<PAGE>   1

                                                                   EXHIBIT 10F

                                 June 28, 1995

Mr. George M. Nevers
1902 Wroxton Road
Houston, Texas 77005

        In recognition of your resignation, effective June 21, 1995, from your
positions as President and Chief Executive Officer and as an employee and
director of Garnet Resources Corporation ("Garnet") and as an officer and
director of Garnet's subsidiaries, which you hereby confirm, this letter sets
forth the terms of our mutual understanding concerning your severance.

        1. We have agreed to provide you with the following severance benefits 
which are over and above those to which you would normally be entitled:

                (a) You will be paid an amount equal to $203,300, which amount 
will be paid in twenty-four equal monthly installments payable on the first 
business day of each month commencing with July 1995.

                (b) Until June 30, 1997, Garnet shall maintain in full force 
and effect, for your continued benefit, the benefits under the $1,000,000 life 
insurance policy currently in effect. Garnet shall continue to provide you with 
the benefits under the medical and long term disability policies maintained by 
Garnet until December 31, 1995. For a period of eighteen months commencing 
January 1, 1996, Garnet will pay to you, or at your direction directly to the 
insurance carrier, the amount of the premium required to be paid to keep the 
medical insurance for the benefit of you and your dependents effective for a 
period of eighteen months commencing January 1, 1996 under COBRA.

                (c) In consideration of your agreement to relinquish the stock 
options held by you and listed on Schedule A attached hereto, Garnet will 
deliver to you, simultaneously with the execution of this agreement, a stock 
option entitling you to
<PAGE>   2
purchase 200,000 shares of Garnet Common Stock at an exercise price of $2.50 
per share at any time after the date hereof and prior to June 21, 1998, which 
option shall be in the form attached hereto as Exhibit A.

        2. In consideration of the foregoing benefits:

                (a) You agree to be available during the transition period 
commencing on the date hereof and ending on December 31, 1995 to perform such 
consulting services as the management and directors of Garnet may from time to 
time reasonably request. Garnet shall reimburse you for all properly documented 
reasonable out-of-pocket expenses incurred in the performance of your duties as 
a consultant.

                (b) You hereby relinquish all stock options currently held by 
you in consideration of the issuance of the option in accordance with paragraph 
1(c) above. You acknowledge that no additional severance benefits, bonus 
payments, other compensation or reimbursement, except as specifically set forth 
above, are payable to you by Garnet, or its subsidiaries or affiliates. You 
acknowledge that all payments under paragraph 1 and any gain realized upon the 
exercise of the option set forth in paragraph 1(c) will be subject to 
applicable statutory withholding taxes.

                (c) You, for yourself and for your successors and assigns, do 
hereby fully and completely RELEASE, ACQUIT and FOREVER DISCHARGE Garnet, and 
its affiliates, subsidiaries or other related entities as well as its 
shareholders, officers, directors, employees or agents, from any and all 
claims, debts, demands, actions, causes of action, suits, sums of money, 
contracts, agreements, judgments and liabilities whatsoever, both in law and in 
equity ("claims") of any kind and any character that you might now have, or 
could have had, whether in contract, tort or otherwise, including specifically 
any claims of discrimination that you may claim in connection with your 
employment or the termination thereof. This includes but is not limited to, 
claims arising under the federal, state or local laws prohibiting 
discrimination on the basis of one's sex, race, age, disability, national 
origin, color or religion, or claims growing out of any legal restriction on 
Garnet's right to terminate its employees. This also specifically includes the 
waiver of any rights or claims arising under the Age Discrimination in 
Employment Act of 1967 (29 U.S.C. 621 et seq.). It is also understood that the 
execution of this agreement shall be construed as a release and covenant not to 
sue, that you will not sue Garnet or any subsidiary, affiliate, officer, 
director, employee or committee thereof, or file any claims of any sort with 
any administrative agency for anything arising out of your employment, and the 
terms of this agreement supersede any and all 





                                       2
<PAGE>   3
other agreements relating to your employment whether written or oral.

                (d) You agree to return to Garnet all documents, records and 
other property relating to Garnet and its business which are in your possession 
or under your control. You agree not to disclose to anyone any confidential or 
non-public information which relates to Garnet or its subsidiaries.

        3. Garnet encourages you to carefully review the terms of this 
agreement and, if you wish, to seek advice and counsel from an attorney before 
signing this agreement.

        4. This Agreement shall inure to the benefit of and shall be binding 
upon you and your executor, administrator, heirs, personal representatives and 
assigns, and Garnet and its successors and assigns; provided, however, that you 
shall not be entitled to assign or delegate any of your rights or obligations 
hereunder without the prior written consent of Garnet.

        5. This Agreement constitutes the entire agreement between the parties 
relating to the subject matter hereof. It cannot be altered or amended except 
by a writing duly executed by the party against whom such alteration or 
amendment is sought to be enforced.

        6. As the terms of this agreement were negotiated in the City of New
York at a meeting held therein, this agreement shall in all respects be governed
by and construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed entirely within such state. In the event
of any dispute between the parties relating in any way to this letter or to your
employment by Garnet a proceeding relating to such dispute may be brought only
in the Federal or state courts sitting in the City of New York, to the
jurisdiction and venue of which both parties hereby submit. Process, including
original process in any such proceeding may be served by certified or registered
mail, return receipt requested or by any other lawful means. Costs in any such
proceeding shall be paid by the unsuccessful party as determined by the court
presiding over such proceeding.

        7. If any one or more of the provisions contained in this agreement 
shall be held illegal or unenforceable, no other provision shall be affected.

        We are pleased that we have been able to reach this agreement. After 
you have the chance to review this agreement and to consult with your attorney, 
if you wish, please sign the enclosed copy and return it to me within 22 days.




                                       3
<PAGE>   4


        After you have executed and delivered this agreement, you will have 
seven (7) days following the date of execution during which time you may revoke 
this agreement, provided, however, that, if you elect to return an executed 
copy of the document to us before the expiration of 22 days from the date 
hereof, you may revoke this agreement at any time before the later to occur of 
seven (7) days following the date of execution or 22 days after the date 
hereof. If we do not receive a written revocation from you, or your attorney, 
prior to the expiration of the period in which you may revoke this agreement, 
this agreement will become effective on the date after the expiration of the 
applicable revocation period.

                                        GARNET RESOURCES CORPORATION

                                        By /s/  EDGAR A. MORTON
                                           ------------------------------
                                           

Accepted and Agreed:

/s/  GEORGE M. NEVERS
---------------------------------
George M. Nevers

        I acknowledge that I have been given the opportunity to consider this 
agreement for at least twenty-one (21) days, that I have been advised to 
discuss this agreement with an attorney of my choice, that I have carefully 
read and fully understand and agree to all of the provisions of this agreement 
and that I am voluntarily entering into this agreement.

        Finally, I also understand that I have seven (7) days after I sign this 
agreement (or twenty-two days after the date hereof, if later) to change my 
mind and that I may revoke this agreement by providing written notice of 
revocation to you prior to the expiration of the applicable period.

July 11, 1995                           /s/  GEORGE M. NEVERS
-------------------------               ---------------------------------
Date of Execution                       George M. Nevers


                                       4
<PAGE>   5


                                   SCHEDULE A


   DATE OF        NUMBER OF           NUMBER OF
    GRANT       SHARES GRANTED      SHARES VESTED        EXERCISE PRICE
  ---------     --------------      -------------        --------------

   2/ 6/90         54,441               54,441                $11.75
  12/ 4/90         50,000               50,000                $ 6.625
  12/ 8/92          5,352                3,211                $ 4.00
   6/23/93         56,250               22,500                $ 5.75


                                       5
<PAGE>   6
                                                                      EXHIBIT A

                          GARNET RESOURCES CORPORATION

                      AGREEMENT RELATING TO STOCK OPTIONS
                       WHICH ARE NOT "INCENTIVE OPTIONS"

                     PURSUANT TO THE 1990 STOCK OPTION PLAN


                         ------------------------------

        Option granted in New York, New York, as of June 28, 1995 (hereinafter 
referred to as the "Date of Grant") by GARNET RESOURCES CORPORATION (the 
"Corporation") to George M. Nevers (the "Grantee"):

        1. THE OPTION. Subject to the execution, delivery and effectiveness of 
the letter agreement dated June 28, 1995 between the Corporation and the 
Grantee (the "Agreement"), the Corporation hereby grants to the Grantee, 
effective on the Date of Grant, a stock option (the "Option") to purchase, on 
the terms and conditions herein set forth, up to 200,000 of the Corporation's 
fully paid, non-assessable shares of Common Stock, par value $0.01 per share 
(the "Shares"), at the option price set forth in Section 2 below.

        The Option is granted pursuant to the Agreement and the Corporation's 
1990 Stock Option Plan (the "Plan"), a copy of which is delivered herewith by 
the Corporation and receipt thereof is acknowledged by the Grantee. The Option 
is subject in its entirety to all the applicable provisions of the Agreement 
and the Plan which are incorporated herein by reference. The Option is a 
"Non-incentive Stock Option" within the meaning of Section 2 of the Plan.

        2. THE PURCHASE PRICE. The purchase price of the Shares shall be $2.50 
per share (the "Option Price").

        3. EXERCISE OF OPTION.

        (a) Except as otherwise provided in the Plan and this Option Agreement, 
and provided the Grantee is not in breach of the Agreement, the Option is 
exercisable over a period commencing on the date hereof and ending at the close 
of business on June 21, 1998. The Option may be exercised from time to time 
during the option period as to the total number of Shares allowable under this 
Section 3(a), or any lesser amount thereof. In the event of the death of the 
Grantee, this Option may be exercised by the person or persons entitled to do 
so under the Grantee's will (a "legatee"), or, if the Grantee shall fail to 
make testamentary disposition of this Option, or shall die intestate, by the 
Grantee's legal representative (a "legal representative"). If the Grantee shall 
die or become disabled within the meaning of Section
 
<PAGE>   7
22(e)(3) of the Internal Revenue Code of 1986, as amended, during the period in 
which this Option is exercisable, the Stock Option and Compensation Committee 
may, in its discretion, extend the period in which this Option may be 
exercised. If this Option shall extend to 100 or more Shares, then this Option 
may not be exercised for less than 100 Shares at any one time, and if this 
Option shall extend to less than 100 Shares, then this Option must be exercised 
for all such Shares at one time.

        (b) Not less than five days nor more than thirty days prior to the date 
upon which all or any portion of the Option is to be exercised, the person 
entitled to exercise the Option shall deliver to the Corporation written notice 
(the "Notice") of his election to exercise all or a part of the Option, which 
Notice shall specify the date for the exercise of the Option and the number of 
Shares in respect of which the Option is to be exercised. The date specified in 
the Notice shall be a business day of the Corporation.

        (c) On the date specified in the Notice, the person entitled to
exercise the Option shall pay to the Corporation the Option Price of the Shares
in respect of which the Option is exercised, and the minimum amount of any
Federal and state withholding tax and any employment tax. The Option Price shall
be paid in full at the time of purchase, in cash or by check or with stock of
the Corporation, the value of which shall be determined in the same manner as
provided for determining the fair market value of a share of Common Stock
subject to an Incentive Stock Option as set forth in Section 6(a) of the Plan.
If the Option is exercised in accordance with the provisions of the Plan and
this Option Agreement, within three business days of receipt of the purchase
price, the Corporation shall deliver to such person certificates representing
the number of Shares or other securities in respect of which the Option is being
exercised which Shares or other securities shall be registered in his name.

        (d) In addition to the procedures set forth above, if Regulation T of 
the Securities Exchange Act of 1934, as amended ("Regulation T") is applicable 
to the exercise of this Option and so permits, the person entitled to exercise 
this Option may direct the Corporation in the Notice to deliver all or any part 
of the number of Shares or other securities to which he is entitled upon 
exercise of this Option directly to a broker specified in the Notice. In such 
event, the Corporation shall accept payment of the Option Price in cash or by 
check from such broker on behalf of the person entitled to exercise this Option 
and shall take all action necessary to effect the prompt delivery of such 
Shares or other securities to such broker in accordance with the provisions of 
Regulation T. Notwithstanding the foregoing, the Corporation shall not be 
required to comply with the provisions of this Section 3(d) if, as a result of 
a change in the accounting rules and regulations applicable to the Corporation, 
or the 


                                      -2-
<PAGE>   8
interpretation thereof, compliance with the provisions of this Section 3(d) 
will result in the imposition of substantial adverse financial reporting 
requirements on the Corporation.

        (e) In the event of the dissolution, liquidation, merger or 
consolidation of the Corporation, or the sale of all or substantially all of 
its assets, during the term hereof, the Corporation shall provide the Grantee 
with at least 30 days' notice of the consummation of any of the events referred 
to in the preceding sentence, during which period the Grantee may so exercise 
the Option.

        4. REPRESENTATIONS, WARRANTS AND COVENANTS.

                (a) The Grantee represents and warrants that he is acquiring 
this Option and, in the event this Option is exercised, the Shares, for 
investment, for his own account and not with a view to the distribution 
thereof, and that he has no present intention of disposing of this Option or 
the Shares or any interest therein or sharing ownership thereof with any other 
person or entity.

                (b) The Grantee agrees that he will not offer, sell, 
hypothecate, transfer or otherwise dispose of any of the Shares unless either:

                (i) A registration statement covering the Shares which are to
        be so offered has been filed with the Securities and Exchange 
        Commission pursuant to the Securities Act of 1933 (the "Securities
        Act") and such sale, transfer or other disposition is accompanied by
        a prospectus relating to a registration statement which is in effect
        under the Securities Act covering the Shares which are to be sold, 
        transferred or otherwise disposed of and meeting the requirements of 
        Section 10 of the Securities Act; or

                (ii) Counsel satisfactory to the Corporation renders a reasoned 
        opinion in writing and addressed to the Corporation, satisfactory in 
        form and substance to the Corporation and its counsel, that in the 
        opinion of such counsel such proposed sale, offer, transfer or other
        disposition of the Shares is exempt from the provisions of Section 5
        of the Securities Act in view of the circumstances of such proposed
        offer, sale, transfer or other disposition.

                (c) The Grantee acknowledges that (i) the Shares and this 
Option constitute "securities" under the Securities Act and/or the Securities 
Exchange Act of 1934 and/or the Rules and Regulations promulgated under said 
acts; (ii) the Shares must be held indefinitely unless subsequently registered 
under the




                                      -3-

<PAGE>   9


Securities Act or an exemption from such registration is available; and (iii) 
except as set forth in Section 8 below, the Corporation is not under any 
obligation with respect to the registration of the Shares.

                (d) The Grantee is advised that he or his legatee or legal 
representative, as the case may be and as defined above, may be required to 
make an appropriate representation at the time of any exercise of this Option 
in form and substance similar to the representations contained herein, 
relating to the Shares then being purchased.

        5. SUCCESSORS AND ASSIGNS. This Option Agreement shall be binding upon 
and shall inure to the benefit of any successor or assign of the Corporation 
and, to the extent herein provided, shall be binding upon and inure to the 
benefit of the Grantee's legatee or legal representative, as defined above; 
provided, however, that under no circumstances shall the rights provided under 
Section 8 hereof be transferred to or inure to the benefit of anyone other than 
the Grantee, including without limitation the Grantee's legatee or legal 
representative. 

        6. ADJUSTMENT OF OPTIONS.

                (a) The number of Shares issuable upon exercise of this Option, 
or the amount and kind of other securities issuable in addition thereto or in 
lieu thereof upon the occurrence of the events specified in Section 9 of the 
Plan, shall be determined and subject to adjustment, as the case may be, in 
accordance with the procedures therein specified.

                (b) Fractional shares resulting from any adjustment in options 
pursuant to this Section may be settled in cash or otherwise as the Stock 
Option and Compensation Committee shall determine. Notice of any adjustment in 
this Option shall be given by the Corporation to the holder of this Option and 
such adjustment (whether or not such notice is given) shall be effective and 
binding for all purposes of the Plan.

        7. EXERCISE AND TRANSFERABILITY OF OPTION. During the lifetime of the 
Grantee, this Option is exercisable only by him and shall not be assignable or 
transferable by him and no other person shall acquire any rights therein. If 
the Grantee shall die during the period in which this Option is exercisable, 
his or her legatee or legal representative shall have the rights provided in 
Section 3(a) above. 



                                     -4-
<PAGE>   10
        8. REGISTRATION OF SHARES. In the event that the Shares issued or 
issuable pursuant to this Option have not been otherwise registered under the 
Securities Act and the Corporation, at any time or from time to time after an 
initial offering of its securities registered under the Securities Act for sale 
to the public generally (otherwise than in connection with a merger or offering 
of its securities in exchange for securities or assets of another person, the 
issuance to employees of securities or options or other rights to purchase 
securities, and other similar transactions) (an "Offering"), the Corporation 
proposes to effect an additional Offering (a "Subject Offering"), the 
Corporation shall give written notice thereof to the Grantee, and the Grantee, 
by written notice to the Corporation within 30 days after the giving of such 
notice by the Corporation, may elect to cause the Corporation to register for 
inclusion in the Subject Offering, upon the terms and subject to the conditions 
hereof, all or any portion of the Shares held or to be held by the Grantee, as 
at the date of filing of the registration statement, and which are or will have 
been acquired upon the exercise in whole or in part of the Option, including 
such other securities of the Corporation issued in replacement for or in 
addition to such Shares pursuant to Section 9 of the Plan (such Shares and 
other securities being herein referred to collectively as "Registrable Stock"). 
Such notice shall set forth the quantity of Registrable Stock sought to be 
included in the Subject Offering and the intended manner of distribution 
thereof; provided that, if the Subject Offering is to be underwritten, the 
Registrable Stock may be sold only to or through the underwriter or 
underwriters acting in respect of the Subject Offering. If and to the extent 
that the underwriter or underwriters acting in respect of the Subject Offering 
reasonably determine that the inclusion of the Registrable Stock may 
substantially prejudice or hinder the consummation of the Subject Offering, the 
amount of Registrable Stock which the Grantee shall be entitled to offer 
therein shall be reduced or eliminated. Notwithstanding the foregoing, the 
Corporation shall have the right, after the giving of notice of a proposed 
Subject Offering hereunder and regardless of whether the Grantee shall have 
requested the inclusion of any Registrable Stock therein, to elect not to file 
such proposed registration statement, or to withdraw the same after the filing 
but prior to the effective date thereof. Subject to the foregoing, the 
Corporation shall use its best efforts to cause the registration statement 
filed in respect of each Subject Offering including shares of Registrable Stock 
hereunder to become effective and to remain effective for a period of at least 
90 days, or for such greater period as may be required by law for the delivery 
of a prospectus, and to qualify the Registrable Stock for sale in each state 
wherein such qualification is requested by the Grantee, provided that the 
Corporation shall not be obligated to make any changes in its capital structure 
necessary to effect such qualification in any jurisdiction nor be required to 
execute or file any general consent to service of process nor to qualify as a 
foreign 


                                      -5-
<PAGE>   11
corporation to do business under the laws of any such jurisdiction. Upon
electing to participate in any Subject Offering hereunder, the Grantee shall
furnish such information and execute such documents as may be required by the
Securities and Exchange Commission and other regulatory authorities or otherwise
reasonably requested by the Corporation, and shall enter into an agreement with
the Corporation containing customary provisions for mutual indemnification
against liabilities associated with the offering. The Corporation shall bear all
costs and expenses of such registration and qualification, including printing
costs, accounting fees and the fees and expenses of counsel for the Corporation,
provided that the Grantee shall bear the fees and expenses of the Grantee's
counsel, applicable transfer taxes and underwriting discounts, commissions and
fees applicable to the shares of Registrable Stock sold by the Grantee.

        If the foregoing is in accordance with the Grantee's understanding and 
approved by him, he may so confirm by signing and returning the duplicate of 
this Option Agreement delivered for that purpose.

                                        GARNET RESOURCES CORPORATION


                                        By
                                          ----------------------------------
                                          Title: Vice President

The foregoing is in accordance with my understanding and is hereby confirmed 
and agreed to as of the Date of Grant.


                                        -------------------------------------
                                        George M. Nevers


                                      -6-
<PAGE>   12
                                                                     APPENDIX A

                          GARNET RESOURCES CORPORATION
               1990 STOCK OPTION PLAN, AS PROPOSED TO BE AMENDED

        Section 1. Establishments. There is hereby established the Garnet 
Resources Corporation 1990 Stock Option Plan ("Plan"), pursuant to which 
employees and any other persons who perform substantial services for or on 
behalf of GARNET RESOURCES CORPORATION (the "Company"), its subsidiaries and 
certain other entities may be granted options to purchase shares of common 
stock of the Company, par value $.01 per share ("Common Stock"), and thereby 
share in the future growth of the business. Notwithstanding the foregoing, any 
director who is not an employee of the Company or any subsidiary of the Company 
shall be ineligible to receive options under this Plan. The subsidiaries of the 
Company included in this Plan (the "Subsidiaries") shall be any subsidiary of 
the Company as defined in Section 425 of the Internal Revenue Code of 1986, as 
amended (the "Code").

        Section 2. Status of Options. The options which may be granted pursuant 
to this Plan will constitute either incentive stock options within the meaning 
of Section 422A of the Code ("Incentive Stock Options") or options which are 
not Incentive Stock Options ("Non-incentive Stock Options"). Incentive Stock 
Options and Non-incentive Stock Options shall be collectively referred to 
herein as "Options".

        Section 3. Eligibility. All employees of the Company or any of its 
Subsidiaries (including officers, whether or not they are members of the Board 
of Directors) who are employed at the time of the adoption of this Plan or 
thereafter, and any other persons who perform substantial services for or on 
behalf of the Company or any of its Subsidiaries, affiliates or any entity in 
which the Company has an interest (collectively, the "Grantees") shall be 
eligible to be granted Non-incentive Stock Options to purchase shares of Common 
Stock under this Plan. All employees of the Company or any of its Subsidiaries 
who are employed at the time of adoption of this Plan or thereafter shall be 
eligible to be granted Incentive Stock Options under this Plan.

        Section 4. Number of Shares Covered by Options; No Preemptive Rights. 
The total number of shares which may be issued and sold pursuant to Options 
granted under this Plan shall be 1,000,000 shares of Common Stock (or the 
number and kind of shares of stock or other securities which, in accordance 
with Section 9 of this Plan, shall be substituted for such shares of Common 
Stock or to which said shares shall be adjusted; hereinafter, all references to 
shares of Common Stock are deemed to be references to said shares or shares so 
adjusted.) The issuance of shares upon exercise of an Option shall be free from 
any preemptive or preferential right of subscription or purchase on the part of 
any stockholder. If any outstanding Option granted under this Plan expires or 
is terminated, for any reason, the shares of Common Stock subject to the 
unexercised portion of the Option will again be available for Options issued 
under this Plan.

        Section 5. Administration.

        (a) This Plan shall be administered by the committee (the "Committee")
referred to in paragraph (b) of this Section. Subject to the express provisions
of this Plan, the Committee shall have complete authority, in its discretion, to
interpret this Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the terms and provisions of the respective option
agreements (which need not be identical), to determine the Grantees to whom, and
the times and the prices at which, Options shall be granted, the option periods,
the number of shares of the Common Stock to be subject to each Option and
whether each Option shall be an Incentive Stock Option or a Non-incentive Stock
Option, and to make all other determinations necessary or advisable for the
administration of the Plan. Each Option shall be clearly identified at the time
of grant as to its status. In making such determinations, the Committee may take
into account the nature of the services rendered by the respective Grantees,
their present and potential contributions to the success of the Company and such
other factors as the Committee, in its discretion, shall deem relevant. Nothing
contained in this Plan shall be deemed to give any Grantee any right to be
granted an Option to purchase shares of Common Stock except to the extent and
upon such terms and conditions as may be determined by the Committee. The
Committee's determination on all of the matters referred to in this Section 5
shall be conclusive.





                                      -1-
<PAGE>   13
        (b) The Committee shall consist of from three (3) to five (5)
individuals who may, but need not, be members of the Board. The Committee shall
be appointed by the Board, which may at any time, and from time to time, remove
any member of the Committee, with or without cause, appoint additional members
to the Committee and fill vacancies, however caused, in the Committee. A
majority of the members of the Committee shall constitute a quorum and all
determinations of the Committee shall be made by a majority of such quorum. Any
decision or determination of the Committee reduced to writing and signed by all
of the members of the Committee shall be fully as effective as if it had been
made at a meeting duly called and held.

        (c) The Committee may at its election provide in any option agreement 
covering the grant of Options under this Plan that, upon the exercise of such 
Options, the Company will loan to the holder thereof such amount as shall equal 
the purchase price of the shares of Common Stock issuable upon such exercise, 
such loan to be on terms and conditions appropriate by the Committee.

        (d) Notwithstanding any provision hereof to the contrary, the 
Committee shall have sole and exclusive authority with respect to the grant of 
Options to directors.

        Section 6. Terms of Incentive Stock Options. Each Incentive Stock 
Option granted under this Plan shall be evidenced by an Incentive Stock Option 
Agreement which shall be executed by the Company and by the person to whom such 
Incentive Stock Option is granted, and shall be subject to the following terms 
and conditions:
                                
                  (a) The price at which shares of Common Stock covered by each
        Incentive Stock Option may be purchased pursuant thereto shall be
        determined in each case on the date of grant by the Committee, but shall
        be an amount not less than the par value of such shares and not less
        than the fair market value of such shares on the date of grant. For
        purposes of this Section, the fair market value of shares of Common
        Stock on any day shall be (i) in the event the Common Stock is not
        publicly traded, the fair market value on such day as determined in good
        faith by the Committee or (ii) in the event the Common Stock is publicly
        traded, the last sale price of a share of Common Stock as reported by
        the principal quotation service on which the Common Stock is listed, if
        available, or, if last sale prices are not reported with respect to the
        Common Stock, the mean of the high and low asked prices of a share of
        Common Stock as reported by such principal quotation service, or, if
        there is no such report by such quotation service for such day, such
        fair market value shall be the average of (i) the last sale price (or,
        if last sale prices are not reported with respect to the Common Stock,
        the mean of the high bid and low asked prices) on the day next preceding
        such day for which there was a report and (ii) the last sale price (or,
        if last sale prices are not reported with respect to the Common Stock,
        the mean of the high bid and low asked prices) on the day next
        succeeding such day for which there was a report, or as otherwise
        determined by the Committee in its discretion pursuant to any reasonable
        method contemplated by Section 422A of the Code and any regulations
        issued pursuant to that Section.

                (b) The option price of the shares to be purchased pursuant to
        each Incentive Stock Option shall be paid in full in cash, or by
        delivery (i.e. surrender) of shares of Common Stock of the Company then
        owned by the Grantee, at the time of the exercise of the Incentive Stock
        Option. Shares of Common Stock so delivered will be valued on the day of
        delivery for the purpose of determining the extent to which the option
        price has been paid thereby, in the same manner as provided for the
        purchase price of Incentive Stock Options as set forth in paragraph (a)
        of this Section, or as otherwise determined by the Committee, in its
        discretion, pursuant to any reasonable method contemplated by Section
        422A of the Code and any regulations issued pursuant to that Section.

                (c) Each Incentive Stock Option Agreement shall provide that
        such Incentive Stock Option may be exercised by the Grantee, in such
        parts and at such times as may be specified in such Agreement, within a
        period not exceeding ten years after the date on which the Incentive
        Stock Option is granted (hereinafter called the "Incentive Stock Option
        Period") and, in any event, only during the continuance of the
        employee's employment by the Company or any of its Subsidiaries or
        during the period of three months after the termination of such
        employment to the extent that the right to exercise such Incentive Stock
        Option had accrued at the date of such termination; provided, however,
        that if Incentive Stock Options as to 100 or more shares are held by a
        Grantee, then such Incentive Stock Options may not be exercised for


                                      -2-
<PAGE>   14
        less than 100 shares at any one time, and if Incentive Stock Options for
        less than 100 shares are held by a Grantee, then Incentive Stock Options
        for all such shares must be exercised at one time; and provided,
        further, that, if the Grantee, while still employed by the Company or
        any of its Subsidiaries, shall die within the Incentive Stock Option
        Period, the Incentive Stock Option may be exercised, to the extent
        specified in the Incentive Stock Option Agreement, and as herein
        provided, but only prior to the first to occur of:

                        (i) the expiration of the period of one year after the
                date of the Grantee's death, or 

                        (ii) the expiration of the Incentive Stock Option
                Period, by the person or persons entitled to do so under the
                Grantee's will, or, if the Grantee shall fail to make
                testamentary disposition of said Incentive Stock Option, or
                shall die intestate, by the Grantee's legal representative or
                representatives.

                (d) Each Incentive Stock Option granted under this Plan shall by
        its terms be non-transferable by the Grantee except by will or by the
        laws of descent and distribution.

                (e) Notwithstanding the foregoing, if an Incentive Stock Option
        is granted to a person at any time when such person owns, within the
        meaning of Section 425(d) of the Code, more than 10% of the total
        combined voting power of all classes of stock of the employer
        corporation (or a parent or subsidiary of such corporation within the
        meaning of Section 425 of the Code) the price at which each share of
        Common Stock covered by such Incentive Stock Option may be purchased
        pursuant to such Incentive Stock Option shall not be less than 110% of
        the fair market value (determined as in paragraph (a) of this Section)
        of the shares of Common Stock at the time the Incentive Stock Option is
        granted, and such Incentive Stock Option must be exercised within a
        period specified in the Incentive Stock Option Agreement which does not
        exceed five years after the date on which such Incentive Stock Option is
        granted.
 
                (f) The Incentive Stock Option Agreement entered into pursuant
        hereto may contain such other terms, provisions and conditions not
        inconsistent herewith as shall be determined by the Committee including,
        without limitation, provisions (i) requiring the giving of satisfactory
        assurances by the Grantee that the shares are purchased for investment
        and not with a view to resale in connection with a distribution of such
        shares, and will not be transferred in violation of applicable
        securities laws, (ii) restricting the transferability of such shares
        during a specified period and (iii) requiring the resale of such shares
        to the Company at the option price if the employment of the employee
        terminates prior to a specified time. In addition, the Committee, in its
        discretion, may afford to holders of Incentive Stock Options granted
        under this Plan the right to require the Company to cause to be
        registered under the Securities Act of 1933, as amended, for public sale
        by the holders thereof, shares of Common Stock subject to such Incentive
        Stock Options upon such terms and subject to such conditions as the
        Committee may determine to be appropriate.

                (g) In the discretion of the Committee, a single Stock Option
        Agreement may include both Incentive Stock Options and Non-incentive
        Stock Options, or those options may be included in separate stock option
        agreements.
        
        Section 7. Terms of Non-incentive Stock Options. Each Non-incentive 
Stock Option granted under this Plan shall be evidenced by a Non-incentive 
Stock Option Agreement which shall be executed by the Company and by the person 
to whom such Non-incentive Stock Option is granted, and shall be subject to the 
following terms and conditions:

                (a) The price at which shares of Common Stock covered by each
        Non-incentive Stock Option may be purchased pursuant thereto shall be an
        amount not less than the par value of such shares.

                (b) Each Non-incentive Stock Option Agreement shall provide that
        such Non-incentive Stock Option may be exercised by the Grantee, in such
        parts and at such times as may be specified in such 


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<PAGE>   15


        Agreement, within a period up to and including ten years and thirty 
        days after the date on which the Non-incentive Stock Option is 
        granted.

                (c) Each Non-incentive Stock Option granted under this Plan 
        shall by its terms be non-transferable by the optionee except by will 
        or by the laws of descent and distribution or pursuant to a qualified 
        domestic relations order as defined by the Code or Title 1 of the 
        Employee Retirement Income Security Act, or the rules thereunder.

                (d) The Non-incentive Stock Option Agreement entered into 
        pursuant hereto may contain such other terms, provisions and conditions 
        not inconsistent herewith as shall be determined by the Committee, in 
        its sole discretion, including without limitation the terms, provisions 
        and conditions set forth in Section 6(f) with respect to Incentive 
        Stock Option Agreements.

        Section 8. Limit on Option Amount. Notwithstanding any provision 
contained herein, the aggregate fair market value (determined under Section 
6(a) as of the time such Incentive Stock Options are granted) of the shares of 
Common Stock with respect to which Incentive Stock Options are first 
exercisable by any employee during any calendar year (under all stock option 
plans of the employee's employer corporation and its parent and subsidiary 
corporation within the meaning of Section 425 of the Code) shall not exceed 
$100,000. An option may be granted which exceeds this $100,000 limitation, as 
long as under then applicable law only the portion of such an option which is 
exercisable for shares of Common Stock in excess of the $100,000 limitation 
shall be treated as a Non-incentive Stock Option. The limit in this paragraph 
shall not apply to options which are designated as Non-incentive Stock Options, 
and, except as otherwise provided herein, there shall be no limit on the amount 
of such options which may be first exercisable in any year.

        Section 9. Adjustment of Number of Shares. In the event that a dividend
shall be declared upon the shares of Common Stock payable in shares of Common
Stock, the number of shares of Common Stock then subject to any Option granted
hereunder, and the number of shares reserved for issuance pursuant to this Plan
but not yet covered by an Option, shall be adjusted by adding to each of such
shares the number of shares which would be distributable thereon if such share
had been outstanding on the date fixed for determining the stockholders entitled
to receive such stock dividend. In the event that the outstanding shares of
Common Stock shall be changed into or exchanged for a different number or kind
of shares of stock or other securities of the Company or of another corporation,
whether through reorganization, recapitalization, stock split-up, combination of
shares, merger or consolidation, then there shall be substituted for each share
of Common Stock subject to any such Option and for each share of Common Stock
reserved for issuance pursuant to the Plan but not yet covered by an Option, the
number and kind of shares of stock or other securities into which each
outstanding share of Common Stock shall be so changed or for which each such
share shall be exchanged; provided, however, that in the event that such change
or exchange results from a merger or consolidation, and in the judgment of the
Board of Directors such substitution cannot be effected or would be
inappropriate, or if the Company shall sell all or substantially all of its
assets, the Company shall use reasonable efforts to effect some other adjustment
of each then outstanding Option which the Board of Directors, in its sole
discretion, shall deem equitable. In the event that there shall be any change,
other than as specified above in this Section 9, in the number or kind of
outstanding shares of Common Stock or of any stock or other securities into
which such shares of Common Stock shall have been changed or for which they
shall have been exchanged, then, if the Board of Directors shall determine that
such change equitably requires an adjustment in the number or kind of shares
theretofore reserved for issuance pursuant to the Plan but not yet covered by an
Option and of the shares then subject to an Option or Options, such adjustment
shall be made by the Board of Directors and shall be effective and binding for
all purposes of this Plan and of each stock option agreement. Notwithstanding
the foregoing, if any adjustment in the number of shares which may be issued and
sold pursuant to Options is required by the Code or regulations issued pursuant
thereto to be approved by the stockholders in order to enable the Company to
issue Incentive Stock Options pursuant to this Plan, then no such adjustment
shall be made without the approval of the stockholders. In the case of any such
substitution or adjustment as provided for in this Section, the option price in
each stock option agreement for each share covered thereby prior to such
substitution or adjustment will be the total option price for all shares of
stock or other securities which shall have been substituted for each such share
or to which such share shall




                                      -4-
<PAGE>   16
have been adjusted pursuant to this Section 9. No adjustment or substitution 
provided for in this Section 9 shall require the Company, in any stock option 
agreement, to sell a fractional share, and the total substitution or adjustment 
with respect to each stock option agreement shall be limited accordingly. 
Notwithstanding the foregoing, in the case of Incentive Stock Options, if the 
effect of the adjustments or substitution is to cause the Incentive Stock 
Option to fail to continue to qualify as an Incentive Stock Option or to cause 
a modification, extension or renewal of such Incentive Stock Option within the 
meaning of Section 425 of the Code, the Board of Directors shall use reasonable 
efforts to effect such other adjustment of each then outstanding option as the 
Board of Directors, in its sole discretion, shall deem equitable.

        Section 10. Amendments. This Plan may be terminated or amended from 
time to time by vote of the Board of Directors; provided, however, that no such 
termination or amendment shall materially adversely affect or impair any then 
outstanding  Option without the consent of the Grantee thereof and no amendment 
which shall (i) change the total number of shares which may be issued and sold 
pursuant to Options granted under this Plan, or (ii) change the designation of 
employees eligible to receive Incentive Stock Options or the class of employees 
or other persons eligible to receive Options, shall be effective without the 
approval of the stockholders. Notwithstanding the foregoing, the Plan may be 
amended by the Committee to incorporate any amendments made to the Code which 
the Committee deems to be necessary or desirable to preserve incentive stock 
option status for outstanding Incentive Stock Options and to preserve the 
ability to issue Incentive Stock Options pursuant to this Plan.

        Section 11. Termination. Except to the extent necessary to govern 
outstanding Options, this Plan shall terminate on, and no additional Options 
shall be granted after, ten years from the date the Plan is adopted, or ten 
years from the date the Plan is approved by the stockholders, whichever is 
earlier.


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