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                                                  EXHIBIT 10.23

                        YANKEE ENERGY SYSTEM, INC.

                1996 LONG-TERM INCENTIVE COMPENSATION PLAN 



SECTION 1.  Purpose.
----------  --------

     The purposes of the 1996 Long-Term Incentive Compensation
Plan (the "Plan") are (i) to attract and retain outstanding
executives in key management portions of Yankee Energy System,
Inc. (the "Company") and any subsidiaries of the Company
(collectively the "Related Corporations"), (ii) to promote the
achievement of long-term corporate goals through the use of
performance-based incentives, (iii) to create parallel interests
between executives and shareholders by providing for some portion
of executive compensation in the form of common stock, and (iv)
to reward performance and to foster Company identification on the
part of key middle managers.

     The Plan will provide a means whereby officers, executive
and managerial employees of the Company and any Related
Corporations may (a) purchase stock in the Company pursuant to
options which qualify as "incentive stock options" ("Incentive
Stock Options") under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), (b) purchase stock in the Company
pursuant to options granted hereunder which do not qualify as
Incentive Stock Options ("Non-Qualified Options"); (c) may be
awarded stock in the Company ("Awards"); and (d) may receive
stock appreciation rights ("SARs").  Both Incentive Stock Options
and Non-Qualified Options are referred to hereafter individually
as an "Option" and collectively as "Options."  As used herein,
the terms "parent" and "subsidiary" mean "parent corporation" and
"subsidiary corporation" as those terms are defined in Section
424 of the Code.  Options, Awards and SARs are referred to
hereafter individually as a "Plan Benefit" and collectively as
"Plan Benefits."  Officers, executive and managerial employees of
the Company and any Related Corporations are referred to herein
as "Participants."


SECTION 2.  Administration.
----------  ---------------

     2.1  Board of Directors and the Committee.  The Plan will be
administered by the Board of Directors of the Company whose
construction and interpretation of the terms and provisions
hereof shall be final and conclusive.  The Board of Directors may
in its sole discretion grant Options, issue shares upon exercise
of such Options, grant Awards and grant SARs all as provided in
the Plan.  The Board of Directors shall have authority, subject
to the express provisions of the Plan, to construe the Plan and
its related agreements, to prescribe, amend and rescind rules and
regulations relating to the Plan, to determine the terms and
provisions of the respective Option, Award and SAR agreements,
which need not be identical, and to make all other determinations
in the judgment of the Board of Directors necessary or desirable
for the administration of the Plan.  The Board of Directors may
correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any related agreement in the
manner and to the extent it shall deem expedient to carry the
Plan into effect and it shall be the sole and final judge of such
expediency.  No director shall be liable for any action or
determination made in good faith.  The Board of Directors may
delegate any or all of its powers under the Plan to the
Organization and Compensation Committee or other Committee (the
"Committee") appointed by the Board of Directors consisting of at
least two members of the Board of Directors, who shall serve at
the discretion of the Board of Directors.  If Plan Benefits are
to be approved solely by a Committee, the members of the
Committee shall at all times be: (i) "outside directors" as that
term is defined in Treas. Reg. Section 1.162-27(e)(3) (or any
successor regulation); and (ii) "non-employee directors" within
the meaning of Rule 16b-3 (or any successor rule) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as such terms are interpreted from time to time.  If the
Committee is so appointed, all references to the Board of
Directors herein shall mean and relate to such Committee, unless
the context otherwise requires.   

     2.2  Compliance with Section 162(m) of the Code.  Section
162(m) of the Code generally limits the tax deductibility to
publicly held companies of compensation in excess of $1,000,000
paid to certain "covered employees" ("Covered Employees").  It is
the Company's intention to preserve the deductibility of such
compensation to the extent it is reasonably practicable and to
the extent it is consistent with the Company's compensation
objectives.  For purposes of this Plan, Covered Employees of the
Company shall be those employees of the Company described in
Section 162(m)(3) of the Code.


SECTION 3.  Eligibility.
----------  ------------

     3.1  Incentive Stock Options.  Participants shall be
eligible to receive Incentive Stock Options pursuant to the Plan;
provided that no Participant shall be granted any Incentive Stock
Option under the Plan who, at the time such Option is granted,
owns, directly or indirectly, Common Stock of the Company
possessing more than 10% of the total combined voting power of
all classes of stock of the Company or of its Related
Corporations, unless the requirements of Section 6.6(b) hereof
are satisfied.  In determining whether this 10% threshold has
been reached, the stock attribution rules of Section 424(d) of
the Code shall apply.  

     3.2  Non-Qualified Options, Awards and SARs.  Non-Qualified
Options, Awards and SARs  may be granted to any Participant.

     3.3  Generally.  The Board of Directors may take into
consideration a Participant's individual circumstances in
determining whether to grant Plan Benefits.  Granting of Plan
Benefits for any individual shall neither entitle that individual
to, nor disqualify that individual from, participation in any
other grant of Plan Benefits.


SECTION 4.  Stock Subject to Plan.
----------  ----------------------

     Subject to adjustment as provided in Sections 9 and 10
hereof, the stock to be offered under the Plan shall consist of
shares of the Company's Common Stock, $5.00 par value, and the
maximum number of shares which will be reserved for issuance, and
in respect of which Plan Benefits may be granted pursuant to the
provisions of the Plan, shall not exceed in the aggregate five
hundred twenty-three thousand (523,000) shares, except that this
number of shares will be increased by that number of shares as to
which awards granted under the Company's 1991 Long-Term Incentive
Compensation Plan may lapse, expire, terminate or be cancelled. 
Such shares may be authorized and unissued shares, treasury
shares or shares purchased on the open market.  If an Option or
SAR granted hereunder shall expire or terminate for any reason
without having been exercised in full, or if the Company shall
reacquire any unvested shares issued pursuant to Awards, any such
shares so reacquired shall again be available for subsequent
grants of Plan Benefits under the Plan.  Stock issued pursuant to
the Plan may be subject to such restrictions on transfer,
repurchase rights or other restrictions as shall be determined by
the Board of Directors.


SECTION 5.  Granting of Plan Benefits.
----------  --------------------------

     Plan Benefits may be granted under the Plan at any time
after adoption of the Plan by the Board of Directors and prior to
October 22, 2006; provided, however, that nothing in the Plan
shall be construed to obligate the Company to grant Plan Benefits
to a Participant or anyone claiming under or through a
Participant.  The date of grant of Plan Benefits under the Plan
will be the date specified by the Board of Directors at the time
the Board of Directors grants such Plan Benefits; provided,
however, that such date shall not be prior to the date on which
the Board of Directors takes such action.  The Board of Directors
shall have the right, with the consent of a Participant, to
convert an Incentive Stock Option granted under the Plan to a
Non-Qualified Option pursuant to Section 6.7.  Plan Benefits may
be granted alone or in addition to other grants under the Plan.


SECTION 6.  Special Provisions Applicable to Options and SARs.
----------  --------------------------------------------------

     6.1  Purchase Price and Shares Subject to Options and SARs.

          (a)  The purchase price per share of Common Stock
     deliverable upon the exercise of an Option shall be
     determined by the Board of Directors; provided, however,
     that the exercise price shall not be less than 100% of the
     fair market value of such Common Stock on the day the Option
     is granted (except as modified in Section 6.6(b) hereof in
     the case of an Incentive Stock Option).
     
          (b)  Options granted under the Plan may provide for the
     payment of the exercise price by delivery of (i) cash or a
     check payable to the order of the Company in an amount equal
     to the exercise price of such Options, (ii) shares of Common
     Stock of the Company owned by the Participant having a fair
     market value equal in amount to the exercise price of the
     Options being exercised, or (iii) any combination of (i) and
     (ii).  The fair market value of any shares of the Company's
     Common Stock which may be delivered upon exercise of an
     Option shall be determined by the Board of Directors.  The
     Board of Directors may also permit Participants, either on a
     selective or aggregate basis, to simultaneously exercise
     Options and sell the shares of Common Stock thereby
     acquired, pursuant to a brokerage or similar arrangement,
     approved in advance by the Board of Directors, and to use
     the proceeds from such sale as payment of the purchase price
     of such shares.

          (c)  If, at the time an Option is granted under the
     Plan, the Company's Common Stock is publicly traded, "fair
     market value" shall be determined as of the last business
     day for which the prices or quotes discussed in this
     sentence are available prior to the date such Option is
     granted (the "Determination Date") and shall mean (i) the
     average (on the Determination Date) of the high and low
     prices of the Common Stock on the principal national
     securities exchange on which the Common Stock is traded, if
     such Common Stock is then traded on a national securities
     exchange; (ii) the last reported sale price (on the
     Determination Date) of the Common Stock on The Nasdaq Stock
     Market if the Common Stock is not then traded on a national
     securities exchange; or (iii) the closing bid price (or
     average of bid prices) last quoted (on the Determination
     Date) by an established quotation service for over-the-
     counter securities, if the Common Stock is not reported on
     The Nasdaq Stock Market.  However, if the Common Stock is
     not publicly traded at the time an Option is granted under
     the Plan, "fair market value" shall be deemed to be the fair
     value of the Common Stock as determined by the Board of
     Directors after taking into consideration all factors which
     it deems appropriate, including, without limitation, recent
     sale and offer prices of the Common Stock in private
     transactions negotiated at arm's length.

          (d)  The maximum number of shares with respect to which
     Options or SARs may be granted to any employee, including
     any cancellations or repricings which may occur, shall be
     limited to 50,000 shares in any calendar year.

     6.2  Duration of Options and SARs.  Subject to Section
6.6(b) hereof, each Option and SAR and all rights thereunder
shall be expressed to expire on such date as the Board of
Directors may determine, but in no event later than ten years
from the day on which the Option or SAR is granted and shall be
subject to earlier termination as provided herein.

     6.3  Exercise of Options and SARs.

          (a)  Subject to Section 6.6(b) hereof, each Option and
     SAR granted under the Plan shall be exercisable at such time
     or times and during such period as shall be set forth in the
     instrument evidencing such Option or SAR.  To the extent
     that an Option or SAR is not exercised by a Participant when
     it becomes initially exercisable, it shall not expire but
     shall be carried forward and shall be exercisable, on a
     cumulative basis, until the expiration of the exercise
     period.  No partial exercise may be for less than ten (10)
     full shares of Common Stock (or its equivalent).

          (b)  The Board of Directors shall have the right to
     accelerate the date of exercise of any installments of any
     Option or SAR; provided that the Board of Directors shall
     not accelerate the exercise date of any installment of any
     Option granted to a Participant as an Incentive Stock Option
     (and not previously converted into a Non-Qualified Option
     pursuant to Section 6.7) if such acceleration would violate
     the annual vesting limitation contained in Section 422(d)(1)
     of the Code, which provides generally that the aggregate
     fair market value (determined at the time the Option is
     granted) of the stock with respect to which Incentive Stock
     Options granted to any Participant are exercisable for the
     first time by such Participant during any calendar year
     (under all plans of the Company and any Related
     Corporations) shall not exceed $100,000.

     6.4  Nontransferability of Options and SARs.

     No Option or SAR granted under the Plan shall be assignable
or transferable by the Participant, either voluntarily or by
operation of law, except by will or the laws of descent and
distribution or, with respect to Non-Qualified Options and SARs,
pursuant to a qualified domestic relations order as defined by
the Code or Title I of the Employee Retirement Income Security
Act ("ERISA") or the rules promulgated thereunder.  During the
life of the Participant, the Option or SAR shall be exercisable
only by him or her.  If any Participant should attempt to dispose
of or encumber his or her Options or SARs, other than in
accordance with the applicable terms of a Non-Qualified Stock
Option Agreement or SAR Agreement, his or her interest in such
Options or SARs shall terminate.

     6.5  Effect of Termination of Employment or Death on Options
and SARs.

          (a)  If a Participant ceases to be employed by the
     Company or a Related Corporation for any reason, including
     retirement but other than death, any Option or SAR granted
     to such Participant under the Plan shall immediately
     terminate; provided, however, that in the case of a
     Participant who terminates employment as the result of
     permanent and total disability, normal retirement as defined
     in the Company's pension plan or early retirement with
     approval of the Board of Directors, any portion of such
     Option or SAR which was otherwise exercisable on the date of
     termination of the Participant's employment may be exercised
     within a one-year period following the date on which the
     Participant ceased to be so employed, or within the three-
     month period following such date in the case of an Incentive
     Stock Option, but in no event after the expiration of the
     exercise period.  Any such exercise may be made only to the
     extent of the number of shares subject to the Option or SAR
     which were purchasable or exercisable on the date of such
     termination of employment.  If the Participant dies during
     the applicable one-year or three-month period, the Option or
     SAR shall be exercisable by the Participant's personal
     representatives, heirs or legatees to the same extent and
     during the same period that the Participant could have
     exercised the Option or SAR on the date of his or her death.

          (b)  If the Participant dies while an employee of the
     Company or any Related Corporation, any Option or SAR
     granted to such Participant under the Plan shall be
     exercisable by the Participant's personal representatives,
     heirs or legatees, for the purchase of or exercise relative
     to that number of shares and to the same extent that the
     Participant could have exercised the Option or SAR on the
     date of his or her death.  The Option or SAR or any
     unexercised portion thereof shall terminate unless so
     exercised prior to the earlier of the expiration of one year
     from the date of such death or the expiration of the
     exercise period.

     6.6  Designation of Incentive Stock Options; Limitations.

     Options granted under the Plan which are intended to be
Incentive Stock Options qualifying under Section 422 of the Code
shall be designated as Incentive Stock Options and shall be
subject to the following additional terms and conditions:

          (a)  Dollar Limitation.  The aggregate fair market
     value (determined at the time the option is granted) of the
     Common Stock for which Incentive Stock Options are
     exercisable for the first time during any calendar year by
     any person under the Plan (and all other incentive stock
     option plans of the Company and any Related Corporations)
     shall not exceed $100,000.  In the event that Section
     422(d)(1) of the Code is amended to alter the limitation set
     forth therein so that following such amendment such
     limitation shall differ from the limitation set forth in
     this Section 6.6(a), the limitation of this Section 6.6(a)
     shall be automatically adjusted accordingly.

          (b)  10% Shareholder.  If any Participant to whom an
     Incentive Stock Option is to be granted pursuant to the
     provisions of the Plan is on the date of grant the owner of
     stock possessing more than 10% of the total combined voting
     power of all classes of stock of the Company or any Related
     Corporations, then the following special provisions shall be
     applicable to the Incentive Stock Option granted to such
     individual:

               (i)  The option price per share of the Common
          Stock subject to such Incentive Stock Option shall not
          be less than 110% of the fair market value of one share
          of Common Stock on the date of grant; and

               (ii) The option exercise period shall not exceed
          five years from the date of grant.

     In determining whether the 10% threshold has been reached,
     the stock attribution rules of Section 424(d) of the Code
     shall apply.

          (c)  Except as modified by the preceding provisions of
     this Section 6.6, all of the provisions of the Plan shall be
     applicable to Incentive Stock Options granted hereunder.

     6.7  Conversion of Incentive Stock Options into Non-
Qualified Options;  Termination of Incentive Stock Options.  

     The Board of Directors, at the written request of any
Participant, may in its discretion take such actions as may be
necessary to convert such Participant's Incentive Stock Options
(or any installments or portions of installments thereof) that
have not been exercised on the date of conversion into Non-
Qualified Options at any time prior to the expiration of such
Incentive Stock Options, regardless of whether the Participant is
an employee of the Company or a Related Corporation at the time
of such conversion.  Such actions may include, but not be limited
to, extending the exercise period or reducing the exercise price
of the appropriate installments of such Options.  At the time of
such conversion, the Board of Directors (with the consent of the
Participant) may impose such conditions on the exercise of the
resulting Non-Qualified Options as the Board of Directors in its
discretion may determine, provided that such conditions shall not
be inconsistent with the Plan.  Nothing in the Plan shall be
deemed to give any Participant the right to have such
Participant's Incentive Stock Options converted into Non-
Qualified Options, and no such conversion shall occur until and
unless the Board of Directors takes appropriate action.  The
Board of Directors, with the consent of the Participant, may also
terminate any portion of any Incentive Stock Option that has not
been exercised at the time of such termination.

     6.8  Stock Appreciation Rights.

     An SAR is the right to receive, without payment by the
participant, an amount equal to the excess, if any, of the fair
market value of a share of Common Stock on the date of exercise
over the grant price, which amount will be multiplied by the
number of shares with respect to which the SARs shall have been
exercised.  The grant of SARs under the Plan shall be subject to
the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the
express terms of the Plan, as the Board of Directors shall deem
desirable:

          (a)  Grant.  SARs may be granted in tandem with, in
     addition to or completely independent of any Plan Benefit.
     
          (b)  Grant Price.  The grant price of an SAR may be the
     fair market value of a share of Common Stock on the date of
     grant or such other price as the Board of Directors may
     determine.
     
          (c)  Exercise.  An SAR may be exercised by a
     Participant in accordance with procedures established by the
     Board of Directors or as otherwise provided in any agreement
     evidencing any SARs.  The Board of Directors may provide
     that an SAR shall be automatically exercised on one or more
     specified dates.
     
          (d)  Form of Payment.  Payment by the Company upon
     exercise of an SAR may be made in cash, in shares of Common
     Stock or any combination thereof, as the Board of Directors
     shall determine, provided, however, that any SAR exercised
     upon or subsequent to the occurrence of a Change in Control
     (as defined in Section 10(b) hereof) shall be paid in cash.
     
          (e)  Fair Market Value.  Fair market value shall be
     determined in accordance with Section 6.1(c) with the
     "Determination Date" being determined by reference to the
     date of grant or the date of exercise of an SAR, as
     applicable.

     6.9  Rights as a Shareholder.

     The holder of an Option or SAR shall have no rights as a
shareholder with respect to any shares covered by the Option or
SAR until the date of issue of a stock certificate to him or her
for such shares.  Except as otherwise expressly provided in the
Plan, no adjustment shall be made for dividends or other rights
for which the record date is prior to the date such stock
certificate is issued.

     6.10 Special Provisions Applicable to Non-Qualified Options
          and SARs Granted to Covered Employees.

     In order for the full value of Non-Qualified Options or SARs
granted to Covered Employees to be deductible by the Company for
federal income tax purposes, the Company may intend for such Non-
Qualified Options or SARs to be treated as  "qualified
performance-based compensation" as described in Treas. Reg.
Section 1.162-27(e) (or any successor regulation). In such case,
Non-Qualified Options or SARs granted to Covered Employees shall
be subject to the following additional requirements:
     
          (a)  such options and rights shall be granted only by
     the Committee; and
          
          (b)  the exercise price of such Options and the grant
     price of such SARs granted shall in no event be less than
     the fair market value of the Common Stock as of the date of
     grant of such Options or SARs.

SECTION 7.  Special Provisions Applicable to Awards.
----------  ----------------------------------------

     7.1  Grants of Awards.

     The Board of Directors may grant a Participant an Award
subject to such terms and conditions as the Board of Directors
deems appropriate, including, without limitation: restrictions on
the pledging, sale, assignment, transfer or other disposition of
such shares; the requirement that the Participant forfeit all or
a portion of such shares back to the Company upon voluntary or
other termination (for any reason other than death, permanent and
total disability, normal retirement as defined in the Company's
pension plan or early retirement with the approval of the Board);
and provisions disallowing a Participant receiving an Award from
making, in connection with such Award, the election permitted
under Section 83(b) of the Code.

     7.2  Conditions.  Approvals of Awards may be subject to the
following conditions:

          (a)  Each Participant receiving an Award shall enter
     into an agreement (a "Stock Restriction Agreement") with the
     Company, if required by the Board of Directors, in a form
     specified by the Board of Directors agreeing to such terms
     and conditions of the Award as the Board of Directors deems
     appropriate.

          (b)  Shares issued and transferred to a Participant
     pursuant to an Award may, if required by the Board of
     Directors, be deposited with the Treasurer or other officer
     of the Company designated by the Board of Directors to be
     held until the lapse of the restrictions upon such shares,
     and each Participant shall execute and deliver to the
     Company stock powers enabling the Company to exercise its
     rights hereunder.

          (c)  Certificates for shares issued pursuant to an
     Award shall, if the Company shall deem it advisable, bear a
     legend to the effect that they are issued subject to
     specified restrictions.

          (d)  Certificates representing the shares issued
     pursuant to an Award shall be registered in the name of the
     Participant and shall be owned by such Participant.  Such
     Participant shall be the holder of record of such shares for
     all purposes, including voting and receipt of dividends paid
     with respect to such shares.

     7.3  Nontransferability.  

     Shares issued pursuant to an Award may not be sold,
assigned, transferred, alienated, commuted, anticipated, or
otherwise disposed of (except by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order
as defined by the Code or Title I of ERISA or the rules
promulgated thereunder), or pledged or hypothecated as collateral
for a loan or as security for the performance of any obligation,
or be otherwise encumbered, and are not subject to attachment,
garnishment, execution or other legal or equitable process, prior
to the lapse of restrictions on such shares, and any attempt at
action in contravention of this Section shall be null and void. 
If any Participant should attempt to dispose of or encumber his
or her shares issued pursuant to an Award prior to the lapse of
the restrictions imposed on such shares, his or her interest in
such shares awarded to him or her shall terminate.

     7.4  Effect of Termination of Employment or Death on Awards.

     If, prior to the lapse of restrictions applicable to Awards,
the Participant ceases to be an employee of the Company or the
Related Corporations for any reason other than death, permanent
and total disability, normal retirement or early retirement with
the approval of the Board of Directors, Awards to such
Participant, as to which restrictions have not lapsed, shall be
forfeited to the Company, effective on the date of the
Participant's termination of employment.  The Board of Directors
shall have the sole power to decide in each case whether leaves
of absence shall be deemed a termination of employment.


SECTION 8.  Requirements of Law.
----------  --------------------

     8.1  Violations of Law.  No shares shall be issued and
delivered upon exercise of any Option or the making of any Award
or the payment of any SAR unless and until, in the opinion of
counsel for the Company, any applicable registration requirements
of the Securities Act of 1933, any applicable listing
requirements of any national securities exchange on which stock
of the same class is then listed, and any other requirements of
law or of any regulatory bodies having jurisdiction over such
issuance and delivery, shall have been fully complied with.  Each
Participant may, by accepting Plan Benefits, be required to
represent and agree in writing, for himself or herself and for
his or her transferees by will or the laws of descent and
distribution, that the stock acquired by him, her or them is
being acquired for investment.  The requirement for any such
representation may be waived at any time by the Board of
Directors.

     8.2  Compliance with Rule 16b-3.  The intent of this Plan is
to qualify for the exemption provided by Rule 16b-3 under the
Exchange Act.  To the extent any provision of the Plan does not
comply with the requirements of Rule 16b-3, it shall be deemed
inoperative to the extent permitted by law and deemed advisable
by the Board of Directors and shall not affect the validity of
the Plan.  In the event Rule 16b-3 is revised or replaced, the
Board of Directors may exercise discretion to modify this Plan in
any respect necessary to satisfy the requirements of the revised
exemption or its replacement.


SECTION 9.  Recapitalization.
----------  -----------------

     In the event that dividends are payable in Common Stock of
the Company or in the event there are splits, sub-divisions or
combinations of shares of Common Stock of the Company, the number
of shares available under the Plan shall be increased or
decreased proportionately, as the case may be, and the number of
shares deliverable upon the exercise thereafter of any Option
previously granted shall be increased or decreased
proportionately, as the case may be, without change in the
aggregate purchase price, the number of shares subject to Awards
as to which restrictions have not lapsed shall be increased or
decreased proportionately, as the case may be, and the number of
shares to which granted SARs relate shall be increased or
decreased proportionately, as the case may be, and the grant
price of such SARs shall be decreased or increased
proportionately, as the case may be.


SECTION 10.  Change in Control and Reorganization.
-----------  -------------------------------------
     
          (a)  For purposes of this Plan, a Change in Control
     shall mean (i) the acquisition by a third person, including
     a "person" as defined in Section 13(d)(3) of the Exchange
     Act, of beneficial ownership (as defined in Rule 13d-3 under
     the Exchange Act) directly or indirectly, of securities of
     the Company representing twenty-five percent (25%) or more
     of the total number of votes that may be cast for the
     election of the directors of the Company; or (ii) as the
     result of, or in connection with, any tender or exchange
     offer, merger, consolidation or other business combination,
     sale of assets or one or more contested elections, or any
     combination of the foregoing transactions, the persons who
     were directors of the Company shall cease to constitute a
     majority of the Board of the Company.  In the event of a
     Change of Control of the Company, except as the Board of
     Directors may expressly provide otherwise, all restrictions
     and conditions applicable to Awards then outstanding shall
     be deemed satisfied as of the date of the Change of Control
     and all Options awarded at least six (6) months prior to the
     Change of Control shall be exercisable as of such date.  Any
     SAR exercised upon or subsequent to the occurrence of a
     Change in Control shall be paid in cash.

          (b)  In the case of any tender or exchange offer,
     merger, consolidation or other business combination or sale
     of all or substantially all of the assets of the Company,
     which does not constitute a Change in Control, or in the
     case of a reorganization or liquidation of the Company, the
     Board of Directors of the Company, or the board of directors
     of any corporation assuming the obligations of the Company
     hereunder shall, as to outstanding Plan Benefits, (i) make
     appropriate provision for the protection of any such
     outstanding Plan Benefits by the substitution on an
     equitable basis of appropriate stock of the Company or of
     the merged, consolidated or otherwise reorganized
     corporation which will be issuable in respect of the shares
     of Common Stock of the Company; provided only that the
     excess of the aggregate fair market value of the shares
     subject to the Plan Benefits immediately after such
     substitution over the purchase price thereof is not more
     than the excess of the aggregate fair market value of the
     shares subject to such Plan Benefits immediately before such
     substitution over the purchase price thereof, (ii) upon
     written notice to the Participants, provide that all
     unexercised Plan Benefits must be exercised within a
     specified number of days of the date of such notice or such
     Plan Benefits will be terminated, or (iii) upon written
     notice to the Participants, provide that the Company or the 

  merged, consolidated or otherwise reorganized corporation
     shall have the right, upon the effective date of any such
     merger, consolidation, sale of assets or reorganization, to
     purchase all Plan Benefits held by each Participant and
     unexercised as of that date at an amount equal to the
     aggregate fair market value on such date of the shares
     subject to the Plan Benefits held by such Participant over
     the aggregate purchase or grant price therefor, such amount
     to be paid in cash or, if stock of the merged, consolidated
     or otherwise reorganized corporation is issuable in respect
     of the shares of the Common Stock of the Company, then, in
     the discretion of the Board of Directors, in stock of such
     merged, consolidated or otherwise reorganized corporation
     equal in fair market value to the aforesaid amount.  In any
     such case the Board of Directors shall, in good faith,
     determine fair market value and may, in its discretion,
     advance the lapse of any waiting or installment periods and
     exercise dates.


SECTION 11.  No Special Employment Rights.
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     Nothing contained in the Plan or in any Plan Benefit
documentation shall confer upon any Participant receiving a grant
of any Plan Benefit any right with respect to the continuation of
his or her employment by the Company (or any Related Corporation)
or interfere in any way with the right of the Company (or any
Related Corporation), subject to the terms of any separate
employment agreement to the contrary, at any time to terminate
such employment or to increase or decrease the compensation of
the Participant from the rate in existence at the time of the
grant of any Plan Benefit.  Whether an authorized leave of
absence or absence in military or government service shall
constitute termination of employment shall be determined by the
Board of Directors in accordance with applicable law.


SECTION 12.  Amendment of the Plan.
-----------  ----------------------

     The Board of Directors may at any time and from time to time
suspend or terminate all or any portion of the Plan or modify or
amend the Plan in any respect.  The termination or any
modification or amendment of the Plan shall not, without the
consent of a recipient of any Plan Benefit, affect his or her
rights under any Plan Benefit previously granted.  With the
consent of the affected Participant, the Board of Directors may
amend outstanding agreements relating to any Plan Benefit in a
manner not inconsistent with the Plan.  The Board of Directors
hereby reserves the right to amend or modify the terms and
provisions of the Plan and of any outstanding Options to the
extent necessary to qualify any or all Options under the Plan for
such favorable federal income tax treatment (including deferral
of taxation upon exercise) as may be afforded incentive stock
options under Section 422 of the Code, provided, however, that
the consent of a Participant is required if such amendment or
modification would cause unfavorable income tax treatment for
such Participant.


SECTION 13.  Withholding.
-----------  ------------

     The Company's obligation to deliver shares of stock upon the
exercise of any Option or SAR or the granting of an Award and to
make payment upon exercise of any SAR shall be subject to the
satisfaction by the Participant of all applicable federal, state
and local income and employment tax withholding requirements.


SECTION 14.  Effective Date and Duration of the Plan.
-----------  ----------------------------------------

     14.1 Effective Date.  The Plan shall become effective when
adopted by the Board of Directors, but no Incentive Stock Option
granted under the Plan shall become exercisable unless and until
the Plan shall have been approved by the Company's shareholders. 
If such shareholder approval is not obtained within 12 months
after the date of the Board's adoption of the Plan, then any
Incentive Stock Options previously granted under the Plan shall
terminate and no further Incentive Stock Options shall be
granted.  Subject to such limitation, Options, SARs and Awards
may be granted under the Plan at any time after the effective
date and before the date fixed herein for termination of the
Plan.

     14.2 Duration.  Unless sooner terminated in accordance with
Section 10 hereof, the Plan shall terminate upon the earlier of
(i) the tenth anniversary of the date of its adoption by the
Board of Directors or (ii) the date on which all shares available
for issuance under the Plan shall have been issued pursuant to
any Awards or the exercise or cancellation of Options and SARs
granted hereunder.  If the date of termination is determined
under (i) above, then Plan Benefits outstanding on such date
shall continue to have force and effect in accordance with the
provisions of the instruments evidencing such Plan Benefits.


SECTION 15.  Governing Law.
-----------  --------------

     The Plan and all actions taken thereunder shall be governed
by the laws of the State of Connecticut.