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                                                                  EXHIBIT 10.19


                                      TELERGY, INC.

                             1999 INCENTIVE COMPENSATION PLAN

1.0   DEFINITIONS

      The following terms shall have the following meanings unless the context
      indicates otherwise:

1.1   "Award" shall mean either a Stock Option, an SAR, a Stock Award, a Stock
      Unit, a Performance Share, a Performance Unit, or a Cash Award.

1.2   "Award Agreement" shall mean a written agreement between the Company and
      the Participant that establishes the terms, conditions, restrictions
      and/or limitations applicable to an Award in addition to those established
      by the Plan and by the Committee's exercise of its administrative powers.

1.3   "Board" shall mean the Board of Directors of the Company.

1.4   "Cash Award" shall mean the grant by the Committee to a Participant of an
      award of cash as described in Section 11 below.

1.5   "Cause" shall mean (i) willful malfeasance or willful misconduct by the
      Employee in connection with his employment, (ii) continuing failure to
      perform such duties as are requested by the Company and/or its
      subsidiaries, (iii) failure by the Employee to observe material policies
      of the Company and/or its subsidiaries applicable to the Employee or (iv)
      the commission by the Employee of (x) any felony or (y) any misdemeanor
      involving moral turpitude.

1.6   "Change in Control of the Company" shall mean the occurrence of any of the
      following events:

      (a)   any Person, as such term is used for purposes of Section 13(d) or
            14(d) of the Exchange Act, or any successor section thereto, (other
            than (i) the Company, (ii) any trustee or other fiduciary holding
            securities under an employee benefit plan of the Company, (iii) any
            Subsidiaries of the Company, (iv) any company owned, directly or
            indirectly, by the stockholders of the Company in substantially the
            same proportions as their ownership of stock of the Company, or (v)
            any Kelly Family Member) becomes the beneficial owner, directly or
            indirectly, of securities of the Company representing 35% or more of
            the combined voting power of the Company's then-outstanding
            securities; provided however, that the acquisition of securities in
            a bona fide public offering or private placement of securities by an
            investor who is acquiring such securities for passive investment
            purposes only shall not constitute a "Change in Control".

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      (b)   during any period of twenty-four months, individuals who at the
            beginning of such period constitute the Board, and any new director
            (other than (i) a director nominated by a Person who has entered
            into an agreement with the Company to effect a transaction described
            in Sections 1.6 (a), (c) or (d) of the Plan, (ii) a director
            nominated by any Person (including the Company) who publicly
            announces an intention to take or to consider taking actions
            (including, but not limited to, an actual or threatened proxy
            contest) which if consummated would constitute a Change in Control
            or (iii) a director nominated by any Person who is the beneficial
            owner, directly or indirectly, of securities of the Company
            representing 10% or more of the combined voting power of the
            Company's securities) whose election by the Board or nomination for
            election by the Company's shareholders is or was approved by a vote
            of at least two-thirds (2/3) of the directors then still in office
            who either were directors at the beginning of the period or whose
            election or nomination for election was previously, so approved,
            cease for any reason to constitute at least a majority thereof;

      (c)   the effective date or date of consummation of any transaction or
            series of transactions (other than a transaction to which only the
            Company and one or more of its subsidiaries are parties) under which
            the Company is merged or consolidated with any other company, other
            than a merger or consolidation (i) which would result in the voting
            securities of the Company outstanding immediately prior thereto
            continuing to represent (either by remaining outstanding or by being
            converted into voting securities of the surviving entity) more than
            66 2/3% of the combined voting power of the voting securities of the
            Company or such surviving entity outstanding immediately after such
            merger or consolidation and (ii) after which no Person holds 35% or
            more of the combined voting power of the then-outstanding securities
            of the Company or such surviving entity; or

      (d)   the shareholders of the Company approve a plan of complete
            liquidation of the Company or an agreement for the sale or
            disposition by the Company of all or substantially all of the
            Company's assets;

1.7   "Code" shall mean the Internal Revenue Code of 1986, as amended from time
      to time.

1.8   "Committee" shall mean (i) the Board or (ii) a committee or subcommittee
      of the Board appointed by the Board from among its members. The Committee
      may be the Board's Compensation Committee.

1.9   "Common Stock" shall mean the Class A common stock, par value per share,
      stated value of $1 per share of the Company.

1.10  "Company" shall mean Telergy, Inc., a New York corporation.

1.11  "Disability" shall mean shall mean the inability to engage in any
      substantial gainful activity by reason of a medically determinable
      physical or mental impairment which constitutes a permanent and total
      disability, as defined in Section 22(e) (3) of the Code


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      (or any successor section thereto). The determination whether a
      Participant has suffered a Disability shall be made by the Committee based
      upon such evidence as it deems necessary and appropriate, and shall be
      conclusive and binding on the Participant. A Participant shall not be
      considered disabled unless he or she furnishes such medical or other
      evidence of the existence of the Disability as the Committee, in its sole
      discretion, may require.

1.12  "Dividend Equivalent Right" shall mean the right to receive an amount
      equal to the amount of any dividend paid with respect to a share of Common
      Stock multiplied by the number of shares of Common Stock underlying or
      with respect to a Stock Option, a SAR, a Stock Unit or a Performance Unit,
      and which shall be payable in cash, in Common Stock, in the form of Stock
      Units or Performance Units, or a combination of any or all of the
      foregoing.

1.13  "Effective Date" shall mean the date on which the Plan is adopted by the
      Board.

1.14  "Employee" shall mean an employee of the Company or any Subsidiary as
      described in Treasury Regulation Section 1.421-7(h).

1.15  "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
      from time to time, including applicable regulations thereunder.

1.16  "Fair Market Value of the Common Stock" shall mean:

      (a)   if the Common Stock is readily tradable on a national securities
            exchange or other market system, the closing price of the Common
            Stock on the date of calculation (or on the last preceding trading
            date if Common Stock was not traded on such date), or

      (b)   if the Common Stock is not readily tradable on a national securities
            exchange or other market system, as determined in good faith by the
            Board.

1.17  "Independent Contractor" shall mean a person (other than a person who is
      an Employee or a Nonemployee Director) or an entity that renders services
      to the Company or any Subsidiary.

1.18  "ISO" shall mean an "incentive stock option" as such term is used in Code
      Section 422.

1.19  "Kelly Family Member" shall means (1) Brian P. Kelly, Kevin J. Kelly and
      William M. Kelly, Jr., (2) members of the immediate families of any of the
      persons referred to in clause (1), (3) any of their respective spouses,
      estates, lineal descendants, heirs, executors, personal representatives,
      administrators, trusts for any of their benefit and charitable foundations
      to which shares of the Company's securities beneficially owned by any of
      the foregoing have been transferred and (4) any trust, corporation,
      partnership or other entity, the beneficiaries, stockholders, partners,
      owners or persons beneficially


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      holding an 80% or more controlling interest of which consist of any one or
      more of the persons referred to in clauses (1) or (2) above.

1.20  "Nonemployee Director" shall mean a member of the Board or the Board of
      Directors of a Subsidiary who is not an Employee.

1.21  "Nonqualified Stock Option" shall mean a Stock Option that does not
      qualify as an ISO.

1.22  "Participant" shall mean any Employee, Nonemployee Director or Independent
      Contractor to whom an Award has been granted by the Committee under the
      Plan.

1.23  "Performance-Based Award" shall mean an Award subject to the achievement
      of certain performance goal or goals as described in Section 12 below.

1.24  "Performance Share" shall mean the grant by the Committee to a Participant
      of an Award as described in Section 10.1 below.

1.25  "Performance Unit" shall mean the grant by the Committee to a Participant
      of an Award as described in Section 10.2 below.

1.26  "Plan" shall mean the Telergy, Inc. 1999 Incentive Compensation Plan.

1.27  "SAR" shall mean the grant by the Committee to a Participant of a stock
      appreciation right as described in Section 8 below.

1.28  "Stock Award" shall mean the grant by the Committee to a Participant of an
      Award of Common Stock as described in Section 9.1 below.

1.29  "Stock Option" shall mean the grant by the Committee to a Participant of
      an option to purchase Common Stock as described in Section 7 below.

1.30  "Stock Unit" shall mean the grant by the Committee to a Participant of an
      Award as described in Section 9.2 below.

1.31  "Subsidiary" shall mean a corporation of which the Company directly or
      indirectly owns more than 50 percent of the Voting Stock or any other
      business entity in which the Company directly or indirectly has an
      ownership interest of more than 50 percent or, other than with respect to
      the grant of ISOs, any other business venture designated by the Committee
      in which the Company has a significant interest, as determined in the
      discretion of the Committee.

1.32  "Treasury Regulations" shall mean the regulations promulgated under the
      Code by the United States Department of the Treasury, as amended from time
      to time.


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1.33  "Vest" shall mean:

      (a)   with respect to Stock Options and SARs, when the Stock Option or SAR
            (or a portion of such Stock Option or SAR) first becomes exercisable
            and remains exercisable subject to the terms and conditions of such
            Stock Option or SAR; or

      (b)   with respect to Awards other than Stock Options and SARs, when the
            Participant has:

            (i)   an unrestricted right, title and interest to receive the
                  compensation (whether payable in Common Stock, cash or a
                  combination of both) attributable to an Award (or a portion of
                  such Award) or to otherwise enjoy the benefits underlying such
                  Award; and

            (ii)  a right to transfer an Award subject to no Company-imposed
                  restrictions or limitations other than restrictions and/or
                  limitations imposed by Section 14 below.

1.34  "Vesting Date" shall mean the date or dates on which an Award Vests.

1.35  "Voting Stock" shall mean the capital stock of any class or classes having
      general voting power under ordinary circumstances, in the absence of
      contingencies, to elect the directors of a corporation.

2.0   PURPOSE AND TERM OF PLAN

2.1   Purpose. The purpose of the Plan is to motivate certain Employees,
      Nonemployee Directors and Independent Contractors to put forth maximum
      efforts toward the growth, profitability, and success of the Company and
      Subsidiaries by providing incentives to such Employees, Nonemployee
      Directors and Independent Contractors either through cash payments and/or
      through the ownership and performance of the Common Stock. In addition,
      the Plan is intended to provide incentives which will attract and retain
      highly qualified individuals as Employees and Nonemployee Directors and to
      assist in aligning the interests of such Employees and Nonemployee
      Directors with those of its stockholders.

2.2   Term. The Plan shall be effective as of the Effective Date; provided,
      however, that the Plan shall be approved by the stockholders of the
      Company at an annual meeting or any special meeting of stockholders of the
      Company within 12 months before or after the Effective Date, and such
      approval by the stockholders of the Company shall be a condition to the
      right of each Participant to receive Awards hereunder. Any Award granted
      under the Plan prior to the approval by the stockholders of the Company
      shall be effective as of the date of grant (unless the Committee specifies
      otherwise at the time of grant), but no such Award may Vest, be paid out,
      or otherwise be disposed of prior to such stockholder approval. If the
      stockholders of the Company fail to approve the Plan in accordance with
      this Section 2.2, any Award granted under the Plan shall be cancelled.


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      The Plan shall be unlimited in duration and in the event of 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 Plan on a date that is more than ten years
      from the Effective Date.

3.0   ELIGIBILITY AND PARTICIPATION

3.1   Eligibility. All Employees of the Company, all Nonemployee Directors and
      all Independent Contractors shall be eligible to participate in the Plan
      and to receive Awards.

3.2   Participation. Participants shall consist of such Employees, Nonemployee
      Directors and Independent Contractors as the Committee in its sole
      discretion designates to receive Awards under the Plan. Subject to Section
      7.1, an Award may also 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 any Subsidiary, provided that such
      Awards shall not become vested prior to the date the Employee first
      performs such services. Designation of a Participant in any year shall not
      require the Committee to designate such person or entity to receive an
      Award in any other year or, once designated, to receive the same type or
      amount of Award as granted to the Participant in any other year. The
      Committee shall consider such factors as it deems pertinent in selecting
      Participants and in determining the type and amount of their respective
      Awards.

4.0   ADMINISTRATION

4.1   Responsibility. The Committee shall have the responsibility, in its sole
      discretion, to control, operate, manage and administer the Plan in
      accordance with its terms.

4.2   Award Agreement. Each Award granted under the Plan shall be evidenced by
      an Award Agreement which shall be signed by the Committee and the
      Participant; provided, however, that in the event of any conflict between
      a provision of the Plan and any provision of an Award Agreement, the
      provision of the Plan shall prevail.

4.3   Authority of the Committee. The Committee shall have all the discretionary
      authority that may be necessary or helpful to enable it to discharge its
      responsibilities with respect to the Plan, including but not limited to
      the following:

      (a)   to determine eligibility for participation in the Plan;

      (b)   to determine eligibility for and the type and size of an Award
            granted under the Plan;

      (c)   to supply any omission, correct any defect, or reconcile any
            inconsistency in the Plan in such manner and to such extent as it
            shall deem appropriate in its sole discretion to carry the same into
            effect;


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      (d)   to issue administrative guidelines as an aid to administer the Plan
            and make changes in such guidelines as it from time to time deems
            proper;

      (e)   to make rules for carrying out and administering the Plan and make
            changes in such rules as it from time to time deems proper;

      (f)   to the extent permitted under the Plan, grant waivers of Plan terms,
            conditions, restrictions, and limitations;

      (g)   to accelerate the Vesting of any Award when such action or actions
            would be in the best interest of the Company;

      (h)   to grant Award in replacement of Awards previously granted under
            this Plan or any other executive compensation plan of the Company;
            and

      (i)   to take any and all other actions it deems necessary or advisable
            for the proper operation or administration of the Plan.

4.4   Action by the Committee. The Committee may act only by a majority of its
      members. Any determination of the Committee may be made, without a
      meeting, by a writing or writings signed by all of the members of the
      Committee. In addition, the Committee may authorize any one or more of its
      members to execute and deliver documents on behalf of the Committee.

4.5   Delegation of Authority. The Committee may delegate to one or more of its
      members, or to one or more agents, such administrative duties as it may
      deem advisable; provided, however, that any such delegation shall be in
      writing. In addition, the Committee, or any person to whom it has
      delegated duties under this Section 4.5, may employ one or more persons to
      render advice with respect to any responsibility the Committee or such
      person may have under the Plan. The Committee may employ such legal or
      other counsel, consultants and agents as it may deem desirable for the
      administration of the Plan and may rely upon any opinion or computation
      received from any such counsel, consultant or agent. Expenses incurred by
      the Committee in the engagement of such counsel, consultant or agent shall
      be paid by the Company, or the Subsidiary whose employees have benefited
      from the Plan, as determined by the Committee.

4.6   Determinations and Interpretations by the Committee. All determinations
      and interpretations made by the Committee shall be binding and conclusive
      on all Participants and their heirs, successors, and legal
      representatives.

4.7   Liability. No member of the Board, no member of the Committee and no
      employee of the Company shall be liable for any act or failure to act
      hereunder, except in circumstances involving his or her bad faith, gross
      negligence or willful misconduct, or for any act or failure to act
      hereunder by any other member or employee or by any agent to whom duties
      in connection with the administration of the Plan have been delegated.


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4.8   Indemnification. The Company shall indemnify members of the Committee and
      any agent of the Committee who is an employee of the Company, against any
      and all liabilities or expenses to which they may be subjected by reason
      of any act or failure to act with respect to their duties on behalf of the
      Plan, except in circumstances involving such person's bad faith, gross
      negligence or willful misconduct.

5.0   SHARES SUBJECT TO PLAN

      5.1 Available Shares. Subject to the provisions of Section 5.2 and Section
      5.3 below, the aggregate number of shares of Common Stock which shall be
      available for grants or payments of Awards under the Plan during its term
      shall be 1,000,000 shares, plus an annual increase to be added on the
      first day of the Company's fiscal year equal to the amount which causes
      the aggregate number of shares of Common Stock which shall be made
      available for Awards under this Plan to equal five percent (5%) of the
      then outstanding shares of Common Stock of the Company. In the event that
      (i) an Award (or portion thereof) lapses, expires or is otherwise
      terminated without the issuance of the shares subject to such Award, (ii)
      shares are tendered to pay the exercise price of a Stock Option or other
      Award or (iii) shares are withheld from any award to satisfy a
      Participant's tax withholding obligations or, if applicable, to pay the
      exercise price of a Stock Option or other Award, such shares shall again
      become available for grants or Awards hereunder. Such shares of Common
      Stock available for issuance under the Plan may be either authorized but
      unissued shares, shares of issued stock held in the Company's treasury, or
      both, at the discretion of the Company. For purposes of determining the
      number of shares that remain available for issuance under the Plan, the
      number of shares subject to outstanding Awards shall be charged against
      the limit set forth in the first sentence of this Section 5.1 (the
      "Section 5.1 Limit"). In addition, any shares underlying a Conversion
      Stock Option shall not be counted against the Section 5.1 Limit. Awards
      that are payable only in cash are not subject to this Section 5.1.

5.2   Adjustment to Shares. If there is any change in the Common Stock of the
      Company, through merger, consolidation, reorganization, recapitalization,
      stock dividend, stock split, reverse stock split, split-up, split-off,
      spin-off, combination of shares, exchange of shares, dividend in kind or
      other like change in capital structure or distribution (other than normal
      cash dividends) to stockholders of the Company, an adjustment shall be
      made to each outstanding Award so that each such Award shall thereafter be
      with respect to or exercisable for such securities, cash and/or other
      property as would have been received in respect of the Common Stock
      subject to such Award had such Award been paid, distributed or exercised
      in full immediately prior to such change or distribution. Such adjustment
      shall be made successively each time any such change shall occur. In
      addition, in the event of any such change or distribution, in order to
      prevent dilution or enlargement of Participants' rights under the Plan,
      the Committee shall have the authority to adjust, in an equitable manner,
      the number and kind of shares that may be issued under the Plan, the
      number and kind of shares subject to outstanding Awards, the exercise
      price applicable to outstanding Stock Options, and the Fair Market Value
      of the Common Stock and other value determinations applicable to
      outstanding Awards. Appropriate adjustments may also be made by the
      Committee in the terms of any Awards granted


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      under the Plan to reflect such changes or distributions and to modify any
      other terms of outstanding Awards on an equitable basis, including
      modifications of performance goals and changes in the length of
      performance periods; provided, however, that with respect to
      Performance-Based Awards, such modifications and/or changes do not
      disqualify compensation attributable to such Awards as "performance-based
      compensation" under Code Section 162(m). In addition, the Committee is
      authorized to make adjustments to the terms and conditions of, and the
      criteria included in, Awards in recognition of unusual or nonrecurring
      events affecting the Company or the financial statements of the Company,
      or in response to changes in applicable laws, regulations, or accounting
      principles. Notwithstanding anything contained in the Plan, any adjustment
      with respect to an ISO due to a change or distribution described in this
      Section 5.2 shall comply with the rules of Code Section 424(a), and in no
      event shall any adjustment be made which would render any ISO granted
      hereunder other than an incentive stock option for purposes of Code
      Section 422.

5.3   The maximum number of shares of Common Stock that may be issued by Stock
      Options intended to be ISOs shall be 1,000,000 shares.

6.0   MAXIMUM INDIVIDUAL AWARDS

6.1   Maximum Aggregate Number of Shares Underlying Stock-Based Awards Granted
      Under the Plan to Any Single Participant. The maximum aggregate number of
      shares of Common Stock underlying all Awards measured in shares of Common
      Stock (whether payable in Common Stock, cash or a combination of both)
      that may be granted to any single Participant in respect of any fiscal
      year of the Company shall be 250,000 shares, subject to adjustment as
      provided in Section 5.2 above. For purposes of the preceding sentence,
      such Awards that are cancelled or repriced shall continue to be counted in
      determining such maximum aggregate number of shares of Common Stock that
      may be granted to any single Participant during the life of the Plan.

6.2   Maximum Dollar Amount Underlying Cash-Based Awards Granted Under the Plan
      to Any Single Participant. The maximum dollar amount that may be paid to
      any single Participant with respect to all Awards measured in cash
      (whether payable in Common Stock, cash or a combination of both) in
      respect of any fiscal year of the Company shall be $2,000,000.

7.0   STOCK OPTIONS

7.1   In General. The Committee may, in its sole discretion, grant Stock Options
      to Employees, Nonemployee Directors and Independent Contractors on or
      after the Effective Date. The Committee shall, in its sole discretion,
      determine the Employees, the Nonemployee Directors and Independent
      Contractors who will receive Stock Options and the number of shares of
      Common Stock underlying each Stock Option. With respect to Employees who
      become Participants, the Committee may grant such Participants ISOs or
      Nonqualified Stock Options or a combination of both. With respect to
      Nonemployee Directors and Independent Contractors who become Participants,
      the Committee may grant such Participants only Nonqualified Stock Options.
      Each Stock Option shall be


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      subject to such terms and conditions consistent with the Plan as the
      Committee may impose from time to time. In addition, each Stock Option
      shall be subject to the following terms and conditions set forth in
      Sections 7.2 through 7.8 below.

7.2   Exercise Price. The Committee shall specify the exercise price of each
      Stock Option in the Award Agreement; provided, however, that (i) the
      exercise price of any ISO shall not be less than 100 percent of the Fair
      Market Value of the Common Stock on the date of grant, and (ii) the
      exercise price of any Nonqualified Stock Option shall not be less than 100
      percent of the Fair Market Value of the Common Stock on the date of grant
      unless the Committee in its sole discretion determines otherwise on the
      date of grant.

7.3   Term of Stock Option. The Committee shall specify the term of each Stock
      Option in the Award Agreement; provided, however, that no ISO shall be
      exercised after the 10th anniversary of the date of grant of such ISO.
      Each Stock Option shall terminate at such earlier times and upon such
      conditions or circumstances as the Committee shall, in its sole
      discretion, set forth in the Award Agreement on the date of grant.

7.4   Vesting Date. The Committee shall specify the Vesting Date with respect to
      each Stock Option in the Award Agreement. The Committee may grant Stock
      Options that are Vested, either in whole or in part, on the date of grant.
      If the Committee fails to specify a Vesting Date in the Award Agreement,
      25 percent of such Stock Option shall become exercisable on each of the
      first 4 anniversaries of the date of grant and shall remain exercisable
      following such anniversary date until the Stock Option expires in
      accordance with its terms under the Award Agreement or under the terms of
      the Plan. The Vesting of a Stock Option may be subject to such other terms
      and conditions as shall be determined by the Committee, including, without
      limitation, accelerating the Vesting if certain performance goals are
      achieved.

7.5   Exercise of Stock Options. The Stock Option exercise price may be paid in
      cash or, in the sole discretion of the Committee, by the delivery of
      shares of Common Stock then owned by the Participant, by the withholding
      of shares of Common Stock for which a Stock Option is exercisable, or by a
      combination of these methods. In the sole discretion of the Committee,
      payment may also be made by delivering a properly executed exercise notice
      to the Company together with a copy of irrevocable instructions to a
      broker to deliver promptly to the Company the amount of sale or loan
      proceeds to pay the exercise price. To facilitate the foregoing, the
      Company may enter into agreements for coordinated procedures with one or
      more brokerage firms. The Committee may prescribe any other method of
      paying the exercise price that it determines to be consistent with
      applicable law and the purpose of the Plan, including, without limitation,
      in lieu of the exercise of a Stock Option by delivery of shares of Common
      Stock then owned by a Participant, providing the Company with a notarized
      statement attesting to the number of shares owned by the Participant,
      where upon verification by the Company, the Company would issue to the
      Participant only the number of incremental shares to which the Participant
      is entitled upon exercise of the Stock Option. In determining which
      methods a Participant may utilize to pay the exercise price, the Committee
      may consider such factors as it determines are appropriate; provided,
      however, (i) that any method approved by the Committee shall comply with
      applicable securities laws and (ii) that with respect


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      to ISOs, all such discretionary determinations by the Committee shall be
      made at the time of grant and specified in the Award Agreement.

7.6   Restrictions Relating to ISOs. In addition to being subject to the terms
      and conditions of this Section 7, ISOs shall comply with this Section 7.6
      to the extent required by Code Section 422. Any Award which does not
      comply with such requirements shall not be an Award of ISOs but shall be
      deemed to be an Award of Nonqualified Stock Options. ISOs may be granted
      only to Participants who are employees (as described in Treasury
      Regulation Section 1.421-7(h)) of the Company or of any "Parent
      Corporation" (as defined in Code Section 424(e)) or of any "Subsidiary
      Corporation" (as defined in Code Section 424(f)) on the date of grant. The
      aggregate market value (determined as of the time the ISO is granted) of
      the Common Stock with respect to which ISOs (under all option plans of the
      Company and of any Parent Corporation and of any Subsidiary Corporation)
      are exercisable for the first time by a Participant during any calendar
      year shall not exceed $100,000. ISOs shall not be transferable by the
      Participant otherwise than by will or the laws of descent and distribution
      and shall be exercisable, during the Participant's lifetime, only by such
      Participant. The Committee shall not grant ISOs to any Employee who, at
      the time the ISO is granted, owns stock possessing (after the application
      of the attribution rules of Code Section 424(d)) more than 10 percent of
      the total combined voting power of all classes of stock of the Company or
      of any Parent Corporation or of any Subsidiary Corporation unless the
      exercise price of the ISO is fixed at not less than 110 percent of the
      Fair Market Value of the Common Stock on the date of grant and the
      exercise of such ISO is prohibited by its terms after the 5th anniversary
      of the ISO's date of grant. In addition, no ISO shall be issued to a
      Participant in tandem with a Nonqualified Stock Option issued to such
      Participant in accordance with Treasury Regulation Section 14a.422A-1,
      Q/A 39.

7.7   Additional Terms and Conditions. The Committee may, by way of the Award
      Agreements or otherwise, establish such other terms, conditions,
      restrictions and/or limitations, if any, of any Stock Option, provided
      they are not inconsistent with the Plan, including, without limitation,
      any requirement that the Participant not engage in competition with the
      Company or any Subsidiary.

7.8   Conversion Stock Options. The Committee may, in its sole discretion, grant
      a Stock Option to any holder of an option (hereinafter referred to as an
      "Original Option") to purchase shares of the stock of any corporation:

      (a)   the stock or assets of which were acquired, directly or indirectly,
            by the Company or any Subsidiary, or

      (b)   which was merged with and into the Company or a Subsidiary,

      so that the Original Option is converted into a Stock Option (hereinafter
      referred to as a "Conversion Stock Option"); provided, however, that such
      Conversion Stock Option as of the date of its grant (the "Conversion Stock
      Option Grant Date") shall have the same economic value as the Original
      Option as of the Conversion Stock Option Grant Date. In


                                      -11-
<PAGE>   12

      addition, unless the Committee, in its sole discretion determines
      otherwise, a Conversion Stock Option which is converting an Original
      Option intended to qualify as an ISO shall have the same terms and
      conditions as applicable to the Original Option in accordance with Code
      Section 424 and the Treasury Regulations thereunder so that the conversion
      (x) is treated as the issuance or assumption of a stock option under Code
      Section 424(a) and (y) is not treated as a modification, extension or
      renewal of a stock option under Code Section 424(h).

8.0   SARS

8.1   In General. The Committee may, in its sole discretion, grant SARs to
      Employees, Nonemployee Directors, and/or Independent Contractors. An SAR
      is a right to receive a payment in cash, Common Stock or a combination of
      both, in an amount equal to the excess of (x) the Fair Market Value of the
      Common Stock, or other specified valuation, of a specified number of
      shares of Common Stock on the date the SAR is exercised over (y) the Fair
      Market Value of the Common Stock, or other specified valuation (which
      shall be no less than the Fair Market Value of the Common Stock), of such
      shares of Common Stock on the date the SAR is granted, all as determined
      by the Committee; provided, however, that if a SAR is granted
      retroactively in tandem with or in substitution for a Stock Option, the
      designated Fair Market Value of the Common Stock in the Award Agreement
      may be the Fair Market Value of the Common Stock on the date such Stock
      Option was granted. Each SAR shall be subject to such terms and
      conditions, including, but not limited to, a provision that automatically
      converts a SAR into a Stock Option on a conversion date specified at the
      time of grant, as the Committee shall impose from time to time in its sole
      discretion and subject to the terms of the Plan.

9.0   STOCK AWARDS AND STOCK UNITS

9.1   Stock Awards. The Committee may, in its sole discretion, grant Stock
      Awards to Employees, Nonemployee Directors, and/or Independent Contractors
      as additional compensation or in lieu of other compensation for services
      to the Company. A Stock Award shall consist of shares of Common Stock
      which shall be subject to such terms and conditions as the Committee in
      its sole discretion determines appropriate including, without limitation,
      restrictions on the sale or other disposition of such shares, the Vesting
      Date with respect to such shares, and the right of the Company to
      reacquire such shares for no consideration upon termination of the
      Participant's employment within specified periods. The Committee may
      require the Participant to deliver a duly signed stock power, endorsed in
      blank, relating to the Common Stock covered by such Stock Award and/or
      that the stock certificates evidencing such shares be held in custody or
      bear restrictive legends until the restrictions thereon shall have lapsed.
      With respect to the shares of Common Stock subject to a Stock Award, the
      Participant shall have all of the rights of a holder of shares of Common
      Stock, including the right to receive dividends and to vote the shares,
      unless the Committee determines otherwise on the date of grant.

9.2   Stock Units. The Committee may, in its sole discretion, grant to
      Employees, Nonemployee Directors, and/or Independent Contractor Stock
      Units as additional


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<PAGE>   13

      compensation or in lieu of other compensation for services to the Company.
      A Stock Unit is a hypothetical share of Common Stock represented by a
      notional account established and maintained (or caused to be established
      or maintained) by the Company for such Participant who receives a grant of
      Stock Units. Stock Units shall be subject to such terms and conditions as
      the Committee, in its sole discretion, determines appropriate including,
      without limitation, determinations of the Vesting Date with respect to
      such Stock Units and the criteria for the Vesting of such Stock Units. A
      Stock Unit granted by the Committee shall provide for payment in shares of
      Common Stock at such time or times as the Award Agreement shall specify.
      The Committee shall determine whether a Participant who has been granted a
      Stock Unit shall also be entitled to a Dividend Equivalent Right.

9.3   Payout of Stock Units. Subject to a Participant's election to defer in
      accordance with Section 17.3 below, upon the Vesting of a Stock Unit, the
      shares of Common Stock representing the Stock Unit shall be distributed to
      the Participant, unless the Committee, in its sole discretion, provides
      for the payment of the Stock Unit in cash (or partly in cash and partly in
      shares of Common Stock) equal to the value of the shares of Common Stock
      which would otherwise be distributed to the Participant.

10.0  PERFORMANCE SHARES AND PERFORMANCE UNITS

10.1  Performance Shares. The Committee may, in its sole discretion, grant
      Performance Shares to Employees, Nonemployee Directors, and/or Independent
      Contractors as additional compensation or in lieu of other compensation
      for services to the Company. A Performance Share shall consist of a share
      or shares of Common Stock which shall be subject to such terms and
      conditions as the Committee, in its sole discretion, determines
      appropriate including, without limitation, determining the performance
      goal or goals which, depending on the extent to which such goals are met,
      will determine the number and/or value of the Performance Shares that will
      be paid out or distributed to the Participant who has been granted
      Performance Shares. Performance goals may be based on, without limitation,
      Company-wide, divisional and/or individual performance, as the Committee,
      in its sole discretion, may determine, and may be based on the performance
      measures listed in Section 12.3 below.

10.2  Performance Units. The Committee may, in its sole discretion, grant to
      Employees, Nonemployee Directors, and/or Independent Contractors
      Performance Units as additional compensation or in lieu of other
      compensation for services to the Company. A Performance Unit is a
      hypothetical share or shares of Common Stock represented by a notional
      account which shall be established and maintained (or caused to be
      established or maintained) by the Company for such Participant who
      receives a grant of Performance Units. Performance Units shall be subject
      to such terms and conditions as the Committee, in its sole discretion,
      determines appropriate including, without limitation, determining the
      performance goal or goals which, depending on the extent to which such
      goals are met, will determine the number and/or value of the Performance
      Units that will be accrued with respect to the Participant who has been
      granted Performance Units. Performance goals may be based on, without
      limitation, Company-wide, divisional and/or


                                      -13-
<PAGE>   14

      individual performance, as the Committee, in its sole discretion, may
      determine, and may be based on the performance measures listed in Section
      12.3 below.

10.3  Adjustment of Performance Goals. With respect to those Performance Shares
      or Performance Units that are not intended to qualify as Performance-Based
      Awards (as described in Section 12 below), the Committee shall have the
      authority at any time to make adjustments to performance goals for any
      outstanding Performance Shares or Performance Units which the Committee
      deems necessary or desirable unless at the time of establishment of the
      performance goals the Committee shall have precluded its authority to make
      such adjustments.

10.4  Payout of Performance Shares or Performance Units. Subject to a
      Participant's election to defer in accordance with Section 17.3 below,
      upon the Vesting of a Performance Share or a Performance Unit, the shares
      of Common Stock representing the Performance Share or the Performance Unit
      shall be distributed to the Participant, unless the Committee, in its sole
      discretion, provides for the payment of the Performance Share or a
      Performance Unit in cash (or partly in cash and partly in shares of Common
      Stock) equal to the value of the shares of Common Stock which would
      otherwise be distributed to the Participant.

11.0  CASH AWARDS

11.1  In General. The Committee may, in its sole discretion, grant Cash Awards
      to Employees, Nonemployee Directors, and/or Independent Contractors as
      additional compensation or in lieu of other compensation for services to
      the Company. A Cash Award shall be subject to such terms and conditions as
      the Committee, in its sole discretion, determines appropriate including,
      without limitation, determining the Vesting Date with respect to such Cash
      Award, the criteria for the Vesting of such Cash Award, and the right of
      the Company to require the Participant to repay the Cash Award (with or
      without interest) upon termination of the Participant's employment within
      specified periods.

12.0  PERFORMANCE-BASED AWARDS

12.1  In General. The Committee, in its sole discretion, may designate Awards
      granted under the Plan as Performance-Based Awards (as defined below) if
      it determines that such compensation might not be tax deductible by the
      Company due to the deduction limitation imposed by Code Section 162(m).
      Accordingly, an Award granted under the Plan may be granted in such a
      manner that the compensation attributable to such Award is intended by the
      Committee to qualify as "performance-based compensation" (as such term is
      used in Code Section 162(m) and the Treasury Regulations thereunder) and
      thus be exempt from the deduction limitation imposed by Code Section
      162(m) ("Performance-Based Awards").

12.2  Qualification of Performance-Based Awards. Awards shall only qualify as
      Performance-Based Awards under the Plan if:


                                      -14-
<PAGE>   15

      (a)   at the time of grant the Committee is comprised solely of two or
            more "outside directors" (as such term is used in Code Section
            162(m) and the Treasury Regulations thereunder);

      (b)   with respect to either the granting or Vesting of an Award (other
            than (i) a Nonqualified Stock Option or (ii) an SAR, which are
            granted with an exercise price at or above the Fair Market Value of
            the Common Stock on the date of grant), such Award is subject to the
            achievement of a performance goal or goals based on one or more of
            the performance measures specified in Section 12.3 below;

      (c)   the Committee establishes in writing (i) the objective
            performance-based goals applicable to a given performance period and
            (ii) the individual employees or class of employees to which such
            performance-based goals apply no later than 90 days after the
            commencement of such performance period (but in no event after 25
            percent of such performance period has elapsed);

      (d)   no compensation attributable to a Performance-Based Award will be
            paid to or otherwise received by a Participant until the Committee
            certifies in writing that the performance goal or goals (and any
            other material terms) applicable to such performance period have
            been satisfied; and

      (e)   after the establishment of a performance goal, the Committee shall
            not revise such performance goal (unless such revision will not
            disqualify compensation attributable to the Award as
            "performance-based compensation" under Code Section 162(m)) or
            increase the amount of compensation payable with respect to such
            Award upon the attainment of such performance goal.

12.3  Performance Measures. The Committee may use the following performance
      measures (either individually or in any combination) to set performance
      goals with respect to Awards intended to qualify as Performance-Based
      Awards: net sales; pretax income before allocation of corporate overhead
      and bonus; budget; cash flow; earnings per share; net income; division,
      group or corporate financial goals; return on stockholders' equity; return
      on assets; attainment of strategic and operational initiatives;
      appreciation in and/or maintenance of the price of the Common Stock or any
      other publicly-traded securities of the Company; market share; gross
      profits; earnings before interest and taxes; earnings before interest,
      taxes, depreciation and amortization; economic value-added models;
      comparisons with various stock market indices; increase in number of
      customers; and/or reductions in costs.

13.0  CHANGE IN CONTROL

13.1  Accelerated Vesting. Notwithstanding any other provision of this Plan to
      the contrary, if there is a Change in Control of the Company, the
      Committee, in its sole discretion, may take such actions as it deems
      appropriate with respect to outstanding Awards, including,


                                      -15-
<PAGE>   16

      without limitation, accelerating the Vesting Date and/or payout of such
      Awards; provided, however, that such action shall not conflict with any
      provision contained in an Award Agreement unless such provision is amended
      in accordance with Section 16.3 below.

13.2  Cashout. The Committee, in its sole discretion, may determine that, upon
      the occurrence of a Change in Control of the Company, all or a portion of
      certain outstanding Awards shall terminate within a specified number of
      days after notice to the holders, and each such holder shall receive an
      amount equal to the value of such Award on the date of the change in
      control, and with respect to each share of Common Stock subject to a Stock
      Option or SAR, an amount equal to the excess of the Fair Market Value of
      such shares of Common Stock immediately prior to the occurrence of such
      change in control over the exercise price per share of such Stock Option
      or SAR. Such amount shall be payable in cash, in one or more kinds of
      property (including the property, if any, payable in the transaction) or
      in a combination thereof, as the Committee, in its sole discretion, shall
      determine.

13.3  Assumption or Substitution of Awards. Notwithstanding anything contained
      in the Plan to the contrary, the Committee may, in its sole discretion,
      provide that an Award may be assumed by any entity which acquires control
      of the Company or may be substituted by a similar award under such
      entity's compensation plans.

14.0  TERMINATION OF EMPLOYMENT IF PARTICIPANT IS AN EMPLOYEE

14.1  Termination of Employment Due to Death or Disability. Subject to any
      written agreement between the Company and a Participant, if a
      Participant's employment is terminated due to death or Disability:

      (a)   all non-Vested portions of Awards held by the Participant on the
            date of the Participant's death or the date of the termination of
            his or her employment, as the case may be, shall immediately be
            forfeited by such Participant as of such date; and

      (b)   all Vested portions of Stock Options and SARs held by the
            Participant on the date of the Participant's death or the date of
            the termination of his or her employment, as the case may be, shall
            remain exercisable until the earlier of:

            (i)   the end of the 12-month period following the date of the
                  Participant's death or the date of the termination of his or
                  her employment, as the case may be, or

            (ii)  the date the Stock Option or SAR would otherwise expire.

14.2  Termination of Employment for Cause. Subject to any written agreement
      between the Company and a Participant, if a Participant's employment is
      terminated by the Company for cause, all Awards held by a Participant on
      the date of the termination of his or her employment for Cause, whether
      Vested or non-Vested, shall immediately be forfeited by such Participant
      as of such date.


                                      -16-
<PAGE>   17

14.3  Other Terminations of Employment. Subject to any written agreement between
      the Company and a Participant, if a Participant's employment is terminated
      for any reason other than for Cause or other than due to death or
      Disability:

      (a)   all non-Vested portions of Awards held by the Participant on the
            date of the termination of his or her employment shall immediately
            be forfeited by such Participant as of such date; and

      (b)   all Vested portions of Stock Options and/or SARs held by the
            Participant on the date of the termination of his or her employment
            shall remain exercisable until the earlier of (i) the end of the
            90-day period following the date of the termination of the
            Participant's employment or (ii) the date the Stock Option or SAR
            would otherwise expire.

14.4  Committee Discretion. Notwithstanding anything contained in the Plan to
      the contrary, the Committee may, in its sole discretion, provide that:

      (a)   any or all non-Vested portions of Stock Options and/or SARs held by
            the Participant on the date of the Participant's death and/or the
            date of the termination of his or her employment shall immediately
            become exercisable as of such date shall remain exercisable until a
            date that occurs on or prior to the date the Stock Option or SAR is
            scheduled to expire;

      (b)   any or all Vested portions of Nonqualified Stock Options and/or SARs
            held by the Participant on the date of the Participant's death
            and/or the date of the termination of his or her employment shall
            remain exercisable until a date that occurs on or prior to the date
            the Stock Option or SAR is scheduled to expire; and/or

      (c)   any or all non-Vested portions of Stock Awards, Stock Units,
            Performance Shares, Performance Units, and/or Cash Awards held by
            the Participant on the date of the Participant's death and/or the
            date of the termination of his or her employment shall immediately
            Vest or shall become Vested on a date that occurs on or prior to the
            date the Award is scheduled to vest.

15.0  TAXES

15.1  Withholding Taxes. With respect to Employees, the Company, or the
      applicable Subsidiary, may require a Participant who has become vested in
      his or her Stock Award, Stock Unit, Performance Share or Performance Unit
      granted hereunder, or who exercises a Stock Option or SAR granted
      hereunder to reimburse the corporation which employs such Participant for
      any taxes required by any governmental regulatory authority to be withheld
      or otherwise deducted and paid by such corporation or entity in respect of
      the issuance or disposition of such shares or the payment of any amounts.
      In lieu thereof, the corporation or entity which employs such Participant
      shall have the right to withhold the amount of such taxes from any other
      sums due or to become due from such corporation or


                                      -17-
<PAGE>   18

      entity to the Participant upon such terms and conditions as the Committee
      shall prescribe. The corporation or entity that employs such Participant
      may, in its discretion, hold the stock certificate to which such
      Participant is entitled upon the vesting of a Stock Award, Stock Unit,
      Performance Share or Performance Unit or the exercise of a Stock Option or
      SAR as security for the payment of such withholding tax liability, until
      cash sufficient to pay that liability has been accumulated.

15.2  Use of Common Stock to Satisfy Withholding Obligation. With respect to
      Employees, at any time that the Company, Subsidiary or other entity that
      employs such Participant becomes subject to a withholding obligation under
      applicable law with respect to the vesting of a Stock Award, Stock Unit,
      Performance Share or Performance Unit or the exercise of a Nonqualified
      Stock Option (the "Tax Date"), except as set forth below, a holder of such
      Award may elect to satisfy, in whole or in part, the holder's related
      personal tax liabilities (an "Election") by (i) directing the Company,
      Subsidiary or other entity that employs such Participant to withhold from
      shares issuable in the related vesting or exercise either a specified
      number of shares or shares of Common Stock having a specified value (in
      each case equal to the related minimum statutory personal withholding tax
      liabilities with respect to the applicable taxing jurisdiction in order to
      comply with the requirements for a "fixed plan" under Accounting
      Principals Board Opinion No. 25), (ii) tendering shares of Common Stock
      previously issued pursuant to the exercise of a Stock Option or other
      shares of the Common Stock owned by the holder, or (iii) combining any or
      all of the foregoing Elections in any fashion. An Election shall be
      irrevocable. The withheld shares and other shares of Common Stock tendered
      in payment shall be valued at their Fair Market Value of the Common Stock
      on the Tax Date. The Committee may disapprove of any Election, suspend or
      terminate the right to make Elections or provide that the right to make
      Elections shall not apply to particular shares or exercises. The Committee
      may impose any additional conditions or restrictions on the right to make
      an Election as it shall deem appropriate, including conditions or
      restrictions with respect to Section 16 of the Exchange Act.

15.3  No Guarantee of Tax Consequences. No person connected with the Plan in any
      capacity, including, but not limited to, the Company and any Subsidiary
      and their directors, officers, agents and employees makes any
      representation, commitment, or guarantee that any tax treatment,
      including, but not limited to, federal, state and local income, estate and
      gift tax treatment, will be applicable with respect to amounts deferred
      under the Plan, or paid to or for the benefit of a Participant under the
      Plan, or that such tax treatment will apply to or be available to a
      Participant on account of participation in the Plan.

16.0  AMENDMENT AND TERMINATION

16.1  Termination of Plan. The Board may suspend or terminate the Plan at any
      time with or without prior notice; provided, however, that no action
      authorized by this Section 16.1 shall reduce the amount of any outstanding
      Award or change the terms and conditions thereof without the Participant's
      consent.


                                      -18-
<PAGE>   19

16.2  Amendment of Plan. The Board may amend the Plan at any time with or
      without prior notice; provided, however, that no amendment or termination
      may adversely affect the rights of any participant under any outstanding
      Award without the Participant's consent.

16.3  Amendment or Cancellation of Award Agreements. The Committee may amend or
      modify any Award Agreement at any time by mutual agreement between the
      Committee and the Participant or such other persons as may then have an
      interest therein. In addition, by mutual agreement between the Committee
      and a Participant or such other persons as may then have an interest
      therein, Awards may be granted to an Employee, Nonemployee Director or
      Independent Contractor in substitution and exchange for, and in
      cancellation of, any Awards previously granted to such Employee,
      Nonemployee Director or Independent Contractor under the Plan, or any
      award previously granted to such Employee, Nonemployee Director or
      Independent Contractor under any other present or future plan of the
      Company or any present or future plan of an entity which (i) is purchased
      by the Company, (ii) purchases the Company, or (iii) merges into or with
      the Company.

17.0  MISCELLANEOUS

17.1  Other Provisions. Awards granted under the Plan may also be subject to
      such other provisions (whether or not applicable to the Award granted to
      any other Participant) as the Committee determines on the date of grant to
      be appropriate, including, without limitation, for the installment
      purchase of Common Stock under Stock Options, to assist the Participant in
      financing the acquisition of Common Stock, for the forfeiture of, or
      restrictions on resale or other disposition of, Common Stock acquired
      under any Stock Option, for the acceleration of Vesting of Awards in the
      event of a Change in Control of the Company, for the payment of the value
      of Awards to Participants in the event of a Change in Control of the
      Company, or to comply with federal and state securities laws, or
      understandings or conditions as to the Participant's employment in
      addition to those specifically provided for under the Plan.

17.2  Transferability. Each Award granted under the Plan to a Participant shall
      not be transferable otherwise than by will or the laws of descent and
      distribution, and Stock Options and SARs shall be exercisable, during the
      Participant's lifetime, only by the Participant. In the event of the death
      of a Participant, each Stock Option or SAR theretofore granted to him or
      her shall be exercisable during such period after his or her death as the
      Committee shall, in its sole discretion, set forth in the Award Agreement
      on the date of grant and then only by the executor or administrator of the
      estate of the deceased Participant or the person or persons to whom the
      deceased Participant's rights under the Stock Option or SAR shall pass by
      will or the laws of descent and distribution. Notwithstanding the
      foregoing, the Committee, in its sole discretion, may permit the
      transferability of a Stock Option by a Participant solely to members of
      the Participant's immediate family or trusts or family partnerships or
      other similar entities for the benefit of such persons, and subject to
      such terms, conditions, restrictions and/or limitations, if any, as the
      Committee may establish and include in the Award Agreement.


                                      -19-
<PAGE>   20

17.3  Election to Defer Compensation Attributable to Award. The Committee may,
      in its sole discretion, allow a Participant to elect to defer the receipt
      of any compensation attributable to an Award under guidelines and
      procedures to be established by the Committee after taking into account
      the advice of the Company's tax counsel.

17.4  Listing of Shares and Related Matters. If at any time the Committee shall
      determine that the listing, registration or qualification of the shares of
      Common Stock subject to any Award on any securities exchange or under any
      applicable law, or the consent or approval of any governmental regulatory
      authority, is necessary or desirable as a condition of, or in connection
      with, the granting of an Award or the issuance of shares of Common Stock
      thereunder, such Award may not be exercised, distributed or paid out, as
      the case may be, in whole or in part, unless such listing, registration,
      qualification, consent or approval shall have been effected or obtained
      free of any conditions not acceptable to the Committee.

17.5  No Right, Title, or Interest in Company Assets. Participants shall have no
      right, title, or interest whatsoever in or to any investments which the
      Company may make to aid it in meeting its obligations under the Plan.
      Nothing contained in the Plan, and no action taken pursuant to its
      provisions, shall create or be construed to create a trust of any kind, or
      a fiduciary relationship between the Company and any Participant,
      beneficiary, legal representative or any other person. To the extent that
      any person acquires a right to receive payments from the Company under the
      Plan, such right shall be no greater than the right of an unsecured
      general creditor of the Company. All payments to be made hereunder shall
      be paid from the general funds of the Company and no special or separate
      fund shall be established and no segregation of assets shall be made to
      assure payment of such amounts except as expressly set forth in the Plan.
      The Plan is not intended to be subject to the Employee Retirement Income
      Security Act of 1974, as amended.

17.6  No Right to Continued Employment or Service or to Grants. The
      Participant's rights, if any, to continue to serve the Company as a
      director, officer, employee, independent contractor or otherwise, shall
      not be enlarged or otherwise affected by his or her designation as a
      Participant under the Plan, and the Company or the applicable Subsidiary
      reserves the right to terminate the employment of any Employee or the
      services of any Independent Contractor or director at any time. The
      adoption of the Plan shall not be deemed to give any Employee, Nonemployee
      Director, Independent Contractor or any other individual any right to be
      selected as a Participant or to be granted an Award.

17.7  Awards Subject to Foreign Laws. The Committee may grant Awards to
      individual Participants who are subject to the tax laws of nations other
      than the United States, and such Awards may have terms and conditions as
      determined by the Committee as necessary to comply with applicable foreign
      laws. The Committee may take any action which it deems advisable to obtain
      approval of such Awards by the appropriate foreign governmental entity;
      provided, however, that no such Awards may be granted pursuant to this
      Section 17.7 and no action may be taken which would result in a violation
      of the Exchange Act or any other applicable law.


                                      -20-
<PAGE>   21

7.8   Governing Law. The Plan, all Awards granted hereunder, and all actions
      taken in connection herewith shall be governed by and construed in
      accordance with the laws of the State of New York without reference to
      principles of conflict of laws, except as superseded by applicable federal
      law or as otherwise provided in any Award Agreement.

17.9  Other Benefits. No Award granted under the Plan shall be considered
      compensation for purposes of computing benefits under any retirement plan
      of the Company or any Subsidiary nor affect any benefits or compensation
      under any other benefit or compensation plan of the Company or any
      Subsidiary now or subsequently in effect.

17.10 No Fractional Shares. No fractional shares of Common Stock shall be issued
      or delivered pursuant to the Plan or any Award. The Committee shall
      determine whether cash, Common Stock, Stock Options, or other property
      shall be issued or paid in lieu of fractional shares or whether such
      fractional shares or any rights thereto shall be forfeited or otherwise
      eliminated.

17.11 Authority of the Company and Shareholders. The existence of the Plan, the
      Award Agreements and the Awards granted hereunder shall not affect or
      restrict in any way the right or power of the Company or the shareholders
      of the Company to make or authorize any adjustment, recapitalization,
      reorganization or other change in the Company's capital structure or its
      business, any merger or consolidation of the Company, any issue of stock
      or of options, warrants or rights to purchase stock or of bonds,
      debentures, preferred or prior preference stocks whose rights are superior
      to or affect the Common Stock or the rights thereof or which are
      convertible into or exchangeable for Common Stock, or the dissolution or
      liquidation of the Company, or 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.


                                      -21-