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                                                                   EXHIBIT 10.6



                            AMERICAN EAGLE GROUP, INC.

                           1994 STOCK INCENTIVE PLAN
                     (AS AMENDED THROUGH NOVEMBER 1, 1996)

         1.      PURPOSE.  The purpose of the American Eagle Group, Inc. 1994
Stock Incentive Plan (the "Plan") is to further and promote the interests of
American Eagle Group, Inc. (the "Company"), its Subsidiaries and its
shareholders by enabling the Company and its Subsidiaries to attract, retain
and motivate key employees, and to align the interests of such key employees
and the Company's shareholders.  To do this, the Plan offers equity-based
incentive awards and opportunities to provide such key employees with a
proprietary interest in maximizing the growth, profitability and overall
success of the Company and its Subsidiaries.

         2.      DEFINITIONS.  For purposes of the Plan, the following terms
shall have the meanings set forth below:

                 2.1      "Award" means an award or grant made to a Participant
under Sections 6 and/or 7 of the Plan.  "Award Agreement" means the agreement
executed by a Participant pursuant to Sections 3.2 and 15.6 of the Plan in
connection with the granting of an Award.

                 2.2      "Board" means the Board of Directors of the Company,
as constituted from time to time.

                 2.3      "Code" means the Internal Revenue Code of 1986, as in
effect and as amended from time to time, or any successor statute thereto,
together with any rules, regulations and interpretations promulgated thereunder
or with respect thereto.

                 2.4      "Committee" means the Compensation Committee of the
Board or any other committee to whom the Board delegates responsibilities under
Section 3.1 hereof and which meets the requirements for a non-employee director
committee under Rule 16b-3, as adopted pursuant to SEC Release Number 34-37260
(May 31, 1996).

                 2.5      "Common Stock" means the Common Stock, par value $.01
per share, of the Company or any security of the Company issued by the Company
in substitution or exchange therefor.

                 2.6      "Company" means American Eagle Group, Inc., a
Delaware corporation, or any successor corporation to American Eagle Group,
Inc.

                 2.7      "Disability" means disability as defined in the
Participant's then effective employment agreement, or if the participant is not
then a party to an effective employment agreement with the Company,
"Disability" means disability as determined by the Committee in accordance with
standards and procedures similar to those under the Company's long-term
disability plan, if any.  Subject to the first sentence of this Section 2.7, at
any time that the Company does not maintain a long-term disability plan,
"Disability" shall mean disability which, at least six months after its
commencement, is determined to be total and permanent by a physician mutually
selected by the Company and the Participant (or the Participant's legal
representative).
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                 2.8      "Exchange Act" means the Securities Exchange Act of
1934, as in effect and as amended from time to time, or any successor statute
thereto, together with any rules, regulations and interpretations promulgated
thereunder or with respect thereto.

                 2.9      "Fair Market Value" means on, or with respect to, any
given date, the closing price of the Common Stock on such date (or, if the
Common Stock was not traded on such date, then the next preceding day on which
the Common Stock was traded) as reported on the NASDAQ composite tape or, if
the Common Stock is not traded on such exchange, as reported on any other
national securities exchange on which the Common Stock may be traded.

                 2.10     "Incentive Stock Option" means any stock option
granted pursuant to the provisions of Section 6 of the Plan (and the relevant
Award Agreement) that is intended to be (and is specifically designated as) an
"incentive stock option" within the meaning of Section 422 of the Code.

                 2.11     "Non-Qualified Stock Option" means any stock option
granted pursuant to the provisions of Section 6 of the Plan (and the relevant
Award Agreement) that is not an Incentive Stock Option.

                 2.12     "Offering" means the initial public offering of
Common Stock by the Company.

                 2.13     "Parent(s)" means any corporation (other than the
Company) in an unbroken chain of corporations including and ending with the
Company, if each of such corporations, other than the Company, owns, directly
or indirectly, fifty percent (50%) or more of the voting stock of one of the
other corporations in such chain.

                 2.14     "Participant" means a key employee of the Company or
any Subsidiary who is selected by the Committee under Section 5 to receive an
Award under the Plan.

                 2.15     "Plan" means the American Eagle Group, Inc. 1994
Stock Incentive Plan, as set forth herein and as in effect and as amended from
time to time (together with any rules and regulations promulgated by the
Committee with respect thereto).

                 2.16     "Restricted Stock" means the restricted shares of
Common Stock granted pursuant to the provisions of Section 7 of the Plan and
the relevant Award Agreement.

                 2.17     "Retirement" means retirement from active employment
with the Company and its Subsidiaries on or after the normal retirement date
specified in the Company's qualified retirement plans or such other date as
approved in writing by the Committee for the purposes of this Plan.

                 2.18     "Stock Option(s)" means a Non-Qualified Stock Option
and/or an Incentive Stock Option.

                 2.19     "Subsidiary(ies)" means any corporation (other than
the Company) in an unbroken chain of corporations, including and beginning with
the Company, if each of such



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corporations, other than the last corporation in the unbroken chain, owns,
directly or indirectly, fifty percent (50%) or more of the voting stock in one
of the other corporations in such chain.

         3.      ADMINISTRATION.

                 3.1      THE COMMITTEE.  The Plan shall be administered by the
Committee.  The Committee shall be appointed from time to time by the Board and
shall be comprised of not less than two members of the Board who qualify to
serve as members of the Committee pursuant to Section 2.4 hereof.  Consistent
with the Bylaws of the Company, members of the Committee shall serve at the
pleasure of the Board and the Board, subject to this section and Section 2.4,
may at any time and from time to time remove members from, or add members to,
the Committee.

                 3.2      PLAN ADMINISTRATION AND PLAN RULES.  The Committee is
authorized to construe and interpret the Plan and to promulgate, amend and
rescind rules and regulations relating to the implementation, administration
and maintenance of the Plan.  Subject to the terms and conditions of the Plan,
the Committee shall make all determinations necessary or advisable for the
implementation, administration and maintenance of the Plan including, without
limitation, (a) selecting the Plan's Participants, (b) making Awards in such
amounts and form as the Committee shall determine, (c) imposing such
restrictions, terms and conditions upon such Awards as the Committee shall deem
appropriate, and (d) correcting any technical defect or technical omission or
reconciling any technical inconsistency, in the Plan and/or any Award
Agreement.  The Committee may designate persons other than members of the
Committee to carry out the day-to- day administration of the Plan under such
conditions and limitations as it may prescribe, except that the Committee shall
not delegate its authority with regard to selection for participation in the
Plan and/or the granting of any Awards to Participants.  The Committee's
determinations under the Plan need not be uniform and may be made selectively
among Participants, whether or not such Participants are similarly situated.
Any determination, decision or action of the Committee in connection with the
construction, interpretation, administration, implementation or maintenance of
the Plan shall be final, conclusive and binding upon all Participants and any
person(s) claiming under or through any Participants.

                 3.3      LIABILITY LIMITATION.  Neither the Board nor the
Committee, nor any member of either, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection
with the Plan (or any Award Agreement), and the members of the Board and the
Committee shall be entitled to indemnification and reimbursement by the Company
in respect of any claim, loss, damage or expense (including, without
limitation, attorneys' fees) arising or resulting therefrom to the fullest
extent permitted by law and/or under any directors and officers liability
insurance coverage which may be in effect from time to time.

         4.      TERM OF PLAN/COMMON STOCK SUBJECT TO PLAN.

                 4.1      TERM.  The Plan shall terminate on February 15, 2004,
except with resect to Awards then outstanding.  After such date no further
Awards shall be granted under the Plan.





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                 4.2      COMMON STOCK.  The maximum number of shares of Common
Stock in respect for which Awards may be granted under the Plan, subject to
adjustment as provided in Section 12 of the Plan, shall be 540,000 shares.  In
the event of a change in the Common Stock of the Company that is limited to a
change in the designation thereof to "Capital Stock" or other similar
designation, or to a change in the par value thereof, or from par value to no
par value, without increase or decrease in the number of issued shares, the
shares resulting from any such change shall be deemed to be the Common Stock
for purposes of the Plan.  Common Stock which may be issued under the Plan may
be either authorized and unissued shares or issued shares which have been
reacquired by the Company and which are being held as treasury shares.  No
fractional shares of Common Stock shall be issued under the Plan, unless the
Committee determines otherwise.

                 4.3      COMPUTATION OF AVAILABLE SHARES.  For the purpose of
computing the total number of shares of Common Stock available for Awards under
the Plan, there shall be counted against the limitations set forth in Section
4.2 of the Plan the maximum number of shares of Common Stock potentially
subject to issuance upon exercise or settlement of Awards granted under Section
6 of the Plan and the number of shares of Common Stock issued or subject to
potential issuance under grants of Restricted Stock pursuant to Section 7 of
the Plan, in each case determined as of the date on which such Awards are
granted.  If any Awards expire unexercised or are forfeited, surrendered,
canceled, terminated or settled in cash in lieu of Common Stock, the shares of
Common Stock which were theretofore subject (or potentially subject) to such
Awards shall again be available for Awards under the Plan to the extent of such
expiration, forfeiture, surrender, cancellation, termination or settlement of
such Awards; provided, however, that forfeited Awards shall not again be
available for Awards under the Plan if the Participant received, directly or
indirectly, any of the benefits of ownership of the securities of the Company
underlying such Award, including, without limitation, the right to receive
dividend or dividend equivalent payments, as described in Sections 7.5 and 9 of
the Plan.

         5.      ELIGIBILITY.  Employees eligible for Awards under the Plan
shall consist of key employees of the Company and/or its Subsidiaries who are
responsible for the management, growth and protection of the business of the
Company and/or its Subsidiaries and whose performance or contribution, in the
sole discretion of the Committee, benefits or will benefit the Company in a
significant manner.

         6.      STOCK OPTIONS.

                 6.1      TERMS AND CONDITIONS.  Stock options granted under
the Plan may be in the form of Incentive Stock Options or Non-Qualified Stock
Options.  Such Stock Options shall be subject to the terms and conditions set
forth in this Section 6 and any additional terms and conditions, not
inconsistent with the express terms and provisions of the Plan, as the
Committee shall set forth in the relevant Award Agreement.

                 6.2      GRANT.  Stock Options may be granted under the Plan
in such form as the Committee may from time to time approve.  Stock Options may
be granted alone or in addition to other Awards under the Plan.
Notwithstanding the above, no Incentive Stock Options shall





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be granted to any employee who owns more than 10% of the combined total voting
power of all classes of stock of the Company or any Parent or Subsidiary.

                 6.3      EXERCISE PRICE.  The exercise price per share of
Common Stock subject to a Stock Option shall be determined by the Committee at
the time of grant; provided, however, that the exercise price of an Incentive
Stock Option shall not be less than one hundred percent (100%) of the Fair
Market Value of the Common Stock on the date of the grant of such Incentive
Stock Option.

                 6.4      TERM.  The term of each Stock Option shall be such
period of time as is fixed by the Committee at the time of grant; provided,
however, that the term of any Incentive Stock Option shall not exceed ten (10)
years after the date immediately preceding the date on which the Incentive
Stock Option is granted.

                 6.5      METHOD OF EXERCISE.  A Stock Option may be exercised,
in whole or in part, by giving written notice of exercise to the Secretary of
the Company, or the Secretary's designee, specifying the number of shares to be
purchased.  Such notice shall be accompanied by payment in full of the exercise
price by any method that is approved by the Committee and that will cause the
shares to be issued to be fully paid and non-assessable, including without
limitation payment in cash, by certified check, bank draft or money order
payable to the order of the Company or, if permitted by the terms of the
relevant Award Agreement and applicable law, by delivery of, alone or in
connection with a partial cash or instrument payment, shares of Common Stock
already owned by the Participant.  The Committee may, in the relevant Award
Agreement, also permit Participants (either on a selective or group basis) to
simultaneously exercise Stock Options and sell the shares of Common Stock
thereby acquired, pursuant to a brokerage "cashless exercise" arrangement,
selected by and approved of in all respects in advance by the Committee, and
use the proceeds from such sale as payment of the exercise price of such Stock
Options.  In addition, the Committee may, in the relevant Award Agreement, also
permit Participants (either on a selective or group basis) to exercise Stock
Options in the manner of stock appreciation rights by the issuance of stock to
Participants in the amount of the appreciation or "spread" in the option
without the requirement of payment of the exercise price.  Payment instruments
shall be received by the Company subject to collection.  The proceeds received
by the Company upon exercise of any Stock Option may be used by the Company for
general corporate purposes.

                 6.6      DATE OF EXERCISE.  Unless otherwise provided in the
Award Agreement in respect of any Stock Option, such Stock Option may be
exercised during its specified term as follows:  (a) for up to 33 1/3% of the
shares of Common Stock subject to such Stock Option on and after the first
anniversary of the date of grant, (b) for up to 66 2/3% of the shares of Common
Stock subject to such Stock Option on and after the second anniversary of the
date of grant, and (c) for up to 100% of the shares of Common Stock subject to
such Stock Option on and after the third anniversary of the date of grant.
Notwithstanding the preceding sentence, in no event shall any Stock Option
granted under the Plan be exercisable prior to the date which is the one (1)
year anniversary of the date on which the Stock Option is granted.





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         7.      RESTRICTED STOCK.

                 7.1      TERMS AND CONDITIONS.  Grants of Restricted Stock
shall be subject to the terms and conditions set forth in this Section 7 and
any additional terms and conditions, not inconsistent with the express terms
and provisions of the Plan, as the Committee shall set forth in the relevant
Award Agreement.  Restricted Stock may be granted alone or in addition to any
other Awards under the Plan.  Subject to the terms of the Plan, the Committee
shall determine the number of shares of Restricted Stock to be granted to a
Participant and the Committee may impose different terms and conditions on any
particular Restricted Stock grant made to any Participant.  With respect to
each Participant receiving an Award of Restricted Stock, there shall be issued
a stock certificate (or certificates) in respect of such shares of Restricted
Stock.  Such stock certificate(s) shall be registered in the name of such
Participant, shall be accompanied by a stock power duly executed by such
Participant, and shall bear, among other required legends, the following legend
referring to certain terms, conditions and restrictions applicable to such
Award:

         "The transferability of this certificate and the shares of stock
         represented hereby are subject to the terms and conditions (including,
         without limitation, forfeiture events) contained in the American Eagle
         Group, Inc. 1994 Stock Incentive Plan and an Award Agreement entered
         into between the registered owner hereof and American Eagle Group,
         Inc.  Copies of such Plan and Award Agreement are on file in the
         office of the Secretary of American Eagle Group, Inc., and American
         Eagle Group, Inc. will furnish to the recordholder of the certificate,
         without charge, upon written request at its principal place of
         business a copy of such Plan and Award Agreement."

Such stock certificate evidencing such shares shall be deposited with and held
in custody by the Company until the restrictions thereon shall have lapsed and
all of the terms and conditions applicable to such grant shall have been
satisfied.

                 7.2      RESTRICTED STOCK GRANTS.  A grant of Restricted Stock
is an Award of shares of Common Stock granted to a Participant, subject to such
restrictions, terms and conditions as the Committee deems appropriate,
including, without limitation, (a) restrictions on the sale, assignment,
transfer, hypothecation or other disposition of such shares, (b) the
requirement that the Participant deposit such shares with the Company while
such shares are subject to such restrictions, and (c) the requirement that such
shares be forfeited upon termination of employment for specified reasons within
a specified period of time.

                 7.3      RESTRICTION PERIOD.  In accordance with Sections 7.1
and 7.2 of the Plan, Restricted Stock shall only become unrestricted and vest
in the Participant in accordance with such vesting schedule relating to the
restriction applicable to such Restricted Stock, if any, as the Committee may
establish at the time of the Award in the relevant Award Agreement (the
"Restriction Period").  Notwithstanding the immediately preceding sentence, in
no event shall the Restriction Period be less than one (1) year and one day
after the date on which such Restricted Stock is granted.  During the
Restriction Period, such stock shall be and remain unvested and a Participant
may not sell, assign, transfer, pledge, encumber or otherwise dispose of or
hypothecate such Award.  Upon satisfaction of the vesting schedule and any
other





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applicable restrictions, terms and conditions, the Participant shall be
entitled to receive payment of the Restricted Stock or a portion thereof, as
the case may be, as provided in Section 7.4 of the Plan.

                 7.4      PAYMENT OF RESTRICTED STOCK GRANTS.  After the
satisfaction and/or lapse of the restrictions, terms and conditions established
by the Committee in respect of a grant of Restricted Stock, a new certificate,
without the legend set forth in Section 7.1 of the Plan, for the number of
shares of Common Stock which are no longer subject to such restrictions, terms
and conditions shall, as soon as practicable thereafter, be delivered to the
Participant.

                 7.5      SHAREHOLDER RIGHTS.  A Participant shall have, with
respect to the shares of Common Stock received under a grant of Restricted
Stock, all of the rights of a shareholder of the Company, including, without
limitation, the right to vote the shares and to receive any cash dividends.
Stock dividends issued with respect to such Restricted Stock shall be treated
as additional Restricted Stock grants and shall be subject to the same
restrictions and other terms and conditions that apply to the shares of
Restricted Stock with respect to which such stock dividends are issued.

         8.      DEFERRAL ELECTIONS.  The Committee may permit a Participant to
elect to defer receipt of any delivery of shares of Common Stock that would
otherwise be due to such Participant by virtue of the exercise or settlement of
any Award under the Plan.  If any such election is permitted, the Committee
shall establish rules and procedures for such deferrals, including, without
limitation, the payment or crediting of dividend equivalents in respect of
deferrals credited in shares of Common Stock.

         9.      DIVIDEND EQUIVALENTS.  In addition to the provisions of
Section  7.5 of the Plan, Awards of Stock Options may, in the sole discretion
of the Committee and if provided for in the relevant Award Agreement, earn
dividend equivalents.  In respect of any such Award which is outstanding on a
dividend record date for Common Stock, the Participant shall be credited with
an amount equal to the amount of cash or stock dividends that would have been
paid on the shares of Common Stock covered by such Award had such covered
shares been issued and outstanding on such dividend record date.  The Committee
shall establish such rules and procedures governing the crediting of such
dividend equivalents, including, without limitation, the amount, the timing,
form of payment and payment contingencies and/or restrictions of such dividend
equivalents, as it deems appropriate or necessary.

         10.     TERMINATION OF EMPLOYMENT.

                 10.1     GENERAL.  Subject to the terms and conditions of
Section 13 of the Plan, if, and to the extent that, the terms and conditions
under which an Award may be exercised or settled after a Participant's
termination of employment for any particular reason shall not have been set
forth (a) in the relevant Award Agreement, by and as determined by the
Committee in its sole discretion, or (b) in the Participant's employment
agreement, if any, the following terms and conditions shall apply as
appropriate and as not inconsistent with the terms and conditions, if any,
contained in such Award Agreement and/or employment agreement:





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                          10.1.1  Except as otherwise provided in this Section
         10.1.1, if a Participant's employment with the Company and its
         Subsidiaries is terminated for any reason, such Participant's rights,
         if any, to exercise any then exercisable Stock Options, if any, shall
         terminate ninety (90) days after the date of such termination and
         thereafter the Participant (and such Participant's estate, designated
         beneficiary or other legal representative) shall forfeit any rights or
         interests in or with respect to any such Stock Options.  The
         Committee, in its sole discretion, may determine that such
         Participant's Stock Options (other than Incentive Stock Options), if
         any, to the extent exercisable immediately prior to any termination of
         employment (other than a termination due to death, Retirement or
         Disability), may remain exercisable for an additional specified time
         period after such ninety (90) day period expires (subject to any other
         applicable terms and provisions of the Plan (and any rules or
         procedures thereunder) and the relevant Award Agreement).  If any
         termination of employment is due to Retirement or Disability, a
         Participant shall have the right, subject to the applicable terms and
         provisions of the Plan (and any rules or procedures thereunder) and
         the relevant Award Agreement, (a) to exercise Non-Qualified Stock
         Options, if any, at any time within 180 days following such
         termination due to Retirement or Disability (to the extent such
         Participant was entitled to exercise any such Awards immediately prior
         to such termination) and (b) to exercise Incentive Stock Options, if
         any, at any time within ninety (90) days following a termination due
         to Retirement and 180 days following a termination due to Disability
         (to the extent such Participant was entitled to exercise any such
         Awards immediately prior to such termination).  If any Participant
         dies while entitled to exercise a Stock Option, if any, such
         Participant's estate, designated beneficiary or other legal
         representative, as the case may be, shall have the right, subject to
         the applicable provisions of the Plan (and any rules or procedures
         thereunder) and the relevant Award Agreement, to exercise such then
         exercisable Stock Options, if any, at any time within 180 days from
         the date of such Participant's death (but in no event more than one
         (1) year from the date of such Participant's termination due to
         Retirement or Disability, except, in the case of Incentive Stock
         Options, in no event more than ninety (90) days from the date of such
         Participant's termination due to Retirement).

                          10.1.2  If a Participant's employment with the
         Company and its Subsidiaries is terminated for any reason (including,
         without limitation, Disability, Retirement or death) prior to the
         actual or deemed (under Section 13 of the Plan) satisfaction and/or
         lapse of the restrictions, terms and conditions applicable to a grant
         of Restricted Stock, such Restricted Stock shall immediately be
         canceled and the Participant (and such other Participant's estate,
         designated beneficiary or other legal representative) shall forfeit
         any rights or interests in and with respect to any such Restricted
         Stock.

         11.     NON-TRANSFERABILITY OF AWARDS.  No Award under the Plan or any
Award Agreement, and no rights or interests herein or therein, shall or may be
assigned, transferred, sold, exchanged, pledged, disposed of or otherwise
hypothecated or encumbered by a Participant or any beneficiary hereof or
thereof, except by testamentary disposition or the laws of descent and
distribution.  No such interest shall be subject to seizure for the payment of
the Participant's (or any beneficiary's) debts, judgments, alimony, or separate
maintenance or be transferable by operation of law in the event of the
Participant's (or any beneficiary's) bankruptcy or insolvency.  During the
lifetime of a Participant Stock Options are exercisable only by the
Participant.





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         12.     CHANGES IN CAPITALIZATION AND OTHER MATTERS.

                 12.1     NO CORPORATE ACTION RESTRICTION.  The existence of
the Plan, any Award Agreement and/or the Awards granted hereunder shall not
limit, affect or restrict in any way the right or power of the Board or the
shareholders of the Company to make or authorize (a) any adjustment,
recapitalization, reorganization or other change in the Company's or any
Subsidiary's capital structure or its business, (b) any merger, consolidation
or change in the ownership of the Company or any Subsidiary, (c) any issue of
bonds, debentures, capital, preferred or prior preference stock ahead of or
affecting the Company's or any Subsidiary's capital stock or the rights
thereof, (d) any dissolution or liquidation of the Company or any Subsidiary,
(e) any sale or transfer of all or any part of the Company's or any
Subsidiary's assets or business, or (f) any other corporate act or proceeding
by the Company or any Subsidiary.  No Participant, beneficiary or any other
person shall have any claim against any member of the Board or the Committee,
the Company or any Subsidiary as a result of any such action.

                 12.2     RECAPITALIZATION ADJUSTMENTS.  In the event of any
change in capitalization affecting the Common Stock of the Company, including,
without limitation, a stock dividend or other distribution, stock split,
reverse stock split, recapitalization, consolidation, subdivision, split-up,
spin-off, split-off, combination or exchange of shares or other form of
reorganization, or any other change affecting the Common Stock, the Board shall
authorize and make such proportionate adjustments, if any, as the Board deems
appropriate to reflect such change, including, without limitation, with respect
to the aggregate number of shares of the Common Stock for which Awards in
respect thereof may be granted under the Plan, the maximum number of shares of
the Common Stock which may be sold or awarded to any Participant, the number of
shares of the Common Stock covered by each outstanding Award, and the exercise
price or other price per share of Common Stock in respect of outstanding
Awards.

                 12.3     REORGANIZATIONS.  The foregoing provisions of Section
12 notwithstanding, the following provisions of Section 12 shall control, where
applicable:

                          12.3.1  If the Company shall at any time participate
         in a reorganization of a type described in Section 424(a) of the Code
         and in which (A) the Company is not the surviving entity, or (B) the
         Company is the surviving entity and the shareholders of Common Stock
         are required to exchange their shares for property and/or securities,
         the Company shall give the Participants written notice of any such
         proposed reorganization on or before thirty (30) days before such
         reorganization, and any outstanding Stock Options shall be exercisable
         after receipt of such notice and prior to such reorganization in full
         for all of the shares of Common Stock covered by the Stock Options;
         provided, however, either the Participant or the Company may make the
         exercise of outstanding Stock Options after Participant's receipt of
         such notice effective only immediately prior to the consummation of
         such reorganization.  To the extent not exercised prior to such
         reorganization, the Stock Options shall expire on the occurrence of
         such reorganization.  A sale of all or substantially all the assets of
         the Company for a consideration (apart from the assumption of
         obligations) consisting primarily of securities shall be deemed a
         reorganization for the foregoing purposes.  Notwithstanding the
         foregoing, the provisions of this Section shall be subject to Section
         6.4.





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                          12.3.2  In the event of the proposed dissolution or
         liquidation of the Company, the Stock Options granted hereunder shall
         terminate as of a date to be fixed by the Board, provided that not
         less than thirty (30) days' prior written notice of the date so fixed
         shall be given to the Participants, and the Participants shall have
         the right, during the period of thirty (30) days preceding such
         termination, to exercise their Stock Options in full for all of the
         shares of Common Stock covered by the Stock Options; provided,
         however, either the Participant or the Company may make the exercise
         of the outstanding Stock Options after Participant's receipt of such
         notice effective only immediately prior to the consummation of such
         dissolution.  Notwithstanding the foregoing, the provisions of this
         Section shall be subject to Section 6.4 and shall be subject to
         Section 12.3.1 if the optionee received notice under Section 12.3.1 at
         a time earlier than the notice provided for herein.

         13.     CHANGE OF CONTROL.

                 13.1     ACCELERATION OF AWARDS VESTING.  Except as otherwise
provided in Section 13.2 of the Plan, if a Change of Control of the Company
occurs (a) all Stock Options then unexercised and outstanding shall become
fully vested and exercisable as of the date of the Change of Control and (b)
all restrictions, terms and conditions applicable to all Restricted Stock then
outstanding shall be deemed lapsed and satisfied as of the date of the Change
of Control.

                 13.2     SIX-MONTH RULE.  The provisions of Section 13.1 of
the Plan shall not apply to any Award that is outstanding for less than six (6)
months as of the date of the Change of Control.

                 13.3     PAYMENT AFTER CHANGE OF CONTROL.  Within thirty (30)
days after a Change of Control occurs, the holder of an Award of Restricted
Stock shall receive a new certificate for such shares without the legend set
forth in Section 7 of the Plan.

                 13.4     TERMINATION AS A RESULT OF A CHANGE OF CONTROL.
Anything in the Plan to the contrary notwithstanding, if a Change of Control
occurs and if the Participant's employment is terminated and it is reasonably
demonstrated by the Participant that such employment termination (a) was at the
request, directly or indirectly, of a third party who has taken steps
reasonably calculated to effect the Change of Control, or (b) otherwise arose
in connection with or in anticipation of the Change of Control, then for
purposes of this Section 13, the Change of Control shall be deemed to have
occurred immediately prior to such Participant's employment termination.

                 13.5     CHANGE OF CONTROL.  For the purposes of this
Agreement, "Change of Control" shall mean:

                          13.5.1  The acquisition, after the Effective Date (as
         defined in Section 15.10  of the Plan), by an individual, entity or
         group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
         Exchange Act) of beneficial ownership (within the meaning of Rule
         13d-3 promulgated under the Exchange Act) of 20% or more of either (a)
         the shares of the Common Stock, or (b) the combined voting power of
         the voting securities of the Company entitled to vote generally in the
         election of directors (the





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<PAGE>   11
         "Voting Securities"); provided, however, that the following
         acquisitions shall not constitute a Change of Control:  (x) any
         acquisition by any employee benefit plan (or related trust) sponsored
         or maintained by the Company or any Subsidiary, or (y) any acquisition
         by any corporation if, immediately following such acquisition, more
         than 80% of the then outstanding shares of common stock of such
         corporation and the combined voting power of the then outstanding
         voting securities of such corporation (entitled to vote generally in
         the election of directors), is beneficially owned, directly or
         indirectly, by all or substantially all of the individuals and
         entities who, immediately prior to such acquisition, were the
         beneficial owners of the Common Stock and the Voting Securities in
         substantially the same proportions, respectively, as their ownership,
         immediately prior to such acquisition, of the Common Stock and Voting
         Securities; or

                          13.5.2  Individuals who, as of the day after the
         first annual meeting of the Company's shareholders following the
         Effective Date, constitute the Board (the "Incumbent Board") cease for
         any reason to constitute at least a majority of the Board; provided,
         however, that any individual becoming a director subsequent to the day
         after the first annual meeting of the Company's shareholders following
         the Effective Date hereof whose election, or nomination for election
         by the Company's shareholders, was approved by a vote of at least a
         majority of the directors then serving and 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
         either an actual or threatened election contest (as such terms are
         used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
         Act) or other actual or threatened solicitation of proxies or
         consents; or

                          13.5.3  Approval by the shareholders of the Company
         of a reorganization, merger or consolidation, other than a
         reorganization, merger or consolidation with respect to which all or
         substantially all of the individuals and entities who where the
         beneficial owners, immediately prior to such reorganization, merger or
         consolidation, of the Common Stock and Voting Securities beneficially
         own, directly or indirectly, immediately after such reorganization,
         merger or consolidation more than 80% of the then outstanding common
         stock and voting securities (entitled to vote generally in the
         election of directors) of the corporation resulting from such
         reorganization, merger or consolidation in substantially the same
         proportions as their respective ownership, immediately prior to such
         reorganization, merger or consolidation, of the Common Stock and the
         Voting Securities; or

                          13.5.4  Approval by the shareholders of the Company
         of (a) a complete liquidation or dissolution of the Company, or (b)
         the sale or other disposition of all or substantially all of the
         assets of the Company, other than to a Subsidiary, wholly-owned,
         directly or indirectly, by the Company.  For purposes of the Plan, and
         without limiting the generality of the preceding sentence, the sale or
         other disposition by the Company of more than 50% of the common stock
         or the voting securities (entitled to vote generally in the election
         of directors) of American Eagle Insurance Company shall be deemed to
         constitute a sale or other disposition of substantially all the assets
         of the Company.





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<PAGE>   12
         14.     AMENDMENT, SUSPENSION AND TERMINATION.

                 14.1     IN GENERAL.  The Board may suspend or terminate the
Plan (or any portion thereof) at any time and may amend the Plan at any time
and from time to time in such respects as the Board may deem advisable to
insure that any and all Awards conform to or otherwise reflect any change in
applicable laws or regulations, or to permit the Company or the Participants to
benefit from any change in applicable laws or regulations, or in any other
respect the Board may deem to be in the best interests of the Company or any
Subsidiary; provided, however, that no such amendment shall, without majority
shareholder approval (a) except as provided in Section 12 of the Plan,
materially increase the number of shares of Common Stock which may be issued
under the Plan, (b) materially modify the requirements as to eligibility for
participation in the Plan, (c) materially increase the benefits accruing to
Participants under the Plan, or (d) extend the termination date of the Plan.
No such amendment, suspension or termination shall (x) materially adversely
affect the rights of any Participant under any outstanding Stock Options or
Restricted Stock grants, without the consent of such Participant, or (y) make
any change that would disqualify the Plan, or any other plan of the Company or
any Subsidiary intended to be so qualified, from (i) the exemption provided by
Rule 16b-3, promulgated under the Exchange Act, or any successor rule or
regulation to such Rule 16b-3, as such rule is applicable from time to time, or
(ii) the benefits provided under Section 422 of the Code, or any successor
thereto.

                 14.2     AWARD AGREEMENTS.  The Committee may amend or modify
at any time and from time to time any outstanding Stock Options or Restricted
Stock grants, in any manner to the extent that the Committee would have had the
authority under the Plan to initially determine the restrictions, terms and
provisions of such Stock Options and/or Restricted Stock grants, including,
without limitation, to change the date or dates as of which such Stock Options
may be exercised.  No such amendment or modification shall, however, materially
adversely affect the rights of any Participant under any such Award without the
consent of such Participant.

         15.     MISCELLANEOUS.

                 15.1     TAX WITHHOLDING.  With respect to any Award the
Company shall have the right to withhold or cause to be withheld by any lawful
means any federal, state, local or other taxes, assessments or amounts of any
kind which the Committee, in its sole discretion, deems necessary to be
withheld to comply with the Code and/or any other applicable law, rule or
regulation.  If the Committee, in its sole discretion, permits shares of Common
Stock to be used to satisfy any such withholding, such Common Stock shall be
valued based on the Fair Market Value of such stock as of the date the
withholding is required to be made, such date to be determined by the
Committee.  The Committee may establish rules limiting the use of Common Stock
to meet withholding requirements by Participants who are subject to Section 16
of the Exchange Act.

                 15.2     NO RIGHT TO EMPLOYMENT.  Neither the adoption of the
Plan, the granting of any Award, nor the execution of any Award Agreement,
shall confer upon any employee of the Company or any Subsidiary any right to
continued employment with the Company or any Subsidiary, as the case may be,
nor shall it interfere in any way with the right, if any, of the Company or any
Subsidiary to terminate the employment of any employee at any time for any
reason.





                                       12
<PAGE>   13
                 15.3     UNFUNDED PLAN.  The Plan shall be unfunded and the
Company shall not be required to segregate any assets in connection with any
Awards under the Plan.  Any liability of the Company to any person with respect
to any Award under the Plan or any Award Agreement shall be based solely upon
the contractual obligations that may be created as a result of the Plan or any
such award or agreement.  No such obligation of the Company shall be deemed to
be secured by any pledge of, encumbrance on, or other interest in, any property
or asset of the Company or any Subsidiary.  Nothing contained in the Plan or
any Award Agreement shall be construed as creating in respect of any
Participant (or beneficiary thereof or any other person) any equity or other
interest of any kind in any assets of the Company or any Subsidiary or creating
a trust of any kind or a fiduciary relationship of any kind between the
Company, any Subsidiary and/or any such Participant, any beneficiary thereof or
any other person.

                 15.4     OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS.
Payments and other benefits received by a Participant under an Award made
pursuant to the Plan shall not be deemed a part of a Participant's compensation
for purposes of the determination of benefits under any other employee welfare
or benefit plans or arrangements, if any, provided by the Company or any
Subsidiary unless expressly provided in such other plans or arrangements, or
except where the Board expressly determines in writing that inclusion of an
Award or portion of an Award should be included to accurately reflect
competitive compensation practices or to recognize that an Award has been made
in lieu of a portion of competitive annual base salary or other cash
compensation.  Awards under the Plan may be made in addition to, in combination
with, or as alternatives to, grants, awards or payments under any other plans
or arrangements of the Company or its Subsidiaries.  The existence of the Plan
notwithstanding, the Company or any Subsidiary may adopt such other
compensation plans or programs and additional compensation arrangements as it
deems necessary to attract, retain and motivate employees.

                 15.5     LISTING, REGISTRATION AND OTHER LEGAL COMPLIANCE.
No shares of the Common Stock shall be issued under the Plan unless legal
counsel for the Company shall be satisfied that such issuance will be in
compliance with all applicable federal and state securities laws and
regulations and any other applicable laws or regulations.  The Committee may
require, as a condition of any payment or share issuance, that certain
agreements, undertakings, representations, certificates, and/or information, as
the Committee may deem necessary or advisable, be executed or provided to the
Company to assure compliance with all such applicable laws or regulations.
Certificates for shares of the Restricted Stock and/or Common Stock delivered
under the Plan may be subject to such stock-transfer orders and such other
restrictions as the Committee may deem advisable under the rules, regulations,
or other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Common Stock is then listed, and any applicable federal
or state securities law.  The Committee may cause a legend or legends to be put
on any such share certificates to make appropriate reference to such
restrictions.  In addition, if, at any time specified herein (or in any Award
Agreement) for (a) the making of any determination or (b) the issuance or other
distribution of Restricted Stock and/or Common Stock to or through a
Participant with respect to any Award, any law, rule, regulation or other
requirement of any governmental authority or agency shall require either the





                                       13
<PAGE>   14
Company, any Subsidiary or any Participant (or any estate, designated
beneficiary or other legal representative thereof) to take any action in
connection with any such determination, any such shares to be issued or
distributed, or the making of any such determination, as the case may be, shall
be deferred until such required action is taken.

                 15.6     AWARD AGREEMENTS.  Each Participant receiving an
Award under the Plan shall enter into an Award Agreement with the Company in a
form not inconsistent with the Plan or any determinations made by the
Committee.  Each such Participant shall agree to the restrictions, terms and
conditions of the Award set forth therein.

                 15.7     DESIGNATION OF BENEFICIARY.  Each Participant to whom
an Award has been made under the Plan may designate a beneficiary or
beneficiaries to receive any payment which under the terms of the Plan and the
relevant Award Agreement may become payable on or after the Participant's
death.  At any time, and from time to time, any such designation may be changed
or canceled by the Participant without the consent of any such beneficiary.
Any such designation, change or cancellation must be on a form provided for
that purpose by the Committee and shall not be effective until received by the
Committee.  If no beneficiary has been designated by a deceased Participant, or
if the designated beneficiaries have predeceased the Participant, the
beneficiary shall be the Participant's estate.  If the Participant designates
more than one beneficiary, any payments under the Plan to such beneficiaries
shall be made in equal shares unless the Participant has expressly designated
otherwise, in which case the payments shall be made in the shares designated by
the Participant.

                 15.8     LEAVES OF ABSENCE/TRANSFERS.  The Committee shall
have the power to promulgate rules and regulations and to make determinations,
as it deems appropriate, under the Plan in respect of any leave of absence from
the Company or any Subsidiary granted to a Participant.  Without limiting the
generality of the foregoing, the Committee may determine whether any such leave
of absence shall be treated as if the Participant has terminated employment
with the Company or any such Subsidiary.  If a Participant transfers within the
Company, or to or from any Subsidiary, such Participant shall not be deemed to
have terminated employment as a result of such transfers.

                 15.9     GOVERNING LAW.  The Plan and all actions taken
thereunder shall be governed by and construed in accordance with the laws of
the State of Delaware, without regard to principles of conflict of laws
thereunder.  Any titles and headings herein are for reference purposes only,
and shall in no way limit, define or otherwise affect the meaning, construction
or interpretation of any provisions of the Plan.

                 15.10    EFFECTIVE DATE.  The Plan shall be effective as of
February 15, 1994 (the "Effective Date"), subject to (a) the occurrence of the
closing of the Offering and (b) the approval by a majority of the Company's
shareholders in accordance with Rule 16b-3 of the Exchange Act and Section 422
of the Code.





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