to the same  restrictions as such Restricted Shares and shall be held as
prescribed in Section 6.01(a).

     (c) Restriction on  Transferability.  None of the Restricted  Shares may be
assigned  or  transferred  (other  than  by  will or the  laws  of  descent  and
distribution),  pledged or sold  prior to lapse or  release of the  restrictions
applicable thereto.

     (d) Delivery of Shares Upon Release of  Restrictions.  Upon  expiration  or
earlier  termination  of the  forfeiture  period  without a  forfeiture  and the
satisfaction  of  or  release  from  any  other  conditions  prescribed  by  the
Committee,  the restrictions applicable to the Restricted Shares shall lapse. As
promptly as administratively feasible thereafter, subject to the requirements of
Section 11.06,  the Company shall deliver to the  Participant or, in case of the
Participant's  death,  to  the  Participant's  Beneficiary,  one or  more  stock
certificates for the appropriate  number of shares of Common Stock,  free of all
such restrictions, except for any restrictions that may be imposed by law.

6.02 Terms of Restricted Shares.

     (a) Forfeiture of Restricted Shares.  Subject to Section 6.02(b) and except
as otherwise  may be set forth in any Award  Agreement,  all  Restricted  Shares
shall be forfeited and returned to the Company and all rights of the Participant
with respect to 



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<PAGE>

such Restricted  Shares shall terminate unless the Participant  continues in the
service  of the  Company or one of its  subsidiaries  as an  employee  until the
expiration of the forfeiture period for such Restricted Shares and satisfies any
and all other conditions set forth in the Award Agreement. The Committee, in its
sole discretion, shall determine the forfeiture period (which may, but need not,
lapse in  installments)  and any other  terms  and  conditions  applicable  with
respect to any Restricted Share Award.

     (b) Waiver of Forfeiture Period. Notwithstanding anything contained in this
Article VI to the contrary, the Committee may, in its sole discretion, waive the
forfeiture  period  and any other  conditions  set forth in any Award  Agreement
under appropriate  circumstances  (including the death, disability or retirement
of the Participant or a material change in circumstances  arising after the date
of an Award) and subject to such terms and conditions (including forfeiture of a
proportionate  number of the  Restricted  Shares)  as the  Committee  shall deem
appropriate.

Article VII. Performance Awards

     7.01 Performance Awards.

     (a) Award  Periods.  Performance  Awards may be granted  either alone or in
addition to other  Awards  granted  under the Plan.  A  Performance  Award shall
consist of the right to receive a payment (measured by (i) the Fair Market Value
of a specified  



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<PAGE>

number  of shares  of  Common  Stock at the end of the Award  Period or (ii) the
increase  in the Fair  Market  Value of a  specified  number of shares of Common
Stock during the Award Period or (iii) a fixed cash amount payable at the end of
the Award  Period)  contingent  upon the extent to which  certain  predetermined
performance  targets have been met during an Award Period.  The Committee  shall
determine the  Participants  to whom  Performance  Awards shall be awarded,  the
number of Performance  Awards to be awarded to any Participant,  the duration of
the Award  Period  during  which the  Performance  Awards will be vested and the
other terms and conditions of the Award.

     (b) Performance  Targets.  The Performance  targets may include  individual
performance  standards or specified  levels of revenue,  funds from  operations,
positive  cash  flow,  earnings  per  share,  return  on  investment,  return on
stockholder  equity  and/or such other goals related to the  performance  of the
Company  and/or its  subsidiaries  as may be established by the Committee in its
sole discretion.  The performance  targets established by the Committee may vary
for  different  Award  Periods  and need  not be the  same for each  Participant
receiving a Performance  Award in an Award Period.  The  Committee,  in its sole
discretion,  but only under  circumstances  when events or transactions occur to
cause the performance  targets to be an inappropriate  measure of achievement as
determined by the Committee,  may change the  performance  targets for any Award
Period at any time prior to the final determination of the Award.

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<PAGE>

     (c) Earning  Performance  Awards.  The Committee at the Date of Grant shall
prescribe a formula to determine the percentage of the  Performance  Award to be
earned based upon the degree of attainment of performance targets. The degree of
attainment of performance  targets shall be determined as of the last day of the
Award Period. In the event the minimum  performance  targets  established by the
Committee are not achieved, no payment shall be made to the Participant.  In the
event the performance targets are fully achieved,  100% of the Performance Award
shall be paid to the Participant.  The Committee,  in its sole  discretion,  may
provide for grants up to a maximum of 150% of Performance Awards for achievement
exceeding performance targets.

     (d) Payment of Earned  Performance  Awards.  Payments of earned Performance
Awards  shall be made in cash or Common Stock (based on the Fair Market Value of
the Common Stock on the last day of the Award Period),  or a combination of cash
and Common Stock at the sole discretion of the Committee.  Payment normally will
be made as soon as is  practicable  following  the end of an Award  Period;  the
Committee,  however, may permit deferral of the payment of all or a portion of a
Performance  Award  payable in cash upon the request of the  Participant  timely
made in accordance with rules prescribed by the Committee.  Deferred amounts may
generate  earnings  for the  Participant  under  the  conditions  of a  separate
agreement  approved  by the  Committee  and  executed  by the  Participant.  The
Committee, in its sole discretion,  may define in the 



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<PAGE>

Award Agreement such other conditions of payment of earned Performance Awards as
it may deem desirable in carrying out the purposes of the Plan.

     7.02  Terms  of  Performance  Awards.  Unless  otherwise  provided  by  the
Committee,  in its  sole  discretion,  in the  Award  Agreement,  the  following
provisions shall apply to Performance Awards:

     (a) Termination of Employment. Unless otherwise provided below, in the case
of a  Participant's  Termination  of  Employment  prior  to the end of an  Award
period, the Participant will not be entitled to any Performance Awards.

     (b)  Disability,  Death or  Retirement.  Unless  otherwise  provided by the
Committee,  in its sole discretion,  in the Award Agreement,  if a Participant's
Disability  Date or  Termination  of Employment by reason of death or retirement
occurs following at least six months of  participation in any Award Period,  but
prior to the end of an  Award  Period,  the  Participant  or such  Participant's
Beneficiary,  as the case may be, shall be entitled to receive a pro-rata  share
of his or her Award as determined under Subsection (c).

     (c) Pro-Rata  Payment.  The amount of any payment made to a Participant (or
Beneficiary) under circumstances  described in subsection (b) will be the amount
determined by multiplying the amount of the  Performance  Award which would have
been 



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<PAGE>

earned,  determined at the end of the Award Period, had such employment not been
terminated,  by a fraction, the numerator of which is the number of whole months
such  Participant was employed  during the Award Period,  and the denominator of
which is the total number of months of the Award Period.  Any such payment shall
be made as soon as practicable after the end of the respective Award Period, and
shall relate to attainment of performance targets over the entire Award Period.

     (d) Other Events.  Notwithstanding anything to the contrary in this Article
VII, the Committee may, in its sole and exclusive  discretion,  determine to pay
all or any portion of a Performance  Award to a Participant  who has  terminated
employment  prior  to the end of an Award  Period  under  certain  circumstances
including a material  change in  circumstances  arising after the Date of Grant,
and  subject  to  such  terms  and  conditions  as  the  Committee   shall  deem
appropriate,  provided that the Participant shall have completed,  at his or her
Termination  of  Employment,  at least one year of employment  after the Date of
Grant.

Article VIII. Other Stock-Based Awards

     8.01 Grant of Other  Awards.  Other  Awards,  valued in whole or in part by
reference to, or otherwise based on, Common Stock may be granted either alone or
in addition to or in  conjunction  with other Awards under the Plan.  Subject to
the provisions of the Plan, the Committee shall have sole and complete authority
to  determine  the  


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<PAGE>

persons to whom and the time or times at which such  Awards  shall be made,  the
number of shares of Common  Stock to be granted  pursuant to such Awards and all
other  conditions  of the Awards.  Any such Award shall be confirmed by an Award
Agreement  executed by the Committee and the Participant,  which Award Agreement
shall contain such  provisions  as the  Committee  determines to be necessary or
appropriate to carry out the intent of this Plan with respect to such Award.

     8.02  Terms of Other  Awards.  In  addition  to the  terms  and  conditions
specified  in the Award  Agreement,  Awards made  pursuant to this  Article VIII
shall be subject to the following:

     (a) Any Common Stock subject to Awards made under this Article VIII may not
be sold,  assigned,  transferred,  pledged or otherwise  encumbered prior to the
date on which the Common  Stock is issued,  or, if later,  the date on which any
applicable restriction or performance or deferral period lapses; and

     (b) If specified by the Committee in the Award Agreement,  the recipient of
an Award under this Article VIII shall be entitled to receive, currently or on a
deferred  basis,  dividends or dividend  equivalents  with respect to the Common
Stock  covered by the Award,  and the  Committee,  in its sole  discretion,  may
provide in the Award  Agreement  that such amounts be  reinvested  in additional
shares of Common Stock; and

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<PAGE>

     (c) The Award Agreement with respect to any Award shall contain  provisions
dealing  with the  disposition  of such Award in the event of a  Termination  of
Employment prior to the exercise,  realization or payment of such Award, whether
such  termination  occurs  because  of  retirement,  Disability,  death or other
reason,  with such provisions to take account of the specific nature and purpose
of the  Award,  as well as  appropriate  provisions  regarding  acceleration  of
exercise,  realization  or payment of such Award upon the occurrence of a Change
in Control, and the Committee,  in its sole discretion,  may waive any or all of
the restrictions imposed with respect to any Award under this Article VIII.

     (d) Common Stock  issued as a bonus  pursuant to this Article VIII shall be
issued for such  consideration  as the  Committee  shall  determine  in its sole
discretion.

Article IX. Terms Applicable to All Awards Granted Under the Plan

     9.01 Effect of Change in Control. Unless otherwise provided in the relevant
Award Agreement, upon the occurrence of an event of Change in Control:

     (a) Any restriction  periods and restrictions  imposed on Restricted Shares
shall lapse and within ten (10) business  days after the  occurrence of a Change
in Control the stock certificates  representing  Restricted Shares,  without any
restrictions  or  legends   thereon,   shall  be  delivered  to  the  applicable
Participant; and

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<PAGE>

     (b) The target  values  attainable  under all  Performance  Awards shall be
deemed to have been fully earned for the entire Award Period as of the effective
date of the Change in Control.

     9.02 Plan  Provisions  Control  Award  Terms.  The terms of the Plan  shall
govern all Awards  granted  under the Plan,  and in no event shall the Committee
have the  power to grant to a  Participant  any Award  under  the Plan  which is
contrary to any  provisions of the Plan. In the event any provision of any Award
granted  under  the Plan  shall  conflict  with any of the  terms in the Plan as
constituted  on the  Date of  Grant  of such  Award,  the  terms  in the Plan as
constituted on the Date of Grant of such Award shall control. Except as provided
in Section 9.04 or 7.01(b) or unless otherwise provided by the Committee, in its
sole discretion,  in the Award  Agreement,  the terms of any Award granted under
the  Plan may not be  changed  after  the  Date of Grant of such  Award so as to
materially  decrease the value of the Award without the express written approval
of the Participant.

     9.03 Award  Agreement.  No person  shall  have any  rights  under any Award
granted under the Plan unless and until the Company and the  Participant to whom
such Award shall have been granted  shall have  executed and  delivered an Award
Agreement or received any other Award acknowledgment authorized by the Committee
expressly  granting the Award to such person and containing  provisions  setting
forth the terms of the 



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<PAGE>

Award. If there is any conflict between the provisions of an Award Agreement and
the terms of the Plan, the terms of the Plan shall control.

     9.04  Modification  of Award  After  Grant.  Except as  provided in Section
7.01(b) unless otherwise provided by the Committee,  in its sole discretion,  in
the Award  Agreement,  no Award granted  under the Plan to a Participant  may be
modified (unless such modification does not materially decrease the value of the
Award) after the Date of Grant except by express written  agreement  between the
Company  and the  Participant,  provided  that any such  change (a) shall not be
inconsistent  with the  terms of the  Plan,  and (b)  shall be  approved  by the
Committee.

     9.05  Limitations  on Transfer.  The rights and  interest of a  Participant
under the Plan may not be assigned or transferred other than by will or the laws
of descent and  distribution.  During the  lifetime of a  Participant,  only the
participant  personally may exercise rights under the Plan.  Except as otherwise
specifically provided in the Plan, a Participant's  Beneficiary may exercise the
Participant's  rights only to the extent they were exercisable under the Plan at
the  date  of  the  death  of  the  Participant  and  are  otherwise   currently
exercisable.

     9.06 Taxes.  The  Company  shall be  entitled,  if the  Committee  deems it
necessary or desirable,  to withhold (or secure payment from the  Participant in
lieu of withholding)  the amount of any withholding or other tax required by law
to be withheld 



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<PAGE>

or paid by the Company with respect to any amount  payable  and/or  Common Stock
issuable  under  such  Participant's  Award,  or  with  respect  to  any  income
recognized  upon the  lapse of  restrictions  applicable  to an  Award,  and the
Company  may defer  payment  or  issuance  of the cash or Common  Stock upon the
grant,  exercise or vesting of an Award unless  indemnified to its  satisfaction
against any  liability for any such tax. The amount of such  withholding  or tax
payment  shall be  determined  by the  Committee  or its  delegate  and shall be
payable  by the  Participant  at such  time  as the  Committee  determines.  The
Committee may prescribe in each Award Agreement one or more methods by which the
Participant will be permitted to satisfy his or her tax withholding  obligation,
which  methods  may  include,  without  limitation,  the  payment of cash by the
Participant  to  the  Company  and  the  withholding  from  the  Award,  at  the
appropriate time, of a number of shares of Common Stock  sufficient,  based upon
the Fair  Market  Value of such  Common  Stock to satisfy  such tax  withholding
requirements.  The Committee  shall be authorized,  in its sole  discretion,  to
establish such rules and procedures  relating to any such withholding methods as
it deems necessary or appropriate.

     9.07 Adjustments to Reflect Capital Changes.  The number and kind of shares
subject to  outstanding  Awards,  the purchase  price or exercise  price of such
Awards,  and the number  and kind of shares  available  for Awards  subsequently
granted  under the Plan shall be  appropriately  adjusted  to reflect  any stock
dividend, stock split, combination or exchange of shares, merger,  consolidation
or other change in  capitalization  with a similar  substantive  effect upon the
Plan or the Awards  granted under 



                                       22
<PAGE>

the Plan.  The Committee  shall have the power and sole  discretion to determine
the  nature and amount of the  adjustment  to be made in each case.  In no event
shall any adjustment be made under the provisions of this Section 9.07(a) to any
previous grant of Restricted Shares if an adjustment has been or will be made to
the Common  Stock  awarded to the  Participant  in such  person's  capacity as a
stockholder.

     9.08 Loans.  The Company  shall be entitled,  if the  Committee in its sole
discretion  deems it necessary or desirable,  to lend money to a Participant for
purposes of (a)  exercising  his or her rights  under an Award  hereunder or (b)
paying  any  income  tax  liability  related  to an Award.  Such a loan shall be
evidenced by a promissory  note payable to the order of the Company  executed by
the  Participant and containing such other terms and conditions as the Committee
may deem desirable.

     9.09 Surrender of Awards. Any Award granted to a Participant under the Plan
may be  surrendered  to the  Company  for  cancellation  on  such  terms  as the
Committee and the Participant approve.

     9.10 No Right to Award; No Right to Employment. No employee or other person
shall have any claim of right to be granted  an Award  under this Plan.  Neither
the Plan nor any  action  taken  hereunder  shall be  construed  as  giving  any
employee  any right to be  retained  in the employ of the  Company or any of its
subsidiaries.

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<PAGE>

     9.11 Awards Not Includable  for Benefit  Purposes.  Income  recognized by a
Participant  pursuant to the provisions of the Plan shall not be included in the
determination  of benefits under any employee pension benefit plan (as such term
is defined in Section 3(2) of the  Employee  Retirement  Income  Security Act of
1974) or group  insurance or other benefit plans  applicable to the  Participant
which are maintained by the Company or any of its subsidiaries, except as may be
provided under the terms of such plans or determined by resolution of the Board.

     9.12 Governing Law. The Plan and all determinations  made and actions taken
pursuant  to the Plan  shall be  governed  by the laws of the State of  Delaware
other than the conflict of laws  provisions of such laws, and shall be construed
in accordance therewith.

     9.13 No  Strict  Construction.  No rule of  strict  construction  shall  be
implied  against  the  Company,  the  Committee  or  any  other  person  in  the
interpretation of any of the terms of the Plan, any Award granted under the Plan
or any rule or procedure established by the Committee.

     9.14 Captions.  The captions (i.e., all Section  headings) used in the Plan
are for convenience  only, do not constitute a part of the Plan and shall not be
deemed to limit,  characterize  or affect in any way any provisions of the Plan,
and all  provisions  of the Plan shall be construed as if no captions  have been
used in the Plan.

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<PAGE>

     9.15 Severability.  Whenever possible, each provision in the Plan and every
Award at any time granted under the Plan shall be  interpreted in such manner as
to be effective and valid under applicable law, but if any provision of the Plan
or any Award at any time granted  under the Plan shall be held to be  prohibited
by or invalid  under  applicable  law, then (a) such  provision  shall be deemed
amended to accomplish the  objectives of the provision as originally  written to
the fullest extent permitted by law and (b) all other provisions of the Plan and
every other Award at any time granted  under the Plan shall remain in full force
and effect.

     9.16 Legends.  All  certificates  for Common Stock delivered under the Plan
shall be subject to such  transfer  restrictions  set forth in the Plan and such
other  restrictions  as the  Committee  may  deem  advisable  under  the  rules,
regulations and other  requirements  of the Securities and Exchange  Commission,
any stock exchange upon which the Common Stock is then listed and any applicable
federal or state securities law, and the Committee may cause a legend or legends
to be put on any  such  certificates  to  make  appropriate  references  to such
restrictions.

     9.17 Amendment and Termination.

     (a)  Amendment.  The Board shall have complete power and authority to amend
the Plan at any time it is deemed  necessary or  appropriate.  No termination 


                                       25
<PAGE>

or amendment of the Plan may, without the consent of the Participant to whom any
Award shall  theretofore have been granted under the Plan,  adversely affect the
right of such individual under such Award; provided, however, that the Committee
may change  performance  targets as  provided  in Section  7.01(b) and make such
provision in the Award Agreement for amendments  which, in its sole  discretion,
it deems appropriate.

     (b) Termination.  The Board shall have the right and the power to terminate
the Plan at any  time.  No Award  shall be  granted  under  the Plan  after  the
termination  of the Plan,  but the  termination  of the Plan  shall not have any
other effect and any Award  outstanding  at the time of the  termination  of the
Plan may be  exercised  after  termination  of the Plan at any time prior to the
expiration  date of such Award to the same  extent  such  Award  would have been
exercisable had the Plan not terminated.






Adopted Effective as of August 26, 1996.



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