FRANKLIN RESOURCES, INC.
            AMENDED AND RESTATED 1998 UNIVERSAL STOCK INCENTIVE PLAN

1.   GENERAL

     1.1  PURPOSE.  The  Franklin  Resources,  Inc.  Amended and  Restated  1998
Universal  Stock  Incentive  Plan (the "Amended  Plan") has been  established by
Franklin Resources,  Inc., a Delaware corporation (the "Company") to (i) attract
and retain persons  eligible to  participate in the Amended Plan;  (ii) motivate
Employees, by means of appropriate incentives, to achieve long-range performance
goals; (iii) provide incentive  compensation  opportunities that are competitive
with those of other  similar  companies;  and (iv) further  identify  Employees'
interests with those of the Company's other  stockholders  through  compensation
that is based on the Company's  common stock;  and thereby promote the long-term
financial interest of the Company and the Subsidiaries.

     1.2 PARTICIPATION. Subject to the terms and conditions of the Amended Plan,
the Committee shall  determine and designate,  from time to time, from among the
Eligible  Employees,  those persons who will be granted one or more Awards under
the  Amended  Plan.  An  Eligible  Employee  who  receives  an Award  shall be a
"Participant"  under the Amended Plan. In the  discretion of the  Committee,  an
Employee may be granted any Award  permitted under the provisions of the Amended
Plan,  and more than one Award may be  granted to a  Participant.  Awards may be
granted  as  alternatives  to or  replacement  of awards  outstanding  under the
Amended  Plan, or any other plan or  arrangement  of the Company or a Subsidiary
(including a plan or  arrangement  of a business or entity,  all or a portion of
which is acquired by the Company or a Subsidiary).

     1.3  OPERATION,   ADMINISTRATION,   AND  DEFINITIONS.   The  operation  and
administration of the Amended Plan,  including the Awards made under the Amended
Plan, shall be subject to the provisions of Section 4 (relating to operation and
administration).  Capitalized  terms in the Amended Plan shall be defined as set
forth in the Amended Plan  (including the definition  provisions of Section 8 of
the Amended Plan).

     1.4  STOCK  SUBJECT  TO  AMENDED  PLAN;  SHARE  COUNTING.  Subject  to  the
provisions of this Section 1.4 and Section 6.1 of the Amended Plan,  the maximum
aggregate  number of shares which may be delivered  pursuant to Options  granted
under the Plan is  20,000,000.  The shares may be authorized,  but unissued,  or
reacquired Common Stock.

          (a) To the extent any Shares  covered by an Award are not delivered to
     a Participant or beneficiary because the Award is forfeited or canceled, or
     the Shares are not  delivered  because  the Award is settled in cash,  such
     Shares  shall  not be  deemed  to  have  been  delivered  for  purposes  of
     determining the maximum number of Shares available for delivery pursuant to
     Awards granted under the Amended Plan.
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          (b) If the  exercise  price of any  Option  granted  under the Plan is
     satisfied by tendering  Shares to the Company (by either actual delivery or
     by  attestation),  only the  number  of  Shares  issued  net of the  Shares
     tendered shall be deemed  delivered for purposes of determining the maximum
     number of Shares  available  for  delivery  pursuant to Awards  (other than
     Options) granted under the Plan.

          (c) Subject to adjustment under Section 6.1, (i) the maximum number of
     shares  that may be granted  to any one  individual  pursuant  to Section 2
     (relating  to  Options  and  SARs)  shall  be  250,000  Shares  during  any
     one-calendar-year  period and (ii) the maximum number of Shares that may be
     granted to any one individual  subject to Section 3 (relating to Stock Unit
     Awards,   Restricted  Stock  Awards,   Restricted  Stock  Unit  Awards  and
     Performance   Share   Awards)   shall  be  1,000,000   Shares   during  any
     one-calendar-year period (regardless of when such Shares are deliverable).

2.   OPTIONS AND SARS

     2.1 OPTIONS.

          (a) An Option is a grant of rights to  purchase  Shares at an Exercise
     Price  established by the Committee.  Options  granted under this Section 2
     may be either Incentive Stock Options ("ISO") or Nonstatutory Stock Options
     ("NSO"), as determined in the discretion of the Committee.

          (b) Each Option shall be designated in the written option agreement as
     either an Incentive Stock Option or a Nonstatutory  Stock Option.  However,
     notwithstanding  such  designations,  to the extent that the aggregate Fair
     Market  Value of the Shares with  respect to which  Options  designated  as
     Incentive  Stock Options are exercisable for the first time by any Optionee
     during any  calendar  year (under all plans of the Company or any Parent or
     Subsidiary)  exceeds  $100,000,  such excess Options shall be automatically
     treated as  Nonstatutory  Stock  Options.  For  purposes of this  paragraph
     2.1(b), Incentive Stock Options shall be taken into account in the order in
     which they were  granted,  and the Fair Market Value of the Shares shall be
     determined  as of the original  date the Option with respect to such Shares
     is granted.

          (c) The term of each  Option  shall be the term  stated in the  Option
     Agreement;  provided,  however,  that in the  case of any  Incentive  Stock
     Option,  the term  shall be no more  than ten (10)  years  from the date of
     grant  thereof  or such  shorter  term  as may be  provided  in the  Option
     Agreement.  However, in the case of an Incentive Stock Option granted to an
     Optionee  who, at the time the Option is granted,  owns stock  representing
     more than ten percent  (10%) of the voting power of all classes of stock of
     the Company or any Parent or  Subsidiary,  the term of the Option  shall be
     five (5) years from the date of grant  thereof or such  shorter term as may
     be provided in the Option Agreement.

          (d) The date of grant of an Option  shall,  for all  purposes,  be the
     date on which the Committee makes the  determination  granting such Option,
     or  such  other  date  as  is  determined  by  the  Board.  Notice  of  the

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     determination  shall be  given to each  Employee  to whom an  Option  is so
     granted within a reasonable time after the date of such grant.

     2.2 STOCK APPRECIATION  RIGHTS. A "Stock  Appreciation  Right" ("SAR") is a
grant of rights to receive,  in cash or Stock (as determined by the  Committee),
value equal to (or otherwise  based on) the excess of: (a) the Fair Market Value
of a specified  number of Shares at the time of  exercise;  over (b) an Exercise
Price established by the Committee.

     2.3 EXERCISE PRICE. The Exercise Price of each Option and SAR shall be
established by the Committee or shall be determined by a method established by
the Committee at the time the Option or SAR is granted; provided that:

          (a) In the case of an ISO,

                    (i) granted to an Employee  who, at the time of the grant of
               such Incentive Stock Option,  owns stock  representing  more than
               ten percent  (10%) of the voting power of all classes of stock of
               the Company or any Parent or  Subsidiary,  the per Share exercise
               price  shall be no less  than 110% of the Fair  Market  Value per
               Share on the date of grant.

                    (ii) granted to any Employee,  the per Share  exercise price
               shall be no less than 100% of the Fair Market  Value per Share on
               the date of grant.

     2.4 TIME AND MANNER OF EXERCISE.  Options and SARs shall be  exercisable in
accordance  with such terms and  conditions  and during  such  periods as may be
established by the Committee; subject to the following terms regarding Options:

          (a)  TERMINATION  OF  EMPLOYMENT.  In the event of  termination  of an
     Optionee's Continuous Status as an Employee with the Company, such Optionee
     may,  but only within  ninety (90) days after the date of such  termination
     (or  such  other  period  as is  set  out by the  Committee  in the  Option
     Agreement,  but in no event later than the  expiration  date of the term of
     such Option as set forth in the Option  Agreement),  exercise the Option to
     the extent that  Optionee  was  entitled to exercise it at the date of such
     termination.  To the extent that  Optionee was not entitled to exercise the
     Option at the date of such  termination,  or if Optionee  does not exercise
     such Option to the extent so entitled within the time specified herein, the
     Option shall terminate.

          (b)  DISABILITY  OF  OPTIONEE.   Notwithstanding   the  provisions  of
     paragraph  2.4(a)  above,  in the  event of  termination  of an  Optionee's
     Continuous  Status as an Employee as a result of disability  (as determined
     by the Board in accordance with the policies of the Company), Optionee may,
     but only within six (6) months from the date of such  termination  (or such
     other period as is set out by the Committee in the Option Agreement, but in
     no event later than the  expiration  date of the term of such Option as set
     forth in the Option Agreement), exercise the Option to the extent otherwise
     entitled to exercise it at the date of such termination. To the extent that
     Optionee   was  not  entitled  to  exercise  the  Option  at  the  date  of

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     termination,  or if Optionee does not exercise such Option to the extent so
     entitled within the time specified herein, the Option shall terminate.

          (c) DEATH OF OPTIONEE.  In the event of the death of an Optionee,  the
     Option may be exercised,  at any time within  twelve (12) months  following
     the date of death (or such other  period as is set out by the  Committee in
     the Option Agreement, but in no event later than the expiration date of the
     term  of  such  Option  as set  forth  in  the  Option  Agreement),  by the
     Optionee's  estate or by a person who  acquired  the right to exercise  the
     Option by bequest or  inheritance,  but only to the extent the Optionee was
     entitled  to exercise  the Option at the date of death.  To the extent that
     Optionee   was  not  entitled  to  exercise  the  Option  at  the  date  of
     termination,  or if Optionee does not exercise such Option to the extent so
     entitled within the time specified herein, the Option shall terminate.

     2.5 PAYMENT OF EXERCISE  PRICE.  Payment of the Exercise Price of an Option
shall be subject to the following:

          (a) The full Exercise Price for Shares  purchased upon the exercise of
     any Option shall be paid at the time of such exercise  (except that, in the
     case of an exercise  arrangement approved by the Committee and described in
     paragraph  2.5(b),  payment  may be made as soon as  practicable  after the
     exercise).

          (b) The  consideration  to be paid for the  Shares to be  issued  upon
     exercise of an Option, including the method of payment, shall be determined
     by the Committee (and, in the case of an Incentive  Stock Option,  shall be
     determined at the time of grant) and may consist entirely of (i) cash, (ii)
     check,  (iii) other Shares (by  delivery of  certificates  or  attestation)
     which (x) either have been owned by the  Optionee  for more than six months
     on the date of surrender or were not acquired, directly or indirectly, from
     the  Company,  and (y) have a Fair  Market  Value on the date of  surrender
     equal to the aggregate exercise price of the Shares as to which said Option
     shall be  exercised,  (iv)  delivery  of  authorization  for the Company to
     retain from the total  number of Shares as to which the Option is exercised
     that number of Shares  having a Fair  Market  Value on the date of exercise
     equal to the exercise  price for the total number of Shares as to which the
     Option is exercised,  (v) delivery of a properly  executed  exercise notice
     together with  irrevocable  instructions to a broker to promptly deliver to
     the  Company  the  amount  of  sale or loan  proceeds  required  to pay the
     exercise price,  (vi) irrevocably  authorizing a third party to sell Shares
     (or a  sufficient  portion of the  shares)  acquired  upon  exercise of the
     Option and remit to the Company a sufficient  portion of the sale  proceeds
     to pay the entire  Exercise  Price and any tax  withholding  resulting from
     such exercise,  (vii) any combination of the foregoing  methods of payment,
     (viii) or such other  consideration  and method of payment for the issuance
     of Shares to the extent permitted under Applicable Laws.

     2.6 SETTLEMENT OF AWARD.  Shares  delivered  pursuant to the exercise of an
Option  or  SAR  shall  be  subject  to  such   conditions,   restrictions   and
contingencies  as the Committee may establish in the applicable  Award Agreement
at the time of grant.  Settlement of SARs may be made in Shares (valued at their
Fair  Market  Value  at the time of  exercise),  in  cash,  or in a  combination
thereof, as determined in the discretion of the Committee. The Committee, in its

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discretion,  may impose such  conditions,  restrictions and  contingencies  with
respect to Shares  acquired  pursuant to the  exercise of an Option or an SAR as
the Committee determines to be desirable.

3.   OTHER STOCK AWARDS

     3.1 DEFINITIONS.

          (a) A "Stock Unit" Award is the grant of a right to receive  Shares in
     the future.

          (b) A  "Performance  Share"  Award is a grant  of a right  to  receive
     Shares or Stock Units which is contingent on the achievement of performance
     or other objectives during a specified period.

          (c) A "Restricted Stock" Award is a grant of Shares, and a "Restricted
     Stock Unit" Award is the grant of a right to receive  Shares in the future,
     with such Shares or right to future  delivery  of such Shares  subject to a
     risk  of  forfeiture  or  other  restrictions  that  will  lapse  upon  the
     achievement  of one or more goals  relating to completion of service by the
     Employee, or achievement of performance or other objectives,  as determined
     by the Committee.

     3.2 RESTRICTIONS ON STOCK AWARDS.  Each Stock Unit Award,  Restricted Stock
Award,  Restricted Stock Unit Award and Performance Share Award shall be subject
to the following:

          (a) Any such Award shall be subject to such  conditions,  restrictions
     and contingencies as the Committee shall determine.

          (b) The Committee  may designate  whether any such Award being granted
     to any Employee are intended to be "performance-based compensation" as that
     term is used in Section 162(m) of the Code.  Any such Awards  designated as
     intended to be "performance-based compensation" shall be conditioned on the
     achievement of one or more Performance  Measures.  The Performance Measures
     that may be used by the Committee for such Awards shall be based on any one
     or more of the criteria attached hereto on Attachment I, as selected by the
     Committee. For Awards intended to be "performance-based  compensation," the
     grant of the Awards and the establishment of the Performance Measures shall
     be made during the period  required  under  Section  162(m) of the Code and
     shall be subject to the  individual  share limit set out in Section  1.4(c)
     above.

4.   OPERATION AND ADMINISTRATION

     4.1  EFFECTIVE  DATE.  Subject to the approval of the  stockholders  of the
Company at the Company's  2000 annual meeting of its  stockholders,  the Amended
Plan shall be effective as of October 28, 2000 (the "Effective Date"); provided,
however, that to the extent that Awards are granted under the Amended Plan prior
to its approval by  stockholders,  the Awards shall be contingent on approval of
the Amended Plan by the stockholders of the Company at such annual meeting.  The

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Amended Plan shall be  unlimited  in duration  and, in the event of Amended Plan
termination,  shall  remain  in  effect  as  long  as any  Awards  under  it are
outstanding; provided, however, that, to the extent required by the Code, no ISO
may be granted under the Amended Plan on a date that is more than ten years from
the date the Amended  Plan is adopted or, if earlier,  the date the Amended Plan
is approved by stockholders.

     4.2 GENERAL  RESTRICTIONS.  Delivery of Shares or other  amounts  under the
Amended Plan shall be subject to the following:

          (a)  Notwithstanding  any other  provision  of the Amended  Plan,  the
     Company  shall have no  liability  to deliver any Shares  under the Amended
     Plan or make any other  distribution  of benefits  under the  Amended  Plan
     unless such delivery or distribution  would comply with all applicable laws
     (including,  without limitation,  the requirements of the Securities Act of
     1933),  and the  applicable  requirements  of any  securities  exchange  or
     similar entity.

          (b) To the extent that the Amended Plan provides for issuance of stock
     certificates  to reflect  the  issuance  of  Shares,  the  issuance  may be
     effected  on a  non-certificated  basis,  to the extent not  prohibited  by
     applicable law or the applicable rules of any stock exchange.

     4.3 TAX WITHHOLDING.  All distributions  under the Amended Plan are subject
to  withholding  of all  applicable  taxes,  and the Committee may condition the
delivery of any shares or other benefits under the Amended Plan on  satisfaction
of the applicable withholding obligations. The Committee, in its discretion, and
subject to such requirements as the Committee may impose prior to the occurrence
of such  withholding,  may permit such  withholding  obligations to be satisfied
through cash payment by the Employee,  through the surrender of Shares which the
Employee  already owns, or through the surrender of Shares to which the Employee
is otherwise entitled under the Amended Plan, provided;  however, that in either
case only the number of Shares  sufficient  to  satisfy  the  Company's  minimum
required tax withholding obligations may be surrendered to the Company.

     4.4 USE OF  SHARES.  Subject  to the  overall  limitation  on the number of
Shares that may be  delivered  under the Amended  Plan,  the  Committee  may use
available  Shares  as the form of  payment  for  compensation,  grants or rights
earned or due under any other  compensation plans or arrangements of the Company
or a  Subsidiary,  including  the plans and  arrangements  of the  Company  or a
Subsidiary assumed in business combinations.

     4.5  DIVIDENDS  AND  DIVIDEND  EQUIVALENTS.  An  Award  (including  without
limitation  an Option or SAR Award) may provide the  Employee  with the right to
receive dividend payments or dividend  equivalent payments with respect to Stock
subject to the Award  (both  before and after the Stock  subject to the Award is
earned,  vested,  or acquired),  which  payments may be either made currently or
credited to an account for the Employee,  and may be settled in cash or Stock as
determined by the  Committee.  Any such  settlements,  and any such crediting of
dividends or dividend  equivalents or reinvestment in Shares,  may be subject to

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such  conditions,   restrictions  and   contingencies  as  the  Committee  shall
establish,  including  the  reinvestment  of  such  credited  amounts  in  Stock
equivalents.

     4.6 PAYMENTS.  Awards may be settled through cash payments, the delivery of
Shares,  the  granting of  replacement  Awards,  or  combination  thereof as the
Committee shall determine.  Any Award settlement,  including payment  deferrals,
may be  subject  to  such  conditions,  restrictions  and  contingencies  as the
Committee shall  determine.  The Committee may permit or require the deferral of
any Award  payment,  subject to such rules and  procedures as it may  establish,
which may  include  provisions  for the payment or  crediting  of  interest,  or
dividend  equivalents,  including  converting  such credits into deferred  Stock
equivalents.  Each Subsidiary  shall be liable for payment of cash due under the
Amended Plan with  respect to any Employee to the extent that such  benefits are
attributable to the services  rendered for that Subsidiary by the Employee.  Any
disputes relating to liability of a Subsidiary for cash payments shall be
resolved by the Committee.

     4.7 TRANSFERABILITY.  Unless specifically  provided by the Committee in the
Award  Agreement,  Awards under the Amended Plan are  nontransferable  except as
designated by the Employee by will or by the laws of descent and distribution.

     4.8 FORM AND TIME OF ELECTIONS.  Unless otherwise  specified  herein,  each
election  required  or  permitted  to be made by any  Employee  or other  person
entitled to benefits under the Amended Plan, and any permitted modification,  or
revocation thereof,  shall be in writing filed with the Committee at such times,
in such form, and subject to such restrictions and limitations, not inconsistent
with the terms of the Amended Plan, as the Committee shall require.

     4.9  AGREEMENT  WITH  COMPANY.  An Award  under the  Amended  Plan shall be
subject to such terms and conditions, not inconsistent with the Amended Plan, as
the Committee shall, in its sole discretion, prescribe. The terms and conditions
of any Award to any Employee shall be reflected in such form of written document
as is determined by the Committee. A copy of such document shall be provided to
the Employee, and the Committee may, but need not require that the Employee
shall sign a copy of such document. Such document is referred to in the Amended
Plan as an "Award Agreement" regardless of whether any Employee signature is
required.

     4.10 ACTION BY COMPANY OR SUBSIDIARY.  Any action  required or permitted to
be taken by the Company or any Parent or  Subsidiary  shall be by  resolution of
its  board of  directors,  or by  action  of one or more  members  of the  board
(including  a  committee  of the board) who are duly  authorized  to act for the
board, or (except to the extent prohibited by applicable law or applicable rules
of any stock exchange) by a duly authorized officer of such company.

     4.11 GENDER AND NUMBER. Where the context admits, words in any gender shall
include any other gender, words in the singular shall include the plural and the
plural shall include the singular.

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     4.12 LIMITATION OF IMPLIED RIGHTS.

          (a) Neither a  Participant  nor any other person  shall,  by reason of
     participation  in the  Amended  Plan,  acquire any right in or title to any
     assets,  funds or  property  of the  Company  or any  Parent or  Subsidiary
     whatsoever,  including,  without limitation, any specific funds, assets, or
     other property which the Company or any Parent or Subsidiary, in their sole
     discretion,  may set aside in anticipation of a liability under the Amended
     Plan. A  Participant  shall have only a  contractual  right to the Stock or
     amounts, if any, payable under the Amended Plan, unsecured by any assets of
     the  Company or any Parent or  Subsidiary,  and  nothing  contained  in the
     Amended Plan shall constitute a guarantee that the assets of the Company or
     any Parent or  Subsidiary  shall be  sufficient  to pay any benefits to any
     person.

          (b) The Amended Plan does not constitute a contract of employment, and
     selection as a  Participant  will not give any  participating  employee the
     right to be retained in the employ of the  Company or any  Subsidiary,  nor
     any right or claim to any benefit under the Amended Plan, unless such right
     or claim has  specifically  accrued  under the terms of the  Amended  Plan.
     Except as  otherwise  provided  in the  Amended  Plan,  no Award  under the
     Amended  Plan  shall  confer  upon  the  holder  thereof  any  rights  as a
     stockholder  of the  Company  prior  to the date on  which  the  individual
     fulfills all conditions for receipt of such rights.

5.   COMMITTEE

     5.1  COMMITTEE.  The  authority  to control  and manage the  operation  and
administration  of  the  Amended  Plan  shall  be  vested  in a  committee  (the
"Committee")  in accordance with this Section 5. The Committee shall be selected
by the Board, and shall be comprised  unless otherwise  determined by the Board,
solely of not less than two members who shall be "outside"  directors within the
meaning of Treasury  Regulation Section  1.162-27(e)(3)  under Section 162(m) of
the Code,  of the Board and, with respect to Awards  granted  subject to Section
162(m) of the Code,  the  Committee  shall be composed of two or more members of
the Board who are not employees of the Company. If the Committee does not exist,
or for any other reason  determined by the Board,  the Board may take any action
under the  Amended  Plan  that  would  otherwise  be the  responsibility  of the
Committee.

     5.2 POWERS OF COMMITTEE. The Committee's administration of the Amended Plan
shall be subject to the following:

          (a) Subject to the  provisions of the Amended Plan, the Committee will
     have the  authority  and  discretion  to select  from  among  the  Eligible
     Employees those persons who shall receive Awards,  to determine the time or
     times of receipt, to determine the types of Awards and the number of shares
     covered by the Awards,  to  establish  the terms,  conditions,  performance
     criteria  (except  that  for  purposes  of  Section  162(m)  of  the  Code,
     performance  measures shall be based on one or more of the criteria set out
     on  Attachment  I hereto) ,  restrictions,  and  other  provisions  of such
     Awards,  and (subject to the  restrictions  imposed by Section 8 hereof) to
     cancel or suspend Awards.

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          (b) To the extent that the Committee  determines that the restrictions
     imposed by the  Amended  Plan  preclude  the  achievement  of the  material
     purposes  of the Awards in  jurisdictions  outside the United  States,  the
     Committee   will  have  the  authority  and   discretion  to  modify  those
     restrictions as the Committee  determines to be necessary or appropriate to
     conform to applicable requirements or practices of jurisdictions outside of
     the United States.

          (c) The Committee  will have the authority and discretion to interpret
     the  Amended  Plan,  to  establish,   amend,  and  rescind  any  rules  and
     regulations  relating  to the  Amended  Plan,  to  determine  the terms and
     provisions of any Award Agreement made pursuant to the Amended Plan, and to
     make all other  determinations  that may be necessary or advisable  for the
     administration of the Amended Plan.

          (d) Any  interpretation  of the Amended Plan by the  Committee and any
     decision  made by it under the  Amended  Plan is final and  binding  on all
     persons.

          (e) In controlling  and managing the operation and  administration  of
     the Amended Plan, the Committee shall take action in a manner that conforms
     to the articles and by-laws of the Company,  and applicable state corporate
     law.

     5.3 DELEGATION BY COMMITTEE.  Except to the extent prohibited by Applicable
Law or the applicable rules of a stock exchange,  the Committee may allocate all
or any  portion  of its  responsibilities  and  powers to any one or more of its
members and may  delegate  all or any part of its  administrative  duties to any
person or persons  selected  by it. Any such  allocation  or  delegation  may be
revoked by the Committee at any time.

     5.4  INFORMATION  TO BE FURNISHED TO COMMITTEE.  The Company and its Parent
and  Subsidiaries  shall furnish the Committee with such data and information as
it determines may be required for it to discharge its duties. The records of the
Company  and  its  Parent  and  Subsidiaries  as  to an  Employee's  employment,
termination of employment, leave of absence, reemployment and compensation shall
be conclusive on all persons  unless  determined to be incorrect.  Employees and
other  persons  entitled to benefits  under the  Amended  Plan must  furnish the
Committee  such  evidence,  data  or  information  as  the  Committee  considers
desirable to carry out the terms of the Amended Plan.

6.   ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR CORPORATE TRANSACTION

     6.1  CHANGES  IN  CAPITALIZATION.  Subject  to any  required  action by the
stockholders  of the Company,  the number of shares of Common  Stock  covered by
each outstanding Award, the price per share of Common Stock covered by each such
outstanding  Award,  the  number  of  shares of  Common  Stock  which  have been
authorized  for  issuance  under the Amended Plan but as to which no Awards have
yet  been  granted  or  which  have  been  returned  to the  Amended  Plan  upon
cancellation or expiration of an Award, and the maximum number of Options, SARs,
Stock Unit Awards,  Restricted  Stock Awards,  Restricted Stock Units Awards and
Performance   Share  Awards  which  may  be  granted  to  any  Employee  in  any
one-calendar-year  period shall be proportionately  adjusted for any increase or

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decrease in the number of issued shares of Common Stock  resulting  from a stock
split,  reverse stock split, stock dividend,  combination or reclassification of
the Common  Stock,  or any other  increase  or  decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company;
provided,  however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected  without  receipt of  consideration."
Such adjustment shall be made by the Board, whose  determination in that respect
shall be final, binding and conclusive.  Except as expressly provided herein, no
issuance by the Company of Shares of any class, or securities  convertible  into
Shares of any class,  shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of Common  Stock  subject to
an Award.

     6.2 TRANSACTIONS.  In the event of the proposed  dissolution or liquidation
of the Company or of a merger or  corporate  combination  (a  "Transaction")  in
which the successor corporation does not agree to assume the Award or substitute
an  equivalent  Award,  the  Committee  shall make a  determination  (subject to
Section 7 below) as to the equitable  treatment of outstanding  Awards under the
Amended Plan and shall notify  Participants  of such treatment no later than ten
(10) days  prior to such  proposed  Transaction.  To the  extent it has not been
previously  exercised,   an  Award  will  terminate  immediately  prior  to  the
consummation of such proposed Transaction.

7.   AMENDMENT AND TERMINATION

The Board may, at any time,  amend or terminate the Amended Plan,  provided that
no amendment or termination may, in the absence of written consent to the change
by the affected  Employee (or, if the Employee is not then living,  the affected
beneficiary),  adversely affect the rights of any Employee or beneficiary  under
any Award  granted  under the Amended  Plan prior to the date such  amendment is
adopted by the Board;  provided that adjustments  pursuant to subject to Section
6.2 shall in no event be  deemed to have an  adverse  affect  on any  Award.

8.   DEFINED TERMS

     In  addition  to the other  definitions  contained  herein,  the  following
definitions shall apply:

          (a)  APPLICABLE  LAW  means  the  corporate,  securities  and tax laws
     (including,  without  limitation,  the Delaware corporate law, the Exchange
     Act,  the  Securities  Act  of  1933  and  the  Code)   applicable  to  the
     establishment and administration of an employee stock incentive plans.

          (b) AWARD.  The term "Award"  shall mean any award or benefit  granted
     under  the  Amended  Plan,  including,  without  limitation,  the  grant of
     Options, SARs, Stock Unit Awards, Restricted Stock Awards, Restricted Stock
     Unit Awards and Performance Share Awards.

          (c) BOARD.  The term "Board"  shall mean the Board of Directors of the
     Company.

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          (d) CODE. The term "Code" means the Internal  Revenue Code of 1986, as
     amended.  A reference to any provision of the Code shall include  reference
     to any successor provision of the Code.

          (e) COMMON  STOCK  shall mean the common  stock,  par value,  $.10 per
     share, of the Company.

          (f)  CONTINUOUS  STATUS  AS AN  EMPLOYEE  means  the  absence  of  any
     interruption  or termination of the employment  relationship by the Company
     or any Subsidiary. Continuous Status as an Employee shall not be considered
     interrupted  in the case of: (i) sick  leave,  military  leave or any other
     leave of absence  approved by the Board,  provided that such leave is for a
     period of not more than  ninety  (90) days,  unless  reemployment  upon the
     expiration of such leave is  guaranteed  by contract or statute,  or unless
     provided otherwise pursuant to Company policy adopted from time to time; or
     (ii) in the case of transfers  between  locations of the Company or between
     the Company, its Subsidiaries or its successor.

          (g) ELIGIBLE EMPLOYEE. The term "Eligible Employee" shall mean any key
     executive or other employee of the Company,  its Parent or  Subsidiary.  An
     Award may be granted to an employee,  in connection with hiring,  retention
     or otherwise,  prior to the date the employee first  performs  services for
     the Company or its Parent or Subsidiaries,  provided that such Awards shall
     not  become  vested  prior to the date the  employee  first  performs  such
     services.

          (h)  EXCHANGE  ACT  means  the  Securities  Exchange  Act of 1934,  as
     amended.

          (i) FAIR MARKET VALUE.  For purposes of  determining  the "Fair Market
     Value" of a share of Stock  granted  pursuant  to Section 2 as of any date,
     the following rules shall apply:

                    (i) If the  principal  market  for the Stock is the New York
               Stock Exchange ("NYSE"),  then the "Fair Market Value" as of that
               date  shall  be the  closing  price  of  the  stock  on the  NYSE
               composite  tape  on that  date as  reported  in the  Wall  Street
               Journal for such date;

                    (ii) If the  principal  market for the Stock is the  another
               national securities exchange or the NASDAQ stock market, then the
               "Fair Market Value" as of that date shall be the mean between the
               lowest and highest reported composite sale prices of the Stock on
               that date on such exchange for such date;

                    (iii) If sale prices are not  available or if the  principal
               market  for  the  Stock  is not  the  NYSE  or  another  national
               securities  exchange  and the Stock is not  quoted on the  NASDAQ
               stock  market,  the  average  between  the highest bid and lowest
               asked  prices for the Stock on such day as reported on the NASDAQ
               OTC Bulletin Board Service or by the National  Quotation  Bureau,
               Incorporated or a comparable service.

                    (iv)  If the day is not a  business  day,  and as a  result,
               paragraphs (i), (ii) and (iii) next above are  inapplicable,  the
               Fair Market Value of the Stock shall be determined as of the last

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               preceding  business day. If  paragraphs  (i), (ii) and (iii) next
               above are otherwise  inapplicable,  then the Fair Market Value of
               the Stock shall be determined in good faith by the Committee.

          (j) INCENTIVE  STOCK OPTION means an Option  intended to qualify as an
     incentive stock option within the meaning of Section 422 of the Code.

          (k) NONSTATUTORY  STOCK OPTION means an Option not intended to qualify
     as an Incentive Stock Option.

          (l) OPTIONEE means an Employee who receives an Option.

          (m) PARENT  means a "parent  corporation",  whether  now or  hereafter
     existing, as defined in Section 424(e) of the Code.

          (n) SHARE means a share of the Common Stock, as adjusted in accordance
     with Section 6 of the Amended Plan.

          (o) STOCK.  The term "Stock"  shall mean shares of Common Stock of the
     Company.

          (p) SUBSIDIARIES.  The term "Subsidiary"  means any company during any
     period in which it is a "subsidiary  corporation"  (as that term is defined
     in Code section 424(f)) with respect to the Company.



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                                  ATTACHMENT I

                              PERFORMANCE CRITERIA

      The Committee shall grant performance-based compensation Awards tied to
one or more of the following business criteria:

      1.    Changes in earnings per share
      2.    Changes in pre-tax operating income
      3.    Changes in value of stock (i.e., stock price)


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