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                               CARROLS CORPORATION
                          1996 LONG-TERM INCENTIVE PLAN



1.      PURPOSE

        The purpose of this Plan is to further the growth and general prosperity
        of Carrols 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"  means,  except as may otherwise be provided in a  Participant's
        employment  agreement (if any) or in the Award  Agreement,  (i) a felony
        conviction  of the  Participant  (or a plea of nolo  contendere  in lieu
        thereof); (ii) the unauthorized  disclosure of confidential  proprietary
        information  of the Company which  disclosure the  Participant  knows or
        reasonably  should  have known would be  reasonably  likely to result in
        material  damage to the Company;  (iii) the breach by the Participant of
        any material  provision of the  Participant's  employment  agreement (if
        any), which breach, if curable,  is not remedied within thirty (30) days
        after the  Participant's  receipt of written notice  thereof,  provided,
        however,  that the Company need not permit the  Participant  to cure any
        breach which has been the subject of a prior  written  notice;  (iv) the
        engagement in self dealing in breach of fiduciary duties with respect to
        the Company's  assets or properties  unless disclosed to and approved by
        the  Committee;  (v) an act of gross  misconduct in connection  with the
        Participant's duties hereunder;  or (vi) habitual or material neglect of




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        the Participant's  duties to the Company (as determined in good faith by
        the   Committee,   continuing   after  prior   written   notice  to  the
        Participant).

        "Change of Control" means, except as  set  forth  on  Appendix A to this
        Plan:

               (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 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 50% or
                   more of either the then outstanding shares of 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) Individuals  who,  as of  the  effective  date  of  the  Plan
                   specified in Section 20, constitute the Board (the "Incumbent
                   Board")  cease  for  any  reason  to  constitute  at  least a
                   majority of the Board;  provided  that any person  becoming a
                   director  subsequent  to  the  effective  date  hereof  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); or

               (c) Approval   by  the   stockholders   of  the   Company   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.

        "Committee" means the Compensation Committee of the Board.

        "Controlling Shareholder" means Dilmun Investments.

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

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


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        "Fair Market Value" means, as of any date:

               (a) if the Stock is publicly  traded,  the average of the highest
                   and  lowest  prices at which the Stock is traded on such date
                   on the principal  market on which the Stock is traded,  or if
                   the Stock is not traded on such  date,  on next date on which
                   the Stock is traded; or

               (b) if the Stock is not publicly traded,  the value of a Share of
                   Stock  as  determined  in good  faith by the  Company  on the
                   advice of its independent auditors.

        "Good  Reason"  means (i) the material  failure of the Company to comply
        with the provisions of the Participant's  employment agreement,  if any,
        which  failure  shall not cease  promptly  and in no event more than ten
        (10)  days  after the  Company's  receipt  of  written  notice  from the
        Participant objecting to such conduct; (ii) any purported termination by
        the  Company of the  Participant's  employment  other than as  expressly
        permitted in the Participant's  employment  agreement,  if any; or (iii)
        the   assignment   to   Participant   of  duties  and   responsibilities
        inconsistent with those duties and responsibilities customarily assigned
        to individuals holding positions similar to that of the Participant at a
        company of comparable size to the Company or the  substantial  reduction
        by the Company of Participant's duties and responsibilities.

        "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.  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" means the complete and permanent  inability of a
        Participant,  for medical  reasons,  to perform all of his or her duties
        with the Company as determined  by the Committee  upon the basis of such
        evidence,  including but not limited to independent  medical reports and
        data, as the Committee deems appropriate or necessary.

        "Plan" means the Carrols Corporation 1996 Long-Term Incentive Plan.

        "Retirement"  means termination of employment without Good Reason or for
        other  than  Cause,  death  or  Permanent  Disability  on or  after  the
        Participant's attainment of age 58.

        "Stock" or "Share" means common stock of Carrols  Holdings  Corporation,
        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



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               directors  of the  Company  shall be  entitled  to rely  upon the
               advice,  opinions or 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 Section 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




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               delivering  a  promissory  note  to the  Controlling  Shareholder
               payable over a three (3) year period and bearing  interest at the
               rate  provided  under  Section  1274(d) of the Code, or (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.


        (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  Controlling  Shareholder  payable  over a three  (3) year
               period and bearing  interest at the rate  provided  under Section
               1274(d)  of the  Code,  or  (iv) by a  combination  of any of the
               foregoing,  in accordance  with the terms of the Plan,  the Award
               Agreement  and of any  applicable  guidelines of the Committee in
               effect at the time.

        (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.



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        (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.

        (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  393,263.77   Shares  or,  if  greater  12.5%  of  the  Shares
               authorized  as  of  the   effective   date  of  the  Plan  (on  a
               pre-dilution  basis associated with grants of Stock Options).  Of
               the



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               Shares  available for Awards under this Plan,  157,305.51  Shares
               (or, if greater,  2/5 of 12.5% of the Shares)  will be  available
               for grant at an exercise price per share of $29.7192;  157,305.51
               Shares  (or,  if  greater,  2/5 of 12.5% of the  Shares)  will be
               available  for grant at an exercise  price per share of $35.1227;
               and 78,652.75  Shares (or, if greater 1/5 of 12.5% of the Shares)
               will be  available  for grant at an  exercise  price per share of
               $37.8245 (notwithstanding the preceding sentence, if, on the date
               of any such grant of options, the Fair Market Value of a Share of
               Stock is greater than the stated  exercise  prices,  such options
               will be  granted  with an  exercise  price  equal to Fair  Market
               Value).  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
               166,558.77 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,  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.

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        (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.

        (c)    Except as otherwise provided by the Committee, if a Participant's
               employment  by the  Company  terminates  because  of  (i)  death,
               Permanent Disability,  Retirement, termination for Good Reason or
               without Cause, all Stock Options held by the Participant,  or his
               or her legal representative, which are not exercisable shall vest
               and the option shall become  immediately  exercisable in full (i)
               for a period  of one  year  after  the date of the  Participant's
               termination   of  employment  on  account  of  death,   Permanent
               Disability or Retirement; or (ii) for a period of forty-five (45)
               days after the  Participant's  termination of employment for Good
               Reason or without Cause.

        (d)    If a  Participant's  employment by the Company is terminated  for
               any reason other than death,  Permanent  Disability,  Retirement,
               for Good Reason or without Cause, all Options,  to the extent not
               vested  and   exercisable  on  the  date  of  the   Participant's
               termination, shall be forfeited on such date of termination.



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        (e)    If a Participant's  employment with the Company is terminated for
               Cause,  any portion of the  Participant's  Stock  Option that was
               vested and exercisable on the date the Company delivers notice of
               termination of employment for Cause to the  Participant  shall be
               forfeited as of such date.


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  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,   issuance  of   warrants,   rights  or
        debentures,  stock dividends,  stock split or reverse stock split,  cash
        dividend,   property  dividend,   including,   without   limitation,   a
        distribution  of the stock of a Subsidiary,  combination  or exchange of
        Shares,   repurchase  of  Shares,  or  any  other  change  in  corporate
        structure,  which  materially  affects  the  value  of the  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, accelerate and become exercisable
        in  full  at  least  ten  days  prior  to  (and  shall  expire  on)  the
        consummation  of such  Change  of  Control,  on such  conditions  as the
        Committee shall determine,  unless the successor corporation assumes the
        outstanding  Stock Options or Stock  Appreciation  Rights or substitutes
        substantially equivalent options.



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13.     REDEMPTION AND SALE OF SHARES

        (a)    Upon the  occurrence  of a Change of Control of the Company,  all
               Shares of Stock issued  pursuant to the Plan shall be redeemed by
               the  Company  at the  Fair  Market  Value of such  Shares  on the
               effective  date of the Change of  Control,  subject to such other
               terms and conditions as the Company may require,  including,  but
               not limited to,  requiring  the  Participant  to tender the share
               certificate  or  certificates   representing  such  Shares  as  a
               condition of such redemption.

        (b)    Except as  otherwise  provided by the  Committee,  in the event a
               Participant's  employment  with the Company is terminated for any
               reason, either by the Company or by the Participant,  the Company
               may, in its sole  discretion and within one year from the date of
               termination,  redeem  all or any  portion  of the Shares of Stock
               issued  to the  Participant  pursuant  to the  Plan,  at the Fair
               Market Value of such Shares on the date of termination.

        (c)    Except as otherwise  provided by the Committee,  in the event the
               Controlling Shareholder elects to sell or otherwise transfer to a
               third party (the "Purchaser") 50% or more of the Shares owned (as
               of  the  effective   date  of  this  Plan)  by  the   Controlling
               Shareholder,  a  Participant  shall  be  entitled  to sell to the
               Purchaser,  as of the time and at the per share  sale price to be
               received  by the  Controlling  Shareholder,  up to an  equivalent
               percentage of the Shares  issued to and owned by the  Participant
               pursuant to the Plan, in the following manner:

               (i)    the Controlling  Shareholder shall notify each Participant
                      of such sale or transfer and its  material  terms at least
                      ten (10) days prior to the effective  date of such sale or
                      transfer;

               (ii)   within five (5) days thereafter,  each  Participant  shall
                      notify the Company of the  number,  if any, of such Shares
                      owned by the  Participant to be sold to the Purchaser (the
                      "Participant  Shares"),  subject  to the  limitations  set
                      forth in subparagraph (c) above;

               (iii)  the  Controlling  Shareholder  shall  sell both its Shares
                      and,  acting  on  behalf  of each  such  Participant,  the
                      Participant  Shares,  to the Purchaser  and, to the extent
                      necessary,  the Controlling  Shareholder  shall reduce the
                      number of its Shares available for sale to accommodate the
                      sale of the Participant Shares.


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



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               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.


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



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               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 shall be effective on and as of the date of its approval by the
        stockholders of the Company  (pursuant to the Company by-laws) and shall
        terminate ten years later,  subject to such earlier  termination  by the
        Board pursuant to Paragraph 14.


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