Exhibit 4.5



                     NORDIC AMERICAN TANKER SHIPPING LIMITED
                            2004 STOCK INCENTIVE PLAN

                                   ARTICLE I.
                                     General

1.1. Purpose

          The Nordic  American  Tanker  Shipping Ltd. 2004 Stock  Incentive Plan
(the "Plan") is designed to provide certain key persons, on whose initiative and
efforts  the  successful  conduct  of the  business  of Nordic  American  Tanker
Shipping Ltd. (the  "Company")  depends,  with incentives to: (a) enter into and
remain in the service of the Company (b) acquire a  proprietary  interest in the
success of the  Company,  (c)  maximize  their  performance  and (d) enhance the
long-term performance of the Company.

1.2. Administration

          (a)   Administration  by  Board  of  Directors.   The  Plan  shall  be
administered  by the Company's  Board of Directors  (the  "Administrator").  The
Administrator shall have the authority (i) to exercise all of the powers granted
to it under the Plan, (ii) to construe, interpret and implement the Plan and any
Award  Agreements  executed  pursuant to Section 2.1 in its sole discretion with
all such determination being final, binding and conclusive,  (iii) to prescribe,
amend and rescind rules and  regulations  relating to the Plan,  including rules
governing  its own  operations,  (iv) to make all  determinations  necessary  or
advisable in administering  the Plan, and (v) to correct any defect,  supply any
omission and reconcile any inconsistency in the Plan.

          (b) Administrator Action.  Actions of the Administrator shall be taken
by the vote of a majority of its  members.  Any action may be taken by a written
instrument  signed by a majority  of the  Administrator  members,  and action so
taken  shall  be  fully  as  effective  as if it had  been  taken by a vote at a
meeting.  Except to the extent  prohibited by applicable  law or the  applicable
rules of a stock exchange,  the Administrator may allocate all or any portion of
its  responsibilities  and  powers  to any one or more  of its  members  and may
delegate  all or any  part of its  responsibilities  to any  person  or  persons
selected by it, and may revoke any such allocation or delegation at any time.

1.3. Persons Eligible for Awards

          The  persons  eligible  to  receive  awards  under  the Plan are those
officers, directors, and executive, managerial,  administrative and professional
employees of the Company and of Scandic American  Shipping,  Ltd.,  ("Scandic"),
(collectively,  "key persons") as the Administrator in its sole discretion shall
select,  taking  into  account  the duties of the  respective  employees,  their
present and  potential  contributions  to the success of the  Company,  and such
other  factors as the  Administrator  shall deem  relevant  in  connection  with
accomplishing  the purpose of the Plan. The Administrator may from time to time,
in its sole  discretion,  determine  that any key person shall be  ineligible to
receive awards under the Plan.

1.4. Types of Awards Under Plan

          Awards may be made under the Plan in the form of (a)  incentive  stock
options,  (b) non-qualified  stock options,  (c) stock appreciation  rights, (d)
dividend  equivalent rights,  (e) restricted stock, (f) unrestricted  stock, (g)
restricted stock units, and (h) performance  shares, all as more fully set forth
in Article II. The term "award" means any of the foregoing. . No incentive stock
option may be granted to a person who is not an  employee  of the Company on the
date of grant.

1.5. Shares Available for Awards

          (a) Subject to the provisions of Section 1.5(b),  the aggregate number
of shares of common stock of the Company  ("Common Stock") with respect to which
options  or  restricted  shares  may at any time be  granted  under the Plan are
400,000 shares of Common Stock.

          (b) Shares issued  pursuant to the Plan may be authorized but unissued
Common Stock. The Administrator may direct that any stock certificate evidencing
shares  issued  pursuant  to the Plan  shall  bear a legend  setting  forth such
restrictions on transferability as may apply to such shares.

          (c) Adjustment  Upon Changes in Common Stock.  Upon certain changes in
Common Stock,  the number of shares of Common Stock  available for issuance with
respect to awards that may be granted under the Plan pursuant to Section 1.5(a),
shall be adjusted pursuant to Section 3.7(a).

          (d) Certain Shares to Become  Available Again. The following shares of
Common Stock shall again become  available for awards under the Plan: any shares
that are subject to an award under the Plan and that  remain  unissued  upon the
cancellation or termination of such award for any reason whatsoever;  any shares
of restricted  stock  forfeited  pursuant to Section  2.7(e),  provided that any
dividends  paid on such  shares  are also  forfeited  pursuant  to such  Section
2.7(e);  and any  shares  in  respect  of  which a stock  appreciation  right or
performance share award is settled for cash.

          (e) Individual Limit.  Except for the limits set forth in this Section
1.5(d) and 2.2(i), no provision of this Plan shall be deemed to limit the number
or value of shares with  respect to which the  Administrator  may make awards to
any eligible  person.  Subject to adjustment as provided in Section 3.7(a),  the
total  number of shares of Common  Stock  with  respect  to which  awards may be
granted to any one employee of the Company  during any one  calendar  year shall
not exceed 400,000 shares.  Stock options and stock appreciation  rights granted
and  subsequently  canceled or deemed to be  canceled  in a calendar  year count
against this limit even after their cancellation.

1.6. Definitions of Certain Terms

          (a) The "Fair  Market  Value"  of a share of  Common  Stock on any day
shall be the closing  price on the New York Stock  Exchange as reported for such
day in The Wall Street  Journal  or, if no such price is reported  for such day,
the average of the high bid and low asked price of Common  Stock as reported for
such day. If no quotation is made for the applicable  day, the Fair Market Value
of a share of Common  Stock on such day shall be  determined  in the  manner set
forth in the preceding  sentence using quotations for the next preceding day for
which there were quotations,  provided that such quotations shall have been made
within the ten (10) business days preceding the applicable day.  Notwithstanding
the foregoing, if deemed necessary or appropriate by the Administrator, the Fair
Market  Value of a share of Common Stock on any day shall be  determined  by the
Administrator.  In no event shall the Fair  Market  Value of any share of Common
Stock be less than its par value.

          (b) The term "incentive stock option" means an option that is intended
to qualify for special federal income tax treatment pursuant to sections 421 and
422 of the Code as now  constituted or  subsequently  amended,  or pursuant to a
successor  provision of the Code,  and which is so designated in the  applicable
Grant  Certificate.  Any  option  that  is  not  specifically  designated  as an
incentive stock option shall under no  circumstances  be considered an incentive
stock  option.  Any option that is not an incentive  stock option is referred to
herein as a "non-qualified stock option."

          (c) The term "cause" in connection with a termination of employment or
Board membership by reason of a dismissal for cause shall mean:

               (i) to the extent that there is an employment, severance or other
          agreement  governing  the  relationship  between  the  grantee and the
          Company,  a Company  subsidiary  or a  Company  joint  venture,  which
          agreement  contains a definition  of "cause,"  cause shall  consist of
          those acts or  omissions  that  would  constitute  "cause"  under such
          agreement; and otherwise,

               (ii) the grantee's  termination of employment or Board membership
          by the  Company or an  affiliate  on account of any one or more of the
          following:

                    (A) any failure by the grantee  substantially to perform the
               grantee's employment or Board membership duties;

                    (B) any excessive unauthorized absenteeism by the grantee;

                    (C) any refusal by the grantee to obey the lawful  orders of
               the  Board  or any  other  person  or  Administrator  to whom the
               grantee reports;

                    (D) any act or  omission  by the  grantee  that is or may be
               injurious to the Company, monetarily or otherwise;

                    (E) any act by the  grantee  that is  inconsistent  with the
               best interests of the Company;

                    (F) the grantee's material violation of any of the Company's
               policies,  including, without limitation, those policies relating
               to discrimination or sexual harassment;

                    (G) the grantee's unauthorized (a) removal from the premises
               of the Company or an  affiliate of any document (in any medium or
               form) relating to the Company or an affiliate or the customers or
               clients of the Company or an affiliate or (b)  disclosure  to any
               person  or  entity of any of the  Company's,  or its  affiliates'
               confidential or proprietary information;

                    (H) the  grantee's  commission  of any felony,  or any other
               crime involving moral turpitude; and

                    (I) the grantee's commission of any act involving dishonesty
               or fraud.

          The terms of this  Section  1.6(c) shall apply to employees of Scandic
in the same manner as they apply to  employees  of the  Company.  Any rights the
Company may have  hereunder in respect of the events  giving rise to cause shall
be in addition to the rights the Company may have under any other agreement with
a grantee  or at law or in equity.  Any  determination  of  whether a  grantee's
employment  or Board  membership is (or is deemed to have been)  terminated  for
cause shall be made by the Administrator in its discretion,  which determination
shall be final,  binding and  conclusive  on all parties.  If,  subsequent  to a
grantee's  voluntary  termination  of employment or  involuntary  termination of
employment  without cause, it is discovered that the grantee's  employment could
have been  terminated  for  cause,  the  Administrator  may deem such  grantee's
employment or Board  membership to have been  terminated  for cause. A grantee's
termination of employment or Board membership for cause shall be effective as of
the date of the occurrence of the event giving rise to cause, regardless of when
the determination of cause is made.

                                  ARTICLE II.
                              Awards Under The Plan

2.1. Agreements Evidencing Awards

          Each award  granted  under the Plan  (except an award of  unrestricted
stock) shall be evidenced by a written  certificate  ("Award  Agreement")  which
shall contain such provisions as the Administrator  may, in its sole discretion,
deem  necessary or desirable.  By executing an Award  Agreement  pursuant to the
Plan,  a grantee  thereby  agrees  that the award shall be subject to all of the
terms and provisions of the Plan and the applicable Award Agreement.

2.2. Grant of Stock Options,  Stock Appreciation Rights,  Restricted Stock Units
and Dividend Equivalent Rights

          (a) Stock Option Grants.  The  Administrator may grant incentive stock
options and non-qualified stock options ("options") to purchase shares of Common
Stock from the Company, to such key persons,  and in such amounts and subject to
such vesting and forfeiture  provisions and other terms and  conditions,  as the
Administrator shall determine, in its sole discretion, subject to the provisions
of the  Plan.  The  Administrator  may not  grant  incentive  stock  options  to
non-employee directors or Scandic employees.

          (b)  Stock  Appreciation  Right  Grants;  Types of Stock  Appreciation
Rights.  The  Administrator  may  grant  stock  appreciation  rights to such key
persons,  and in such  amounts  and  subject  to  such  vesting  and  forfeiture
provisions and other terms and conditions, as the Administrator shall determine,
in its sole  discretion,  subject to the  provisions of the Plan. The terms of a
stock  appreciation  right may provide that it shall be automatically  exercised
for a cash payment upon the  happening of a specified  event that is outside the
control of the grantee,  and that it shall not be otherwise  exercisable.  Stock
appreciation  rights may be granted  in  connection  with all or any part of, or
independently of, any option granted under the Plan. A stock  appreciation right
granted  in  connection  with an option  may be  granted at or after the time of
grant of such option.

          (c)  Nature  of Stock  Appreciation  Rights.  The  grantee  of a stock
appreciation  right  shall have the right,  subject to the terms of the Plan and
the applicable Award  Agreement,  to receive from the Company an amount equal to
(i) the excess of the Fair Market  Value of a share of Common  Stock on the date
of exercise  of the stock  appreciation  right over the Fair  Market  Value of a
share of Common Stock on the date of grant (or over the option exercise price if
the  stock  appreciation  right  is  granted  in  connection  with  an  option),
multiplied  by (ii) the  number  of  shares  with  respect  to which  the  stock
appreciation  right is exercised.  Payment upon exercise of a stock appreciation
right shall be in cash or in shares of Common Stock (valued at their Fair Market
Value on the date of exercise of the stock  appreciation  right) or both, all as
the Administrator shall determine in its sole discretion. Upon the exercise of a
stock  appreciation  right granted in connection  with an option,  the number of
shares  subject  to the option  shall be  reduced  by the number of shares  with
respect to which the stock appreciation right is exercised. Upon the exercise of
an option in connection with which a stock  appreciation right has been granted,
the number of shares subject to the stock appreciation right shall be reduced by
the number of shares with respect to which the option is exercised.

          (d) Option  Exercise  Price.  Each Award  Agreement with respect to an
option shall set forth the amount (the "option  exercise  price") payable by the
grantee to the Company upon exercise of the option evidenced thereby. The option
exercise  price per share shall be determined by the  Administrator  in its sole
discretion;  provided,  however,  that the option exercise price of an incentive
stock  option  shall be at least  100% of the  Fair  Market  Value of a share of
Common Stock on the date the option is granted,  and provided further that in no
event shall the option  exercise  price be less than the par value of a share of
Common Stock.

          (e) Exercise Period. Each Award Agreement with respect to an option or
stock  appreciation  right  shall set forth the periods  during  which the award
evidenced  thereby  shall be  exercisable,  whether  in  whole or in part.  Such
periods  shall  be  determined  by the  Administrator  in its  sole  discretion;
provided,  however,  that no  option  or a stock  appreciation  right  shall  be
exercisable  more than 10 years after the date of grant,  and  provided  further
that,  except as and to the extent that the  Administrator may otherwise provide
pursuant to Sections  2.5,  3.7 or 3.8,  no option or stock  appreciation  right
shall be exercisable  prior to the first  anniversary of the date of grant. (See
the default exercise period provided for under Sections 2.3(a) and (b).)

          (f) Reload Options.  The  Administrator  may, in its sole  discretion,
include in any Award Agreement with respect to an option (the "original option")
a provision that an additional  option (the "reload option") shall be granted to
any grantee who, pursuant to Section 2.3(e)(ii), delivers shares of Common Stock
in partial or full payment of the exercise  price of the  original  option.  The
reload  option  shall be for a number of shares  of  Common  Stock  equal to the
number thus  delivered,  shall have an  exercise  price equal to the Fair Market
Value of a share of Common Stock on the date of exercise of the original option,
and shall  have an  expiration  date no later  than the  expiration  date of the
original option. In the event that a Award Agreement provides for the grant of a
reload option,  such Agreement shall also provide that the exercise price of the
original option be no less than the Fair Market Value of a share of Common Stock
on its date of grant, and that any shares that are delivered pursuant to Section
2.3 (e) (ii) in payment of such exercise price shall have been held for at least
six months.

          (g) Dividend  Equivalent  Rights.  The Administrator  may, in its sole
discretion,  include in any Award  Agreement  with  respect to an option,  stock
appreciation right or performance  shares, a dividend equivalent right entitling
the grantee to receive  amounts  equal to the ordinary  dividends  that would be
paid,  during the time such award is outstanding and unexercised,  on the shares
of Common Stock covered by such award if such shares were then  outstanding.  In
the event such a provision is included in a Award Agreement,  the  Administrator
shall  determine  whether  such  payments  shall be made in cash or in shares of
Common Stock,  whether they shall be conditioned  upon the exercise of the award
to which they  relate,  the time or times at which they shall be made,  and such
other vesting and  forfeiture  provisions  and other terms and conditions as the
Administrator shall deem appropriate.

          (h)  Restricted  Stock  Units.  The  Administrator  may,  in its  sole
discretion,  grant stock restricted stock units to such key persons, and in such
amounts and subject to such vesting and  forfeiture  provisions  and other terms
and conditions,  as the Administrator  shall determine,  in its sole discretion,
subject to the provisions of the Plan. A restricted stock unit granted under the
Plan shall confer upon the grantee a right to receive from the Company, upon the
occurrence of an event specified in the Award  Agreement,  such grantee's vested
restricted  stock units multiplied by the Fair Market Value of a share of Common
Stock.  Restricted stock units may be granted in connection with all or any part
of, or  independently  of, any award granted under the Plan. A restricted  stock
unit granted in  connection  with  another  award may be granted at or after the
time of grant of such award.

          (i) Incentive Stock Option Limitation:  Exercisability.  To the extent
that the aggregate  Fair Market Value  (determined  as of the time the option is
granted) of the stock with respect to which  incentive  stock  options are first
exercisable by any employee during any calendar year shall exceed  $100,000,  or
such higher  amount as may be permitted  from time to time under  section 422 of
the Code, such options shall be treated as non-qualified stock options.

          (j) Incentive Stock Option Limitation: 10% Owners. Notwithstanding the
provisions  of  paragraphs  (d) and (e) of this Section 2.2, an incentive  stock
option may not be granted under the Plan to an  individual  who, at the time the
option is granted,  owns stock  possessing  more than 10% of the total  combined
voting  power of all  classes  of stock of his  employer  corporation  or of its
parent or subsidiary  corporations  (as such  ownership  may be  determined  for
purposes  of  section  422(b)  (6) of the  Code)  unless  (i) at the  time  such
incentive  stock option is granted the option exercise price is at least 110% of
the Fair Market Value of the shares subject thereto and (ii) the incentive stock
option by its terms is not exercisable  after the expiration of 5 years from the
date it is granted.

2.3. Exercise of Options, Stock Appreciation Rights and Restricted Stock Units

          Subject to the other provisions of this Article II, each option, stock
appreciation  right and  restricted  stock unit granted  under the Plan shall be
exercisable as follows:

          (a) Timing and Extent of Exercise.  Options, stock appreciation rights
and  restricted  stock units shall be  exercisable  at such times and under such
conditions as set forth in the  corresponding  Award Agreement,  but in no event
shall any such award be exercisable prior to the first anniversary or subsequent
to the tenth anniversary of the date on which such award was granted. Unless the
applicable Award Agreement  otherwise  provides,  an option,  stock appreciation
right or restricted  stock unit may be exercised  from time to time as to all or
part of the shares or units as to which such award is then exercisable.  A stock
appreciation  right granted in connection with an option may be exercised at any
time when, and to the same extent that, the related option may be exercised.

          (b)  Notice  of  Exercise.  An  option,  stock  appreciation  right or
restricted  stock unit shall be exercised by the filing of a written notice with
the Company or the Company's  designated  exchange agent (the "exchange agent"),
on  such  form  and in  such  manner  as the  Administrator  shall  in its  sole
discretion prescribe.

          (c) Payment of Exercise  Price.  Any written  notice of exercise of an
option  shall be  accompanied  by payment for the shares being  purchased.  Such
payment  shall  be  made:  (i) by  certified  or  official  bank  check  (or the
equivalent thereof acceptable to the Company or its exchange agent) for the full
option  exercise  price;  or (ii)  with the  consent  of the  Administrator,  by
delivery of shares of Common Stock having a Fair Market Value  (determined as of
the  exercise  date)  equal to all or part of the  option  exercise  price and a
certified or official bank check (or the  equivalent  thereof  acceptable to the
Company or its  exchange  agent) for any  remaining  portion of the full  option
exercise  price;  or (iii) at the  discretion  of the  Administrator  and to the
extent permitted by law, by such other  provision,  consistent with the terms of
the Plan, as the Administrator may from time to time prescribe (whether directly
or indirectly through the exchange agent).

          (d) Delivery of Certificates  Upon Exercise.  Subject to the provision
of section 2.3(e),  promptly after receiving payment of the full option exercise
price, or after receiving notice of the exercise of a stock  appreciation  right
for which payment will be made partly or entirely in shares,  the Company or its
exchange agent shall,  subject to the provisions of Section 3.2,  deliver to the
grantee  or to such  other  person as may then have the  right to  exercise  the
award,  a certificate or  certificates  for the shares of Common Stock for which
the award has been  exercised.  If the method of payment  employed  upon  option
exercise so requires,  and if applicable law permits, an optionee may direct the
Company,  or its  exchange  agent as the  case  may be,  to  deliver  the  stock
certificate(s) to the optionee's stockbroker.

          (e) Investment  Purpose and Legal  Requirements.  Notwithstanding  the
foregoing,  at the time of the  exercise of any option,  the Company  may, if it
shall deem it necessary or advisable for any reason,  require the holder of such
option (i) to represent in writing to the Company that it is the optionee's then
intention  to  acquire  the  Shares  with  respect  to which the option is to be
exercised for investment  and not with a view to the  distribution  thereof,  or
(ii) to  postpone  the date of  exercise  until  such  time as the  Company  has
available for delivery to the optionee a prospectus  meeting the requirements of
all  applicable  securities  laws;  and no shares shall be issued or transferred
upon the  exercise  of any  option  unless  and  until  all  legal  requirements
applicable to the issuance or transfer of such Shares have been complied with to
the  satisfaction of the Company.  The Company shall have the right to condition
any issuance of shares to any optionee hereunder on such optionee's  undertaking
in writing to comply with such  restrictions on the subsequent  transfer of such
shares as the  Company  shall deem  necessary  or  advisable  as a result of any
applicable law, regulation or official  interpretation thereof, and certificates
representing such shares may contain a legend to reflect any such restrictions.

          (f) No Stockholder Rights. No grantee of an option, stock appreciation
right or  restricted  stock unit (or other  person  having the right to exercise
such award)  shall have any of the rights of a  stockholder  of the Company with
respect  to  shares  subject  to  such  award  until  the  issuance  of a  stock
certificate  to such person for such  shares.  Except as  otherwise  provided in
Section  1.5(b),  no adjustment  shall be made for dividends,  distributions  or
other rights (whether ordinary or extraordinary, and whether in cash, securities
or other  property)  for which the  record  date is prior to the date such stock
certificate is issued.

2.4. Compensation in Lieu of Exercise of an Option

          Upon   written   application   of  the  grantee  of  an  option,   the
Administrator  may in its  sole  discretion  determine  to  substitute,  for the
exercise  of such  option,  compensation  to the  grantee  not in  excess of the
difference  between the option  exercise  price and the Fair Market Value of the
shares covered by such written application on the date of such application. Such
compensation may be in cash, in shares of Common Stock, or both, and the payment
thereof may be subject to conditions,  all as the Administrator  shall determine
in its sole  discretion.  In the event  compensation is substituted  pursuant to
this Section 2.4 for the exercise, in whole or in part, of an option, the number
of shares  subject  to the  option  shall be reduced by the number of shares for
which such compensation is substituted.

2.5. Termination of Employment; Death Subsequent to a Termination of Employment

          (a)  General  Rule.  Except  to  the  extent  otherwise   provided  in
paragraphs  (b), (c), (d) or (e) of this Section 2.5 or Section  3.8(b)(iii),  a
grantee who incurs a  termination  of  employment  may exercise any  outstanding
option or stock  appreciation  right on the following terms and conditions:  (i)
exercise  may be made  only to the  extent  that the  grantee  was  entitled  to
exercise the award on the termination of employment date; and (ii) exercise must
occur within three months after  termination of employment but in no event after
the original expiration date of the award.

          (b)  Dismissal  for  Cause;   Resignation.   If  a  grantee  incurs  a
termination  of employment as the result of a dismissal for cause or resignation
without the Company's or Scandic's prior consent, as applicable, all options and
stock  appreciation  rights not  theretofore  exercised shall terminate upon the
grantee's termination of employment.

          (c) Retirement. If a grantee incurs a termination of employment as the
result of his retirement,  then any outstanding option, stock appreciation right
or restricted  stock unit shall be exercisable  pursuant to its terms.  For this
purpose  "retirement"  shall mean a grantee's  termination of employment,  under
circumstances  other than those  described in paragraph (b) above,  on or after:
(x)  his  65th  birthday,  (y) the  date on  which  he has  attained  age 60 and
completed  at least five  years of  service  with the  Company  or  Scandic,  as
applicable,   (using  any  method  of  calculation   the   Administrator   deems
appropriate)  or (z)  if  approved  by the  Administrator,  on or  after  he has
completed at least 20 years of service.

          (d)  Disability.  If a grantee  incurs a termination  of employment by
reason of a disability (as defined below),  then any outstanding  option,  stock
appreciation right or restricted stock unit shall be exercisable pursuant to its
terms.  For this  purpose  "disability"  shall mean,  except in  connection  any
physical  or mental  condition  that would  qualify a grantee  for a  disability
benefit  under the  long-term  disability  plan  maintained  by the  Company  or
Scandic,  if there is no such plan, a physical or mental condition that prevents
the grantee from  performing the essential  functions of the grantee's  position
(with or  without  reasonable  accommodation)  for a period  of six  consecutive
months.  The existence of a disability shall be determined by the  Administrator
in its sole and absolute discretion.

          (e)  Death.

               (i) Termination of Employment as a Result of Grantee's  Death. If
          a grantee  incurs a  termination  of  employment  as the result of his
          death,  then  any  outstanding  option,  stock  appreciation  right or
          restricted stock unit shall be exercisable pursuant to its terms.

               (ii) Restrictions on Exercise  Following Death. Any such exercise
          of an award  following  a  grantee's  death  shall be made only by the
          grantee's   executor  or   administrator   or  other  duly   appointed
          representative reasonably acceptable to the Administrator,  unless the
          grantee's will specifically disposes of such award, in which case such
          exercise  shall  be  made  only  by the  recipient  of  such  specific
          disposition.  If a grantee's personal  representative or the recipient
          of a specific  disposition  under the grantee's will shall be entitled
          to  exercise  any  award  pursuant  to the  preceding  sentence,  such
          representative  or  recipient  shall  be bound  by all the  terms  and
          conditions of the Plan and the applicable  Award Agreement which would
          have  applied  to  the  grantee  including,  without  limitation,  the
          provisions of Sections 3.2 and 3.5 hereof.

          (f) Special Rules for Incentive Stock Options.  No option that remains
exercisable  for more than three  months  following a grantee's  termination  of
employment for any reason other than death or  disability,  or for more than one
year  following  a  grantee's  termination  of  employment  as the result of his
becoming disabled, may be treated as an incentive stock option.

          (g) Administrator  Discretion.  The  Administrator,  in the applicable
Award Agreement, may waive or modify the application of the foregoing provisions
of this Section 2.5.

2.6. Transferability of Options,  Stock Appreciation Rights and Restricted Stock
     Units

          Except  as  otherwise   provided  in  an  applicable  Award  Agreement
evidencing an option,  stock appreciation right or restricted stock unit, during
the  lifetime  of a  grantee,  each such  award  granted  to a grantee  shall be
exercisable  only by the  grantee  and no such  award  shall  be  assignable  or
transferable  otherwise than by will or by the laws of descent and distribution.
The  Administrator  may, in any applicable Award Agreement  evidencing an option
(other  than an  incentive  stock  option to the  extent  inconsistent  with the
requirements  of section 422 of the Code applicable to incentive stock options),
permit a grantee to  transfer  all or some of the  options to (A) the  grantee's
spouse, children or grandchildren  ("Immediate Family Members"),  (B) a trust or
trusts for the exclusive benefit of such Immediate Family Members,  or (C) other
parties  approved  by the  Administrator  in its sole and  absolute  discretion.
Following  any such  transfer,  any  transferred  options  shall  continue to be
subject to the same terms and conditions as were applicable immediately prior to
the transfer.

2.7. Grant of Restricted Stock

          (a) Restricted Stock Grants.  The  Administrator  may grant restricted
shares of Common Stock to such key persons, in such amounts, and subject to such
vesting  and  forfeiture  provisions  and  other  terms  and  conditions  as the
Administrator shall determine in its sole discretion,  subject to the provisions
of the  Plan.  Restricted  stock  awards  may  be  made  independently  of or in
connection with any other award under the Plan. A grantee of a restricted  stock
award  shall  have no rights  with  respect to such award  unless  such  grantee
accepts  the award  within  such period as the  Administrator  shall  specify by
accepting  delivery  of a  restricted  stock  agreement  in  such  form  as  the
Administrator  shall determine and, in the event the restricted shares are newly
issued by the  Company,  makes  payment to the  Company  its  exchange  agent by
certified or official bank check (or the  equivalent  thereof  acceptable to the
Company) in an amount at least  equal to the par value of the shares  covered by
the award.

          (b) Issuance of Stock Certificate(s). Promptly after a grantee accepts
a restricted  stock award,  the Company or its exchange agent shall issue to the
grantee a stock certificate or stock certificates for the shares of Common Stock
covered by the award or shall establish an account  evidencing  ownership of the
stock in uncertificated form. Upon the issuance of such stock certificate(s), or
establishment  of  such  account,  the  grantee  shall  have  the  rights  of  a
stockholder  with  respect  to  the  restricted  stock,   subject  to:  (i)  the
nontransferability restrictions and forfeiture provision described in paragraphs
(d) and (e) of this Section 2.7; (ii) in the  Administrator's  discretion,  to a
requirement that any dividends paid on such shares shall be held in escrow until
all  restrictions on such shares have lapsed;  and (iii) any other  restrictions
and conditions contained in the applicable restricted stock agreement.

          (c) Custody of Stock  Certificate(s).  Unless the Administrator  shall
otherwise  determine,   any  stock  certificates  issued  evidencing  shares  of
restricted stock shall remain in the possession of the Company until such shares
are  free of any  restrictions  specified  in the  applicable  restricted  stock
agreement.  The Administrator may direct that such stock  certificate(s)  bear a
legend setting forth the applicable restrictions on transferability.

          (d)  Nontransferability.  Shares of restricted  stock may not be sold,
assigned, transferred,  pledged or otherwise encumbered or disposed of except as
otherwise  specifically provided in this Plan or the applicable restricted stock
agreement.  The  Administrator  at the time of grant  shall  specify the date or
dates  (which may depend  upon or be related to the  attainment  of  performance
goals and other  conditions) on which the  nontransferability  of the restricted
stock shall lapse.

          (e) Consequence of Termination of Employment.  A grantee's termination
of  employment  for any  reason  (including  death)  shall  cause the  immediate
forfeiture of all shares of restricted  stock that have not yet vested as of the
date of such  termination of employment.  All dividends paid on such shares also
shall be forfeited, whether by termination of any escrow arrangement under which
such  dividends are held,  by the  grantee's  repayment of dividends he received
directly, or otherwise.

2.8. Grant of Unrestricted Stock

          The  Administrator  may  grant (or sell at a  purchase  price at least
equal to par value) shares of Common Stock free of restrictions  under the Plan,
to such  key  persons  and in  such  amounts  and  subject  to  such  forfeiture
provisions as the Administrator  shall determine in its sole discretion.  Shares
may be  thus  granted  or sold  in  respect  of past  services  or  other  valid
consideration.

2.9. Grant of Performance Shares

          (a) Performance Share Grants.  The Administrator may grant performance
share  awards to such key  persons,  and in such  amounts  and  subject  to such
vesting  and  forfeiture  provisions  and  other  terms and  conditions,  as the
Administrator shall in its sole discretion determine,  subject to the provisions
of the Plan. Such an award shall entitle the grantee to acquire shares of Common
Stock,  or to be paid the value  thereof  in cash,  as the  Administrator  shall
determine,  if specified  performance goals are met.  Performance  shares may be
awarded independently of, or in connection with, any other award under the Plan.
A grantee shall have no rights with respect to a performance  share award unless
such  grantee  accepts the award by accepting  delivery of a Award  Agreement at
such time and in such form as the Administrator shall determine.

          (b) Stockholder  Rights. The grantee of a performance share award will
have the rights of a stockholder only as to shares for which a stock certificate
has been issued  pursuant to the award and not with  respect to any other shares
subject to the award.

          (c) Consequence of Termination of Employment.  Except as may otherwise
be provided by the Administrator at any time prior to a grantee's termination of
employment,  the  rights  of  a  grantee  of a  performance  share  award  shall
automatically  terminate  upon the  grantee's  termination  of employment by the
Company, its subsidiaries or Scandic for any reason (including death).

          (d) Exercise Procedures;  Automatic Exercise. At the discretion of the
Administrator,  the applicable  Award Agreement may set out the procedures to be
followed in  exercising  a  performance  share award or it may provide that such
exercise  shall  be made  automatically  after  satisfaction  of the  applicable
performance goals.

          (e) Tandem Grants;  Effect on Exercise.  Except as otherwise specified
by the  Administrator,  (i) a performance  share award granted in tandem with an
option may be exercised only while the option is exercisable,  (ii) the exercise
of a performance share award granted in tandem with any other award shall reduce
the number of shares subject to such other award in the manner  specified in the
applicable  Award  Agreement,  and (iii) the  exercise  of any award  granted in
tandem with a performance  share award shall reduce the number of shares subject
to the latter in the manner specified in the applicable Award Agreement.

          (f) Nontransferability.  Performance shares may not be sold, assigned,
transferred,  pledged or otherwise encumbered or disposed of except as otherwise
specifically  provided  in this  Plan or the  applicable  Award  Agreement.  The
Administrator  at the time of grant shall  specify the date or dates  (which may
depend  upon or be  related to the  attainment  of  performance  goals and other
conditions)  on which the  nontransferability  of the  performance  shares shall
lapse.

                                  ARTICLE III.
                                  Miscellaneous

3.1. Amendment of the Plan; Modification of Awards

          (a)  Amendment of the Plan.  The Board may from time to time  suspend,
discontinue,  revise or amend the Plan in any respect whatsoever, except that no
such amendment  shall  materially  impair any rights or materially  increase any
obligations  under any award theretofore made under the Plan without the consent
of the grantee (or,  upon the  grantee's  death,  the person having the right to
exercise  the award).  For purposes of this Section 3.1, any action of the Board
or the Administrator  that in any way alters or affects the tax treatment of any
award shall not be considered to materially impair any rights of any grantee.

          (b) Stockholder  Approval  Requirement.  Stockholder approval shall be
required  with  respect  to any  amendment  to the Plan that (i)  increases  the
aggregate  number  of shares  that may be issued  pursuant  to  incentive  stock
options or changes the class of employees  eligible to receive such options;  or
(ii)  materially  increases  the  benefits  under  the  Plan  to  persons  whose
transactions  in Common  Stock are  subject to section  16(b) of the 1934 Act or
increases the benefits  under the Plan to someone who is,  materially  increases
the number of shares which may be issued to such persons, or materially modifies
the eligibility requirements affecting such persons.

          (c)  Modification of Awards.  The  Administrator  may cancel any award
under  the  Plan.  The  Administrator  also  may  amend  any  outstanding  Award
Agreement,   including,  without  limitation,  by  amendment  which  would:  (i)
accelerate the time or times at which the award becomes  unrestricted  or may be
exercised, provided that, except as and to the extent that the Administrator may
otherwise  provide  pursuant  to  Section  2.5,  3.7 or 3.8,  no  option,  stock
appreciation  right or restricted  stock unit shall be exercisable  prior to the
first  anniversary  of its  date of  grant;  (ii)  waive  or  amend  any  goals,
restrictions  or conditions set forth in the Agreement;  or (iii) waive or amend
the operation of Section 2.5 with respect to the  termination  of the award upon
termination of employment.  However,  any such  cancellation or amendment (other
than an amendment  pursuant to Sections 3.7 or 3.8(b)) that  materially  impairs
the  rights or  materially  increases  the  obligations  of a  grantee  under an
outstanding  award shall be made only with the consent of the grantee (or,  upon
the grantee's death, the person having the right to exercise the award).

3.2. Consent Requirement

          (a) No Plan Action  Without  Required  Consent.  If the  Administrator
shall at any time  determine  that  any  Consent  (as  hereinafter  defined)  is
necessary or desirable as a condition of, or in connection with, the granting of
any award under the Plan,  the  issuance  or purchase of shares or other  rights
thereunder, or the taking of any other action thereunder (each such action being
hereinafter referred to as a "Plan Action"),  then such Plan Action shall not be
taken,  in whole or in part,  unless  and until  such  Consent  shall  have been
effected or obtained to the full satisfaction of the Administrator.

          (b) Consent Defined. The term "Consent" as used herein with respect to
any Plan Action means (i) any and all listings,  registrations or qualifications
in respect thereof upon any securities  exchange or under any federal,  state or
local  law,  rule  or  regulation,  (ii)  any  and all  written  agreements  and
representations  by the grantee with respect to the  disposition  of shares,  or
with respect to any other matter,  which the Administrator  shall deem necessary
or  desirable  to comply  with the terms of any such  listing,  registration  or
qualification  or to  obtain an  exemption  from the  requirement  that any such
listing,  qualification  or registration be made and (iii) any and all consents,
clearances  and  approvals  in respect of a Plan Action by any  governmental  or
other regulatory bodies.

3.3. Nonassignability

          Except as provided in Sections 2.5(e),  2.6, 2.7(d) and 2.9(f): (a) no
award or right granted to any person under the Plan or under any Award Agreement
shall be assignable or transferable other than by will or by the laws of descent
and  distribution;  and (b) all  rights  granted  under  the  Plan or any  Award
Agreement  shall  be  exercisable  during  the life of the  grantee  only by the
grantee or the grantee's legal representative.

3.4. Requirement of Notification of Election Under Section 83(b) of the Code

          If any grantee shall,  in connection with the acquisition of shares of
Common Stock under the Plan, make the election  permitted under section 83(b) of
the Code (i.e.,  an election to include in gross  income in the year of transfer
the amounts  specified in section 83(b)),  such grantee shall notify the Company
of such  election  within 10 days of  filing  notice  of the  election  with the
Internal  Revenue Service,  in addition to any filing and notification  required
pursuant to regulations issued under the authority of Code section 83(b).

3.5.  Requirement of Notification Upon  Disqualifying  Disposition Under Section
421(b) of the Code

          Each Award  Agreement with respect to an incentive  stock option shall
require the grantee to notify the Company of any disposition of shares of Common
Stock issued  pursuant to the  exercise of such option  under the  circumstances
described  in section  421(b) of the Code  (relating  to  certain  disqualifying
dispositions), within 10 days of such disposition.

3.6. Withholding Taxes

          (a)  With  Respect  to  Cash  Payments.  Whenever  cash  is to be paid
pursuant  to an award under the Plan,  the  Company  shall be entitled to deduct
therefrom an amount sufficient in its opinion to satisfy all federal,  state and
other governmental tax withholding requirements related to such payment.

          (b) With  Respect to  Delivery  of Common  Stock.  Whenever  shares of
Common  Stock are to be  delivered  pursuant  to an award  under  the Plan,  the
Company shall be entitled to require as a condition of delivery that the grantee
remit to the  Company an amount  sufficient  in the  opinion  of the  Company to
satisfy all federal,  state and other governmental tax withholding  requirements
related thereto. With the approval of the Administrator, which the Administrator
shall have sole  discretion  whether or not to give, the grantee may satisfy the
foregoing  condition  by  electing to have the Company  withhold  from  delivery
shares  having a value  equal to the amount of tax to be  withheld.  Such shares
shall be valued at their Fair Market Value as of the date on which the amount of
tax to be withheld is determined.  Fractional  share amounts shall be settled in
cash. Such a withholding election may be made with respect to all or any portion
of the shares to be delivered pursuant to an award.

3.7. Adjustment Upon Changes in Common Stock

          (a) Shares  Available  for  Grants.  In the event of any change in the
number of shares of Common Stock  outstanding by reason of any stock dividend or
split, reverse stock split, recapitalization, merger, consolidation, combination
or exchange of shares or similar corporate change,  the maximum number of shares
of Common Stock with respect to which the  Administrator  may grant awards under
Article II hereof,  as described in Section  1.5(a),  and the individual  annual
limit  described  in Section  1.5(d),  shall be  appropriately  adjusted  by the
Administrator.  In the  event of any  change  in the  number of shares of Common
Stock outstanding by reason of any other event or transaction, the Administrator
may, but need not,  make such  adjustments  in the number and class of shares of
Common Stock with respect to which  awards:  (i) may be granted under Article II
hereof  and (ii)  granted to any one  employee  of the  Company or a  subsidiary
during  any one  calendar  year,  in each  case as the  Administrator  may  deem
appropriate.

          (b) Outstanding  Restricted Stock and Performance  Shares.  Unless the
Administrator  in its sole and absolute  discretion  otherwise  determines,  any
securities or other  property  (including  dividends paid in cash) received by a
grantee with respect to a share of restricted stock, the issue date with respect
to which occurs prior to such event,  but which has not vested as of the date of
such event,  as a result of any  dividend,  stock  split,  reverse  stock split,
recapitalization,  merger,  consolidation,  combination,  exchange  of shares or
otherwise will not vest until such share of restricted stock vests, and shall be
promptly  deposited with the Company or other custodian  designated  pursuant to
Section 2.7(c) hereof.

          The Administrator may, in its absolute discretion, adjust any grant of
shares of  restricted  stock,  the  issue  date  with  respect  to which has not
occurred as of the date of the occurrence of any of the following events, or any
grant of performance shares, to reflect any dividend, stock split, reverse stock
split, recapitalization,  merger, consolidation, combination, exchange of shares
or similar corporate change as the Administrator may deem appropriate to prevent
the enlargement or dilution of rights of grantees.

          (c)  Outstanding  Options,  Stock  Appreciation  Rights  and  Dividend
Equivalent  Rights--Increase or Decrease in Issued Shares Without Consideration.
Subject to any required action by the stockholders of the Company,  in the event
of any  increase  or  decrease  in the number of issued  shares of Common  Stock
resulting from a subdivision or  consolidation  of shares of Common Stock or the
payment of a stock  dividend  (but only on the shares of Common  Stock),  or any
other increase or decrease in the number of such shares effected without receipt
of consideration by the Company, the Administrator shall  proportionally  adjust
the  number of shares of Common  Stock  subject to each  outstanding  option and
stock  appreciation  right, and the exercise  price-per-share of Common Stock of
each such  option and stock  appreciation  right and the  number of any  related
dividend equivalent rights.

          (d) Outstanding Options,  Stock Appreciation Rights,  Restricted Stock
Units and Dividend Equivalent  Rights--Certain  Mergers. Subject to any required
action by the  stockholders of the Company,  in the event that the Company shall
be the surviving  corporation in any merger or consolidation (except a merger or
consolidation as a result of which the holders of shares of Common Stock receive
securities of another  corporation),  each option,  stock appreciation right and
dividend   equivalent   right   outstanding  on  the  date  of  such  merger  or
consolidation shall pertain to and apply to the securities which a holder of the
number of shares of Common  Stock  subject to such  option,  stock  appreciation
right, restricted stock unit or dividend equivalent right would have received in
such merger or consolidation.

          (e) Outstanding Options,  Stock Appreciation Rights,  Restricted Stock
Units and Dividend Equivalent  Rights--Certain Other Transactions.  In the event
of (i) a  dissolution  or  liquidation  of the  Company,  (ii) a sale  of all or
substantially  all of the  Company's  assets,  (iii) a merger  or  consolidation
involving the Company in which the Company is not the surviving  corporation  or
(iv) a merger or consolidation involving the Company in which the Company is the
surviving  corporation  but the  holders  of  shares  of  Common  Stock  receive
securities of another  corporation  and/or other  property,  including cash, the
Administrator shall, in its absolute discretion, have the power to:

               (i) cancel, effective immediately prior to the occurrence of such
          event, each option, stock appreciation right and restricted stock unit
          (including each dividend equivalent right related thereto) outstanding
          immediately  prior to such event  (whether  or not then  exercisable),
          and, in full consideration of such cancellation, pay to the grantee to
          whom such option or stock  appreciation right was granted an amount in
          cash,  for each share of Common Stock  subject to such option or stock
          appreciation  right,  respectively,  equal  to the  excess  of (x) the
          value, as determined by the Administrator in its absolute  discretion,
          of the property  (including cash) received by the holder of a share of
          Common Stock as a result of such event over (y) the exercise  price of
          such option or stock appreciation right; or

               (ii) provide for the exchange of each option,  stock appreciation
          right and  restricted  stock  unit  (including  any  related  dividend
          equivalent right) outstanding immediately prior to such event (whether
          or not then exercisable) for an option on, stock  appreciation  right,
          restricted  stock unit and dividend  equivalent right with respect to,
          as  appropriate,  some or all of the  property  which a holder  of the
          number of  shares  of  Common  Stock  subject  to such  option,  stock
          appreciation  right or restricted  stock unit would have received and,
          incident  thereto,  make an equitable  adjustment as determined by the
          Administrator in its absolute  discretion in the exercise price of the
          option,  stock  appreciation  right or  restricted  stock unit, or the
          number of shares or amount of property  subject to the  option,  stock
          appreciation right, restricted stock unit or dividend equivalent right
          or, if appropriate,  provide for a cash payment to the grantee to whom
          such option,  stock  appreciation  right or restricted  stock unit was
          granted in partial consideration for the exchange of the option, stock
          appreciation right or restricted stock unit.

          (f) Outstanding Options,  Stock Appreciation Rights,  Restricted Stock
Units and Dividend Equivalent  Rights--Other Changes. In the event of any change
in the  capitalization  of the  Company or a corporate  change  other than those
specifically   referred  to  in  Sections  3.7(c),   (d)  or  (e)  hereof,   the
Administrator  may, in its absolute  discretion,  make such  adjustments  in the
number  and class of shares  subject  to  options,  stock  appreciation  rights,
restricted stock units and dividend equivalent rights outstanding on the date on
which  such  change  occurs  and in the  per-share  exercise  price of each such
option,  stock appreciation right and restricted stock unit as the Administrator
may  consider  appropriate  to prevent  dilution or  enlargement  of rights.  In
addition,  if and to the extent the Administrator  determines it is appropriate,
the Administrator may elect to cancel each option,  stock appreciation right and
restricted stock unit (including each dividend equivalent right related thereto)
outstanding  immediately prior to such event (whether or not then  exercisable),
and, in full consideration of such cancellation, pay to the grantee to whom such
option,  stock appreciation right or restricted stock unit was granted an amount
in  cash,  for  each  share  of  Common  Stock  subject  to such  option,  stock
appreciation right or restricted stock unit,  respectively,  equal to the excess
of (i) the Fair Market  Value of Common  Stock on the date of such  cancellation
over  (ii)  the  exercise  price of such  option,  stock  appreciation  right or
restricted stock unit.

          (g) No Other  Rights.  Except as  expressly  provided in the Plan,  no
grantee shall have any rights by reason of any subdivision or  consolidation  of
shares of stock of any class,  the  payment of any  dividend,  any  increase  or
decrease  in the  number of  shares  of stock of any  class or any  dissolution,
liquidation,  merger or consolidation  of the Company or any other  corporation.
Except as expressly  provided in the Plan,  no issuance by the Company of shares
of stock of any class,  or  securities  convertible  into shares of stock of any
class,  shall affect,  and no  adjustment  by reason  thereof shall be made with
respect  to,  the  number of shares of Common  Stock  subject to an award or the
exercise price of any option or stock appreciation right.

3.8.     Change in Control

          (a) Change in Control  Defined.  For  purposes  of this  Section  3.8,
"Change in Control" shall mean the occurrence of any of the following:

               (i) any person or "group" (within the meaning of Section 13(d)(3)
          of the 1934 Act),  other than entities which the Chairman of the Board
          directly or  indirectly  controls  (as defined in Rule 12b-2 under the
          1934 Act), acquiring "beneficial  ownership" (as defined in Rule 13d-3
          under the 1934 Act), directly or indirectly, of fifty percent (50%) or
          more of the  aggregate  voting power of the capital  stock  ordinarily
          entitled to elect directors of the Company;

               (ii) the sale of all or substantially all of the Company's assets
          in one or more related transactions to a person other than such a sale
          to a subsidiary  of the Company which does not involve a change in the
          equity  holdings  of the  Company or to an entity  which the  Chairman
          directly or indirectly controls; or

               (iii) any merger, consolidation,  reorganization or similar event
          of the  Company or any of its  subsidiaries,  as a result of which the
          holders of the voting stock of the Company  immediately  prior to such
          merger, consolidation, reorganization or similar event do not directly
          or indirectly hold at least  fifty-one  percent (51%) of the aggregate
          voting power of the capital stock of the surviving entity.

          (b) Effect of a Change in Control.  Unless the Administrator  provides
otherwise in a Award Agreement, upon the occurrence of a Change in Control:

               (i)  notwithstanding  any other provision of this Plan, any award
          then  outstanding  shall become fully vested and any award in the form
          of an option,  stock appreciation right or restricted stock unit shall
          be immediately exercisable;

               (ii) to the extent  permitted by law, the  Administrator  may, in
          its sole  discretion,  amend any Award  Agreement in such manner as it
          deems appropriate;

               (iii) a grantee who incurs a termination  of  employment  for any
          reason,  other than a dismissal for cause,  concurrent  with or within
          one year following the Change in Control may exercise any  outstanding
          option, stock appreciation right or restricted stock unit, but only to
          the extent that the grantee was  entitled to exercise the award on his
          termination of employment  date, until the earlier of (A) the original
          expiration  date  of the  award  and  (B) the  later  of (x) the  date
          provided for under the terms of Section 2.5 without  reference to this
          Section  3.8(b)(iii)  and (y) the first  anniversary  of the grantee's
          termination of employment.

          (c)  Miscellaneous.  Whenever deemed appropriate by the Administrator,
any action  referred  to in  paragraph  (b)(ii) of this  Section 3.8 may be made
conditional  upon  the   consummation  of  the  applicable   Change  in  Control
transaction.

3.9.     Right of Discharge Reserved

          Nothing in the Plan or in any Award  Agreement  shall  confer upon any
grantee  the right to  continue  his  employment  with the Company or affect any
right that the Company or Scandic may have to terminate such employment.

3.10. Non-Uniform Determinations

          The Administrator's  determinations under the Plan need not be uniform
and may be made by it selectively among persons who receive, or who are eligible
to receive,  awards under the Plan  (whether or not such  persons are  similarly
situated).  Without limiting the generality of the foregoing,  the Administrator
shall be  entitled,  among  other  things,  to make  non-uniform  and  selective
determinations, and to enter into non-uniform and selective Award Agreements, as
to (a) the  persons  to  receive  awards  under the Plan,  and (b) the terms and
provisions of awards under the Plan.

3.11. Other Payments or Awards

          Nothing  contained  in the Plan shall be deemed in any way to limit or
restrict  the Company  from making any award or payment to any person  under any
other plan,  arrangement or understanding,  whether now existing or hereafter in
effect.

3.12.   Headings

         Any  section,  subsection,  paragraph  or  other  subdivision  headings
contained herein are for the purpose of convenience only and are not intended to
expand, limit or otherwise define the contents of such subdivisions.

3.13. Effective Date and Term of Plan

          (a) Adoption;  Stockholder Approval. The Plan was adopted by the Board
and although the Company intends to obtain approval of the Plan by the Company's
stockholders  within  the time  period  required  to  allow  grants  of  options
hereunder to qualify as incentive stock options,  awards under the Plan prior to
such stockholder approval may, but need not, be made subject to such approval.

          (b)  Termination  of Plan.  Unless  sooner  terminated by the Board or
pursuant to Paragraph (a) above, the provisions of the Plan respecting the grant
of incentive  stock  options  shall  terminate on the tenth  anniversary  of the
adoption of the Plan by the Board,  and no incentive  stock option  awards shall
thereafter be made under the Plan.  All such awards made under the Plan prior to
its termination  shall remain in effect until such awards have been satisfied or
terminated  in  accordance  with the  terms and  provisions  of the Plan and the
applicable Award Agreements.

3.14. Restriction on Issuance of Stock Pursuant to Awards

          The Company  shall not permit any shares of Common  Stock to be issued
pursuant to Awards granted under the Plan unless such shares of Common Stock are
fully paid and non-assessable under applicable law.

3.15.    Governing Law

          Except to the extent preempted by any applicable federal law, the Plan
will be construed and  administered  in accordance with the laws of the State of
New York, without giving effect to principles of conflict of laws.

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