EXHIBIT 10.1
                        HARRINGTON FINANCIAL GROUP, INC.
                              AMENDED AND RESTATED
                                STOCK OPTION PLAN


                                    ARTICLE I
                            ESTABLISHMENT OF THE PLAN

         Harrington Financial Group, Inc. (the "Corporation") hereby establishes
this Stock Option Plan (the "Plan")  upon the terms and  conditions  hereinafter
stated.

                                   ARTICLE II
                               PURPOSE OF THE PLAN

         The purpose of this Plan is to improve the growth and  profitability of
the  Corporation  and  its  Subsidiary  Companies  by  providing  Employees  and
Non-Employee  Directors  with a proprietary  interest in the  Corporation  as an
incentive to contribute  to the success of the  Corporation  and its  Subsidiary
Companies,  and rewarding those  Employees for  outstanding  performance and the
attainment of targeted goals. All Incentive Stock Options issued under this Plan
are intended to comply with the requirements of Section 422 of the Code, and the
regulations thereunder,  and all provisions hereunder shall be read, interpreted
and applied with that purpose in mind.


                                   ARTICLE III
                                   DEFINITIONS

         3.01  "Award"  means an  Option  or Stock  Appreciation  Right  granted
pursuant to the terms of this Plan.

         3.02 "Board"  means the Board of Directors  of the  Corporation  or the
Board of Directors of any Subsidiary Companies.

         3.03 "Change in Control of the  Corporation"  means a change in control
of a nature  that would be  required  to be reported in response to Item 6(e) of
Schedule  14A of  Regulation  14A  promulgated  under the  Exchange  Act, or any
successor thereto,  whether or not the Corporation in fact is required to comply
with Regulation 14A thereunder.

         3.04 "Code" means the Internal Revenue Code of 1986, as amended.

         3.05 "Committee"  means a committee of two or more directors  appointed
by the Board pursuant to Article IV hereof,  none of whom shall be an Officer or
Employee of the Corporation or a Subsidiary Company, and each of whom shall be a
"disinterested  person" within the meaning of Rule 16b-3 under the Exchange Act,
or any successor thereto.


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         3.06 "Common  Stock" means shares of the common stock,  $.125 par value
per share, of the Corporation.

         3.07  "Disability"  means  any  physical  or  mental  impairment  which
qualifies an Employee for disability  benefits  under the  applicable  long-term
disability plan maintained by the Corporation or a Subsidiary Company, or, if no
such plan applies,  which would qualify such  Employee for  disability  benefits
under the Federal Social Security System.

         3.08 "Effective  Date" means the day upon which the Board approves this
Plan.

         3.09 "Employee"  means any person who is employed by the Corporation or
a  Subsidiary  Company,  or is an Officer  of the  Corporation  or a  Subsidiary
Company,  but not including  directors who are not also Officers of or otherwise
employed by the Corporation or a Subsidiary Company.

         3.10  "Exchange  Act" means the  Securities  Exchange  Act of 1934,  as
amended.

         3.11 "Fair  Market  Value"  shall be equal to the fair market value per
share of the  Corporation's  Common  Stock on the date an Award is granted.  For
purposes  hereof,  the Fair Market Value of a share of Common Stock shall be the
closing  sale price of a share of Common  Stock on the date in question  (or, if
such day is not a trading  day in the U.S.  markets,  on the  nearest  preceding
trading day), as reported with respect to the principal market (or the composite
of the  markets,  if more than one) or national  quotation  system in which such
shares are then traded,  or if no such  closing  prices are  reported,  the mean
between the high bid and low asked  prices that day on the  principal  market or
national  quotation  system then in use, or if no such quotations are available,
the price furnished by a professional  securities dealer making a market in such
shares selected by the Committee.

         3.12 "Incentive  Stock Option" means any Option granted under this Plan
which the Board  intends (at the time it is granted)  to be an  incentive  stock
option within the meaning of Section 422 of the Code or any successor thereto.

         3.13 "Non-Employee  Director" means a member of the Board who is not an
Officer or  Employee  of the  Corporation  or any  Subsidiary  Company and shall
include any individual  who, at any time after the date of adoption of the Plan,
services the Board in an advisory or emeritus capacity.

         3.14  "Non-Qualified  Option" means any Option  granted under this Plan
which is not an Incentive Stock Option.

         3.15 "Offering" means the 1996 underwritten offering of Common Stock to
the public.

         3.16 "Officer"  means an Employee whose position in the  Corporation or
Subsidiary Company is that of a corporate officer, as determined by the Board.

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         3.17 "Option" means a right granted under this Plan to purchase  Common
Stock.

         3.18 "Optionee" means an Employee or Non-Employee Director or former
Employee or Non-Employee Director to whom an Option is granted under the Plan.

         3.19 "Retirement" means a termination of employment upon or after
attainment of age sixty-five (65) or such earlier age as may be specified in any
applicable  plans or policies  maintained  by the  Corporation  or a  Subsidiary
Company.

         3.20 "Savings Bank" means  Harrington  Bank,  F.S.B.,  the wholly-owned
subsidiary of the Corporation.

         3.21 "Stock Appreciation Right" means a right to surrender an Option in
consideration  for a payment by the  Corporation in cash and/or Common Stock, as
provided in the discretion of the Committee in accordance with Section 8.11.

         3.22   "Subsidiary   Companies"   means  those   subsidiaries   of  the
Corporation,   including  the  Savings  Bank,   which  meet  the  definition  of
"subsidiary  corporations"  set forth in Section 425(f) of the Code, at the time
of  granting  of the Option in  question,  as  designated  by the  Committee  to
participate in the Plan.


                                   ARTICLE IV
                           ADMINISTRATION OF THE PLAN

         4.01  Duties  of the  Committee.  The Plan  shall be  administered  and
interpreted  by the  Committee,  as  appointed  from  time to time by the  Board
pursuant to Section 4.02. The Committee shall have the authority in its absolute
discretion to adopt,  amend and rescind such rules,  regulations  and procedures
as,  in  its  opinion,  may be  advisable  in the  administration  of the  Plan,
including, without limitation,  rules, regulations and procedures which (i) deal
with  satisfaction  of an  Optionee's  tax  withholding  obligation  pursuant to
Section 12.02 hereof,  (ii) include  arrangements  to facilitate  the Optionee's
ability to borrow  funds for payment of the  exercise  or  purchase  price of an
Award,  if applicable,  from securities  brokers and dealers,  and (iii) include
arrangements  which  provide for the payment of some or all of such  exercise or
purchase price by delivery of  previously owned  shares of Common Stock or other
property  and/or by  withholding  some of the shares of Common  Stock  which are
being  acquired.  The  interpretation  and  construction by the Committee of any
provisions of the Plan, any rule, regulation or procedure adopted by it pursuant
thereto or of any Award shall be final and binding.

         4.02  Appointment  and Operation of the  Committee.  The members of the
Committee  shall be appointed  by, and will serve at the pleasure of, the Board.
The Board from time to time may remove  members  from,  or add  members  to, the
Committee,  provided  the  Committee  shall  continue  to consist of two or more
members of the Board, none of whom shall be an officer or employee of


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the Corporation,  and each of whom shall be a "disinterested  person" within the
meaning of Rule 16b- 3 under the Exchange Act. The  Committee  shall act by vote
or  written  consent  of a  majority  of its  members.  Subject  to the  express
provisions  and  limitations  of the Plan,  the  Committee may adopt such rules,
regulations  and  procedures  as it deems  appropriate  for the  conduct  of its
affairs.  It may  appoint  one of its  members to be  chairman  and any  person,
whether or not a member,  to be its  secretary  or agent.  The  Committee  shall
report its actions and  decisions  to the Board at  appropriate  times but in no
event less than one time per calendar year.

         4.03  Revocation  for  Misconduct.  The  Committee  may  by  resolution
immediately revoke, rescind and terminate any Option, or portion thereof, to the
extent not yet vested,  or any Stock  Appreciation  Right, to the extent not yet
exercised,  previously  granted or awarded under this Plan to an Employee who is
discharged from the employ of the Corporation or a Subsidiary Company for cause,
which,  for purposes hereof,  shall mean  termination  because of the Employee's
personal dishonesty,  incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law,  rule,  or  regulation  (other than traffic  violations or
similar  offenses) or final  cease-and-desist  order.  Options granted to a Non-
Employee Director who is removed for cause pursuant to the Corporation's Amended
and Restated Articles of Incorporation  shall terminate as of the effective date
of such removal.

         4.04  Limitation  on  Liability.  No member of the  Committee  shall be
liable for any action or  determination  made in good faith with  respect to the
Plan,  any rule,  regulation  or  procedure  adopted by the  Committee  pursuant
thereto or for any Awards granted  hereunder.  If a member of the Committee is a
party  or is  threatened  to be  made a  party  to any  threatened,  pending  or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative,  by reason of anything  done or not done by him in such  capacity
under or with  respect  to the  Plan,  the  Corporation  shall,  subject  to the
requirements of applicable laws and  regulations,  indemnify such member against
all liabilities and expenses (including attorneys' fees),  judgments,  fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action,  suit or  proceeding if he acted in good faith and in a manner
he reasonably  believed to be in the best interests of the  Corporation  and its
Subsidiary Companies and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful.

         4.05 Compliance with Law and Regulations.  All Awards granted hereunder
shall be subject to all applicable federal and state laws, rules and regulations
and to such approvals by any government or regulatory agency as may be required.
The Corporation  shall not be required to issue or deliver any  certificates for
shares  of  Common  Stock  prior  to  the  completion  of  any  registration  or
qualification  of or  obtaining  of consents or  approvals  with respect to such
shares  under  any  federal  or  state  law or any  rule  or  regulation  of any
government body, which the Corporation shall, in its sole discretion,  determine
to be necessary or advisable.  Moreover,  no Option or Stock  Appreciation Right
may be  exercised  if such  exercise  would be contrary to  applicable  laws and
regulations.


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         4.06 Restrictions on Transfer.  The Corporation may place a legend upon
any  certificate  representing  shares  acquired  pursuant  to an Award  granted
hereunder  noting  that  the  transfer  of  such  shares  may be  restricted  by
applicable laws and regulations.


                                    ARTICLE V
                                   ELIGIBILITY

         Awards may be granted to such  Employees or  Non-Employee  Directors of
the Corporation  and its Subsidiary  Companies as may be designated from time to
time by the  Committee.  Awards may not be granted  to  individuals  who are not
Employees or Non-Employee  Directors of either the Corporation or its Subsidiary
Companies.   Non-Employee   Directors   shall  be  eligible   to  receive   only
Non-Qualified Options pursuant to Section 8.02 of the Plan.


                                   ARTICLE VI
                        COMMON STOCK COVERED BY THE PLAN

         6.01 Option  Shares.  The  aggregate  number of shares of Common  Stock
which may be issued pursuant to this Plan,  subject to adjustment as provided in
Article IX, shall be 276,500 shares. None of such shares shall be the subject of
more  than  one  Award  at any  time,  but if an  Option  as to  any  shares  is
surrendered  before  exercise,  or expires or terminates  for any reason without
having been exercised in full, or for any other reason ceases to be exercisable,
the number of shares  covered  thereby  shall again become  available  for grant
under the Plan as if no Awards had been previously  granted with respect to such
shares.

         6.02 Source of Shares. The shares of Common Stock issued under the Plan
may be authorized but unissued  shares,  treasury shares or shares  purchased by
the  Corporation  on the open market or from  private  sources for use under the
Plan.


                                   ARTICLE VII
                                DETERMINATION OF
                         AWARDS, NUMBER OF SHARES, ETC.

         The Committee  shall,  in its  discretion,  determine from time to time
which  Employees  will be granted Awards under the Plan, the number of shares of
Common  Stock  subject to each Award,  whether  each Option will be an Incentive
Stock  Option or a  Non-Qualified  Stock  Option  and the  exercise  price of an
Option. In making all such determinations  there shall be taken into account the
duties,  responsibilities  and  performance  of each  respective  Employee,  his
present  and  potential   contributions   to  the  growth  and  success  of  the
Corporation,  his  salary and such other  factors  as the  Committee  shall deem
relevant to accomplishing the purposes of the Plan. Non-Employee Directors shall
be eligible to receive only  Non-Qualified  Options  pursuant to Section 8.02 of
the Plan.


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                                  ARTICLE VIII
                      OPTIONS AND STOCK APPRECIATION RIGHTS

         Each  Option  granted  hereunder  shall be on the  following  terms and
conditions:

         8.01  Stock  Option  Agreement.  The proper  Officers  on behalf of the
Corporation and each Optionee shall execute a Stock Option Agreement which shall
set forth the total number of shares of Common  Stock to which it pertains,  the
exercise  price,  whether it is a  Non-Qualified  Option or an  Incentive  Stock
Option,  and such other terms,  conditions,  restrictions  and privileges as the
Committee  in each  instance  shall  deem  appropriate,  provided  they  are not
inconsistent  with the terms,  conditions  and  provisions  of this  Plan.  Each
Optionee shall receive a copy of his executed Stock Option Agreement.

         8.02 Awards to Non-Employee Directors.

                  (a)   Initial   Grants   to   Non-Employee   Directors.   Each
Non-Employee  Director of the  Corporation and each  Non-Employee  Director of a
Subsidiary  Company  as of the date of  commencement  of the  Offering  shall be
granted an Option to  purchase  1,000 and 500  shares,  respectively,  of Common
Stock  effective at such time and with a per share  exercise  price equal to the
Fair  Market  Value of a share of Common  Stock on such  date.  Any  person  who
becomes a Non-Employee Director of the Corporation and any person who becomes a
Non-Employee  Director of a  Subsidiary  Company  shall,  as of the date of such
person's  seating on the Board,  be granted an Option to purchase  1,000 and 500
shares,  respectively,  of Common Stock with a per share exercise price equal to
the Fair Market Value of a share of Common Stock on such date.

                  (b)  Subsequent  Grants.  Each  Non-Employee  Director  of the
Corporation  and each  Non-Employee  Director  of a  Subsidiary  Company  who is
serving on the Board on each  anniversary  date of the Offering shall receive on
such date an Option to purchase 2,000 and 1,000 shares, respectively,  of Common
Stock (or an Option to  purchase  such lesser  number of shares of Common  Stock
which  are then  remaining  such  that  each of the  Corporation's  Non-Employee
Directors then on the Board receives an Option to purchase  approximately  twice
the number of shares of Common Stock as each of the Non-Employee  Directors then
on the Board of any Subsidiary Companies); at the per share exercise price equal
to the Fair Market  Value of a share of Common  Stock on each of such dates.  In
the  event  of a  forfeiture  of the  right  to any  Options  to be  granted  to
Non-Employee  Directors  pursuant to this Section  8.02,  such Options  shall be
deemed  unawarded  and shall be made  available  to satisfy  current  and future
Awards  to  Non-Employee  Directors  in a manner  consistent  with the terms and
limitations set forth in Section 8.02.

         8.03 Option Exercise Price.

                  (a) Incentive Stock Options.  The per share price at which the
subject Common Stock may be purchased upon exercise of an Incentive Stock Option
shall be no less than one


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hundred  percent  (100%) of the Fair Market  Value of a share of Common Stock at
the time such Incentive  Stock Option is granted,  except as provided in Section
8.10(b).

                  (b)  Non-Qualified  Options.  The per share price at which the
subject  Common Stock may be purchased upon exercise of a  Non-Qualified  Option
shall be no less than one hundred  (100%) of the Fair Market Value of a share of
Common Stock at the time such Non-Qualified Option is granted.

         8.04  Vesting and Exercise of Options.

                  (a) General Rules.  Incentive Stock Options and  Non-Qualified
Options granted hereunder shall become vested and exercisable at the rate of 20%
per year on each annual anniversary of the date the Option was granted,  and the
right to exercise shall be cumulative. Notwithstanding the foregoing, no vesting
shall occur on or after an Employee's  employment  with the  Corporation and all
Subsidiary  Companies  is  terminated  for any  reason  other  than  his  death,
Disability or Retirement.  In  determining  the number of shares of Common Stock
with respect to which Options are vested and/or  exercisable,  fractional shares
will be rounded up to the nearest whole number if the fraction is 0.5 or higher,
and down if it is less.  Notwithstanding  anything  herein to the  contrary,  no
Option  granted  hereunder  may be  exercised  prior  to  receiving  shareholder
approval.

                  (b)   Accelerated   Vesting.   Unless  the   Committee   shall
specifically  state  otherwise  at the time an Option is  granted,  all  Options
granted  hereunder  shall become vested and  exercisable  in full on the date an
Optionee  terminates  his  employment  with or service to the  Corporation  or a
Subsidiary  Company  because of his death or Disability.  All options  hereunder
shall become  immediately vested and exercisable in full on the date an Optionee
terminates his employment or service to the Corporation or a Subsidiary  Company
due to Retirement or as the result of a Change in Control of the Corporation.

         8.05  Duration of Options.

                  (a) General Rule.  Except as provided in Sections  8.05(b) and
8.10,  each Option or portion  thereof  granted to  Employees  and  Non-Employee
Directors  shall be  exercisable  at any time on or after it vests  and  becomes
exercisable  until the  earlier of (i) ten (10) years after its date of grant or
(ii) three (3) months after the date on which the Optionee ceases to be employed
(or in the  service  of the  Board  of  Directors  in the  case of  Non-Employee
Directors) by the Corporation and all Subsidiary Companies, unless the Committee
in its  discretion  decides at the time of grant or  thereafter  to extend  such
period of exercise  upon  termination  of  employment  or service from three (3)
months to a period not exceeding one (1) year.

                  (b) Exceptions. If an Employee dies while in the employ of the
Corporation  or  a  Subsidiary   Company  or  terminates   employment  with  the
Corporation  or a Subsidiary  Company as a result of Disability  without  having
fully exercised his Options, the Optionee or the executors,


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administrators,  legatees or  distributees  of his estate  shall have the right,
during the twelve-month period following the earlier of his death or termination
due to Disability,  to exercise such Options.  If a  Non-Employee  Director dies
while  serving as a  Non-Employee  Director  or  terminates  his  service to the
Corporation  or a Subsidiary  Company as a result of Disability  without  having
fully  exercised  his  Options,  the  Non-Employee  Director  or the  executors,
administrators,  legatees or  distributees  of his estate  shall have the right,
during the twelve-month period following the earlier of his death or termination
due to Disability,  to exercise such Options.  In no event,  however,  shall any
Option be exercisable within six (6) months after the date of grant or more than
ten (10)  years from the date it was  granted.  In the event of  Retirement,  an
Employee or Non-Employee  Director shall be entitled to the same time period set
forth above in this Section 8.05(b) to exercise an Option.

         8.06 Nonassignability. Options shall not be transferable by an Optionee
except by will or the laws of descent or distribution,  and during an Optionee's
lifetime shall be exercisable  only by such Optionee or the Optionee's  guardian
or legal representative.

         8.07 Manner of  Exercise.  Options may be exercised in part or in whole
and at one time or from time to time.  The  procedures for exercise shall be set
forth in the written Stock Option Agreement provided pursuant to Section 8.01.

         8.08  Payment for  Shares.  Payment in full of the  purchase  price for
shares of Common Stock purchased pursuant to the exercise of any Option shall be
made to the Corporation upon exercise of such Option.  All shares sold under the
Plan shall be fully paid and  nonassessable.  Payment  for shares may be made by
the  Optionee  in cash or, at the  discretion  of the  Committee  in the case of
Awards to Employees,  by  delivering  shares of Common Stock  (including  shares
acquired  pursuant to the exercise of an Option) or other property equal in Fair
Market Value to the purchase price of the shares to be acquired  pursuant to the
Option,  by  withholding  some of the  shares  of Common  Stock  which are being
purchased upon exercise of an Option, or any combination of the foregoing.

         8.09 Voting and Dividend  Rights.  No Optionee shall have any voting or
dividend  rights or other  rights of a  stockholder  in respect of any shares of
Common Stock covered by an Option prior to the time that his name is recorded on
the  Corporation's  stockholder  ledger as the  holder of record of such  shares
acquired pursuant to an exercise of such Option.

         8.10  Additional  Terms  Applicable  to Incentive  Stock  Options.  All
Options  issued under the Plan as Incentive  Stock  Options will be subject,  in
addition  to the  terms  detailed  in  Sections  8.01 to 8.09  above,  to  those
contained in this Section 8.10.

                  (a)   Notwithstanding   any  contrary   provisions   contained
elsewhere  in this Plan and as long as required by Section 422 of the Code,  the
aggregate Fair Market Value, determined as of the time an Incentive Stock Option
is granted,  of the Common Stock with respect to which  Incentive  Stock Options
are  exercisable  for the first time by the Optionee  during any calendar  year,
under this Plan and stock options that satisfy the  requirements  of Section 422
of the Code  under  any  other  stock  option  plan or plans  maintained  by the
Corporation (or any parent or Subsidiary Company), shall not exceed $100,000.


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                  (b) Limitation on Ten Percent Stockholders. The price at which
shares of Common Stock may be  purchased  upon  exercise of an  Incentive  Stock
Option granted to an individual  who, at the time such Incentive Stock Option is
granted, owns, directly or indirectly,  more than ten percent (10%) of the total
combined  voting  power of all classes of stock  issued to  stockholders  of the
Corporation or any Subsidiary Company, shall be no less than one hundred and ten
percent  (110%) of the Fair Market  Value of a share of the Common  Stock of the
Corporation at the time of grant,  and such Incentive  Stock Option shall by its
terms not be exercisable  after the earlier of the date determined under Section
8.04 or the  expiration  of five (5) years  from the date such  Incentive  Stock
Option is granted.

                  (c) Notice of Disposition;  Withholding;  Escrow.  An Optionee
shall  immediately  notify the  Corporation  in  writing of any sale,  transfer,
assignment  or  other  disposition  (or  action   constituting  a  disqualifying
disposition  within the  meaning  of  Section  421 of the Code) of any shares of
Common Stock acquired  through  exercise of an Incentive Stock Option within two
(2) years after the grant of such Incentive  Stock Option or within one (1) year
after the  acquisition  of such  shares,  setting  forth the date and  manner of
disposition, the number of shares disposed of and the price at which such shares
were  disposed  of. The  Corporation  shall be  entitled  to  withhold  from any
compensation  or other  payments  then or  thereafter  due to the Optionee  such
amounts as may be necessary to satisfy any  withholding  requirements of federal
or state law or  regulation  and,  further,  to collect  from the  Optionee  any
additional amounts which may be required for such purpose. The Committee may, in
its  discretion,  require  shares of Common Stock  acquired by an Optionee  upon
exercise of an Incentive  Stock Option to be held in an escrow  arrangement  for
the purpose of enabling compliance with the provisions of this Section 8.10(c).

         8.11     Stock Appreciation Rights.

                  (a) General Terms and Conditions. The Committee may, but shall
not be obligated to, authorize the Corporation,  on such terms and conditions as
it deems  appropriate in each case, to grant rights to Optionees to surrender an
exercisable  Option, or any portion thereof, in consideration for the payment by
the Corporation of an amount equal to the excess of the Fair Market Value of the
shares of Common Stock subject to the Option,  or portion  thereof,  surrendered
over the  exercise  price of the Option  with  respect to such  shares (any such
authorized  surrender  and  payment  being  hereinafter  referred to as a "Stock
Appreciation Right").  Such payment, at the discretion of the Committee,  may be
made in shares of Common Stock valued at the then Fair Market Value thereof,  or
in cash, or partly in cash and partly in shares of Common Stock.

         The terms and conditions set with respect to a Stock Appreciation Right
may include  (without  limitation),  subject to other provisions of this Section
8.11 and the Plan,  the period during  which,  date by which or event upon which
the Stock  Appreciation Right may be exercised (which shall be on the same terms
as the  Option to which it relates  pursuant  to Section  8.04  hereunder);  the
method for valuing  shares of Common Stock for purposes of this Section  8.11; a
ceiling  on the  amount  of  consideration  which  the  Corporation  may  pay in
connection with exercise and cancellation of the Stock  Appreciation  Right; and
arrangements for income tax withholding. The


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Committee shall have complete discretion to determine whether,  when and to whom
Stock Appreciation  Rights may be granted.  Notwithstanding  the foregoing,  the
Corporation  may not permit the  exercise of a Stock  Appreciation  Right issued
pursuant to this Plan until the  Corporation  has been subject to the  reporting
requirements of Section 13 of the Exchange Act for a period of at least one year
prior to the  exercise  of any such Stock  Appreciation  Right and until a Stock
Appreciation  Right  issued  pursuant to this Plan has been  outstanding  for at
least six months from the date of grant.

                  (b)  Time  Limitations.  If a holder  of a Stock  Appreciation
Right  terminates  service with the  Corporation as an Officer or Employee,  the
Stock Appreciation Right may be exercised only within the period, if any, within
which the  Option to which it  relates  may be  exercised.  Notwithstanding  the
foregoing, any election by an Optionee to exercise the Stock Appreciation Rights
provided  in this Plan shall be made  during the period  beginning  on the third
business  day  following  the release for  publication  of  quarterly  or annual
financial   information   required  to  be  prepared  and  disseminated  by  the
Corporation  pursuant to the  requirements of the Exchange Act and ending on the
twelfth  business day following such date.  The required  release of information
shall be deemed to have been satisfied when the specified financial data appears
on or in a  wire  service,  financial  news  service  or  newspaper  of  general
circulation or is otherwise first made publicly available.

                  (c)  Effects  of  Exercise  of Stock  Appreciation  Rights  or
Options.  Upon the exercise of a Stock Appreciation  Right, the number of shares
of Common Stock available under the Option to which it relates shall decrease by
a number  equal to the number of shares for which the Stock  Appreciation  Right
was exercised.  Upon the exercise of an Option,  any related Stock  Appreciation
Right shall  terminate as to any number of shares of Common Stock subject to the
Stock  Appreciation  Right that exceeds the total number of shares for which the
Option remains unexercised.

                  (d) Time of Grant. A Stock  Appreciation  Right may be granted
concurrently with the Option to which it relates or at any time thereafter prior
to the exercise or expiration of such Option.

                  (e) Non-Transferable. The holder of a Stock Appreciation Right
may not transfer or assign the Stock  Appreciation  Right otherwise than by will
or in  accordance  with the  laws of  descent  and  distribution,  and  during a
holder's  lifetime a Stock  Appreciation  Right may be  exercisable  only by the
holder.


                                   ARTICLE IX
                         ADJUSTMENTS FOR CAPITAL CHANGES

         The aggregate  number of shares of Common Stock  available for issuance
under  this  Plan,  the  number of shares  to which  any Award  relates  and the
exercise price per share of Common Stock


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under any Option shall be proportionately  adjusted for any increase or decrease
in the total number of outstanding  shares of Common Stock issued  subsequent to
the  effective  date  of  this  Plan  resulting  from a  split,  subdivision  or
consolidation of shares or any other capital adjustment,  the payment of a stock
dividend,  or other increase or decrease in such shares effected without receipt
or  payment  of   consideration   by  the   Corporation.   If,  upon  a  merger,
consolidation,  reorganization, liquidation, recapitalization or the like of the
Corporation, the shares of the Corporation's Common Stock shall be exchanged for
other securities of the Corporation or of another corporation, each recipient of
an Award shall be entitled, subject to the conditions herein stated, to purchase
or acquire such number of shares of Common  Stock or amount of other  securities
of the Corporation or such other corporation as were exchangeable for the number
of shares of Common Stock of the  Corporation  which such  optionees  would have
been  entitled to purchase or acquire  except for such action,  and  appropriate
adjustments  shall  be made to the  per  share  exercise  price  of  outstanding
Options.


                                    ARTICLE X
                      AMENDMENT AND TERMINATION OF THE PLAN

         The Board may, by  resolution,  at any time terminate or amend the Plan
with  respect to any  shares of Common  Stock as to which  Awards  have not been
granted,  subject to any  applicable  regulatory  requirements  and any required
stockholder  approval or any stockholder approval which the Board may deem to be
advisable for any reason,  such as for the purpose of obtaining or retaining any
statutory  or  regulatory  benefits  under  tax,  securities  or  other  laws or
satisfying any applicable  stock exchange  listing  requirements.  The Board may
not,  without the  consent of the holder of an Award,  alter or impair any Award
previously granted or awarded under this Plan as specifically authorized herein.
Notwithstanding  anything contained in this Plan to the contrary, the provisions
of  Articles  V,  VII and  VIII of this  Plan  relating  to  Awards  granted  to
Non-Employee  Directors  shall not be amended  more than once every six  months,
other than to comport with changes in the Code, the Employee  Retirement  Income
Security Act of 1974, as amended, or the rules and regulations promulgated under
such statutes.


                                   ARTICLE XI
                                EMPLOYMENT RIGHTS

         Neither the Plan nor the grant of any Awards  hereunder  nor any action
taken by the Committee or the Board in connection with the Plan shall create any
right on the part of any Employee or Non-Employee Director of the Corporation or
a Subsidiary Company to continue in such capacity.


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                                   ARTICLE XII
                                   WITHHOLDING

         12.01 Tax  Withholding.  The  Corporation  may  withhold  from any cash
payment  made  under  this  Plan  sufficient  amounts  to cover  any  applicable
withholding  and  employment  taxes,  and if the amount of such cash  payment is
insufficient, the Corporation may require the Optionee to pay to the Corporation
the amount  required  to be withheld as a  condition  to  delivering  the shares
acquired  pursuant to an Award.  The  Corporation  also may  withhold or collect
amounts with respect to a  disqualifying  disposition  of shares of Common Stock
acquired  pursuant to the exercise of an Incentive Stock Option,  as provided in
Section 8.10(c).

         12.02 Methods of Tax Withholding.  The Committee is authorized to adopt
rules,  regulations  or  procedures  which  provide for the  satisfaction  of an
Optionee's tax withholding obligation by the retention of shares of Common Stock
to which the Employee would otherwise be entitled pursuant to an Award and/or by
the  Optionee's  delivery of  previously owned  shares of Common  Stock or other
property.


                                  ARTICLE XIII
                        EFFECTIVE DATE OF THE PLAN; TERM

         13.01 Effective Date of the Plan.  This Plan shall become  effective on
the  Effective  Date,  and Awards may be  granted  hereunder  as of or after the
Effective  Date and  prior to the  termination  of the  Plan,  provided  that no
Incentive Stock Option issued pursuant to this Plan shall qualify as such unless
this Plan is approved by the  requisite  vote of the holders of the  outstanding
voting shares of the Corporation at a meeting of stockholders of the Corporation
held within twelve (12) months of the Effective Date.

         13.02 Term of Plan. Unless sooner terminated, this Plan shall remain in
effect for a period of ten (10)  years  ending on the tenth  anniversary  of the
Effective Date.  Termination of the Plan shall not affect any Awards  previously
granted and such Awards  shall  remain  valid and in effect until they have been
fully  exercised  or earned,  are  surrendered  or by their terms  expire or are
forfeited.


                                   ARTICLE XIV
                                  MISCELLANEOUS

         14.01  Governing  Law. To the extent not governed by federal law,  this
Plan shall be construed under the laws of the State of Indiana.

         14.02  Pronouns.  Wherever  appropriate,  the  masculine  pronoun shall
include the feminine pronoun, and the singular shall include the plural.


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