Exhibit 10.3

                        HARLEYSVILLE NATIONAL CORPORATION
                            1998 STOCK INCENTIVE PLAN


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                        HARLEYSVILLE NATIONAL CORPORATION

                            1998 STOCK INCENTIVE PLAN

1.   Purpose.  The  purpose  of this  Stock  Incentive  Plan (the  "Plan") is to
     advance the  development,  growth and financial  condition of  Harleysville
     National  Corporation (the  "Corporation") and each subsidiary  thereof, as
     defined in Section 424 of the  Internal  Revenue  Code of 1986,  as amended
     (the  "Code"),  by  providing  incentives  through   participation  in  the
     appreciation of the common stock of the  Corporation to secure,  retain and
     motivate  personnel  who  may be  responsible  for  the  operation  and for
     management  of the affairs of the  Corporation  and any  subsidiary  now or
     hereafter existing ("Subsidiary").

2.   Term.  The Plan shall become  effective as of the date it is adopted by the
     Corporation's Board of Directors (the "Board"),  and shall be presented for
     approval at the next meeting of the Corporations shareholders.  Any and all
     options  and  rights  awarded  under the Plan (the  "Awards")  before it is
     approved by the Corporation's  shareholders  shall be conditioned upon, and
     may not be exercised  before,  receipt of shareholder  approval,  and shall
     lapse upon failure to receive such approval.  Unless previously  terminated
     by the Board,  the Plan shall terminate on, and no options shall be granted
     after the tenth anniversary of the effective date of the Plan.

3.   Stock. Shares of the Corporation's common stock (the "Stock"),  that may be
     issued under the Plan shall not exceed,  in the aggregate,  575,000 shares,
     as may be  adjusted  pursuant  to Section  19 hereof.  Shares may be either
     authorized  and  unissued  shares,  or  authorized  shares,  issued  by and
     subsequently  reacquired by the  Corporation  as treasury  stock.  Under no
     circumstances shall any fractional shares be awarded under the Plan. Except
     as may be  otherwise  provided in the Plan,  any Stock  subject to an Award
     that, for any reason,  lapses or terminates prior to exercise,  shall again
     become available for grant under the Plan. While the Plan is in effect, the
     Corporation  shall reserve and keep available the number of shares of Stock
     needed to satisfy the requirements of the Plan. The Corporation shall apply
     for any  requisite  governmental  authority to issue shares under the Plan.
     The Corporation's failure to obtain any such governmental authority, deemed
     necessary by the  Corporation's  legal counsel for the lawful  issuance and
     sale of Stock under the Plan, shall relieve the Corporation of any duty, or
     liability for the failure to issue or sell the Stock.

4.   Administration.  The  ability to  control  and  manage  the  operation  and
     administration  of the Plan shall be vested in the Board or in a  committee
     of  two  or  more  members  of  the  Board,  selected  by  the  Board  (the
     "Committee").  The Committee  shall have the  authority  and  discretion to
     interpret  the  Plan,  to  establish,  amend  and  rescind  any  rules  and
     regulations  relating to the Plan, to determine the terms and provisions of
     any  agreements  made  pursuant  to the  Plan,  and to  make  any  and  all
     determinations that may be necessary or advisable for the administration of
     the Plan. Any  interpretation of the Plan by the Committee and any decision
     made by the Committee under the Plan is final and binding.


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     The Committee shall be responsible and shall have full,  absolute and final
     power of authority to determine  what,  to whom,  when and under what facts
     and  circumstances  Awards  shall be made,  and the  form,  number,  terms,
     conditions  and  duration  thereof,  including  but  not  limited  to  when
     exercisable,  the number of shares of Stock subject thereto,  and the stock
     option exercise prices.  The Committee shall make all other  determinations
     and decisions,  take all actions and do all things necessary or appropriate
     in and for the administration of the Plan. No member of the Committee or of
     the Board shall be liable for any decision, determination or action made or
     taken in good faith by such person under or with respect to the Plan or its
     administration.

5.   Awards.  Awards may be made  under the Plan in the form of: (a)  "Qualified
     Options" to purchase  Stock,  which are intended to qualify for certain tax
     treatment  as incentive  stock  options  under  Sections 421 and 422 of the
     Code, (b) "Non-Qualified Options" to purchase Stock, which are not intended
     to  qualify  under  Sections  421  through  424  of  the  Code,  (c)  Stock
     Appreciation  Rights  ("SARs"),  or (d) "Restricted  Stock".  More than one
     Award may be  granted  to an  eligible  person,  and the grant of any Award
     shall not prohibit the grant of another Award, either to the same person or
     otherwise,  or impose any  obligation to exercise on the  participant.  All
     Awards and the terms and  conditions  thereof shall be set forth in written
     agreements, in such form and content as approved by the Committee from time
     to time,  and shall be subject to the provisions of the Plan whether or not
     contained in such agreements.  Multiple Awards for a particular  person may
     be set forth in a single written  agreement or in multiple  agreements,  as
     determined  by the  Committee,  but in all cases each  agreement for one or
     more Awards shall  identify  each of the Awards  thereby  represented  as a
     Qualified Option,  Non-Qualified Option or Stock Appreciation Right, as the
     case may be.

6.   Eligibility. Persons eligible to receive Awards shall be those key officers
     and other employees of the Corporation and each  Subsidiary,  as determined
     by the  Committee.  A person's  eligibility  to receive an Award  shall not
     confer upon him or her any right to receive an Award.  Except as  otherwise
     provided,  a person's eligibility to receive, or actual receipt of an Award
     under  the Plan  shall not limit or  affect  his or her  benefits  under or
     eligibility  to  participate  in any other  incentive  or  benefit  plan or
     program of the Corporation or of its affiliates.

7.   Qualified Options. In addition to other applicable  provisions of the Plan,
     all Qualified  Options and Awards thereof shall be under and subject to the
     following terms and conditions:

     (a)  The  maximum  number of shares of Stock  that may be issued by options
          intended to be Qualified Options shall be 575,000 shares;

     (b)  No  Qualified  Option  shall be awarded more than ten (10) years after
          the  date  the Plan is  adopted  by the  Board or the date the Plan is
          approved by the Corporation's shareholders, whichever is earlier;

     (c)  The time period during which any Qualified  Option is exercisable,  as
          determined by the Committee,  shall not commence before the expiration
          of six (6) months or continue  beyond the expiration of ten (10) years
          after the date the Qualified Option is awarded;


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     (d)  If a  participant,  who was awarded a Qualified  Option,  ceases to be
          employed by the  Corporation  or any  Subsidiary  for any reason other
          than his or her  death,  the  Committee  may  permit  the  participant
          thereafter  to exercise  the option  during its  remaining  term for a
          period of not more than three (3) months after cessation of employment
          to  the  extent  that  the  Qualified  Option  was  then  and  remains
          exercisable,   unless  such  employment   cessation  was  due  to  the
          participant's  disability, as defined in Section 22(e)(3) of the Code,
          in which case the three (3) month  period shall be twelve (12) months;
          if  the  participant  dies  while  employed  by the  Corporation  or a
          Subsidiary,  the  Committee  may  permit the  participant's  qualified
          personal  representatives,  or any persons  who acquire the  Qualified
          Option   pursuant   to  his  or  her  Will  or  laws  of  descent  and
          distribution,  to exercise the  Qualified  Option during its remaining
          term for a period  of not more  than  twelve  (12)  months  after  the
          participant's  death to the extent that the Qualified  Option was then
          and remains exercisable; the Committee may impose terms and conditions
          upon and for the exercise of a Qualified Option after the cessation of
          the participant's employment or his or her death;

     (e)  The purchase price of Stock subject to any Qualified  Option shall not
          be less than the Stock's fair market  value at the time the  Qualified
          Option is awarded  and shall not be less than the  Stock's  par value;
          and

     (f)  Qualified  Options  may not be sold,  transferred  or  assigned by the
          participant except by Will or the laws of descent and distribution.

8.   Non-Qualified  Options.  In addition to other applicable  provisions of the
     Plan,  all  Non-Qualified  Options  and Awards  thereof  shall be under and
     subject to the following terms and conditions:

     (a)  The time period during which any  Non-Qualified  Option is exercisable
          shall not commence before the expiration of six (6) months or continue
          beyond  the   expiration   of  ten  (10)  years  after  the  date  the
          Non-Qualified Option is awarded;

     (b)  If a participant, who was awarded a Non-Qualified Option, ceases to be
          eligible under the Plan,  before lapse or full exercise of the option,
          the Committee may permit the participant to exercise the option during
          its remaining term, to the extent that the option was then and remains
          exercisable,  or for  such  time  period  and  under  such  terms  and
          conditions as may be prescribed by the Committee;

     (c)  The purchase  price of a share of Stock  subject to any  Non-Qualified
          Option shall not be less than the Stock's par value; and

     (d)  Except as otherwise  provided by the  Committee,  Non-Qualified  Stock
          Options  granted  under  the  Plan  are  not  transferable  except  as
          designated  by the  participant  by Will and the laws of  descent  and
          distribution.


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9.   Stock  Appreciation  Rights. In addition to other applicable  provisions of
     the Plan,  all SARs and Awards  thereof  shall be under and  subject to the
     following terms and conditions:

     (a)  SARs may be  granted  either  alone,  or in  connection  with  another
          previously or contemporaneously granted Award (other than another SAR)
          so as to operate in tandem  therewith  by having the  exercise  of one
          affect the right to exercise the other,  as and when the Committee may
          determine;  however,  no SAR shall be  awarded  in  connection  with a
          Qualified  Option  more than ten (10) years after the date the Plan is
          adopted  by  the  Board  or the  date  the  Plan  is  approved  by the
          Corporation's stockholders, whichever date is earlier;

     (b)  Each SAR shall entitle the participant to receive upon exercise of the
          SAR all or a portion of the excess of (i) the fair market value at the
          time of such  exercise  of a  specified  number  of shares of Stock as
          determined by the Committee, over (ii) a specified price as determined
          by the  Committee  of such  number of shares of Stock  that,  on a per
          share  basis,  is not less than the Stock's  fair market  value at the
          time  the SAR is  awarded,  or if the SAR is  connected  with  another
          Award,  such lesser  percentage of the Stock purchase price thereunder
          as may be determined by the Committee;

     (c)  Upon exercise of any SAR, the participant shall be paid either in cash
          or in Stock,  or in any  combination  thereof,  as the Committee shall
          determine;  if such  payment  is to be made in  Stock,  the  number of
          shares  thereof  to be  issued  pursuant  to  the  exercise  shall  be
          determined by dividing the amount payable upon exercise by the Stock's
          fair market value at the time of exercise;

     (d)  The time period during which any SAR is exercisable,  as determined by
          the  Committee,  shall not commence  before the  expiration of six (6)
          months;  however,  no  SAR  connected  with  another  Award  shall  be
          exercisable  beyond the last date that such other  connected Award may
          be exercised;

     (e)  If a  participant  holding a SAR,  before its lapse or full  exercise,
          ceases to be eligible  under the Plan,  the  Committee  may permit the
          participant thereafter to exercise such SAR during its remaining term,
          to the extent that the SAR was then and remains exercisable,  for such
          time period and under such terms and  conditions  as may be prescribed
          by the Committee;

     (f)  No SAR shall be awarded in connection with any Qualified Option unless
          the SAR (i) lapses no later than the expiration date of such connected
          Option,  (ii) is for not more than the  difference  between  the Stock
          purchase price under such connected Option and the Stock's fair market
          value at the time the SAR is  exercised,  (iii) is  transferable  only
          when and as such connected  Option is transferable  and under the same
          conditions,  (iv) may be exercised only when such connected Option may
          be  exercised,  and (v) may be  exercised  only when the Stock's  fair
          market value  exceeds the Stock  purchase  price under such  connected
          Option.


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10.  Restricted  Stock. In addition to other applicable  provisions of the Plan,
     all  Restricted  Stock and Awards thereof shall be under and subject to the
     following terms and conditions:

     (a)  Restricted Stock shall consist of shares of Stock that may be acquired
          by and issued to a participant  at such time,  for such or no purchase
          price,  and under and subject to such  transfer,  forfeiture and other
          restrictions,  conditions  or  terms as  shall  be  determined  by the
          Committee, including but not limited to prohibitions against transfer,
          substantial  risks of  forfeiture  within the meaning of Section 83 of
          the Code, and attainment of performance or other goals,  objectives or
          standards, all for or applicable to such time periods as determined by
          the Committee;

     (b)  Except  as  otherwise  provided  in the Plan or the  Restricted  Stock
          Award, a participant holding shares of Restricted Stock shall have all
          the rights as does a holder of Stock, including without limitation the
          right to vote such shares and receive  dividends with respect thereto;
          however,  during the time period of any  restrictions,  conditions  or
          terms applicable to such Restricted  Stock, the shares thereof and the
          right to vote the same and  receive  dividends  thereon  shall  not be
          sold,  assigned,   transferred,   exchanged,  pledged,   hypothecated,
          encumbered or otherwise disposed of except as permitted by the Plan or
          the Restricted Stock Award;

     (c)  Each  certificate  issued  for  shares of  Restricted  Stock  shall be
          deposited  with  the  Secretary  of the  Corporation,  or  the  office
          thereof,  and shall bear a legend in substantially  the following form
          and content:

               This  Certificate and the shares of Stock hereby  represented are
               subject  to  the  provisions  of  the  Corporation's  1998  Stock
               Incentive Plan and a certain  agreement  entered into between the
               holder and the  Corporation  pursuant to the Plan. The release of
               this Certificate and the shares of Stock hereby  represented from
               such  provisions  shall  occur only as  provided  by the Plan and
               agreement,  a copy of  which  are on file  in the  office  of the
               Secretary of the Corporation.

          Upon the lapse or  satisfaction  of the  restrictions,  conditions and
          terms applicable to the Restricted Stock, a certificate for the shares
          of Stock free of  restrictions  and without the legend shall be issued
          to the participant;

     (d)  If a  participant's  employment  with the  Corporation or a Subsidiary
          ceases  for  any  reason  prior  to the  lapse  of  the  restrictions,
          conditions or terms applicable to his or her Restricted  Stock, all of
          the   participant's   Restricted  Stock  still  subject  to  unexpired
          restrictions, conditions or terms shall be forfeited absolutely by the
          participant  to the  Corporation  without  payment or  delivery of any
          consideration  or  other  thing of  value  by the  Corporation  or its
          affiliates,  and thereupon and thereafter  neither the participant nor
          his or her  heirs,  personal  or  legal  representatives,  successors,
          assigns,  beneficiaries, or any claimants under the participant's Last
          Will or laws of  descent  and  distribution,  shall have any rights or
          claims  to or  interests  in the  forfeited  Restricted  Stock  or any
          certificates  representing  shares  thereof,  or  claims  against  the
          Corporation or its affiliates with respect thereto.


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11.  Exercise. Except as otherwise provided in the Plan, Awards may be exercised
     in whole or in part by giving  written  notice  thereof to the Secretary of
     the  Corporation,  or his or her  designee,  identifying  the  Award  to be
     exercised,  the number of shares of Stock with respect  thereto,  and other
     information  pertinent to exercise of the Award.  The purchase price of the
     shares of Stock with respect to which an Award is  exercised  shall be paid
     with the written notice of exercise, either in cash or in securities of the
     Corporation,  including securities issuable hereunder,  at its then current
     fair market value,  or in any combination  thereof,  as the Committee shall
     determine. Funds received by the Corporation from the exercise of any Award
     shall be used for its general corporate purposes.

     The number of shares of Stock  subject to an Award  shall be reduced by the
     number  of shares  of Stock  with  respect  to which  the  participant  has
     exercised  rights under the Award.  If a SAR is awarded in connection  with
     another  Award,  the number of shares of Stock that may be  acquired by the
     participant  under the other connected Award shall be reduced by the number
     of shares of Stock with respect to which the  participant has exercised his
     or her SAR, and the number of shares of Stock subject to the  participant's
     SAR shall be  reduced  by the  number of  shares of Stock  acquired  by the
     participant pursuant to the other connected Award.

     The Committee may permit an acceleration of previously established exercise
     terms of any Awards as,  when,  under  such  facts and  circumstances,  and
     subject  to such  other  or  further  requirements  and  conditions  as the
     Committee may deem necessary or appropriate. In addition:

     (a)  if the Corporation or its shareholders execute an agreement to dispose
          of all or substantially  all of the  Corporation's  assets or stock by
          means of sale, merger, consolidation,  reorganization,  liquidation or
          otherwise,  as a  result  of  which  the  Corporation's  shareholders,
          immediately  before  the  transaction,  will  not own at  least  fifty
          percent  (50%) of the total  combined  voting  power of all classes of
          voting  stock  of the  surviving  entity  (be it  the  Corporation  or
          otherwise) immediately after the consummation of the transaction, then
          any and all  outstanding  Awards shall  immediately  become and remain
          exercisable  or,  if the  transaction  is not  consummated,  until the
          agreement  relating to the  transaction  expires or is terminated,  in
          which case,  all Awards shall be treated as if the agreement was never
          executed;

     (b)  if there is an actual, attempted or threatened change in the ownership
          of at least  twenty-five  percent (25%) of all classes of voting stock
          of the Corporation  through the acquisition of, or an offer to acquire
          such  percentage  of the  Corporation's  voting stock by any person or
          entity,  or persons or entities  acting in concert or as a group,  and
          such  acquisition  or offer has not been duly  approved  by the Board,
          then any and all  outstanding  awards  shall  immediately  become  and
          remain exercisable; or


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     (c)  if during any period of two (2) consecutive years, the individuals who
          at the beginning of such period  constituted the Board cease,  for any
          reason,  to  constitute  at least a majority of the Board  (unless the
          election of each director of the Board,  who was not a director of the
          Board at the  beginning of such  period,  was approved by a vote of at
          least  two-thirds  of the  directors  then  still in  office  who were
          directors  at the  beginning  of such  period) then any and all Awards
          shall immediately become and remain exercisable.

12.  Right of First Refusal.  Each written  agreement for an Award may contain a
     provision that requires as a condition to exercising a Qualified  Option or
     a Non  Qualified  Option  that the  participant  agree,  prior to  selling,
     transferring or otherwise disposing of any shares of Stock obtained through
     the  exercise  of the Award,  to first  offer  such  shares of Stock to the
     Corporation  for purchase.  The terms and conditions of such right of first
     refusal  shall be  determined  by the  Committee  in its sole and  absolute
     discretion, provided that the purchase price shall be at least equal to the
     Stock's fair market value as determined under paragraph 14 below, and shall
     be subject to all applicable federal and state laws, rules and regulations.

13.  Withholding.   When  a  participant  exercises  a  stock  option  or  Stock
     Appreciation  Right  awarded  under  the  Plan,  the  Corporation,  in  its
     discretion and as required by law, may require the  participant to remit to
     the  Corporation an amount  sufficient to satisfy fully any federal,  state
     and other  jurisdictions'  income  and other tax  withholding  requirements
     prior to the  delivery  of any  certificates  for  shares of Stock.  At the
     Committee's discretion, remittance may be made in cash, shares already held
     by the  participant or by the  withholding by the Corporation of sufficient
     shares  issuable  pursuant  to the  option  to  satisfy  the  participant's
     withholding obligation.

14.  Value.  Where  used in the Plan,  the "fair  market  value" of Stock or any
     options or rights with respect thereto, including Awards, shall mean and be
     determined  by (a) the  average of the highest  and lowest  reported  sales
     prices thereof on the principal established domestic securities exchange on
     which listed,  and if not listed,  then (b) the average of the dealer "bid"
     and "ask" prices thereof on the over-the-counter market, as reported by the
     National  Association  of Securities  Dealers  Automated  Quotation  System
     ("NASDAQ"),  in either case as of the  specified or  otherwise  required or
     relevant time, or if not traded as of such specified,  required or relevant
     time,  then based upon such reported sales or "bid" and "ask" prices before
     and/or  after such time in  accordance  with  pertinent  provisions  of and
     principles under the Code and the regulations promulgated thereunder.

15.  Amendment.  To the extent permitted by applicable law, the Board may amend,
     suspend, or terminate the Plan at any time. The amendment or termination of
     this Plan shall not,  without  the  consent of the  participants,  alter or
     impair  any  rights  or  obligations  under any  Award  previously  granted
     hereunder.


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     From time to time, the Committee may rescind,  revise and add to any of the
     terms, conditions and provisions of the Plan or of an Award as necessary or
     appropriate  to have  the  Plan  and any  Awards  thereunder  be or  remain
     qualified  and  in  compliance   with  all  applicable   laws,   rules  and
     regulations,  and the Committee may delete,  omit or waive any of the terms
     conditions or provisions  that are no longer  required by reason of changes
     of applicable laws, rules or regulations, including but not limited to, the
     provisions  of  Sections  421  and  422  of  the  Code,  Section  16 of the
     Securities Exchange Act of 1934, as amended, (the "1934 Act") and the rules
     and  regulations  promulgated by the  Securities  and Exchange  Commission.
     Without limiting the generality of the preceding  sentence,  each Qualified
     Option shall be subject to such other and additional terms,  conditions and
     provisions as the Committee may deem  necessary or  appropriate in order to
     qualify as a Qualified Option under Section 422 of the Code, including, but
     not limited to, the following provisions:

     (a)  At the time a Qualified  Option is awarded,  the aggregate fair market
          value of the Stock  subject  thereto and of any Stock or other capital
          stock with respect to which incentive stock options  qualifying  under
          Sections 421 and 422 of the Code are exercisable for the first time by
          the participant  during any calendar year under the Plan and any other
          plan  of  the  Corporation  or  its   affiliates,   shall  not  exceed
          $100,000.00; and

     (b)  No Qualified  Option shall be awarded to any person if, at the time of
          the Award,  the  person  owns  shares of the stock of the  Corporation
          possessing  more than ten percent (10%) of the total  combined  voting
          power of all classes of stock of the  Corporation  or its  affiliates,
          unless,  at the time the  Qualified  Option is awarded,  the  exercise
          price of the Qualified  Option is at least one hundred and ten percent
          (110%) of the fair market  value of the Stock on the date of grant and
          the option,  by its terms, is not exercisable  after the expiration of
          five (5) years from the date it is awarded.

16.  Continued  Employment.  Nothing in the Plan or any Award shall  confer upon
     any participant or other persons any right to continue in the employ of, or
     maintain  any  particular   relationship   with,  the  Corporation  or  its
     affiliates,  or limit or affect any rights,  powers or privileges  that the
     Corporation  or its  affiliates  may  have  to  supervise,  discipline  and
     terminate  the  participant.  However,  the  Committee  may  require,  as a
     condition of making and/or  exercising any Award,  that a participant agree
     to,  and in fact  provide  services,  either as an  employee  or in another
     capacity,  to or for the Corporation or any Subsidiary for such time period
     as the Committee may prescribe.  The immediately  preceding  sentence shall
     not apply to any Qualified  Option,  to the extent such  application  would
     result in  disqualification of the option under Sections 421 and 422 of the
     Code.

17.  General  Restrictions.  If the  Committee  or Board  determines  that it is
     necessary or desirable to: (a) list,  register or qualify the Stock subject
     to the Award,  or the Award itself,  upon any securities  exchange or under
     any federal or state  securities or other laws,  (b) obtain the approval of
     any  governmental  authority,  or (c)  enter  into an  agreement  with  the
     participant  with respect to disposition of any Stock  (including,  without
     limitation, an agreement that, at the time of the participant's exercise of
     the Award,  any Stock thereby  acquired is and will be acquired  solely for
     investment  purposes and without any  intention to sell or  distribute  the
     Stock), then such Award shall not be consummated in whole or in part unless
     the listing,  registration,  qualification,  approval or agreement,  as the
     case may be,  shall have been  appropriately  effected  or  obtained to the
     satisfaction of the Committee and legal counsel for the Corporation.


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18.  Rights.  Except as otherwise provided in the Plan,  participants shall have
     no  rights  as a  holder  of  the  Stock  unless  and  until  one  or  more
     certificates  for the  shares  of Stock are  issued  and  delivered  to the
     participant.

19.  Adjustments.  In  the  event  that  the  shares  of  common  stock  of  the
     Corporation,  as presently constituted,  shall be changed into or exchanged
     for a  different  number  or  kind of  shares  of  common  stock  or  other
     securities of the Corporation or of other  securities of the Corporation or
     of  another  corporation  (whether  by  reason  of  merger,  consolidation,
     recapitalization,  reclassification,  split-up,  combination  of  shares or
     otherwise)  or if the  number  of such  shares  of  common  stock  shall be
     increased  through the payment of a stock dividend,  stock split or similar
     transaction, then, there shall be substituted for or added to each share of
     common stock of the Corporation that was theretofore appropriated, or which
     thereafter  may become  subject to an option under the Plan, the number and
     kind of  shares  of  common  stock  or other  securities  into  which  each
     outstanding  share  of the  common  stock  of the  Corporation  shall be so
     changed or for which each such share  shall be  exchanged  or to which each
     such share shall be entitled,  as the case may be. Each  outstanding  Award
     shall be  appropriately  amended  as to price  and other  terms,  as may be
     necessary to reflect the foregoing events.

     If there shall be any other change in the number or kind of the outstanding
     shares of the common  stock of the  Corporation,  or of any common stock or
     other securities in which such common stock shall have been changed, or for
     which it shall have been exchanged,  and if a majority of the disinterested
     members of the Committee shall, in its sole discretion, determine that such
     change  equitably  requires an adjustment in any Award that was theretofore
     granted  or that may  thereafter  be  granted  under  the  Plan,  then such
     adjustment shall be made in accordance with such determination.

     The grant of an Award  under the Plan shall not affect in any way the right
     or  power  of  the  Corporation  to  make  adjustments,  reclassifications,
     reorganizations or changes of its capital or business structure,  to merge,
     to consolidate, to dissolve, to liquidate or to sell or transfer all or any
     part of its business or assets.

     Fractional  shares resulting from any adjustment in Awards pursuant to this
     Section  19 may be settled  as a  majority  of the  members of the Board of
     Directors or of the Committee, as the case may be, shall determine.

     To the extent  that the  foregoing  adjustments  relate to common  stock or
     securities of the Corporation, such adjustments shall be made by a majority
     of the members of the Board or of the Committee,  as the case may be, whose
     determination  in that  respect  shall be final,  binding  and  conclusive.
     Notice of any adjustment  shall be given by the  Corporation to each holder
     of an Award that is so adjusted.


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<PAGE>


20.  Forfeiture.  Notwithstanding  anything to the contrary in this Plan, if the
     Committee finds,  after full consideration of the facts presented on behalf
     of the  Corporation and the involved  participant,  that he or she has been
     engaged  in  fraud,  embezzlement,   theft,  commission  of  a  felony,  or
     dishonesty in the course of his or her employment by the  Corporation or by
     any  Subsidiary  and  such  action  has  damaged  the  Corporation  or  the
     Subsidiary, as the case may be, or that the participant has disclosed trade
     secrets of the Corporation or its affiliates, the participant shall forfeit
     all  rights  under  and to all  unexercised  Awards,  and  under and to all
     exercised Awards under which the Corporation has not yet delivered  payment
     or  certificates  for  shares of Stock  (as the case may be),  all of which
     Awards and rights  shall be  automatically  canceled.  The  decision of the
     Committee as to the cause of the  participant's  discharge from  employment
     with the  Corporation or any  Subsidiary  and the damage  thereby  suffered
     shall be final for purposes of the Plan,  but shall not affect the finality
     of the  participant's  discharge by the  Corporation  or Subsidiary for any
     other purposes.  The preceding provisions of this paragraph shall not apply
     to any  Qualified  Option to the extent such  application  would  result in
     disqualification  of the option as an incentive stock option under Sections
     421 and 422 of the Code.

21.  Indemnification. In and with respect to the administration of the Plan, the
     Corporation  shall  indemnify  each member of the  Committee  and/or of the
     Board, each of whom shall be entitled, without further action on his or her
     part, to  indemnification  from the  Corporation  for all damages,  losses,
     judgments,  settlement  amounts,  punitive  damages,  excise taxes,  fines,
     penalties, costs and expenses (including without limitation attorneys' fees
     and   disbursements)   incurred  by  the  member  in  connection  with  any
     threatened,  pending or completed action,  suit or other proceedings of any
     nature, whether civil,  administrative,  investigative or criminal, whether
     formal  or  informal,  and  whether  by or in  the  right  or  name  of the
     Corporation,  any class of its security holders, or otherwise, in which the
     member may be or may have been involved, as a party or otherwise, by reason
     of his or her being or having been a member of the Committee  and/or of the
     Board,  whether or not he or she  continues to be a member of the Committee
     or of the Board.  The  provisions,  protection and benefits of this Section
     shall apply and exist to the fullest extent  permitted by applicable law to
     and for the  benefit of all  present  and future  members of the  Committee
     and/or  of the  Board  and  their  respective  heirs,  personal  and  legal
     representatives,  successors  and assigns,  in addition to all other rights
     that they may have as a matter of law, by contract,  or  otherwise,  except
     (a)  to the  extent  there  is  entitlement  to  insurance  proceeds  under
     insurance  coverages  provided  by the  Corporation  on account of the same
     matter or proceeding for which indemnification hereunder is claimed, or (b)
     to the extent there is entitlement to indemnification from the Corporation,
     other than under this Section,  on account of the same matter or proceeding
     for which indemnification hereunder is claimed.

22.  Taxes.  The  issuance  of shares of Common  Stock  under the Plan  shall be
     subject to any applicable  taxes or other laws or regulations of the United
     States of  America  and any state or local  authority  having  jurisdiction
     there over.


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<PAGE>


23.  Miscellaneous.

     (a)  Any  reference  contained  in this  Plan to a  particular  section  or
          provision of law, rule or regulation, including but not limited to the
          Code and the 1934 Act,  shall  include  any  subsequently  enacted  or
          promulgated  section or provision of law, rule or  regulation,  as the
          case may be. With respect to persons subject to Section 16 of the 1934
          Act,  transactions  under this Plan are  intended  to comply  with all
          applicable  conditions  of  Section  16 and the rules and  regulations
          promulgated  thereunder,  or any successor rules and regulations  that
          may be promulgated by the Securities and Exchange  Commission,  and to
          the extent any provision of this Plan or action by the Committee fails
          to so  comply,  it  shall  be  deemed  null and  void,  to the  extent
          permitted by applicable law and deemed advisable by the Committee.

     (b)  Where used in this Plan:  the plural shall include the  singular,  and
          unless the context  otherwise  clearly  requires,  the singular  shall
          include  the  plural;  and the term  "affiliates"  shall mean each and
          every Subsidiary and any parent of the Corporation.

     (c)  The captions of the numbered  Sections  contained in this Plan are for
          convenience   only,  and  shall  not  limit  or  affect  the  meaning,
          interpretation or construction of any of the provisions of the Plan.


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