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                                                                     EXHIBIT B4

                          CARROLS HOLDINGS CORPORATION
                          1996 LONG-TERM INCENTIVE PLAN

1.      PURPOSE

        The purpose of this Plan is to further the growth and general prosperity
        of Carrols Holdings  Corporation (the "Company") by providing  long-term
        incentives to officers and employees of the Company and any Subsidiaries
        of the Company.  The Company  intends  that the Plan will help  attract,
        retain and motivate  officers and key employees of high caliber and good
        potential and promote the alignment of the Participant's  interests with
        that of the Company's shareholders.

2.      DEFINITIONS

        As used in the  Plan,  the  following  words  shall  have the  following
meanings:

        "Award"  means an award made to a  Participant  pursuant to the Plan and
        described in Paragraph 6, including,  without limitation, an award of an
        Incentive Stock Option,  Nonqualified  Stock Option,  Stock Appreciation
        Right, Restricted Stock, Performance Units, Performance Shares, or Other
        Stock-Based Awards or any combination of the foregoing.

        "Award   Agreement"  means  an  agreement  between  the  Company  and  a
        Participant  that  sets  forth the  terms,  conditions  and  limitations
        applicable to an Award.

        "Board" means the Board of Directors of the Company as constituted  from
        time to time.

        "Code" means the Internal  Revenue Code of 1986, as amended from time to
        time.

        "Cause" has the meaning determined by the Committee and set forth in the
        applicable Participant's Award Agreement.

        "Change of Control" means:

               (a) The acquisition  (other than from the Company) by any person,
                   entity or "group",  within the meaning of Section 13(d)(3) or
                   14(d)(2)  of  the  Securities   Exchange  Act  of  1934  (the
                   "Exchange  Act"),  excluding  for this  purpose any  employee
                   benefit  plan  of  the  Company  or  its  subsidiaries  which
                   acquires  beneficial  ownership of voting  securities  of the
                   Company, of beneficial  ownership (within the meaning of Rule
                   13d-3  promulgated  under the Exchange Act), of more than 50%
                   of either the then outstanding  shares of




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                   common  stock or the combined  voting power of the  Company's
                   then outstanding voting securities entitled to vote generally
                   in the election of directors;

               (b)(1) Individuals who are elected as members of the new Board of
                   Directors of the Company (the "Incumbent  Board") pursuant to
                   the  terms  of  the   Stockholders   Agreement   executed  in
                   connection  with the Stock  Purchase  Agreement  thereto (the
                   "Stockholders  Agreement") cease for any reason to constitute
                   at least a majority  of the Board;  provided  that any person
                   becoming a  director  on or after the  effective  date of the
                   Stockholders  Agreement  whose  election,  or nomination  for
                   election by the  Company's  shareholders,  was  approved by a
                   vote of at least a majority of the directors then  comprising
                   the Incumbent  Board (other than an election or nomination of
                   an  individual  whose  initial  assumption  of  office  is in
                   connection  with an actual  or  threatened  election  contest
                   relating to the election of directors of the Company, as such
                   terms are used in Rule 14a-11 of Regulation  14A  promulgated
                   under the  Exchange  Act) shall be for purposes of this Plan,
                   considered  as  though  such  person  were  a  member  of the
                   Incumbent Board,

               (b)(2)  Notwithstanding  the  foregoing,  paragraph  (b)(1) above
                   shall not apply to any change in the  Incumbent  Board during
                   the period in which the  Stockholders  Agreement is in effect
                   and a majority of the Board of the Company is  designated  or
                   otherwise   appointed   to  serve  on  the  Board  under  the
                   provisions of such Stockholders Agreement;

               (c) Approval and  consummation of a  reorganization,  merger,  or
                   consolidation,  in each case,  with respect to which  persons
                   who were the stockholders of the Company immediately prior to
                   such   reorganization,   merger  or   consolidation  do  not,
                   immediately  thereafter,  own more  than 50% of the  combined
                   voting  power  entitled to vote  generally in the election of
                   directors  of  the   reorganized,   merged  or   consolidated
                   company's   then   outstanding   voting   securities,   or  a
                   liquidation  or  dissolution of the Company or of the sale of
                   all or substantially all of the assets of the Company; or

               (d) The  Company  ceases  to own  at  least  50  percent  of  the
                   Employer.

               (e) A Change of Control shall not be deemed to have occurred as a
                   result of any  purchase or  acquisition  of shares of capital
                   stock in the Company by Madison  Dearborn  Capital  Partners,
                   L.P. and its affiliates,  Madison  Dearborn  Capital Partners
                   II, L.P. and its affiliates,  Atlantic Restaurants,  Inc. and
                   its affiliates, or any combination thereof.

        "Committee" means the Compensation Committee of the Board.

        "Employee"  means  any  officer  or  other  employee of the Company or a
Subsidiary.


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        "Employer" means Carrols Corporation.

        "Exchange  Act" means the  Securities  Exchange Act of 1934,  as amended
        from time to time.

        "Fair Market Value" as of any date:

               (a) of  Stock  shall  be  deemed  to  equal  (i) if the  Stock is
                   publicly  traded,  the  average  of the last  reported  sales
                   prices of such Stock for ten (10) consecutive trading days as
                   officially  reported on the principal trading market on which
                   the Stock is traded ending on the second trading day prior to
                   the  date  of  determination;  or (ii)  if the  Stock  is not
                   publicly traded,  the value of a Share of Stock as determined
                   in good faith by the Committee or the Board of the Company on
                   the advice of its independent auditors; or

               (b) of  assets  other  than  Stock  shall  equal  such  value  as
                   determined by the Committee in its sole discretion.

        "Good Reason" has the meaning  determined by the Committee and set forth
        in the applicable Participant's Award Agreement.

        "Incentive  Stock Option" means an option  intended to be and designated
        as an incentive stock option meeting the  requirements of Section 422 of
        the Code.

        "Nonqualified  Stock  Option" means an option that is not intended to be
        nor designated as an Incentive Stock Option.

        "Participant"  means an Employee  who, as of any date,  has been granted
        one or more  Awards  under the Plan which are still  outstanding  (i.e.,
        have not been exercised, forfeited or terminated).

        "Performance  Goals"  means,  with  respect to any  Performance  Period,
        performance goals based on any of the following criteria and established
        by the Committee  prior to the beginning of such  Performance  Period or
        performance goals based on any of the following criteria and established
        by the  Committee  after the beginning of such  Performance  Period that
        meet the requirements to be considered pre-established performance goals
        under Section 162(m) of the Code: earnings or earnings growth; return on
        equity, assets or investment;  revenues;  expenses;  stock price; market
        share; charge-offs; or reductions in non-performing assets or such other
        performance  indicators  as  determined  by the  Committee  in its  sole
        discretion.  Such Performance  Goals may be particular to an Employee or
        the division,  department, branch, line of business, Subsidiary or other
        unit in which the Employee  works, or may be based on the performance of
        the Company generally.

        "Performance  Period" means (when and if applicable)  the period of time
        designated  by the  Committee  during  which  Performance  Goals will be
        measured in connection with an Award.




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        "Permanent  Disability" has the meaning  determined by the Committee and
        set forth in the applicable Participant's Award Agreement.

        "Plan" means this Carrols Holdings  Corporation 1996 Long-Term Incentive
        Plan, as amended from time to time.

        "Retirement"  has the meaning  determined by the Committee and set forth
        in the applicable Participant's Award Agreement.

        "Stock" or "Share" means common stock of the Company, par value $.01 per
        share, which may be authorized but unissued or issued and reacquired.

        "Other  Stock-Based  Awards"  means any Award other than a Stock Option,
        Stock  Appreciation  Right,   Restricted  Stock,   Performance  Unit  or
        Performance Share that is valued by reference to or otherwise based upon
        the Stock.

        "Stock  Options"  means the  collective  reference  to  Incentive  Stock
        Options and Nonqualified Stock Options.

        "Subsidiary" means any corporation, other than the Company, in which the
        Company has at least a fifty percent beneficial ownership interest.

3.      ADMINISTRATION

        (a)    The Plan  shall be  administered  by the  Committee.  None of the
               members of the  Committee  shall be  eligible  to receive  Awards
               under  the  Plan.  Members  of the  Committee  shall  qualify  to
               administer and make Awards under the Plan for purposes of Section
               162(m) of the Code and Rule 16b-3 (and any other applicable rule)
               promulgated   under  Section  16(b)  of  the  Exchange  Act.  The
               Committee may adopt its own rules or  procedures,  and the action
               of a  majority  of the  Committee,  taken at a  meeting  or taken
               without a meeting  by a writing  signed by such  majority,  shall
               constitute action by the Committee.  The Committee shall have the
               power and  authority to  administer,  construe and  interpret the
               Plan,  to make rules for  carrying it out and to make  changes in
               such rules. Any such  interpretations,  rules, and administration
               shall be consistent with the basic purposes of the Plan.

        (b)    The Committee may delegate to the Chief Executive  Officer and to
               other  senior  officers of the Company its duties  under the Plan
               subject to such conditions and limitations as the Committee shall
               prescribe;   provided,  however,  that  only  the  Committee  may
               designate  and make  Awards to  Participants  who are  subject to
               Section 16 of the Exchange Act and Section 162(m) of the Code.

        (c)    The Committee  may employ  attorneys,  consultants,  accountants,
               appraisers, brokers or other persons. The Committee, the Company,
               and the officers and  directors of the Company  shall be entitled
               to rely  upon the  advice,  opinions  or




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               valuations  of any  such  persons.  All  actions  taken  and  all
               interpretations  and determinations made by the Committee in good
               faith  shall be final  and  binding  upon all  Participants,  the
               Company  and all  other  interested  persons.  No  member  of the
               Committee   shall   be   personally   liable   for  any   action,
               determination or  interpretation  made in good faith with respect
               to the Plan or Awards made under the Plan, and all members of the
               Committee shall be fully protected by the Company with respect to
               any such action, determination or interpretation.


4.      ELIGIBILITY

        The  Committee,  in its  discretion,  may grant Awards to any  Employee,
        subject to the  provisions of the Plan. No Employee shall be entitled as
        a matter of right to receive  an Award,  nor shall the grant of an Award
        entitle an Employee to receive any future Award.

5.      AWARD AGREEMENT

        The terms, conditions and limitations of each Award under the Plan shall
        be determined by the Committee  subject to the limitations  provided for
        in Paragraph 7 below, and shall be set forth in an Award Agreement, in a
        form approved by the Committee,  consistent,  however, with the terms of
        the Plan;  provided,  however,  that such Award  Agreement shall contain
        provisions  dealing  with the  treatment  of  Awards in the event of the
        termination, death or disability of a Participant.

6.      AWARDS

        As the Committee  may  determine,  the following  types of Awards may be
        granted  under  the  Plan  to  eligible  Employees,   either  alone,  in
        combination or on an alternative basis:

        (a)    Incentive Stock Options:  These are options within the meaning of
               Section 422 of the Code to purchase  Stock.  In addition to other
               restrictions  contained in the Plan, an option granted under this
               Paragraph 6(a), (i) may not be exercised more than 10 years after
               the date it is  granted,  (ii) may not  have an  option  exercise
               price  less than the Fair  Market  Value of the Stock on the date
               the option is  granted,  (iii)  must  otherwise  comply  with the
               requirements  of  Section  422 of the  Code,  and  (iv)  must  be
               designated as an "Incentive  Stock Option" by the  Committee.  To
               the extent the aggregate Fair Market Value  (determined as of the
               time the  Incentive  Stock  Option is  granted) of the Stock with
               respect to which Incentive  Stock Options become  exercisable for
               the first time by an  individual  during any calendar  year under
               all plans of the  Company or any  Subsidiary  exceeds ONE HUNDRED
               THOUSAND  DOLLARS  ($100,000),  such options  shall be treated as
               Nonqualified Stock Options.  Payment of the option exercise price
               shall be made (i) in cash,  (ii) by  delivering  shares  of Stock
               already  owned  by  the   Participant,   (iii)  by  delivering  a
               promissory  note to the Company that is either (A)  unsecured and
               full




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               recourse  against the  Participant or (B) nonrecourse but secured
               by the Stock being purchased by such exercise and by other assets
               having a Fair  Market  Value  equal to not less than  forty  (40)
               percent of the exercise  price per share (a  "Nonrecourse  Note")
               and,  in  either  event,  such  note  shall  mature  on the fifth
               anniversary  date  thereof  and  shall  bear  interest,   payable
               quarterly,  at the Federal  mid-term rate provided  under Section
               1274(d)  of  the  Code;  (iv)  by a  combination  of  any  of the
               foregoing,  in accordance  with the terms of the Plan,  the Award
               Agreement,  and any  applicable  guidelines  of the  Committee in
               effect at the time,  or (v) by any other  means  approved  by the
               Committee.  The terms of a  Nonrecourse  Note shall provide that:
               (i) any dividends  received on Stock securing a Nonrecourse  Note
               shall be applied  toward  payment of the  principal  and  accrued
               interest of the  Nonrecourse  Note;  and (ii) a Nonrecourse  Note
               shall become  immediately  due and payable upon the sale of Stock
               securing the  Nonrecourse  Note and the proceeds shall be applied
               to the  payment  of the  unpaid  principal  balance  and  accrued
               interest of the Nonrecourse Note.

        (b)    Nonqualified  Stock Options:  These are options to purchase Stock
               which  are  not  intended  to be and are  not  designated  by the
               Committee as "Incentive Stock Options." At the time of the Award,
               the  Committee  shall  determine,  and shall have included in the
               Award Agreement or other Plan rules,  the option exercise period,
               the option price,  and such other  conditions or  restrictions as
               may  be  appropriate.  In  addition  to  the  other  restrictions
               contained in the Plan,  an option  granted  under this  Paragraph
               6(b),  (i) may not be exercised more than 10 years after the date
               it is  granted,  and (ii) may not have an option  exercise  price
               less than 100% of the Fair Market  Value of Stock on the date the
               option is granted.  Payment of the option exercise price shall be
               made (i) in cash,  (ii) by  delivering  shares  of Stock  already
               owned by the  Participant,  (iii) by delivering a promissory note
               to the Company that is either (A)  unsecured  and fully  recourse
               against the  Participant  or (B)  nonrecourse  but secured by the
               Stock being purchased by such exercise and by other assets having
               a Fair Market  Value equal to not less than forty (40) percent of
               the  exercise  price per share (a  "Nonrecourse  Note")  and,  in
               either  event,  such note shall  mature on the fifth  anniversary
               date thereof and shall bear interest,  payable quarterly,  at the
               Federal mid-term rate provided under Section 1274(d) of the Code;
               (iv) by a combination of any of the foregoing, in accordance with
               the terms of the Plan,  the Award  Agreement,  and any applicable
               guidelines  of the Committee in effect at the time, or (v) by any
               other means approved by the Committee. The terms of a Nonrecourse
               Note shall  provide  that:  (i) any  dividends  received on Stock
               securing a Nonrecourse  Note shall be applied  toward  payment of
               the principal and accrued  interest of the Nonrecourse  Note; and
               (ii) a Nonrecourse Note shall become  immediately due and payable
               upon the  sale of Stock  securing  the  Nonrecourse  Note and the
               proceeds shall be applied to the payment of the unpaid  principal
               balance and accrued interest of the Nonrecourse Note.



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        (c)    Stock  Appreciation  Rights:  These are rights  that on  exercise
               entitle  the holder to receive  the excess of (i) the Fair Market
               Value of a Share of Stock on the date of  exercise  over (ii) the
               Fair Market  Value on the date of award or, if  connected  with a
               previously issued Stock Option, the Fair Market Value at the time
               such  previously  issued  Stock  Option  was  granted  (the "base
               value"), multiplied by (iii) the number of Shares covered by  the
               rights  exercised,  as  determined  by  the  Committee.  A  Stock
               Appreciation  Right  granted under the Plan may, but need not be,
               granted in tandem with a Stock  Option under  Paragraphs  6(a) or
               6(b).  The  Committee,  in the Award  Agreement  or by other Plan
               rules, may impose such restrictions or conditions on the exercise
               of Stock  Appreciation  Rights as it deems  appropriate,  and may
               terminate,  amend, or suspend such Stock  Appreciation  Rights at
               any time. No Stock Appreciation Right granted under this Plan may
               be exercised more than 10 years after the date it is granted.

        (d)    Restricted  Stock:  Restricted  Stock  is  Stock  delivered  to a
               Participant with or without payment of consideration,  subject to
               such    conditions,    terms    and    restrictions    (including
               performance-based   or   employment-based   vesting,   forfeiture
               conditions and transfer  restrictions) on the Participant's right
               to  transfer  or  sell  such  Stock.  The  number  of  Shares  of
               Restricted  Stock  and the  restrictions  or  conditions  on such
               Shares  shall  be  determined  by the  Committee,  in  the  Award
               Agreement  or by other Plan rules,  and the  certificate  for the
               Restricted  Stock  shall bear  evidence  of the  restrictions  or
               conditions.

        (e)    Performance Shares and Performance Units: An Award of Performance
               Shares  or  Performance  Units  shall  entitle a  Participant  to
               receive  Stock  or a cash  payment  specified  by the  Committee,
               depending upon the attainment of certain Performance Goals over a
               Performance  Period. The Performance Period and Performance Goals
               shall  be  specified  by the  Committee  and  may  relate  to the
               performance  of the  Company  or one or  more  Subsidiaries  or a
               combination thereof. At the time an Award of such Shares or units
               is made, the Committee shall, in the Award  Agreement,  determine
               the base value of the Award or specify a formula for  determining
               such value. Other than an Award intended to qualify under Section
               162(m) of the Internal  Revenue  Code,  the  Committee may adjust
               previously  established  Performance  Goals and  other  terms and
               conditions of an Award at any time prior to the  determination of
               the payment amount,  to reflect major  unforeseen  events such as
               changes  in  laws,   regulations   or   accounting   policies  or
               procedures,    mergers,    acquisitions    or   divestitures   or
               extraordinary, unusual or non-recurring items or events.

               Payment pursuant to an Award of Performance Shares or Performance
               Units shall be made following the  Committee's  determination  of
               the extent to which the performance criteria were satisfied,  and
               shall  be  made  in the  form of  Stock,  cash  or a  combination
               thereof, as the Committee may determine. Payment shall be made as
               promptly  as  practicable  following  the end of the  Performance
               Period unless  deferred  subject to such terms and  conditions as
               may be prescribed by the Committee.




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        (f)    Other Stock-Based Awards: Other Stock-Based Awards may be granted
               to such  Employees as the Committee  may select,  at any time and
               from time to time as the Committee shall determine. The Committee
               shall  have  complete  discretion  in  determining  the number of
               Shares subject to such Awards,  the consideration for such Awards
               and the terms,  conditions  and  limitations  pertaining  to same
               including,  without  limitation,   restrictions  based  upon  the
               achievement of specific business  objectives,  tenure,  and other
               measurements  of  individual  or  business  performance,   and/or
               restrictions  under applicable  federal or state securities laws,
               and  conditions  under  which same will  lapse.  Such  Awards may
               include the issuance of Stock in payments of amounts earned under
               other  incentive  compensation  plans of the Company.  The terms,
               restrictions  and  conditions  of the Award  need not be the same
               with respect to each Participant.

               The Committee may, in its sole discretion,  direct the Company to
               issue  Shares  subject to such  restrictive  legends  and/or stop
               transfer instructions as the Committee deems appropriate.

7.      LIMITATIONS AND CONDITIONS

        (a)    The number of Shares  available  for Awards under this Plan shall
               be 106,250 Shares or, if greater,  such Shares as approved by the
               Committee.  The Shares  available for Awards under this Plan will
               be  available  for  grant  at an  exercise  price  per  share  as
               determined  by the  Committee.  The  number of Shares  subject to
               Awards  under the Plan  (including,  but not  limited  to,  Stock
               Options  and Stock  Appreciation  Rights) to any one  Participant
               shall not exceed 45,000  Shares.  To the extent that any Award is
               canceled or forfeited, or terminates,  expires, or lapses for any
               reason,  any unissued Shares subject to such Award shall again be
               available for grant under the Plan.

        (b)    No Awards shall be made under the Plan beyond ten years after the
               effective  date of the Plan,  but the terms of Awards  made on or
               before the expiration thereof may extend beyond such expiration.

        (c)    Nothing in this Plan shall interfere with or limit in any way the
               right  of  the  Company  or  any   Subsidiary  to  terminate  any
               Participant's  employment  at  any  time,  nor  confer  upon  any
               Participant any right to continue in the employ of the Company or
               any Subsidiary.

        (d)    Deferral  of  Award  payouts  may be  provided  for,  at the sole
               discretion of the Committee, subject to such terms and conditions
               as the Committee may specify in the Award Agreements.

        (e)    Participants shall not have any of the  rights or  privileges  of
               stockholders  of  the  Company   with   respect  to  any   Shares
               purchasable in  connection  with any  Award,



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               unless and until certificates  representing such Shares have been
               issued by the Company to such  Participants,  except as otherwise
               specifically provided.

        (f)    Except as otherwise provided in this Paragraph 7, no Stock Option
               or  other  Award  under  the Plan  shall  be  sold,  transferred,
               assigned  or   otherwise   alienated  or   hypothecated   by  the
               Participant,  other  than by will or by the laws of  descent  and
               distribution,  and all Stock Options shall be exercisable  during
               the  Participant's  lifetime  only  by  the  Participant  or  the
               Participant's  legal  representative.  The  Participant  may,  if
               permitted by state law or the rules and regulations governing any
               exchange on which the Stock is traded, transfer,  without payment
               of  consideration,  any Stock Option,  other than Incentive Stock
               Options, to a member of such Participant's immediate family or to
               a trust or partnership  whose  beneficiaries  are members of such
               Participant's  immediate family.  For purposes of this Paragraph,
               the term  "immediate  family"  shall  include  the  Participant's
               spouse, children and grandchildren.

        (g)    No grant or Award related  payout under this Plan shall be deemed
               compensation for purposes of computing  benefits or contributions
               under any retirement plan of the Company or its  Subsidiaries and
               shall not affect any benefits under any other benefit plan of any
               kind or any benefit plan subsequently  instituted under which the
               availability  or  amount  of  benefits  is  related  to  level of
               compensation.  This Plan is not a  "Retirement-Plan"  or "Welfare
               Plan" under the Employee  Retirement Income Security Act of 1974,
               as amended.

        (h)    No  benefit  or  promise  under the Plan  shall be secured by any
               specific  assets of the Company or any of its  Subsidiaries,  nor
               shall any  assets of the  Company  or any of it  Subsidiaries  be
               designated as  attributable  or allocated to the  satisfaction of
               the Company's obligations under the Plan.

        (i)    Prior to the issuance of Shares,  the Participant  must execute a
               shareholder's  agreement  containing such terms and conditions as
               determined by the Committee and approved by the Board.

8.      OPTION TERMS

        (a)    The exercise  period for a Stock Option,  including any extension
               which the Committee may from time to time decide to grant,  shall
               not exceed ten years from the date of grant.

        (b)    Except as  otherwise  provided by the  Committee,  a Stock Option
               shall  become  exercisable  with  respect  to 25%  of the  Shares
               commencing on the first anniversary of the date of grant, with an
               additional 25% becoming  exercisable  on each  anniversary of the
               date of  grant  thereafter;  provided,  in each  case,  that  the
               Participant  shall  have  continuously  remained  in  the  active
               employment of the Company or, where appropriate, a Subsidiary.



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        (c)    Except as otherwise provided by the Committee, if a Participant's
               employment  with the Company or, where  applicable,  a Subsidiary
               terminates then the Stock Options held by the  Participant  shall
               have  the  vesting  and  exercise  terms  as  determined  by  the
               Committee  and  provided in the  applicable  Participant's  Award
               Agreement.

9.      DIVIDENDS AND DIVIDEND EQUIVALENTS

        The  Committee  may  provide  that  Awards  earn  dividends  or dividend
        equivalents.   Such  dividends  or  dividend  equivalents  may  be  paid
        currently or may be credited to an account  established by the Committee
        under  the  Plan  in the  name  of the  Participant.  Any  crediting  of
        dividends or dividend  equivalents  may be subject to such  restrictions
        and conditions as the Committee may establish, including reinvestment in
        additional Shares or Share equivalents.

10.     TRANSFERS AND LEAVES OF ABSENCE

        For purposes of the Plan, (a) the transfer of a Participant's employment
        between the Company and any Subsidiary  without an intervening period of
        separation  shall not be deemed a termination of  employment,  and (b) a
        Participant who is granted in writing a leave of absence shall be deemed
        to have remained in the employ of the Company or Subsidiary  during such
        leave of absence; provided, however, that no Awards may be granted to an
        Employee while absent on such leave.

11.     ADJUSTMENTS

        In  the   event  of  a   reclassification,   recapitalization,   merger,
        consolidation,  reorganization,  stock dividends, stock split or reverse
        stock split, including,  without limitation, a distribution of the stock
        of a Subsidiary,  combination or exchange of Shares, the Committee shall
        determine, in its discretion,  the appropriate  adjustments,  if any, to
        (a) the number of Shares which may be issued under the Plan, and (b) the
        number of Shares  issuable and the exercise  price per Share pursuant to
        any outstanding Award theretofore granted under this Plan.

12.     CHANGE OF CONTROL

        In the event of a Change of Control,  any or all Stock Options and Stock
        Appreciation   Rights  still  outstanding  shall,   notwithstanding  any
        contrary terms of the Award  Agreement,  vest and become  exercisable in
        full on the date of such Change of Control.  As soon as practicable  but
        in no event  later than thirty  (30) days prior to the  occurrence  of a
        Change of Control,  the Committee  shall notify the  Participant of such
        Change  of  Control.  Upon a Change  of  Control  that  qualifies  as an
        Approved  Sale (as  defined in  Paragraph  13) in which the  outstanding
        common stock of the Company is  converted or exchanged  for or becomes a




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        right to receive any cash,  property or  securities  other than Illiquid
        Consideration  (as defined in Paragraph  13), (i) the Stock  Options and
        Stock Appreciation Rights shall become exercisable solely for the amount
        of such cash,  property or securities  that the  Participant  would have
        been  entitled to had the Stock  Options and Stock  Appreciation  Rights
        been exercised  immediately  prior to such event;  (ii) the  Participant
        shall be given an  opportunity  to either (A) exercise any Stock Options
        and Stock Appreciation  Rights prior to the consummation of the Approved
        Sale  and  participate  in such  sale as  holders  of  Stock or (B) upon
        consummation  of the Approved  Sale,  receive in exchange for such Stock
        Options and Stock Appreciation Rights  consideration equal to the amount
        determined by multiplying (1) the same amount of consideration per share
        of  Stock  received  by the  holders  of Stock  in  connection  with the
        Approved  Sale less the exercise  price per share of Stock of such Stock
        Options and Stock Appreciation Rights to acquire Stock by (2) the number
        of  shares  of  Stock  represented  by  such  Stock  Options  and  Stock
        Appreciation Rights; and (iii) to the extent the Stock Options and Stock
        Appreciation Rights are not exercised prior to or simultaneous with such
        Approved Sale, the Stock Options and Stock Appreciation  Rights shall be
        canceled.

13.     SALE OF THE COMPANY

        (a)    If the Board and the holders of a majority of the Company's Stock
               approve a Sale of the Company (the "Approved Sale"),  the holders
               of Stock  shall  consent to and raise no  objections  against the
               Approved  Sale of the Company,  and if the  Approved  Sale of the
               Company is structured as a sale of capital stock,  the holders of
               Stock shall agree to sell their  shares of Stock on the terms and
               conditions approved by the Board and the holders of a majority of
               the  Company's  Stock.  The  holders  of  Stock  shall  take  all
               necessary   and  desirable   actions  in   connection   with  the
               consummation of the Approved Sale of the Company. Notwithstanding
               the foregoing, in the event that the consideration to be received
               by the  holders of Stock in  connection  with the  Approved  Sale
               shall include  either (a) shares of common stock of a class which
               is not listed on a national  securities exchange or in the NASDAQ
               system and which is not entitled to registration  rights for sale
               in a registered  public offering under the Securities Act of 1933
               or (b) shares of senior  equity  securities  which do not provide
               for a scheduled  redemption  or a redemption at the option of the
               holders thereof, such holders shall not be required to sell their
               shares of Stock pursuant to this Paragraph  13(a)  (collectively,
               the "Illiquid Consideration").

        (b)    The  obligations  of the  holders  of Stock  with  respect to the
               Approved  Sale of the Company is subject to the  satisfaction  of
               the condition that,  upon the  consummation of the Approved Sale,
               all of the  holders of Stock  receive the same form and amount of
               consideration  per share of Stock, or if any holders of Stock are
               given an option as to the form and amount of  consideration to be
               received, all holders be given the same option.




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        (c)    If the Company or the holders of the Company's  securities  enter
               into any  negotiation or  transaction  for which Rule 506 (or any
               similar  rule  then  in  effect)  promulgated  by the  Securities
               Exchange  Commission  may  be  available  with  respect  to  such
               negotiation or transaction (including a merger,  consolidation or
               other reorganization),  the holders of Stock shall at the request
               of the  Company,  appoint a "purchaser  representative"  (as such
               term  is  defined  in  Rule  501)  reasonably  acceptable  to the
               Company.   If  any   holder  of  Stock   appoints   a   purchaser
               representative  designated by the Company,  the Company shall pay
               the fees of such purchaser representative. However, if any holder
               of  Stock  declines  to  appoint  the  purchaser   representative
               designated  by the  Company,  such holder shall  appoint  another
               purchaser representative  (reasonably acceptable to the Company),
               and  such  holder  shall  be  responsible  for  the  fees  of the
               purchaser representative so appointed.


        (d)    Participants  and the other  holders of Stock (if any) shall bear
               their  pro-rata  share  (based upon the number of shares sold) of
               the costs of any sale of Stock  pursuant to an  Approved  Sale to
               the extent such costs are incurred for the benefit of all holders
               of  Stock  and  are not  otherwise  paid  by the  Company  or the
               acquiring  party.  Costs incurred by  Participants  and the other
               holders  of Stock on their own  behalf  shall  not be  considered
               costs of the transaction hereunder.

        (e)    The  provisions  of this  Paragraph 13 shall  terminate  upon the
               completion of a Qualified Public Offering.

        (f)    For  purposes of this  Paragraph  13,  "Independent  Third Party"
               shall mean any Person who,  immediately prior to the contemplated
               transaction,  does not own in excess of 5% of the Company's Stock
               on a fully-diluted basis (a "5% Owner");  who is not controlling,
               controlled  by or under control with any such 5% Owner and who is
               not the spouse or  descendent  (by birth or adoption) of any such
               5% Owner or a trust for the benefit of such 5% Owner  and/or such
               other Persons;  "Person" shall mean an individual, a partnership,
               a corporation,  a limited liability  company,  an association,  a
               joint stock company, a trust, a joint venture,  an unincorporated
               organization and a governmental entity or any department,  agency
               or political  subdivision  thereof;  "Qualified  Public Offering"
               shall mean the sale in an underwritten public offering registered
               under the Securities Act of 1933 of Shares of the Company's Stock
               resulting in aggregate  gross proceeds to the Company of at least
               $50 million and a price per share of not less than  $108.2353 (as
               such amount is equitably  adjusted for  subsequent  stock splits,
               stock dividends and recapitalizations); and "Sale of the Company"
               shall mean the sale of the Company to an Independent  Third Party
               or affiliated  group of  Independent  Third  Parties  pursuant to
               which such  party or parties  acquire  (i)  capital  stock of the
               Company  possessing  the voting  power to elect a majority of the
               Company's board of directors (whether by merger, consolidation or
               sale or transfer of the




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               Company's  capital  stock) or (ii) all or  substantially  all the
               Company's assets determined on a consolidated basis.

14.     AMENDMENT AND TERMINATION

        (a)    The Committee shall have the authority to make such amendments to
               any terms and conditions  applicable to outstanding Awards as are
               consistent  with this Plan provided that,  except for adjustments
               under Paragraph 11 hereof, no such action shall modify such Award
               in a manner adverse to the Participant  without the Participant's
               consent,   except  as  such   modification  is  provided  for  or
               contemplated under the terms of the Award.

        (b)    The Committee may  terminate,  amend or modify the  provisions of
               this Plan (including any performance criteria or conditions which
               must be  achieved in order for an Employee to receive an Award or
               Awards,  subject to Paragraph  6(e)) at any time and from time to
               time;  provided,   however,  that  an  amendment  which  requires
               stockholder  approval in order for the Plan to continue to comply
               with Rule  16b-3,  Section  162(m) of the Code or any other  law,
               regulation or stock exchange  requirement  shall not be effective
               unless  approved  by the  requisite  vote  of  stockholders.  The
               termination,  amendment  or  modification  of the  Plan may be in
               response  to  changes in the Code,  the  Exchange  Act,  national
               securities  exchange  regulations  or for  other  reasons  deemed
               appropriate by the Committee.

15.     FOREIGN OPTIONS AND RIGHTS

        The  Committee  may make Awards to Employees who are subject to the laws
        of nations other than the United States, which Awards may have terms and
        conditions  that differ from the terms thereof as provided  elsewhere in
        the Plan for the purpose of complying with foreign laws.

16.     WITHHOLDING TAXES

        The Company  shall have the right to deduct from any cash  payment  made
        under  the  Plan any  federal,  state or  local  income  or other  taxes
        required by law to be withheld with respect to such payment. It shall be
        a condition to the  obligation of the Company to deliver Shares upon the
        exercise of a Stock Option or Stock Appreciation  Right, upon payment of
        Performance  Units or  Performance  Shares,  upon delivery of Restricted
        Stock or upon exercise,  settlement or payment of any Other  Stock-Based
        Award,  that the  Participant  pay to the Company  such amount as may be
        requested by the Company for the purpose of satisfying any liability for
        such withholding taxes.




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17.     INDEMNIFICATION

        Each current or former member of the Committee,  and of the Board, shall
        be indemnified and held harmless by the Company against any loss,  cost,
        liability or expense that may be imposed upon, or reasonably incurred by
        him or her in connection with or resulting from any claim,  action, suit
        or  proceeding to which the member may be a party or in which the member
        may be  involved  by reason of any action  taken or failure to act under
        the Plan and against and from any and all amounts  paid by the member in
        settlement thereof,  with the Company's approval,  or paid by the member
        in satisfaction  of any judgment in any such action,  suit or proceeding
        against  the  member,  provided  such  member  shall give the Company an
        opportunity,  at its own  expense,  to handle and defend the same before
        the member  undertakes to handle and defend it on his or her own behalf.
        The  foregoing  right of  indemnification  shall not be exclusive of any
        other  rights of  indemnification  to which the member  may be  entitled
        under the Company's Certificate of Incorporation or By-laws, as a matter
        of law,  or  otherwise,  or any  power  that  the  Company  may  have to
        indemnify them or hold them harmless.

18.     SUCCESSORS

        The  terms  of the Plan  shall  be  binding  upon  the  Company  and its
        successors and assigns.

19.     REQUIREMENTS OF LAW

        (a)    The  granting of Awards and the issuance of Shares under the Plan
               shall be subject to all applicable  laws,  rules and regulations,
               and to such  approval  by any  governmental  agencies or national
               securities exchanges as may be required.

        (b)    In the event any  provision  of the Plan shall be held illegal or
               invalid for any reason,  the  illegality or invalidity  shall not
               affect  the  remaining  parts of the Plan,  and the Plan shall be
               construed and enforced as if the illegal or invalid provision had
               not been included.

        (c)    To the extent that federal  laws do not  otherwise  control,  the
               Plan and all Award  Agreements,  shall be construed in accordance
               with and governed by the laws of the State of New York.

20.     EFFECTIVE DATE AND TERMINATION DATES

        The Plan, as amended and restated,  shall be effective as of the closing
        of the Stock Purchase  Agreement dated as of February 25, 1997 and shall
        terminate ten years later,  subject to such earlier  termination  by the
        Board pursuant to Paragraph 14.

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