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                           Schein Pharmaceutical, Inc.




                  1995 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN


                  (Amended and Restated as of August 24, 1998)


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                                Table of Contents

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I.       Purposes.............................................................1

II.      Definitions..........................................................1

III.     Effective Date.......................................................3

IV.      Administration.......................................................3
         A.       Duties of the Committee.....................................3
         B.       Advisors....................................................3
         C.       Indemnification.............................................3
         D.       Meetings of the Committee...................................4

V.       Adjustments..........................................................4
         A.       Shares to be Delivered; Fractional Shares...................4
         B.       Number of Shares............................................4
         C.       Adjustments.................................................4

VI.      Awards and Terms of Options..........................................6
         A.       Grant.......................................................6
         B.       Date of Grant...............................................6
         C.       Option Terms................................................6
         D.       Expiration..................................................7
         E.       Acceleration of Exercisability..............................7

VII.     Effect of Termination of Directorship................................9

VIII.    Nontransferability of Options........................................9

IX.      Rights as a Stockholder..............................................9

X.       Termination, Amendment and Modification..............................9

XI.      Issuance of Stock Certificates;Legends; Payment of Expenses.........10
         A.       Stock Certificates.........................................10
         B.       Legends....................................................10
         C.       Payment of Expenses........................................10

XII.     Listing of Shares and Related Matters...............................10

XIII.    Withholding Taxes...................................................11

XIV.     General.............................................................11
         A.       Right to Terminate Directorship............................11
         B.       No Trust.  ................................................11
         C.       Notices....................................................11
         D.       Severability.  ............................................11
         E.       Costs......................................................11
         F.       Controlling Law............................................12
         G.       Section 16(b)..............................................12
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                                       i
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                           Schein Pharmaceutical, Inc.

                  1995 Non-Employee Director Stock Option Plan

                  (Amended and Restated as of August 24, 1998)

I.    Purposes

            The purposes of this 1995 Non-Employee Director Stock Option Plan
(this "Plan"), as amended and restated effective as of August 24, 1998, are to
enable Schein Pharmaceutical, Inc. (the "Company") to attract, retain and
motivate directors who will be important to the success of the Company, and to
increase the identity of interest between directors and stockholders of the
Company by granting certain directors options to purchase common stock of the
Company.


II.   Definitions

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

            A.  "Act" means the Securities Exchange Act of 1934 and the rules 
and regulations under the Securities Exchange Act of 1934.

            B.  "Board" means the board of directors of the Company.

            C.  "Committee" means the Board or a duly appointed committee of the
Board to which the Board has delegated its power and functions under this Plan.

            D.  "Common Stock" means the common stock of the Company, par value
$0.01 per share, any common stock into which such common stock of the Company
may be converted and any common stock resulting from any reclassification of
such common stock.

            E.  "Eligible Director" means an Eligible Director -- Class 1 or an
Eligible Director -- Class 2.

            F.  "Eligible Director -- Class 1" means a director of the Company
who is not an Eligible Director -- Class 2 and who is not an active employee of
the Company or any subsidiary of the Company.

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            G.  "Eligible Director -- Class 2" means a director of the Company
designated by the Board as such at the time the director is first elected to
serve on the Board or, in the case of members of the Board at the time this Plan
is adopted, a director of the Company designated by the Board as such at that
time, and, in each case, who is not an active employee of the Company or any
subsidiary of the Company (it being understood that the Board shall have the
right, but shall not be required, to designate a director as an Eligible
Director -- Class 2, and that the Board shall designate a director as an
Eligible Director -- Class 2 only if, at the time of the designation, the
director shall have waived all future annual fees for serving as a director of
the Company but not fees for attending Board meetings or committee meetings or
reimbursement of out-of-pocket expenses for traveling to and from and attending
such meetings).

            H.  "Fair Market Value" means the value of a Share as of a 
particular date determined as follows:

                  1.  If the Common Stock is listed or admitted to trading on
      that date on a national securities exchange or is quoted on the Nasdaq
      National Market, the closing sale price of a Share as reported on the
      relevant composite transaction tape, if applicable, or on the principal
      national securities exchange or through the Nasdaq National Market, as the
      case may be, on that date, or, in the absence of reported sales on that
      date, the mean between the highest reported bid and lowest reported asked
      prices reported on the relevant composite transaction tape or national
      securities exchange or through the Nasdaq National Market, as the case may
      be, on that date.

                  2.  If the Common Stock is not listed or quoted as described 
      in clause 1, but bid and asked prices are quoted through Nasdaq, the mean
      between the highest reported bid and the lowest reported asked prices as
      quoted through Nasdaq on that date.

                  3.  If the Fair Market Value would otherwise be determined in
      accordance with clause 2 but the Committee determines that that would not
      properly reflect the Fair Market Value, by any other method the Committee
      determines to be reasonable.

                  4.  If the Common Stock is not publicly traded, an amount
      determined by the Committee in good faith.

            I.  "Option" means the right to purchase one Share at a prescribed
purchase price on the terms specified in this Plan.

            J.  "Share" means a share of Common Stock.

            K.  "Termination of Directorship" with respect to an individual 
means
                                       2
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that individual is no longer a director of the Company.

III.  Effective Date

            This Plan became effective January 1, 1995 (the "Effective Date"),
and was approved on September 30, 1995 by holders of a majority of the
outstanding Shares at the time of approval. This Plan was amended and restated
as of August 8, 1996, and further amended and restated as of August 24, 1998.

IV.      Administration

            A.  Duties of the Committee.  This Plan shall be administered by the
Committee. The Committee shall have full authority to interpret this Plan and to
decide any questions and settle any controversies or disputes that may arise in
connection with this Plan; to establish, amend and rescind rules for carrying
out this Plan; to administer this Plan; to prescribe the forms of instruments
evidencing Options and any other instruments required under this Plan, and to
change such forms from time to time; and to make all other determinations and to
take all actions in connection with this Plan and the Options as the Committee,
in its sole discretion, deems necessary or desirable. The Committee shall not be
bound to any standards of uniformity or similarity of action, interpretation or
conduct in the discharge of its duties under this Plan. Any determination,
action or conclusion of the Committee shall be final, conclusive and binding on
all parties.

            B.  Advisors.  The Committee may employ such legal counsel,
consultants and agents as it deems desirable for the administration of this
Plan, and may rely upon any advice or opinion received from any such counsel or
consultant and any computation received from any such consultant or agent. The
Company shall pay all the expenses of any such counsel, consultant or agent.

            C.  Indemnification.  To the maximum extent permitted by applicable
law, no officer of the Company or member or former member of the Committee or of
the Board shall be liable for any action or determination made in good faith
with respect to this Plan or any Option granted under it. To the maximum extent
permitted by applicable law and the certificate of incorporation
and by-laws of the Company, the Company shall indemnify and hold harmless each
officer and member or former member of the Committee and the Board against any
cost or expense (including reasonable fees of counsel reasonably acceptable to
the Company) or liability (including any sum paid in settlement of a claim with
the approval of the Company), and advanced amounts necessary to pay the
foregoing at the earliest time and to the fullest extent permitted, arising out
of any act or omission to act in connection with this Plan. Such indemnification
shall be in addition to any rights of an indemnitee under applicable law or the
certificate of incorporation or by-laws of the Company.

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Notwithstanding anything to the contrary in this paragraph, however, the rights
under this paragraph shall not apply to actions or determinations by an
individual with regard to Options granted to that individual under this Plan.

            D.  Meetings of the Committee.  The Committee shall adopt such rules
and regulations as it deems appropriate concerning its meetings and the
transaction of its business. All determinations by the Committee shall be made
by the affirmative vote of a majority of its members. Any such determination may
be made at a meeting duly called and held at which a majority of the members of
the Committee are in attendance in person or through telephonic communication.
Any written determination signed by all the members of the Committee shall be as
effective as if made by a majority vote of the members at a meeting duly called
and held.

V.    Adjustments

            A.  Shares to be Delivered; Fractional Shares.  Shares to be issued
under this Plan shall be made available, at the sole discretion of the Board,
either from authorized but unissued Shares or from issued Shares reacquired by
the Company and held in treasury. No fractional Shares shall be issued or
transferred upon the exercise of any Option, nor shall any compensation be paid
with regard to fractional shares.

            B.  Number of Shares.  Subject to adjustment as provided in this
Article V, the maximum aggregate number of Shares that may be issued under this
Plan shall be 105,000 (after giving effect to a 105-for-one stock split on April
3, 1998). Where Options are for any reason canceled, or expire or terminate
unexercised, the Shares covered by those Options shall again be available for
the grant of Options, subject to the preceding sentence.

            C.  Adjustments.  The existence of this Plan and the Options granted
under this Plan shall not affect in any way the right or power of the Board or
the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any
issuance of securities, whether or not senior to the Common Stock, the
dissolution or liquidation of the Company or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding, but
this Article V(C) shall govern outstanding Options in each such case.

                  1.  If the Company effects a subdivision, recapitalization or
      consolidation of Shares or effects a stock dividend on Shares without
      receipt of consideration, the aggregate number and kind of shares of
      capital stock issuable under this Plan shall be proportionately adjusted,
      and each holder of a then outstanding Option shall have the right to
      purchase under that Option, in lieu of the number of Shares as to which
      the Option was then exercisable but on the
                                       4
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      same terms and conditions of exercise set forth in that Option, the number
      and kind of shares of capital stock the holder would have owned after the
      subdivision, recapitalization, consolidation or dividend, if, immediately
      prior to the subdivision, recapitalization, consolidation or dividend, the
      holder had been the holder of record of the number of Shares as to which
      that Option was then exercisable.

                  2.  If the Company merges or consolidates with one or more
      corporations and the Company is the surviving corporation, thereafter,
      upon exercise of an Option theretofore granted, the holder shall be
      entitled to purchase under that Option, in lieu of the number of Shares as
      to which the Option was then exercisable, but on the same terms and
      conditions of exercise set forth in that Option, the number and kind of
      shares of capital stock or other property to which the holder would have
      been entitled pursuant to the agreement of merger or consolidation, if,
      immediately prior to the merger or consolidation, the holder had been the
      holder of record of the number of Shares as to which that Option was then
      exercisable.

                  3.  If the Company is not the surviving corporation in any
      merger or consolidation, or if the Company is to be dissolved or
      liquidated, then, unless the surviving corporation assumes the Options or
      substitutes new options that are determined by the Board in its sole
      discretion to be substantially similar in nature and equivalent in terms
      and value to Options then outstanding, upon the effective date of the
      merger, consolidation, liquidation or dissolution, any unexercised Options
      shall expire without additional compensation to the holders; provided that
      the Committee shall give notice to each holder at least 20 days prior to
      the merger, consolidation, dissolution or liquidation that the Options, if
      unexercised, will expire upon the merger, consolidation, dissolution or
      liquidation, and each holder has the right to exercise in full, effective
      as of the consummation of the merger, consolidation, dissolution or
      liquidation, all the holder's then outstanding Options (without regard to
      limitations on exercise otherwise contained in the Options, other than
      pursuant to Article III) contingent on the occurrence of the merger,
      consolidation, dissolution or liquidation, and provided that, if the
      contemplated transaction does not take place within 90 days after that
      notice, the notice, accelerated vesting and exercise shall be null and
      void. Notwithstanding the foregoing, the Options held by persons subject
      to section 16(b) of the Act that would not have vested under this Plan
      except pursuant to Article VI(E) prior to the effective date of the
      merger, consolidation, liquidation or dissolution shall not expire upon
      the consummation of the merger, consummation of the merger, consolidation,
      liquidation or dissolution, but shall expire 30 days after they would have
      otherwise vested under this Plan and shall, after the merger,
      consolidation, liquidation or dissolution, represent the right to receive
      the number and kind of shares of capital stock or other property to which
      the holder would have been entitled, if, immediately prior to the merger,
      consolidation, liquidation or dissolution, the holder had been the holder
      of record

                                       5
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      of the number of Shares as to which that Option was then exercisable.

                  4.  If, as a result of any adjustment pursuant to the 
      preceding paragraphs of this Article V(C), any holder becomes entitled
      upon exercise of an Option to receive any shares of capital stock other
      than Common Stock, then the number and kind of shares of capital stock so
      receivable shall be subject to adjustment from time to time pursuant to
      this Article V(C), mutatis mutandis.

                  5.  Except as provided above, the issuance by the Company of
      shares of stock of any class or securities convertible into shares of
      stock of any class, for cash, property or services, upon direct sale, upon
      exercise of rights or warrants or upon conversion of shares or other
      securities, whether or not for fair value, shall not affect, and no
      adjustment by reason of the issuance shall be made with respect to, the
      number of Shares subject to Options granted or the purchase price per
      Share.

VI.   Awards and Terms of Options

            A.  Grant.  Without further action by the Board or the stockholders
of the Company, each Eligible Director on each Annual Date of Grant (as defined
below) shall be automatically granted Options to purchase a number of Shares
determined by dividing $50,000 by the Fair Market Value on the Annual Date of
Grant, in the case of each Eligible Director -- Class 1, and a number of Shares
determined by dividing $100,000 by the Fair Market Value on the Annual Date of
Grant, in the case of each Eligible Director -- Class 2; provided that no such
Option shall be granted, if, on the date of grant, the Company shall have
liquidated, dissolved or merged or consolidated with another entity and is not
the surviving entity (unless this Plan shall have been assumed by the surviving
entity with regard to future grants). If an Eligible Director shall first become
a member of the Board on a date other than an Annual Date of Grant, such
Eligible Director on the date he first becomes a member of the Board shall be
automatically granted Options to purchase a number of Shares equal to the number
set forth above (i) multiplied by a fraction, the numerator of which shall be
the number of days from the date of grant until the next following Annual Date
of Grant, and the denominator of which shall be 365 and (ii) divided by the Fair
Market Value on the date of grant. In addition, on August 24, 1998, each then
Eligible Director -- Class 1 shall be automatically granted Options to purchase
a number of Shares determined by dividing $18,223 by the Fair Market Value on
August 24, 1998, and each then Eligible Director -- Class 2 shall be
automatically granted Options to purchase a number of Shares determined by
dividing $11,554 by the Fair Market Value on August 24, 1998.

            B.  Date of Grant.  Grants shall be made on the Effective Date,
annually on each anniversary of the Effective Date (the "Annual Date of Grant")
and at such other times as provided in Article VI(A); provided that, if the
Common Stock is

                                       6
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then publicly traded and that date in any year is a date on which the national
securities exchange or automated quotation system on which the Common Stock is
primarily traded or through which it is primarily quoted is not open for trading
or quotation, the grant shall be made on the first day thereafter on which the
relevant exchange or quotation system is open for trading or quotation.

            C.  Option Terms

                  1.  The purchase price per Share ("Purchase Price")
      deliverable upon the exercise of an Option shall be 100% of the Fair 
      Market Value at the time of the grant of the Option, or the par value of 
      a Share, whichever is greater.

                  2.  Except as otherwise provided in this Plan, each Option 
      (a) granted prior to August 8, 1996 shall be exercisable with respect to 
      20% of the Shares subject to the Option on or after the first anniversary
      of the date of grant and with respect to an additional 20% of the Shares
      subject to the Option on or after each of the next four anniversaries of
      the date of grant, and (b) granted on or after August 8, 1996 shall be
      exercisable with respect to one-third of the Shares subject to the Option
      on or after the first anniversary of the date of grant and with respect to
      an additional one-third of the Shares subject to the Option on or after
      each of the next two anniversaries of the date of grant.

                  3.  An Option holder electing to exercise one or more Options
      shall give written notice to the secretary of the Company of the election
      and the number of Options the holder elects to exercise. Shares so
      purchased shall be paid for at the time of exercise in cash or by delivery
      of unencumbered Shares (valued, for these purposes, at 100% of the Fair
      Market Value at the time) owned by the holder for at least six months (or
      such longer period as required by applicable accounting standards to avoid
      a charge to earnings) or a combination of cash and such Shares.

            D.  Expiration.  Except as otherwise provided in this Plan, if not
previously exercised, each Option shall expire upon the tenth anniversary of the
date of grant.

            E.  Acceleration of Exercisability.  All Options granted and not
previously exercisable shall become fully exercisable immediately upon a Change
of Control (as defined below). A "Change of Control" shall be deemed to have
occurred upon:

                  1.  any individual, entity or group (within the meaning of
      section 13d-3 or 14d-1 of the Act) (a "Person") directly or indirectly
      being a beneficial owner (within the meaning of Rule 13d-3 under the Act,
      except that a Person shall not be deemed a beneficial owner of securities
      solely by virtue of that

                                       7
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      Person's rights under any voting trust or shareholders agreement in effect
      on the Effective Date) of more than 50% of the combined voting power of
      the then outstanding voting securities of the Company entitled to vote
      generally in the election of directors (the "Outstanding Voting
      Securities"); excluding, however, the following: (x) the Company, (y) any
      employee benefit plan (or related trust) sponsored or maintained by the
      Company or (z) any corporation that becomes a beneficial owner pursuant to
      a reorganization, merger, consolidation or similar corporate transaction
      (in each case, a "Corporate Transaction"), if, pursuant to the
      Corporate Transaction, the conditions described in clauses (a), (b) and
      (c) of paragraph 3 below are satisfied; or

                  2.  a change in the composition of the Board, such that the
      individuals who, as of the Effective Date, constitute the Board (the Board
      as of the Effective Date, the "Incumbent Board") cease for any reason to
      constitute at least a majority of the Board; provided that, for purposes
      of this clause, any individual who becomes a member of the Board
      subsequent to the Effective Date and whose election, or nomination for
      election by the Company's stockholders, was approved by the members of the
      Board who also are members of the Incumbent Board (or so deemed to be
      pursuant to this proviso) shall be deemed a member of the Incumbent Board;
      but, provided further, that any such individual whose initial assumption
      of office occurs as a result of either an actual or threatened election
      contest (as such terms are used in Rule 14a-11 of Regulation 14A under the
      Act) or other actual or threatened solicitation of proxies or consents by
      or on behalf of a Person other than the Board shall not be so deemed a
      member of the Incumbent Board; or

                  3.  the approval by the stockholders of the Company of a
      Corporate Transaction, or, if consummation of the Corporate Transaction is
      subject, at the time of such approval by stockholders, to the consent of
      any government or governmental agency, the obtaining of the consent
      (either explicitly or implicitly by consummation); excluding, however,
      such a Corporate Transaction pursuant to which (a) the beneficial owners
      (or beneficiaries of the beneficial owners) of the outstanding Shares and
      Outstanding Voting Securities immediately prior to the Corporate
      Transaction will beneficially own, directly or indirectly, more than 60%
      of, respectively, the outstanding shares of common stock of the
      corporation resulting from the Corporate Transaction and the combined
      voting power of the outstanding voting securities of that corporation
      entitled to vote generally in the election of directors, in substantially
      the same proportions as their ownership, immediately prior to the
      Corporate Transaction, of the outstanding Shares and Outstanding Voting
      Securities, as the case may be, (b) no Person (other than the Company, any
      employee benefit plan (or related trust) of the Company or the corporation
      resulting from the Corporate Transaction and any Person beneficially
      owning, immediately prior to the Corporate Transaction, directly or
      indirectly, 20% or more of the outstanding Shares or Outstanding Voting
      Securities, as the case may be) will beneficially

                                       8
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      own, directly or indirectly, 20% or more of, respectively, the outstanding
      shares of common stock of the corporation resulting from the Corporate
      Transaction or the combined voting power of the then
      outstanding securities of that corporation entitled to vote generally in
      the election of directors and (c) individuals who were members of the
      Incumbent Board will constitute at least a majority of the members of the
      board of directors of the corporation resulting from the Corporate
      Transaction; or

                  4.  the approval of the stockholders of the Company of (a) a
      complete liquidation or dissolution of the Company or (b) the sale or
      other disposition of all or substantially all the assets of the Company;
      excluding, however, such a sale or other disposition to a corporation with
      respect to which, following the sale or other disposition, (i) more than
      60% of the then outstanding shares of common stock of that corporation and
      the combined voting power of the then outstanding voting securities of
      that corporation entitled to vote generally in the election of directors
      will be then beneficially owned, directly or indirectly, by the
      individuals and entities who were the beneficial owners (or beneficiaries
      of the beneficial owners), respectively, of the outstanding Shares and
      Outstanding Voting Securities immediately prior to the sale or other
      disposition in substantially the same proportion as their ownership,
      immediately prior to the sale or other disposition, of the outstanding
      Shares and Outstanding Voting Securities, as the case may be, (ii) no
      Person (other than the Company and any employee benefit plan (or related
      trust) of the Company or that corporation and any Person beneficially
      owning, immediately prior to such sale or other disposition, directly or
      indirectly, 20% or more of the outstanding Shares or Outstanding Voting
      Securities, as the case may be) will beneficially own, directly or
      indirectly, 20% or more of, respectively, the then outstanding shares of
      common stock of that corporation and the combined voting power of the then
      outstanding voting securities of that corporation entitled to vote
      generally in the election of directors and (iii) individuals who were
      members of the Incumbent Board will constitute at least a majority of the
      members of the board of directors of that corporation.

VII.  Effect of Termination of Directorship

            Upon Termination of Directorship for any reason other than cause,
all outstanding Options shall continue to vest, and remain exercisable until the
expiration of the Option, in accordance with this Plan. Upon Termination of
Directorship for cause, all outstanding Options shall terminate and become null
and void.

VIII. Nontransferability of Options


                                       9

<PAGE>

            No Option shall be transferable by the holder otherwise than by will
or under applicable laws of descent and distribution, and, during the lifetime
of the holder, may be exercised only by the holder or the holder's guardian or
legal representative. In addition, except as provided above, no Option shall be
assigned, negotiated, pledged or hypothecated (whether by operation of law or
otherwise), and no Option shall be subject to execution, attachment or similar
process. Upon any attempt to transfer, assign, negotiate, pledge or hypothecate
any Option, or in the event of any levy upon any Option by reason of any
execution, attachment or similar process contrary to the provisions of this
paragraph, the Option shall immediately terminate and become null and void.

IX.   Rights as a Stockholder

            A holder of an Option (or a permitted transferee of an Option) shall
have no rights as a stockholder with respect to any Shares covered by the
holder's Options, until the holder (or permitted transferee) shall have become
the holder of record of the Shares, and no adjustments shall be made for
dividends in cash or other property or distributions or other rights in respect
of any Shares, except as otherwise specifically provided in this Plan.


X.    Termination, Amendment and Modification

            This Plan shall terminate at the close of business on the tenth
anniversary of the Effective Date (the "Termination Date"), unless terminated
sooner as provided in this Plan, and no Option shall be granted under this Plan
on or after that date. The termination of this Plan shall not terminate any
outstanding Options that by their terms continue beyond the Termination Date.
The Committee at any time or from time to time may amend this Plan to effect (A)
amendments necessary or desirable in order that this Plan and the Options shall
conform to all applicable laws and regulations, and (B) any other amendments
deemed appropriate. Notwithstanding the foregoing, the Committee may not effect
any amendment that would require the approval of the stockholders of the Company
unless the approval is obtained.

            This Plan may be amended or terminated at any time by the
stockholders of the Company.

            Except as otherwise required by law, no termination, amendment or
modification of this Plan may, without the consent of the holder of an Option or
the permitted transferee of the holder's Option, alter or impair the rights and
obligations under any then outstanding Option.


XI.   Issuance of Stock Certificates; Legends; Payment of Expenses

                                       10
<PAGE>


            A.  Stock Certificates.  Upon any exercise of an Option and payment
of the exercise price as provided in the Option, a certificate or certificates 
for the Shares as to which the Option has been exercised shall be issued by the
Company in the name of the person or persons exercising the Option and shall be
delivered to or upon the order of that person or those persons, subject,
however, in the case of Options exercised pursuant to clause 3 of Article V(C),
to the merger, consolidation, dissolution or liquidation triggering the rights
under that section.

            B.  Legends.  Certificates for Shares issued upon exercise of an
Option shall bear such legends as the Committee, in its sole discretion,
determines to be necessary or appropriate to prevent a violation of, or to
perfect an exemption from, the registration requirements of the Securities Act
of 1933 or to implement the provisions of any agreements between the Company and
the holder of the Option with respect to the Shares.

            C.  Payment of Expenses.  The Company shall pay all issue or 
transfer taxes with respect to the issuance or transfer of Shares, as well as
all fees and expenses incurred by the Company in connection with the issuance or
transfer and with the administration of this Plan.

XII.  Listing of Shares and Related Matters

            If at any time the Board or the Committee determines in its sole
discretion that the listing, registration or qualification of the Shares covered
by this Plan upon any national securities exchange or under any state or federal
law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the grant of
Options or the award or sale of Shares under this Plan, no Option grant shall be
effective and no Shares shall be delivered, as the case may be, unless and until
such listing, registration, qualification, consent or approval shall have been
effected or obtained, or otherwise provided for, free of any conditions not
acceptable to the Board.

XIII. Withholding Taxes

            The Company shall have the right to require, prior to the issuance
or delivery of any Shares, payment by the holder of an Option of any federal,
state or local taxes required by law to be withheld.

XIV.  General

            A.  Right to Terminate Directorship.  This Plan shall not impose any

                                       11

<PAGE>

obligation on the Company to retain any Eligible Director as a director, nor
shall it impose any obligation on the part of any Eligible Director to remain as
a director.

            B.  No Trust.  Nothing in this Plan and no action taken pursuant to
this Plan (including, without limitation, the grant of any Option) shall create
or be construed to create a trust of any kind, or a fiduciary relationship,
between the Company and any Option holder or the executor, administrator or
other personal representative or designated beneficiary of a holder or any other
person.

            C.  Notices.  Any notice or other communication to the Company under
this Plan shall be addressed to the Company at its principal executive offices
from time to time. Each Eligible Director shall be responsible for furnishing
the Committee with the Eligible Director's current address for the mailing to
that Eligible Director of notices and other communications. Any notice or other
communication to the Eligible Director shall, if the Company has received notice
that the Eligible Director is then deceased, be given to the Eligible Director's
personal representative, if that representative has previously informed the
Company of his or her status and address (and has provided such reasonable
substantiating information as the Company may request) by written notice under
this section. Any notice under this Plan shall be deemed to have been given when
delivered in person or when dispatched by telegram or one business day after
having been dispatched by a nationally recognized overnight courier service or
three business days after having been mailed by United States registered or
certified mail, return receipt requested, postage prepaid.

            D.  Severability.  If any provision of this Plan is held invalid or
unenforceable, the invalidity or unenforceability shall not affect any other
provision of this Plan, and this Plan shall be construed and enforced as if that
provision had not been included.

            E.  Costs.  The Company shall bear all expenses included in
administering this Plan, including expenses of issuing Common Stock pursuant to
any Options.

            F.  Controlling Law.  This Plan shall be construed and enforced
according to the laws of the state of incorporation of the Company.

            G.  Section 16(b).  All elections and transactions under this Plan 
by persons subject to section 16 of the Act involving shares of Common Stock are
intended to comply with all exemptive conditions under Rule 16b-3. To the extent
any provision of this Plan or action by the Committee fails so to comply, it
shall be deemed null and void. The Committee may establish and adopt written
administrative guidelines, designed to facilitate compliance with section 16(b)
of the Act, as it may deem necessary or proper for the administration and
operation of this Plan and the transaction of business under this Plan.

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