Exhibit 10.1

























                               XANSER CORPORATION

                              STOCK INCENTIVE PLAN


                            Amendment and Restatement
                          Effective September 11, 2001










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                                Table of Contents
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                                                                                                             Page

<S>      <C>                                                                                                    <C>
ARTICLE I             PLAN.......................................................................................1

         1.1      Purpose........................................................................................1
         1.2      Term of Plan...................................................................................1

ARTICLE II            DEFINITIONS................................................................................2

         2.1      Affiliate......................................................................................2
         2.2      Award..........................................................................................2
         2.3      Board..........................................................................................2
         2.4      Change of Control..............................................................................2
         2.5      Code...........................................................................................3
         2.6      Committee......................................................................................3
         2.7      Company........................................................................................3
         2.8      Disability.....................................................................................3
         2.9      Distribution Date..............................................................................4
         2.10     Employee Benefits Agreement....................................................................4
         2.11     Employee.......................................................................................4
         2.12     Exchange Act...................................................................................4
         2.13     Fair Market Value..............................................................................4
         2.14     Holder.........................................................................................4
         2.15     Incentive Option...............................................................................4
         2.16     KSI Deferred Compensation Plans................................................................4
         2.17     Mature Shares..................................................................................4
         2.18     Non-Employee Director..........................................................................4
         2.19     Nonqualified Option............................................................................4
         2.20     Option.........................................................................................4
         2.21     Option Agreement...............................................................................4
         2.22     Plan...........................................................................................5
         2.23     Restricted Stock...............................................................................5
         2.24     Restricted Stock Agreement.....................................................................5
         2.25     Restricted Stock Award.........................................................................5
         2.26     Retirement.....................................................................................5
         2.27     Stock..........................................................................................5
         2.28     Ten Percent Stockholder........................................................................5
         2.29     Net Shares.....................................................................................5

ARTICLE III           ELIGIBILITY................................................................................6


ARTICLE IV            GENERAL PROVISIONS RELATING TO AWARDS......................................................7

         4.1      Authority to Grant Awards......................................................................7
         4.2      Dedicated Shares; Maximum Awards...............................................................7
         4.3      Non-Transferability............................................................................7
         4.4      Requirements of Law............................................................................7
         4.5      Changes in the Company's Capital Structure.....................................................8
         4.6      Election Under Section 83(b) of the Code......................................................10

ARTICLE V             OPTIONS...................................................................................11

         5.1      Type of Option................................................................................11
         5.2      Exercise Price................................................................................11
         5.3      Duration of Options...........................................................................11
         5.4      Amount Exercisable............................................................................13
         5.5      Exercise of Options...........................................................................13
         5.6      Substitution Options..........................................................................14
         5.7      No Rights as Stockholder......................................................................14

ARTICLE VI            RESTRICTED STOCK AWARDS...................................................................15

         6.1      Restricted Stock Awards.......................................................................15
         6.2      Holder's Rights as Stockholder................................................................15

ARTICLE VII           ADMINISTRATION............................................................................16


ARTICLE VIII          AMENDMENT OR TERMINATION OF PLAN..........................................................17


ARTICLE IX            MISCELLANEOUS.............................................................................18

         9.1      No Establishment of a Trust Fund..............................................................18
         9.2      No Employment or Affiliation Obligation.......................................................18
         9.3      Forfeiture....................................................................................18
         9.4      Tax Withholding...............................................................................18
         9.5      Written Agreement.............................................................................19
         9.6      Indemnification of the Committee..............................................................19
         9.7      Gender........................................................................................20
         9.8      Headings......................................................................................20
         9.9      Other Compensation Plans......................................................................20
         9.10     Other Options or Awards.......................................................................20
         9.11     Option Adjustments Pursuant to the Employee Benefits Agreement................................20
         9.12     Governing Law.................................................................................20

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                                    ARTICLE I
                                      PLAN

1.1  Purpose.  The Plan is intended to advance the best interests of the Company
     and its  stockholders  by  providing  those  persons  who have  substantial
     responsibility  for  the  management  and  growth  of the  Company  and its
     Affiliates  with  additional  incentives  and an  opportunity  to obtain or
     increase their  proprietary  interest in the Company,  thereby  encouraging
     them to continue in their employment or affiliation with the Company or any
     of its Affiliates.

1.2  Term of Plan.  No Award shall be granted under the Plan after July 9, 2011.
     The Plan shall  remain in effect  until all Awards under the Plan have been
     satisfied or expired.

                                   ARTICLE II

                                   DEFINITIONS

The words and phrases  defined in this Article shall have the meaning set out in
these definitions throughout the Plan, unless the context in which any such word
or phrase appears reasonably requires a broader, narrower or different meaning.

2.1  "Affiliate"  means any parent  corporation and any subsidiary  corporation.
     The  term  "parent  corporation"  means  any  corporation  (other  than the
     Company) in an unbroken chain of  corporations  ending with the Company if,
     at the time of the action or transaction,  each of the  corporations  other
     than the  Company  owns  stock  possessing  50 percent or more of the total
     combined  voting  power  of all  classes  of  stock  in  one  of the  other
     corporations  in the chain.  The term  "subsidiary  corporation"  means any
     corporation  (other than the Company) in an unbroken chain of  corporations
     beginning  with the Company  if, at the time of the action or  transaction,
     each of the  corporations  other than the last  corporation in the unbroken
     chain owns stock possessing 50 percent or more of the total combined voting
     power  of all  classes  of stock in one of the  other  corporations  in the
     chain.

2.2  "Award" means any Incentive Option, Nonqualified Option or Restricted Stock
     Award granted under the Plan.

2.3  "Board" means the board of directors of the Company.

2.4  "Change of Control" means the occurrence of any of the following after June
     1, 2001:

     (a)  the acquisition by any individual, entity or group (within the meaning
          of Section  13(d)(3)  or  14(d)(2)  of the  Exchange  Act) (a "Covered
          Person")  of  beneficial  ownership  (within the meaning of rule 13d-3
          promulgated  under the  Exchange  Act) of 20 percent or more of either
          (i) the then  outstanding  shares of Stock (the  "Outstanding  Company
          Common  Stock")  or  (ii)  the  combined  voting  power  of  the  then
          outstanding   voting  securities  of  the  Company  entitled  to  vote
          generally  in the  election of  directors  (the  "Outstanding  Company
          Voting  Securities");  provided,  however,  that for  purposes of this
          Section  2.4(a),  the following  acquisitions  shall not  constitute a
          Change in Control of the Company:  (i) any acquisition by the Company,
          (ii) any  acquisition by any employee  benefit plan (or related trust)
          sponsored or maintained by the Company or any entity controlled by the
          Company or (iii) any  acquisition  by any  corporation  pursuant  to a
          transaction which complies with clauses (i), (ii) and (iii) of Section
          2.4(c);

     (b)  individuals who, as of June 1, 2001, constitute the Board of Directors
          (the "Incumbent  Board") cease for any reason to constitute at least a
          majority  of the  Board  of  Directors;  provided,  however,  that any
          individual  becoming  a  director  subsequent  to June1,  2001,  whose
          election, or nomination for election,  by the Company's  stockholders,
          was  approved by a vote of at least a majority of the  directors  then
          comprising  the  Incumbent  Board shall be  considered  as though such
          individual were a member of the Incumbent  Board,  but excluding,  for
          this purpose,  any such individual whose initial  assumption of office
          occurs as a result of an actual or  threatened  election  contest with
          respect to the election or removal of directors; or

     (c)  the consummation of (i) a  reorganization,  merger or consolidation or
          sale of the Company or (ii) a disposition of all or substantially  all
          of the assets of the Company (a "Business Combination"), in each case,
          unless, following such Business Combination,  (A) all or substantially
          all of the  individuals  and entities who were the beneficial  owners,
          respectively,  of the Outstanding Company Common Stock and Outstanding
          Company  Voting   Securities   immediately   prior  to  such  Business
          Combination  beneficially  own,  directly or indirectly,  more than 80
          percent of, respectively,  the then outstanding shares of common stock
          and  the  combined  voting  power  of  the  then  outstanding   voting
          securities entitled to vote generally in the election of directors, as
          the case may be,  of the  corporation  resulting  from  such  Business
          Combination (including,  without limitation,  a corporation which as a
          result of such  transaction  owns the Company or all or  substantially
          all of the  Company's  assets  either  directly or through one or more
          subsidiaries) in substantially the same proportions as their ownership
          immediately  prior to such  Business  Combination  of the  Outstanding
          Company Common Stock or Outstanding Company Voting Securities,  as the
          case may be, (B) no Covered  Person  (excluding  any employee  benefit
          plan (or related trust) of the Company or such  corporation  resulting
          from  such  Business  Combination)   beneficially  owns,  directly  or
          indirectly, 80 percent or more of, respectively,  the then outstanding
          shares of common stock of the corporation resulting from such Business
          Combination  or the  combined  voting  power of the  then  outstanding
          voting securities of such corporation,  except to the extent that such
          ownership existed prior to the Business Combination,  and (C) at least
          a majority of the members of the board of directors of the corporation
          resulting from such Business Combination were members of the Incumbent
          Board at the time of the execution of the initial agreement, or of the
          action  of  the  Board,   providing  for  such  Business  Combination;
          provided,  however, that any individual becoming a director subsequent
          to June 1, 2001 whose  election,  or  nomination  for  election by the
          Company's stockholders,  was approved by a vote of at least a majority
          of  the  directors  then  comprising  the  Incumbent  Board  shall  be
          considered  as though such  individual  were a member of the Incumbent
          Board,  but excluding,  for this purpose,  any such  individual  whose
          initial  assumption  of  office  occurs  as a result  of an  actual or
          threatened election contest with respect to the election or removal of
          directors.

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

2.6  "Committee"  means a  committee  of at least two persons  appointed  by the
     Board.

2.7  "Company" means Kaneb Services, Inc., a Delaware corporation.

2.8  "Disability" means a medically  determinable  mental or physical impairment
     which,  in the opinion of a  physician  selected  by the  Committee,  shall
     prevent the Holder from engaging in any  substantial  gainful  activity and
     which can be  expected  to  result  in death or which has  lasted or can be
     expected  to last for a  continuous  period of not less than 12 months  and
     which:  (a) was not  contracted,  suffered or incurred while the Holder was
     engaged in, or did not result from having engaged in, a felonious  criminal
     enterprise;  (b) did not result from  alcoholism or addiction to narcotics;
     (c) did not  result  from an  injury  incurred  while a member of the Armed
     Forces of the  United  States  for which the  Holder  receives  a  military
     pension;  and (d)  did not  result  from  an  intentionally  self-inflicted
     injury.

2.9  "Distribution  Date" shall have the meaning  specified in the  Distribution
     Agreement by and between the Company, Kaneb Services LLC and Kaneb Pipeline
     Partners, L.P.

2.10 "Employee Benefits  Agreement" means the Employee Benefits Agreement by and
     between the Company and Kaneb  Services LLC, a Delaware  limited  liability
     company.

2.11 "Employee"  means a person  employed by the Company or any  Affiliate  as a
     common law employee.

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

2.13 "Fair Market  Value" of the Stock as of any date means the closing price of
     the Stock on such date,  or, if the Stock was not  traded on such date,  on
     the immediately preceding day that the Stock was so traded. However, if the
     Stock is not listed on a securities exchange, the Fair Market Value will be
     an amount determined by the Committee.

2.14 "Holder"  means a person who has been granted an Award or any person who is
     entitled to receive stock under an Award.

2.15 "Incentive  Option"  means  an  Option  granted  under  the  Plan  which is
     designated as an  "Incentive  Option" and  satisfies  the  requirements  of
     section 422 of the Code.

2.16 "KSI  Deferred  Compensation  Plans" means the Kaneb  Services,  Inc.  1996
     Supplemental   Deferred   Compensation  Plan,  the  Kaneb  Services,   Inc.
     Non-Employee  Directors Deferred Stock Unit Plan, the Kaneb Services,  Inc.
     Deferred Stock Unit Plan, and any other nonqualified  deferred compensation
     plans that the Company may adopt in the future.

2.17 "Mature Shares" means shares of Stock that the Holder has held for at least
     six months.

2.18 "Non-Employee  Director"  means any duly elected member of the Board who is
     not an Employee.

2.19 "Nonqualified  Option" means an Option granted under the Plan other than an
     Incentive Option.

2.20 "Option" means either an Incentive Option or a Nonqualified  Option granted
     under the Plan to purchase shares of Stock.

2.21 "Option  Agreement" means the written agreement which sets out the terms of
     an Option.

2.22 "Plan" means the Kaneb  Services,  Inc. 1994 Stock  Incentive  Plan, as set
     forth in this document and as it may be amended from time to time.

2.23 "Restricted Stock" means stock awarded or purchased under the Plan pursuant
     to a Restricted Stock Agreement.

2.24 "Restricted Stock Agreement" means the written agreement which sets out the
     terms of a Restricted Stock Award.

2.25 "Restricted Stock Award" means an Award of Restricted Stock.

2.26 "Retirement" means the termination of an Employee's employment relationship
     with the Company and all Affiliates after attaining the age of 55.

2.27 "Stock"  means the common  stock of the Company,  no par value,  or, in the
     event that the outstanding shares of common stock are later changed into or
     exchanged  for a different  class of stock or  securities of the Company or
     another  corporation,  that other stock or  security.  Shares of Stock when
     issued, may be represented by a certificate or by book or electronic entry.

2.28 "Ten Percent  Stockholder"  means an individual who, at the time the Option
     is  granted,  owns  stock  possessing  more than ten  percent  of the total
     combined  voting  power of all classes of stock or series of the Company or
     of any  Affiliate.  An  individual  shall be considered as owning the stock
     owned, directly or indirectly,  by or for his brothers and sisters (whether
     by the whole or half blood), spouse, ancestors and lineal descendants;  and
     stock owned, directly or indirectly, by or for a corporation,  partnership,
     estate or trust,  shall be considered as being owned  proportionately by or
     for its stockholders, partners or beneficiaries.

2.29 "Net  Shares"  means the shares of Stock to be issued  upon  exercise of an
     Option reduced by the number of  unencumbered,  transferable  Mature Shares
     that would be  required  to be  tendered  to the  Company  to  satisfy  the
     exercise price of the Option.

                                   ARTICLE III

                                   ELIGIBILITY

The  individuals  who shall be eligible to receive  Incentive  Options  shall be
those key  Employees of the Company or any of its  Affiliates  as the  Committee
shall  determine  from time to time.  The  individuals  who shall be eligible to
receive  Awards other than Incentive  Options shall be those persons,  including
Employees,   consultants,   advisors  and   directors,   who  have   substantial
responsibility  for the  management  and  growth  of the  Company  or any of its
Affiliates as the Committee shall determine from time to time.  Further,  shares
of Stock may be issued under the Plan to participants and former participants in
the KSI Deferred Compensation Plans in satisfaction of the Company's obligations
thereunder.

                                   ARTICLE IV

                      GENERAL PROVISIONS RELATING TO AWARDS

4.1  Authority  to Grant  Awards.  The  Committee  may grant Awards to those key
     Employees  of the  Company  or any of its  Affiliates  and  other  eligible
     persons  as it shall  from  time to time  determine,  under  the  terms and
     conditions of the Plan. Subject only to any applicable  limitations set out
     in the Plan, the number of shares of Stock to be covered by any Award to be
     granted to any person shall be as determined by the Committee.

4.2  Dedicated Shares;  Maximum Awards.  The aggregate number of shares of Stock
     with respect to which  Awards may be granted  under the Plan and to current
     and former participants in the KSI Deferred  Compensation Plans pursuant to
     the terms thereof is 3,600,000. Such shares of Stock may be treasury shares
     or authorized  but unissued  shares.  The maximum number of shares of Stock
     with  respect to which  Options may be granted  under the Plan is 3,600,000
     shares.  The  maximum  number  of  shares of Stock  with  respect  to which
     Restricted  Stock Awards may be granted  under the Plan is 750,000  shares.
     The maximum  number of shares with  respect to which  Options  which may be
     granted to any person  under the Plan during any  calendar  year is 750,000
     shares.  If a Holder's Option is cancelled,  the cancelled Option continues
     to be  counted  against  the  maximum  number  of shares of Stock for which
     Options may be granted to the Holder  under the Plan.  The number of shares
     stated in this  Section 4.2 shall be subject to  adjustment  in  accordance
     with the  provisions  of Section 4.5. If any  outstanding  Award expires or
     terminates for any reason or any Award is surrendered,  the shares of Stock
     allocable to the unexercised  portion of that Award may again be subject to
     an Award under the Plan.

4.3  Non-Transferability.  Incentive  Options shall not be  transferable  by the
     Employee other than by will or under the laws of descent and  distribution,
     and shall be  exercisable,  during the  Employee's  lifetime,  only by him.
     Except as  specified  in the  applicable  Award  agreements  or in domestic
     relations  court orders,  Awards other than Incentive  Options shall not be
     transferable  by the Holder other than by will or under the laws of descent
     and distribution,  and shall be exercisable,  during the Holder's lifetime,
     only by him. In the discretion of the Committee, any attempt to transfer an
     Award  other  than  under  the terms of the Plan and the  applicable  Award
     agreement may terminate the Award.

4.4  Requirements of Law. The Company shall not be required to sell or issue any
     shares of Stock  under  any  Award if  issuing  the  shares of Stock  would
     constitute  or result in a  violation  by the Holder or the  Company of any
     provision of any law, statute or regulation of any governmental  authority.
     Specifically,  in  connection  with any  applicable  statute or  regulation
     relating to the registration of securities, upon exercise of any Award, the
     Company  shall not be  required  to issue any  shares of Stock  unless  the
     Committee has received  evidence  satisfactory to it to the effect that the
     Holder will not  transfer  the shares of Stock  except in  accordance  with
     applicable law, including receipt of an opinion of counsel  satisfactory to
     the  Company  to the  effect  that  any  proposed  transfer  complies  with
     applicable law. The  determination by the Committee on this matter shall be
     final,  binding and  conclusive.  The Company may, but shall in no event be
     obligated to,  register any shares of Stock covered by the Plan pursuant to
     applicable securities laws of any country or any political subdivision.  In
     the event the  shares of Stock  issuable  on  exercise  of an Option or any
     other Award are not registered,  the Company may imprint on the certificate
     evidencing  the shares of Stock any legend  that  counsel  for the  Company
     considers  necessary or advisable to comply with  applicable law; or should
     the shares of Stock be represented by book or electronic  entry rather than
     a certificate,  the Company may take such steps to restrict transfer of the
     shares of Stock as counsel for the Company considers necessary or advisable
     to comply with  applicable  law. The Company shall not be obligated to take
     any other affirmative action in order to cause the exercise of an Option or
     vesting  under an  Award,  or the  issuance  of  shares  of Stock  pursuant
     thereto,  to  comply  with  any  law  or  regulation  of  any  governmental
     authority.

4.5  Changes  in  the  Company's  Capital   Structure.   (a)  The  existence  of
     outstanding  Awards  shall not  affect in any way the right or power of the
     Company or its  stockholders  to make or authorize any or all  adjustments,
     recapitalizations,  reorganizations  or  other  changes  in  the  Company's
     capital  structure  or its  business,  any merger or  consolidation  of the
     Company,  any issue of bonds,  debentures,  preferred  or prior  preference
     stock ahead of or affecting  the Stock or its rights,  the  dissolution  or
     liquidation of the Company,  any sale or transfer of all or any part of its
     assets or business or any other  corporate act or proceeding,  whether of a
     similar character or otherwise.

     (a)  If the Company shall effect a subdivision or  consolidation  of shares
          or other capital  readjustment,  the payment of a stock  dividend,  or
          other  increase  or  reduction  of  the  number  of  shares  of  Stock
          outstanding,  without receiving compensation for it in money, services
          or property,  then (i) the number, class or series and per share price
          of shares of Stock  subject  to  outstanding  Options  under this Plan
          shall be  appropriately  adjusted  in such a manner  as to  entitle  a
          Holder to receive upon exercise of an Option,  for the same  aggregate
          cash consideration, the equivalent total number and class or series of
          shares he would  have  received  had he  exercised  his Option in full
          immediately prior to the event requiring the adjustment,  and (ii) the
          number  and class or series of  shares of Stock  then  reserved  to be
          issued under the Plan shall be adjusted by substituting  for the total
          number  and class or series of  shares of Stock  then  reserved,  that
          number  and class or series of shares of Stock  that  would  have been
          received by the owner of an equal number of outstanding shares of each
          class or series of Stock as the  result  of the  event  requiring  the
          adjustment.

     (b)  If while unexercised Options remain outstanding under the Plan (i) the
          Company shall not be the surviving entity in any merger, consolidation
          or other reorganization (or survives only as a subsidiary of an entity
          other than an entity that was wholly-owned by the Company  immediately
          prior to such merger, consolidation or other reorganization), (ii) the
          Company  sells,  leases  or  exchanges  or  agrees  to sell,  lease or
          exchange all or substantially all of its assets to any other person or
          entity (other than an entity  wholly-owned by the Company),  (iii) the
          Company is to be dissolved or (iv) the Company is a party to any other
          corporate transaction (as defined under section 424(a) of the Code and
          applicable  Department of Treasury  Regulations) that is not described
          in clauses  (i),  (ii) or (iii) of this  sentence  (each such event is
          referred to herein as a "Corporate Change"), then, except as otherwise
          provided  in  an  Option  Agreement  or as a  result  of  the  Board's
          effectuation of one or more of the alternatives described below, there
          shall  be no  acceleration  of the  time  at  which  any  Option  then
          outstanding  may be  exercised,  and no later  than ten days after the
          approval by the stockholders of the Company of such Corporate  Change,
          the Board,  acting in its sole and  absolute  discretion  without  the
          consent or approval of any Holder,  shall act to effect one or more of
          the following  alternatives,  which may vary among individual  Holders
          and which may vary among Options held by any individual Holder:

          (A)  accelerate  the time at  which  some or all of the  Options  then
               outstanding  may  be  exercised  so  that  such  Options  may  be
               exercised  in full for a  limited  period  of time on or before a
               specified date (before or after such  Corporate  Change) fixed by
               the Board,  after  which  specified  date all such  Options  that
               remain  unexercised  and all rights of Holders  thereunder  shall
               terminate;

          (B)  require the mandatory surrender to the Company by all or selected
               Holders of some or all of the then  outstanding  Options  held by
               such  Holders  (irrespective  of whether  such  Options  are then
               exercisable  under  the  provisions  of this  Plan or the  Option
               Agreements evidencing such Options) as of a date, before or after
               such Corporate Change, specified by the Board, in which event the
               Board shall  thereupon  cancel such Options and the Company shall
               pay to each such  Holder an amount of cash per share equal to the
               excess, if any, of the per share price offered to stockholders of
               the Company in  connection  with such  Corporate  Change over the
               exercise prices under such Options for such shares;

          (C)  with  respect  to all or  selected  Holders,  have some or all of
               their  then  outstanding  Options  (whether  vested or  unvested)
               assumed or have a new Option substituted for some or all of their
               then  outstanding  Options  (whether  vested or  unvested)  by an
               entity  which is a party  to the  transaction  resulting  in such
               Corporate  Change and which is then employing him, or a parent or
               subsidiary of such entity,  provided that (1) such  assumption or
               substitution is on a basis where the excess of the aggregate fair
               market  value of the shares  subject  to the  Option  immediately
               after the assumption or substitution over the aggregate  exercise
               price of such shares is equal to the excess of the aggregate fair
               market  value of all shares  subject  to the  Option  immediately
               before  such  assumption  or  substitution   over  the  aggregate
               exercise  price of such shares,  and (2) the assumed rights under
               such  existing  Option or the  substituted  rights under such new
               Option as the case may be will have the same terms and conditions
               as the rights under the existing  Option  assumed or  substituted
               for, as the case may be;

          (D)  provide  that the  number  and class or series of shares of Stock
               covered by an Option  (whether  vested or  unvested)  theretofore
               granted  shall be adjusted  so that such  Option  when  exercised
               shall  thereafter  cover the number and class or series of shares
               of stock or other  securities  or  property  (including,  without
               limitation,  cash) to which the Holder  would have been  entitled
               pursuant to the terms of the  agreement or plan  relating to such
               Corporate Change if,  immediately prior to such Corporate Change,
               the  Holder had been the holder of record of the number of shares
               of Stock then covered by such Option; or

          (E)  make such  adjustments  to Options then  outstanding as the Board
               deems  appropriate  to reflect such Corporate  Change  (provided,
               however,  that the Board may  determine  in its sole and absolute
               discretion that no such adjustment is necessary).

          In effecting one or more of  alternatives  (C), (D) or (E) above,  and
          except as otherwise may be provided in an Option Agreement, the Board,
          in its sole  and  absolute  discretion  and  without  the  consent  or
          approval of any Holder,  may  accelerate the time at which some or all
          Options then outstanding may be exercised.

     (c)  In the  event  of  changes  in the  outstanding  Stock  by  reason  of
          recapitalizations,     reorganizations,    mergers,    consolidations,
          combinations,  exchanges or other relevant  changes in  capitalization
          occurring  after the date of the grant of any Option and not otherwise
          provided  for by this Section  4.5,  any  outstanding  Options and any
          agreements  evidencing  such Options shall be subject to adjustment by
          the Board in its sole and  absolute  discretion  as to the  number and
          price  of  shares  of Stock or  other  consideration  subject  to such
          Options. In the event of any such change in the outstanding Stock, the
          aggregate   number  of  shares   available  under  this  Plan  may  be
          appropriately  adjusted  by the Board,  whose  determination  shall be
          conclusive.

     (d)  After a merger of one or more corporations into the Company or after a
          consolidation of the Company and one or more corporations in which the
          Company  shall be the  surviving  corporation,  each  Holder  shall be
          entitled to have his Restricted Stock appropriately  adjusted based on
          the manner the Stock was adjusted  under the terms of the agreement of
          merger or consolidation.

     (e)  The issue by the Company of shares of Stock of any class or series, or
          securities  convertible  into  shares of Stock of any class or series,
          for cash or property, or for labor or services either upon direct sale
          or upon the exercise of rights or warrants to subscribe  for them,  or
          upon  conversion of shares or obligations  of the Company  convertible
          into shares or other securities,  shall not affect,  and no adjustment
          by reason of such issuance  shall be made with respect to, the number,
          class  or  series,  or price  of  shares  of  Stock  then  subject  to
          outstanding Options or Restricted Stock Awards.

4.6  Election  Under  Section  83(b) of the Code.  No Holder shall  exercise the
     election  permitted  under  section  83(b) of the Code with  respect to any
     Award without the written  approval of the Chief  Financial  Officer of the
     Company.  Any Holder who makes an election  under section 83(b) of the Code
     with  respect  to any  Award  without  the  written  approval  of the Chief
     Financial  Officer of the Company may, in the  discretion of the Committee,
     forfeit any or all Awards granted to him under the Plan.

                                   ARTICLE V

                                   OPTIONS

5.1  Type of Option.  The Committee shall specify in an Option Agreement whether
     a given Option is an Incentive  Option or a Nonqualified  Option.  However,
     notwithstanding  such  designation,  to the extent that the aggregate  Fair
     Market Value  (determined as of the time an Incentive Option is granted) of
     the Stock with  respect  to which  incentive  stock  options  first  become
     exercisable by an Employee during any calendar year (under the Plan and any
     other  incentive  stock  option  plan(s) of the  Company or any  Affiliate)
     exceeds  $100,000,  the Incentive Option shall be treated as a Nonqualified
     Option.  In making this  determination,  incentive  stock  options shall be
     taken into account in the order in which they were granted.

5.2  Exercise  Price.  The price at which Stock may be purchased under an Option
     shall not be less than 100 percent of the Fair  Market  Value of the shares
     of Stock on the date the Option is granted.  In the case of any Ten Percent
     Stockholder,  the price at which shares of Stock may be purchased  under an
     Incentive  Option  shall not be less than 110  percent  of the Fair  Market
     Value of the Stock on the date the Incentive Option is granted.

5.3  Duration of Options.  An Option shall not be exercisable  after the earlier
     of (i) the term of the  Option  specified  in the Option  Agreement  (which
     shall not exceed five years from the date the Option is granted in the case
     of an Incentive Option granted to a Ten Percent  Stockholder,  or ten years
     from the date the Option is granted  in the case of any other  Option),  or
     (ii)  the  period  of time  specified  herein  that  follows  the  Holder's
     Retirement,  Disability,  death or other  severance  of the  employment  or
     affiliation  relationship  between  the  Holder  and  the  Company  and all
     Affiliates. Except as specified in Section 9.11, unless the Holder's Option
     Agreement specifies  otherwise,  an Option shall not continue to vest after
     the severance of the  employment or  affiliation  relationship  between the
     Company and all Affiliates.

     (a)  General  Term of  Option.  Unless  the Option  Agreement  specifies  a
          shorter term, an Option shall expire on the tenth  anniversary  of the
          date the Option is granted.  Notwithstanding the foregoing, unless the
          Option Agreement specifies a shorter term, in the case of an Incentive
          Option granted to a Ten Percent  Stockholder,  the Option shall expire
          on the fifth anniversary of the date the Option is granted.

     (b)  Early  Termination  of  Option  Due  to  Severance  of  Employment  or
          Affiliation   Relationship  (Other  Than  for  Death,   Disability  or
          Retirement).  Except  as may be  otherwise  expressly  provided  in an
          Option  Agreement,  (i) an Option  that has been  granted  to a person
          other than a Non-Employee  Director and that has been in effect for at
          least two years  shall  terminate  on the  earlier  of the date of the
          expiration of the general term of the Option or 90 days after the date
          of the termination of the employment  relationship  between the Holder
          and the  Company  and all  Affiliates  for any  reason  other than the
          death, Disability or Retirement of the Holder, and (ii) an Option that
          has been  granted to a person other than a  Non-Employee  Director and
          that has been in effect for less than two years shall terminate on the
          earlier  of the  date of the  expiration  of the  general  term of the
          Option or 30 days after the date of the  termination of the employment
          relationship between the Holder and the Company and all Affiliates for
          any reason  other  than the death,  Disability  or  Retirement  of the
          Holder,  during  which period the Holder shall be entitled to exercise
          the Option in respect  of the number of shares  that the Holder  would
          have been entitled to purchase had the Holder  exercised the Option on
          the date of such termination of employment.  Whether  authorized leave
          of  absence,  or absence on  military  or  government  service,  shall
          constitute a termination  of the employment  relationship  between the
          Holder and the Company and all  Affiliates  shall be determined by the
          Committee at the time thereof.

          Except as may be otherwise  expressly provided in an Option Agreement,
          an Option  that has been  granted  to a  Non-Employee  Director  shall
          terminate on the earlier of the date of the  expiration of the general
          term of the Option or 90 days after the  Non-Employee  Director  is no
          longer a director of the  Company for any reason  other than the death
          or Disability of the Holder.

     (c)  Early Termination of Option Due to Death.  Unless the Option Agreement
          specifies  otherwise,  in the event of the severance of the employment
          or affiliation relationship between the Holder and the Company and all
          Affiliates  due to death before the date of  expiration of the general
          term of the Option, the Holder's Option shall terminate on the earlier
          of the date of  expiration  of the  general  term of the Option or 180
          days after the Holder's death.

     (d)  Early  Termination  of Option Due to  Disability.  With  respect to an
          Option granted to a person other than a Non-Employee Director,  unless
          the  Option  Agreement  specifies  otherwise,  in  the  event  of  the
          severance of the  employment  relationship  between the Holder and the
          Company and all  Affiliates  due to Disability  before the date of the
          expiration  of the  general  term  of the  Option,  the  Option  shall
          terminate on the earlier of the  expiration of the general term of the
          Option or 90 days after the termination of the employment relationship
          between the Holder and the Company and all  Affiliates  terminates due
          to Disability.

          In the event his affiliation relationship is terminated as a result of
          Disability,  a Holder who is a  Non-Employee  Director may exercise an
          Option for a period of 180 days after the Non-Employee  Director is no
          longer a director of the Company or until the expiration of the Option
          period,  if sooner,  to the extent of the Stock with  respect to which
          the  Option  could have been  exercised  by the Holder on the date the
          Non-Employee Director ceases being a director of the Company.

     (e)  Early  Termination  of Option  Due to  Retirement.  Unless  the Option
          Agreement  specifies  otherwise,  if the Holder is an Employee and the
          employment  relationship  between  the Holder and the  Company and all
          Affiliates  terminates by reason of  Retirement,  the Holder's  Option
          shall  terminate on the earlier of the  expiration of the general term
          of the Option or one day less than three  months after the date of the
          Holder's termination of employment due to Retirement.

          After the death of the Holder, the Holder's executors,  administrators
          or  any  person  or  persons  to  whom  the  Holder's  Option  may  be
          transferred by will or by the laws of descent and distribution,  shall
          have the right,  at any time prior to the termination of the Option to
          exercise  the  Option,  in respect  to the  number of shares  that the
          Holder  would have been  entitled to exercise if the Holder  exercised
          the Option prior to his death.

5.4  Amount Exercisable. Each Option may be exercised at the time, in the manner
     and  subject  to the  conditions  the  Committee  specifies  in the  Option
     Agreement in its sole discretion.  If specified in the Option Agreement, an
     Option  will be  exercisable  in full  upon the  occurrence  of a Change of
     Control.

5.5  Exercise of Options.  Each Option  shall be  exercised  by the  delivery of
     written  notice to the Company  setting forth the number of shares of Stock
     with respect to which the Option is to be  exercised,  together  with:  (a)
     cash, a certified  check,  a bank draft or a postal or express  money order
     payable to the order of the  Company  for an amount  equal to the  exercise
     price under the Option,  (b) Mature  Shares with a Fair Market Value on the
     date of exercise  equal to the  exercise  price  under the  option,  (c) an
     election to make a cashless exercise through a registered  broker-dealer or
     (d)  except  as  specified  below,  any  other  form of  payment  which  is
     acceptable  to the  Committee,  and  specifying  the  address  to which the
     certificates  for the  shares of Stock are to be mailed or the  information
     necessary for the Company to effect an electronic transfer of the shares of
     Stock.  If Mature Shares are used for payment by the Holder,  the aggregate
     Fair Market Value of the shares of Stock  tendered must be equal to or less
     than the aggregate  exercise  price of the shares of Stock being  purchased
     upon exercise of the Option,  and any  difference  must be paid pursuant to
     (a) above. As promptly as practicable after receipt of written notification
     and payment,  the Company  shall deliver the number of shares of Stock with
     respect to which the Option has been exercised, issued as designated by the
     Holder.  Delivery of the shares of Stock shall be deemed  effected  for all
     purposes when the transfer  agent of the Company  shall have  deposited the
     certificates  in the United  States mail,  to the address  specified by the
     Holder,  or  when  the  shares  have  been  transferred  electronically  as
     designated  by the Holder.  In lieu of tendering  the Mature  Shares to the
     Company for the exercise price  pursuant to (b) above,  the Company may, in
     its sole discretion,  accept documentation  provided by the Holder that the
     Holder owns the Mature  Shares  necessary for exercise and would be able to
     deliver them to the Company if requested by the Company,  in which case the
     Company  will  deliver  only the Net Shares.  The  Company  shall have sole
     discretion in  determining  that the shares are Mature Shares and that they
     are  unencumbered,  transferable,  and  acceptable  by the Company for this
     purpose.

     The delivery of certificates upon the exercise of Options is subject to the
     condition  that the person  exercising  the Option provide the Company with
     the  information  the  Company  might  reasonably   request  pertaining  to
     exercise, sale or other disposition.

     Electronic transfer of shares of Stock may be effected by the Company it is
     sole discretion, in lieu of issuance of physical share certificate(s).

     The Company may permit a Holder to elect to pay the exercise price upon the
     exercise of an Option by authorizing a third-party  broker to sell all or a
     portion of the shares of Stock  acquired  upon  exercise  of the Option and
     remit to the Company a sufficient  portion of the sale  proceeds to pay the
     exercise  price and any  applicable  tax  withholding  resulting  from such
     exercise.

     An Option may not be exercised for a fraction of a Common Share.

5.6  Substitution  Options.  Options may be granted  under the Plan from time to
     time  in  substitution  for  stock  options  held  by  employees  of  other
     corporations  who are about to become  employees of or affiliated  with the
     Company or any Affiliate as the result of a merger or  consolidation of the
     employing corporation with the Company or any Affiliate, or the acquisition
     by the Company or any Affiliate of the assets of the employing corporation,
     or the  acquisition  by  the  Company  or any  Affiliate  of  stock  of the
     employing corporation as the result of which it becomes an Affiliate of the
     Company.  The terms and  conditions of the substitute  Options  granted may
     vary from the terms and  conditions  set out in the Plan to the  extent the
     Committee,  at the time of grant, may deem appropriate to conform, in whole
     or in part,  to the  provisions of the stock  options in  substitution  for
     which they are granted.

5.7  No Rights as Stockholder.  No Holder shall have any rights as a Stockholder
     with  respect to Stock  covered by his Option until the shares of Stock are
     delivered to him.

                                   ARTICLE VI

                             RESTRICTED STOCK AWARDS

6.1  Restricted Stock Awards.  The Committee may make Awards of Restricted Stock
     to  eligible  persons  selected  by it. The amount of, the  vesting and the
     transferability  restrictions  applicable  to, any  Restricted  Stock Award
     shall be  determined  by the  Committee in its sole  discretion;  provided,
     however, that the minimum vesting period for any Awards of Restricted Stock
     should  normally be ratably  over a period of three years and, in no event,
     less than one year. If the  Committee  imposes  vesting or  transferability
     restrictions  on a Holder's  rights  with  respect to shares of  Restricted
     Stock, the Committee may issue such instructions to the Company's  transfer
     agent in connection  therewith as it deems  appropriate.  The Committee may
     also cause the certificate for shares issued pursuant to a Restricted Stock
     Award to be  imprinted  with  any  legend  which  counsel  for the  Company
     considers  advisable with respect to the restrictions or, should the shares
     of  Stock  be  represented  by  book  or  electronic  entry  rather  than a
     certificate,  the Company  may take such steps to restrict  transfer of the
     shares of Stock as counsel for the Company considers necessary or advisable
     to comply  with  applicable  law.  Each  Restricted  Stock  Award  shall be
     evidenced by a Restricted  Stock Award Agreement that contains any vesting,
     transferability restrictions and other provisions that are not inconsistent
     with the Plan as the Committee may specify.

6.2  Holder's Rights as Stockholder.  Subject to the terms and conditions of the
     Plan,  each  Holder of  Restricted  Stock  shall  have all the  rights of a
     shareholder  with respect to the shares of Stock included in the Restricted
     Stock  Award  during  any  period  in which  such  shares  are  subject  to
     forfeiture and restrictions on transfer,  including without limitation, the
     right to vote such shares,  if  unrestricted  shares of the same class have
     the right to vote.  Dividends  paid with  respect  to shares of  Restricted
     Stock in cash or  property  other  than  Stock in the  Company or rights to
     acquire  shares  of  Stock  in the  Company  shall  be paid  to the  Holder
     currently.  Dividends  paid in Stock in the  Company  or rights to  acquire
     Stock in the Company shall be added to and become a part of the  Restricted
     Stock.

                                  ARTICLE VII

                                ADMINISTRATION

The Plan shall be administered by the Committee. All questions of interpretation
and application of the Plan and Awards shall be subject to the  determination of
the  Committee.  A majority of the members of the Committee  shall  constitute a
quorum.  All  determinations of the Committee shall be made by a majority of its
members.  Any  decision  or  determination  reduced to  writing  and signed by a
majority  of the  members  shall be as  effective  as if it had  been  made by a
majority  vote at a  meeting  properly  called  and  held.  The  Plan  shall  be
administered  in such a manner as to permit the Options which are  designated to
be  Incentive  Options to qualify as  Incentive  Options.  In  carrying  out its
authority  under the Plan, the Committee shall have full and final authority and
discretion,  including  but not  limited  to the  following  rights,  powers and
authorities, to:

     (a)  determine  the  persons to whom and the time or times at which  Awards
          will be made;

     (b)  determine the number of shares and the exercise price of Stock covered
          in each Award, subject to the terms of the Plan;

     (c)  determine the terms,  provisions and  conditions of each Award,  which
          need not be identical;

     (d)  accelerate the time at which any outstanding  Option may be exercised,
          or Restricted Stock Award will vest;

     (e)  define  the  effect,  if any,  on an Award of the  death,  disability,
          retirement or termination  of employment or  affiliation  relationship
          between the Holder and the Company and Affiliates;

     (f)  prescribe,  amend  and  rescind  rules  and  regulations  relating  to
          administration of the Plan; and

     (g)  make  all  other  determinations  and take all  other  actions  deemed
          necessary,  appropriate or advisable for the proper  administration of
          the Plan.

     The actions of the Committee in exercising all of the rights,  powers,  and
     authorities  set out in this  Article  and all other  Articles of the Plan,
     when  performed  in good  faith and in its sole  judgment,  shall be final,
     conclusive and binding on all parties.

                                  ARTICLE VIII

                        AMENDMENT OR TERMINATION OF PLAN

The Board or the Committee may amend, terminate or suspend the Plan at any time,
in its sole and  absolute  discretion;  provided,  however,  that to the  extent
required to  maintain  the status of any  Incentive  Option  under the Code,  no
amendment that would change the aggregate number of shares of Stock which may be
issued under  Incentive  Options,  or change the class of Employees  eligible to
receive  Incentive  Options  shall be made without the approval of the Company's
stockholders.  Subject to the preceding sentence, the Board shall have the power
to make  any  changes  in the  Plan and in the  regulations  and  administrative
provisions under it or in any outstanding  Incentive Option as in the opinion of
counsel for the Company may be  necessary  or  appropriate  from time to time to
enable any Incentive  Option granted under the Plan to continue to qualify as an
incentive  stock option or such other stock  option as may be defined  under the
Code so as to receive preferential federal income tax treatment.

                                   ARTICLE IX

                                  MISCELLANEOUS

9.1  No  Establishment of a Trust Fund. No property shall be set aside nor shall
     a trust fund of any kind be  established to secure the rights of any Holder
     under the Plan. All Holders shall at all times rely solely upon the general
     credit of the Company for the payment of any benefit which becomes  payable
     under the Plan.

9.2  No  Employment  or  Affiliation  Obligation.  The granting of any Option or
     Award shall not constitute an employment contract,  express or implied, nor
     impose  upon the  Company  or any  Affiliate  any  obligation  to employ or
     continue to employ,  or utilize the services  of, any Holder.  The right of
     the Company or any  Affiliate to  terminate  the  employment  of any person
     shall not be diminished or affected by reason of the fact that an Option or
     Award has been granted to him.

9.3  Forfeiture.  Notwithstanding  any  other  provisions  of the  Plan,  if the
     Committee  finds by a majority vote after full  consideration  of the facts
     that  the  Holder,  before  or  after  termination  of  his  employment  or
     affiliation  relationship  with the Company or an Affiliate  for any reason
     committed or engaged in willful misconduct,  gross negligence,  a breach of
     fiduciary duty,  fraud,  embezzlement,  theft, a felony,  a crime involving
     moral turpitude or proven dishonesty in the course of his employment by the
     Company or an Affiliate,  which  conduct  damaged the Company or Affiliate,
     the Holder  shall  forfeit  all  outstanding  Options  and all  outstanding
     Awards,  and all  exercised  Options if the Company  has not yet  delivered
     Stock to the Holder with respect thereto.

     The decision of the  Committee  as to the cause of the Holder's  discharge,
     the damage done to the Company or an Affiliate  shall be final. No decision
     of the  Committee,  however,  shall affect the finality of the discharge of
     the Holder by the Company or an Affiliate in any manner.

9.4  Tax  Withholding.  Except with respect to each Holder who is a Non-Employee
     Director,  the  Company or any  Affiliate  shall be entitled to deduct from
     other  compensation  payable to each  Holder any sums  required by federal,
     state or local tax law to be withheld with respect to the grant or exercise
     of an  Option,  or  lapse  of  restrictions  on  Restricted  Stock.  In the
     alternative,  the  Company  may  require the Holder of an Award to pay such
     sums for taxes directly to the Company or any Affiliate in cash or by check
     within ten days after the date of exercise or lapse of restrictions. In the
     discretion of the Company,  and with the consent of the Holder, the Company
     may  reduce the  number of shares of Stock  issued to the  Holder  upon his
     exercise of an Option to satisfy  the tax  withholding  obligations  of the
     Company or an Affiliate;  provided that the Fair Market Value of the shares
     held  back  shall not  exceed  the  Company's  or the  Affiliate's  minimum
     statutory withholding tax obligations.  The Company may, in its discretion,
     permit a Holder to satisfy any tax withholding obligations arising upon the
     vesting of Restricted  Stock by delivering to the Holder of the  Restricted
     Stock  Award a reduced  number of shares of Stock in the  manner  specified
     herein.  If permitted by the Company and  acceptable to the Holder,  at the
     time of  vesting  of shares of  Restricted  Stock,  the  Company  shall (i)
     calculate the amount of the Company's or an Affiliate's  minimum  statutory
     tax withholding obligation on the assumption that all such vested shares of
     Restricted Stock are made available for delivery, (ii) reduce the number of
     such shares made  available  for  delivery so that the Fair Market Value of
     the shares withheld on the vesting date  approximates the amount of tax the
     Company or an  Affiliate  is obliged to  withhold  and (iii) in lieu of the
     withheld  shares,  remit  cash to the  United  States  Treasury  and  other
     applicable governmental authorities, on behalf of the Holder, in the amount
     of the withholding tax due. The Company shall withhold only whole shares of
     Stock to satisfy its withholding obligation. Where the Fair Market Value of
     the  withheld   shares  does  not  equal  the  Company's   withholding  tax
     obligation,  the Company  shall  withhold  shares with a Fair Market  Value
     slightly less than the amount of its withholding  obligation and the Holder
     of the  Restricted  Stock  Award must  satisfy  the  remaining  withholding
     obligation  in some other  manner  permitted  under this  Section  9.4. The
     withheld shares of Restricted  Stock not made available for delivery by the
     Company  shall be retained as treasury  stock or will be cancelled  and, in
     either case,  the  Holder's  right,  title and interest in such  Restricted
     Stock shall  terminate.  The Company shall have no obligation upon exercise
     of any  Option  or lapse of  restrictions  on  Restricted  Stock  until the
     Company or an Affiliate  has received  payment  sufficient to cover all tax
     withholding amounts due with respect to that exercise.  Neither the Company
     nor any Affiliate shall be obligated to advise a Holder of the existence of
     the tax or the amount which it will be required to withhold.

9.5  Written  Agreement.  Each Award shall be  embodied  in a written  agreement
     which shall be subject to the terms and conditions of the Plan and shall be
     signed  by the  Holder  and by a member of the  Committee  on behalf of the
     Committee  and the Company or an executive  officer of the  Company,  other
     than the Holder,  on behalf of the Company.  The  agreement may contain any
     other  provisions that the Committee in its discretion shall deem advisable
     which are not inconsistent with the terms of the Plan.

9.6  Indemnification of the Committee.  The Company shall indemnify each present
     and  future  member  of the  Committee  against,  and  each  member  of the
     Committee  shall be entitled  without  further act on his part to indemnity
     from the Company for, all expenses  (including  attorney's fees, the amount
     of judgments and the amount of approved settlements made with a view to the
     curtailment of costs of litigation,  other than amounts paid to the Company
     itself) reasonably incurred by him in connection with or arising out of any
     action,  suit or  proceeding  in which he may be  involved by reason of his
     being or having been a member of the Committee, whether or not he continues
     to be a member of the  Committee  at the time of  incurring  the  expenses,
     including,  without  limitation,  matters  as to which he shall be  finally
     adjudged in any action,  suit or proceeding to have been found to have been
     negligent  in the  performance  of his duty as a member  of the  Committee.
     However,  this  indemnity  shall not include any  expenses  incurred by any
     member of the  Committee  in  respect  of  matters  as to which he shall be
     finally  adjudged in any action,  suit or proceeding to have been guilty of
     gross negligence or willful  misconduct in the performance of his duty as a
     member of the Committee. In addition, no right of indemnification under the
     Plan shall be available to or  enforceable  by any member of the  Committee
     unless, within 60 days after institution of any action, suit or proceeding,
     he shall have offered the Company,  in writing,  the  opportunity to handle
     and defend same at its own  expense.  This right of  indemnification  shall
     inure to the  benefit of the heirs,  executors  or  administrators  of each
     member of the  Committee  and shall be in addition  to all other  rights to
     which a  member  of the  Committee  may be  entitled  as a  matter  of law,
     contract or otherwise.

9.7  Gender. If the context requires,  words of one gender when used in the Plan
     shall  include  the other and words used in the  singular  or plural  shall
     include the other.

9.8  Headings. Headings of Articles and Sections are included for convenience of
     reference only and do not constitute part of the Plan and shall not be used
     in construing the terms of the Plan.

9.9  Other  Compensation  Plans.  The  adoption of the Plan shall not affect any
     other stock  option,  incentive or other  compensation  or benefit plans in
     effect for the Company or any  Affiliate,  nor shall the Plan  preclude the
     Company  from  establishing  any  other  forms  of  incentive  compensation
     arrangements for Employees.

9.10 Other  Options or Awards.  The grant of an Award  shall not confer upon the
     Holder the right to  receive  any  future or other  Awards  under the Plan,
     whether or not Awards may be granted to similarly situated Holders,  or the
     right  to  receive  future  Awards  upon the same  terms or  conditions  as
     previously granted.

9.11 Option   Adjustments   Pursuant  to  the   Employee   Benefits   Agreement.
     Notwithstanding any other provision of the Plan or an Option Agreement, the
     exercise price  applicable to each outstanding  Option,  to the extent that
     the Option has not expired or been exercised as of the  Distribution  Date,
     shall be reduced in accordance with the formula  specified in paragraph (b)
     of Section 3.1 of the  Employee  Benefits  Agreement.  Notwithstanding  any
     other  provisions  of the  Plan  or  Option  Agreement,  the  term  of each
     outstanding  Option,  to the extent that the Option has not expired or been
     exercised  as of the  Distribution  Date,  shall be  adjusted in the manner
     specified  in  paragraph  (e)  of  Section  3.1 of  the  Employee  Benefits
     Agreement.

9.12 Governing Law. The provisions of the Plan shall be construed,  administered
     and governed under the laws of the State of Texas.