BREED Technologies, Inc.

                            1994 STOCK INCENTIVE PLAN





Section 1. Purpose

          The purpose of this Stock  Incentive  Plan (the  "Plan") is to advance
  the interests of Breed Technologies,  Inc. by enhancing its ability to attract
  and  retain key  employees,  consultants  and others who are in a position  to
  contribute to the Company's future growth and success.


Section 2.  Definitions

          "Award" means any Option, Stock Appreciation Right, Performance
  Share, Restricted Stock or Unrestricted Stock awarded under the Plan.

  "Board" means the Board of Directors of the Company.

           "Code" means the Internal  Revenue Code of 1986, as amended from time
  to time.

           "Committee"  means a  committee  of not less than two  members of the
  Board appointed by the Board to administer the Plan, provided that at any time
  when the  Common  Stock  is  registered  under  Section  12 of the  Securities
  Exchange Act of 1934, each member of the Committee  shall be a  "disinterested
  person" within the meaning of Rule 16b-3 under the Securities  Exchange Act of
  1934 ("Rule 16b-3").

           "Common Stock" or "Stock" means the Common Stock,  $.01 par value per
  share, of the Company.

           "Company" means Breed Technologies, Inc. and, except where the
  content otherwise requires, all present and future subsidiaries of the
  Company as defined in Sections 424(f) of the Code.

           "Designated  Beneficiary"  means  the  beneficiary  designated  by  a
  Participant,  in a manner  determined by the Board,  to receive amounts due or
  exercise rights of the Participant in the event of the Participant's death. In
  the  absence  of  an  effective  designation  by  a  Participant,   Designated
  Beneficiary shall mean the Participant's estate.

           "Fair Market Value" means,  with respect to Common Stock or any other
  property, the fair market value of such property as

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  determined  by the Board in good  faith or in the  manner  established  by the
  Board from time to time.

           "Incentive Stock Option" means an Option to purchase shares of Common
  Stock awarded to a  Participant  under Section 6 which is intended to meet the
  requirements of Section 422 of the Code or any successor provision.

           "Nonstatutory  Stock  Option"  means an Option to purchase  shares of
  Common Stock awarded to a Participant under Section 6 which is not intended to
  be an Incentive Stock Option.

           "Option" means an Incentive Stock Option or a Nonstatutory Stock
  Option.

           "Participant" means a person selected by the Board to receive an 
  Award under the Plan.

           "Performance  Shares" mean shares of Common Stock which may be earned
  by the achievement of performance goals awarded to a Participant under Section
  8.

           "Reporting  Person"  means a  person  subject  to  Section  16 of the
  Securities Exchange Act of 1934 or any successor provision.

           "Restricted  Period"  means the period of time  selected by the Board
  during which shares subject to a Restricted  Stock Award may be repurchased by
  or forfeited to the Company.

           "Restricted  Stock"  means  shares  of  Common  Stock  awarded  to  a
  Participant under Section 9.

           "Stock  Appreciation  Right" or "SAR"  means a right to  receive  any
  excess in Fair Market Value of shares of Common Stock over the exercise  price
  awarded to a Participant under Section 7.

           "Unrestricted  Stock"  means  shares of  Common  Stock  awarded  to a
  Participant under Section 9(c).

          The Plan will be  administered  by the  Board.  The Board  shall  have
  authority  to make Awards and to adopt,  amend and repeal such  administrative
  rules,  guidelines  and  practices  relating  to the  Plan  as it  shall  deem
  advisable  from time to time, and to interpret the provisions of the Plan. The
  Board's decisions shall be final and binding.  No member of the Board shall be
  liable  for any  action  or  determination  relating  to the Plan made in good
  faith.  To the extent  permitted by applicable  law, the Board may delegate to
  one or more  executive  officers  of the  Company  the power to make Awards to
  Participants who are not Reporting Persons

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  and all determinations under the Plan with respect thereto,  provided that the
  Board shall fix the maximum amount of such Awards to be made by such executive
  officers and a maximum amount for any one Participant. To the extent permitted
  by applicable  law, the Board may appoint a Committee to  administer  the Plan
  and, in such event,  all  references  to the Board in the Plan shall mean such
  Committee or the Board.  All decisions by the Board or the Committee  pursuant
  to the Plan shall be final and binding on all persons  having or claiming  any
  interest in the Plan or in any Award.


  Section 4. Eliqibilitv


          All of the Company's employees, officers, directors, consultants and
  advisors who are expected to contribute to the Company's future growth
  and success, other than persons who have irrevocably elected not to be
  eligible, are eligible to be Participants in the Plan.  Incentive Stock


  Options may be awarded  only to persons  eligible to receive  Incentive  Stock
  Options under the Code.


  Section 5. Stock Available for Awards

           (a) Subject to adjustment under  subsection (b) below,  Awards may be
  made under the Plan for up to that  number of shares of Common  Stock equal to
  (i)  2,5OO,OOO  less  (ii) the sum of (X) the  number  of  shares  as to which
  Options have  previously  been granted under the  Company's  1992 Stock Option
  Plan (the "1992  Plan"),  as such number shall be reduced to the extent shares
  become  reavailable  for  issuance  under the 1992 Plan  pursuant to Section 4
  thereof, and (Y) the number of shares as to which Options are then outstanding
  under the Company's 1992 Employee  Stock  Purchase Plan (the "Purchase  Plan")
  and the number of shares previously sold under the Purchase Plan. If any Award
  in respect of shares of Common Stock expires or is terminated  unexercised  or
  is forfeited,  in whole or in part, for any reason, the shares subject to such
  Award,  to the extent of such  expiration,  termination or  forfeiture,  shall
  again be available for award under the Plan, subject,  however, in the case of
  Incentive Stock Options,  to any limitation required under the Code. If shares
  of Stock are  tendered to the Company in payment of the  exercise  price of an
  Option  pursuant to Section  6(a)(iv) or in  satisfaction  of tax  withholding
  requirements  pursuant to Section lO(g),  such tendered  shares shall again be
  available for subsequent Awards under the Plan; provided,  however, that in no
  event shall the total  number of shares  issued  pursuant  to the  exercise of
  Incentive  Stock  Options under the Plan,  on a cumulative  basis,  exceed the
  maximum  number of shares  authorized for issuance under the Plan exclusive of
  shares made available for issuance  pursuant to this  sentence.  Shares issued
  under the Plan may consist in
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  whole or in part of authorized but unissued shares or treasury shares.


           (b) In the event that the Board, in its sole  discretion,  determines
  that  any  stock  dividend,  extraordinary  cash  dividend,  recapitalization,
  reorganization,  merger,  consolidation,  split-up,  spin-off,  combination or
  other similar  transaction affects the Common Stock such that an adjustment is
  required in order to preserve the benefits or potential  benefits  intended to
  be made  available  under the Plan,  then the Board,  subject,  in the case of
  Incentive  Stock  Options,  to any limitation  required under the Code,  shall
  equitably adjust any or all of (i) the number and kind of shares in respect of
  which  Awards may be made  under the Plan,  (ii) the number and kind of shares
  subject to  outstanding  Awards,  and (iii) the award,  exercise or conversion
  price with respect to any of the foregoing, and if considered appropriate, the
  Board may make  provision  for a cash payment  with respect to an  outstanding
  Award, provided that the number of shares subject to any Award shall always be
  a whole number.


           (c) The Board may grant  Awards  under the Plan in  substitution  for
  stock and stock based  awards held by  employees  of another  corporation  who
  concurrently  become  employees  of the  Company  as a result  of a merger  or
  consolidation of the employing corporation with the Company or a Subsidiary or
  the  acquisition  by the Company or a  subsidiary  of property or stock of the
  employing  corporation.  The substitute  Awards shall be granted on such terms
  and conditions as the Board considers appropriate in the circumstances.


  Section 6. Stock Options

  (a) General.


                       (i) Subject to the provisions of the Plan, the Board may
  award Incentive Stock Options and  Nonstatutory  Stock Options,  and determine
  the number of shares to be covered by each Option,  the Option price  therefor
  and the conditions and  limitations  applicable to the exercise of the Option.
  The terms and  conditions  of Incentive  Stock Options shall be subject to and
  comply  with  Section 422 of the Code,  or any  successor  provision,  and any
  regulations thereunder.


                     (ii) The Board shall  establish  the exercise  price at the
  time each Option is awarded.  In the case of  Incentive  Stock  Options,  such
  price shall not be less than 100% of the Fair Market Value of the Common Stock
  on the date of award.


                    (iii) Each Option shall be exercisable at such times and
  subject to such terms and conditions as the Board may specify in the
  applicable Award or thereafter. The Board may impose such
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  conditions  with  respect to the  exercise  of Options,  including  conditions
  relating  to  applicable  federal  or state  securities  laws as it  considers
  necessary or advisable.


                     (iv)  Options  granted  under the Plan may  provide for the
  payment of the exercise  price by delivery of cash or check in an amount equal
  to the exercise price of such Options or, to the extent permitted by the Board
  at or after the award of the Option, by (A) delivery of shares of Common Stock
  owned by the Optionee  for at least six months (or such  shorter  period as is
  approved by the Board),  valued at their Fair Market Value,  (B) delivery of a
  promissory  note of the  Optionee  to the Company on terms  determined  by the
  Board,  (C)  delivery  of an  irrevocable  undertaking  by a broker to deliver
  promptly to the Company sufficient funds to pay the exercise price or delivery
  of  irrevocable  instructions  to a broker to deliver  promptly to the Company
  cash or a check  sufficient  to pay the  exercise  price,  (D) payment of such
  other lawful consideration as the Board may determine,  or (E) any combination
  of the foregoing.


                       (v) The Board may provide for the automatic award of an 
  Option upon the delivery of shares to the Company in payment of the exercise 
  price of an Option for up to the number of shares so delivered.


                     (vi) The Board may at any time accelerate the time at which
  all or any part of an Option may be exercised.


  (b) Incentive Stock Options.


                   Options  granted  under  the Plan  which are  intended  to be
  Incentive Stock Options shall be subject to the following additional terms and
  conditions:

                     (i) All  Incentive  Stock  Options  granted  under the Plan
  shall, at the time of grant, be specifically  designated as such in the Option
  agreement  covering such Incentive  Stock Options.  The Option exercise period
  shall not exceed ten years from the date of grant.


                   (ii) If any employee to whom an Incentive  Stock Option is to
  be  granted  under the Plan is, at the time of the grant of such  Option,  the
  owner of stock  possessing more than 1O% of the total combined voting power of
  all classes of stock of the Company (after taking into account the attribution
  of stock ownership rule of Section 424(b) and of the Code), then the following
  special  provisions  shall be applicable to the Incentive Stock Option granted
  to such individual:


                    (x) The purchase price per share of the Common
  Stock subject to such Incentive Stock Option shall not be
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  less than llO% of the Fair Market Value of one share of Common
  Stock at the time of grant; and


                   (y) The Option  exercise  period  shall not exceed five years
  from the date of grant.


                  (iii)  For so long  as the  Code  shall  so  provide,  Options
  granted to any employee under the Plan (and any other  incentive  stock Option
  plans of the Company) which are intended to constitute Incentive Stock Options
  shall not constitute  Incentive Stock Options to the extent that such Options,
  in the aggregate,  become  exercisable  for the first time in any one calendar
  year  for  shares  of  Common  Stock  with  an  aggregate  Fair  Market  Value
  (determined  as of the  respective  date or  dates  of  grant)  of  more  than
  $1OO,OOO.


                    (iv) No Incentive Stock Option may be exercised  unless,  at
  the time of such exercise, the Participant is, and has been continuously since
  the date of grant of his or her Option, employed by the Company, except that:


                    (x) an Incentive  Stock  Option may be exercised  within the
  period of three months after the date the Participant ceases to be an employee
  of the  Company  (or within  such  lesser  period as may be  specified  in the
  applicable  Option  agreement),  provided,  that the agreement with respect to
  such Option may designate a longer exercise period and that the exercise after
  such  three-month  period shall be treated as the  exercise of a  Nonstatutory
  Stock Option under the Plan;


                    (y) if the  Participant  dies  while  in the  employ  of the
  Company,  or within three months  after the  Participant  ceases to be such an
  employee,  the  Incentive  Stock Option may be exercised by the  Participant's
  Designated  Beneficiary  within the period of one year after the date of death
  (or within such lesser  period as may be  specified in the  applicable  Option
  agreement); and


                    (z) if the Participant  becomes disabled (within the meaning
  of Section 22(e)(3) of the Code or any successor  provision  thereto) while in
  the employ of the Company,  the Incentive Stock Option may be exercised within
  the period of one year after the date of death (or within such  lesser  period
  as may be specified in the Option agreement).


  For all purposes of the Plan and any Option  granted  hereunder,  "employment"
  shall be defined in accordance  with the  provisions of Section  1.421-7(h) of
  the Income Tax Regulations (or any successor regulations). Notwithstanding the
  foregoing  provisions,  no Incentive  Stock Option may be exercised  after its
  expiration date.
<PAGE>
                  (v)  Incentive  Stock  Options  shall  not be  assignable  or
  transferable by the person to whom they are granted,  either voluntarily or by
  operation of law, except by will or the laws of descent and distribution, and,
  during the life of the Optionee, shall be exercisable only by the Optionee.


 Section 7. Stock Appreciation Rights


           (a)  The  Board  may  grant  Stock   Appreciation   Rights  entitling
  recipients on exercise of the Stock  Appreciation  Right to receive an amount,
  in cash or Stock or a  combination  thereof (such form to be determined by the
  Board),  determined  in whole or in part by reference to  appreciation  in the
  Fair Market Value of the Stock  between the date of the Award and the exercise
  of the Award.  A Stock  Appreciation  Right shall entitle the  Participant  to
  receive,  with  respect  to  each  share  of  Stock  as  to  which  the  Stock
  Appreciation  Right is exercised,  the excess of the share's Fair Market Value
  on the  date of  exercise  over its Fair  Market  Value on the date the  Stock
  Appreciation  Right was granted.  The Board may also grant Stock  Appreciation
  Rights  that  provide  that,  following a change in control of the Company (as
  defined  by the Board at the time of the  Award),  the  holder  of such  Stock
  Appreciation Right will be entitled to receive,  with respect to each share of
  Stock subject to the Stock  Appreciation  Right, an amount equal to the excess
  of a specified  value  (which may include an average of values) for a share of
  Stock  during a period  preceding  such change in control over the Fair Market
  Value  of a share  of Stock on the  date  the  Stock  Appreciation  Right  was
  granted.


           (b) Stock  Appreciation  Rights  may be granted  in tandem  with,  or
  independently of, Options granted under the Plan. A Stock  Appreciation  Right
  granted in tandem with an Option which is not an Incentive Stock Option may be
  granted  either  at  or  after  the  time  the  Option  is  granted.  A  Stock
  Appreciation  Right  granted in tandem with an  Incentive  Stock Option may be
  granted only at the time the Option is granted.


           (c) When  Stock  Appreciation  Rights  are  granted  in  tandem  with
  Options, the following provisions will apply:


                   (i) The Stock  Appreciation Right will be exercisable only at
  such time or times, and to the extent,  that the related Option is exercisable
  and will be exercisable in accordance with the procedure required for exercise
  of the related Option.


                  (ii) The Stock Appreciation Right will terminate and no longer
  be exercisable upon the termination or exercise of the related Option,  except
  that a Stock  Appreciation  Right  granted  with respect to less than the full
  number of shares  covered by an Option will not be reduced until the number of
  shares as to which
<PAGE>
  the related Option has been exercised or has terminated  exceeds the number of
  shares not covered by the Stock Appreciation Right.


                (iii) The Option  will  terminate  and no longer be  exercisable
  upon the exercise of the related Stock Appreciation Right.


                  (iv) The Stock  Appreciation  Right will be transferable  only
  with the related Option.


                   (v) A Stock  Appreciation  Right  granted in tandem  with an
  Incentive  Stock  Option may be  exercised  only when the market  price of the
  Stock subject to the Option exceeds the exercise price of such Option.


           (d) A Stock  Appreciation  Right not granted in tandem with an Option
  will become exercisable at such time or times, and on such conditions,  as the
  Board may specify.


           (e) The Board may at any time accelerate the time at which all or any
  part of the Stock Appreciation Right may be exercised.


  Section 8. Performance Shares


           (a) The Board may make Performance Share Awards entitling  recipients
  to acquire shares of Stock upon the attainment of specified performance goals.
  The Board may make  Performance  Share Awards  independent of or in connection
  with the  granting of any other  Award  under the Plan.  The Board in its sole
  discretion  shall determine the performance  goals  applicable under each such
  Award,  the periods  during which  performance  is to be  measured,  all other
  limitations  and  conditions  applicable  to the awarded  Performance  Shares;
  provided,  however,  that the Board may rely the  performance  goals and other
  standards  applicable to other performance plans of the Company in setting the
  standards for Performance Share Awards under the Plan.


           (b)  Performance  Share  Awards and all rights  with  respect to such
  Awards  may  not  be  sold,  assigned,   transferred,   pledged  or  otherwise
  encumbered.


       (c) A Participant  receiving a Performance Share Award shall have the
  rights of a stockholder only as to shares actually received by the Participant
  under  the Plan and not with  respect  to shares  subject  to an Award but not
  actually  received  by the  Participant  A  Participant  shall be  entitled to
  receive a stock  certificate  evidencing  the  acquisition  of shares of Stock
  under a  Performance  Share  Award only upon  satisfaction  of all  conditions
  specified in the agreement evidencing the Performance Share Award.
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           (d) The Board may at any time  accelerate  or waive any or all of the
  goals, restrictions or conditions imposed under any Performance Share Award.


  Section 9.  Restricted and Unrestricted Stock


           (a) The Board may grant Restricted Stock Awards entitling  recipients
  to acquire shares of Stock,  subject to the right of the Company to repurchase
  all or part of such shares at their purchase  price (or to require  forfeiture
  of such shares if purchased  at no cost) from the  recipient in the event that
  conditions  specified by the Board in the  applicable  Award are not satisfied
  prior to the end of the  applicable  Restricted  Period or Restricted  Periods
  established  by the  Board  for such  Award.  Conditions  for  repurchase  (or
  forfeiture) may be based on continuing employment or service or achievement of
  pre-established performance or other goals and objectives.


           (b)  Shares  of   Restricted   Stock  may  not  be  sold,   assigned,
  transferred,  pledged or  otherwise  encumbered,  except as  permitted  by the
  Board,  during the applicable  Restricted  Period.  Shares of Restricted Stock
  shall be evidenced in such manner as the Board may determine. Any certificates
  issued in respect of shares of  Restricted  Stock shall be  registered  in the
  name  of the  Participant  and,  unless  otherwise  determined  by the  Board,
  deposited by the  Participant,  together with a stock power endorsed in blank,
  with the  Company  (or its  designee).  At the  expiration  of the  Restricted
  Period,  the Company (or such designee) shall deliver such certificates to the
  Participant or if the  Participant has died, to the  Participant's  Designated
  Beneficiary.


           (c) The  Board  may,  in its  sole  discretion,  grant  (or sell at a
  purchase price  determined by the Board,  which shall not be lower than 85% of
  Fair Market Value on the date of sale) to Participants shares of Stock free of
  any restrictions under the Plan ("Unrestricted Stock").


           (d) The  purchase  price  for each  share  of  Restricted  Stock  and
  Unrestricted  Stock shall be  determined by the Board of Directors and may not
  be less than the par value of the Common  Stock.  Such  purchase  price may be
  paid in the form of past  services or such other  lawful  consideration  as is
  determined by the Board.


           (e) The  Board  may at any  time  accelerate  the  expiration  of the
  Restricted Period applicable to all, or any particular,  outstanding shares of
  Restricted Stock.
<PAGE>
  Section 10. General Provisions Applicable to Awards


           (a)  Applicability of Rule 16b-3.  Those provisions of the Plan which
  make an express  reference  to Rule 16b-3 shall  apply to the Company  only at
  such time as the  Company's  Common Stock is registered  under the  Securities
  Exchange Act of 1934, or any successor  provision,  and then only to Reporting
  Persons.


           (b) Reporting Person Limitations. Notwithstanding any other provision
  of the Plan, to the extent  required to qualify for the exemption  provided by
  Rule 16b-3,  (i) any Option,  SAR,  Performance  Share Award or other  similar
  right  related  to an equity  security  issued  under the Plan to a  Reporting
  Person shall not be transferable other than by will or the laws of descent and
  distribution or pursuant to a qualified domestic relations order as defined by
  the Code or Title I or the Employee Retirement Income Security Act (" ERISA"),
  or the rules  thereunder,  and shall be exercisable  during the  Participant's
  lifetime  only by the  Participant  or the  Participant's  guardian  or  legal
  representative,  and (ii) the selection of a Reporting Person as a Participant
  and the terms of his or her Award shall be determined  only in accordance with
  the applicable provisions of Rule 16b-3.


           (c) Documentation. Each Award under the Plan shall be evidenced by an
  instrument  delivered to the  Participant  specifying the terms and conditions
  thereof and containing such other terms and conditions not  inconsistent  with
  the provisions of the Plan as the Board considers necessary or advisable. Such
  instruments  may be in the  form of  agreements  to be  executed  by both  the
  Company and the Participant,  or certificates,  letters or similar  documents,
  acceptance of which will  evidence  agreement to the terms thereof and of this
  Plan.


    (d) Board Descretion. Each type of Award may be made alone in addition to or
in relation to any other type of Award. The terms of each type of Award need not
be identical,  and the Board need not treat  Participants  uniformly.  Except as
otherwise  provided by the Plan or a particular  Award, any  determination  with
respect to an Award may be made by the Board at the time of award or at any time
thereafter.

    (e) Termination of Status.  Subject to the provisions of Section 6 (b) (iv),
the Committee shall  determine the effect on an Award of the disability,  death,
retirement,  authorized  leave of absence or  termination of employment or other
status of a  Participant  and the extent to which,  and the period during which,
the Participant's legal representative,  guardian or Designated  Beneficiary may
exercise rights under such Award.

  (f) Merqers, Etc. In the event of a consolidation, merger or other
reorganization in which all of the outstanding shares of
<PAGE>
  Common Stock are exchanged for securities, cash or other property of any other
  corporation  or  business  entity  (an  "Acquisition"),  or in the  event of a
  liquidation  of the Company,  the Board of  Directors  of the Company,  or the
  board of directors of any corporation assuming the obligations of the Company,
  may, in its  discretion,  take any one or more of the following  actions as to
  outstanding  Awards:  (i)  provide  that  such  Awards  shall be  assumed,  or
  substantially  equivalent  Awards shall be  substituted,  by the  acquiring or
  succeeding  corporation  (or an affiliate  thereof) on such terms as the Board
  determines  to be  appropriate,  (ii) upon  written  notice  to  Participants,
  provide that all unexercised Options or SARs will terminate  immediately prior
  to the  consummation of such  transaction  unless exercised by the Participant
  within a specified  period  following  the date of such  notice,  (iii) in the
  event of an  Acquisition  under the terms of which holders of the Common Stock
  of the Company will receive upon consummation  thereof a cash payment for each
  share  surrendered  in the  Acquisition  (the " Acquisition  Price"),  make or
  provide for a cash payment to Participants equal to the difference between (A)
  the  Acquisition  Price times the number of shares of Common Stock  subject to
  outstanding  Options or SARs (to the extent then  exercisable at prices not in
  excess of the Acquisition  Price) and (B) the aggregate  exercise price of all
  such  outstanding  Options or SARs in  exchange  for the  termination  of such
  Options and SARs,  and (iv) provide that all or any  outstanding  Awards shall
  become  exercisable  or realizable in full prior to the effective date of such
  Acquisition.

           (g) Withholdinq.  The Participant  shall pay to the Company,  or make
  provision  satisfactory to the Board for payment of, any taxes required by law
  to be withheld  in respect of Awards  under the Plan no later than the date of
  the event creating the tax liability.  In the Board's discretion,  and subject
  to such  conditions as the Board may establish,  such tax  obligations  may be
  paid in whole or in part in shares of Common Stock,  including shares retained
  from the Award creating the tax obligation, valued at their Fair Market Value.
  The  Company  may,  to the  extent  permitted  by law,  deduct  any  such  tax
  obligations from any payment of any kind otherwise due to the Participant.

           (h) Foreiqn  Nationals.  Awards may be made to  Participants  who are
  foreign  nationals  or employed  outside  the United  States on such terms and
  conditions  different from those  specified in the Plan as the Board considers
  necessary  or  advisable  to achieve  the  purposes of the Plan or comply with
  applicable laws.

  (i)  Amendment  of Award.  The  Board  may  amend,  modify  or  terminate  any
  outstanding Award,  including  substituting therefor another Award of the same
  or a  different  type,  changing  the  date of  exercise  or  realization  and
  converting an Incentive Stock Option to a Nonstatutory Stock Option,  provided
  that the
<PAGE>
  Participant's  consent  to such  action  shall be  required  unless  the Board
  determines that the action,  taking into account any related action, would not
  materially and adversely affect the Participant.

           (j)  Cancellation  and New Grant of Options.  The Board of  Directors
  shall have the  authority to effect,  at any time and from time to time,  with
  the consent of the  affected  Optionees,  (i) the  cancellation  of any or all
  outstanding  Options under the Plan and the grant in substitution  therefor of
  new Options under the Plan covering the same or different numbers of shares of
  Common Stock and having an Option  exercise price per share which may be lower
  or higher than the exercise  price per share of the cancelled  Options or (ii)
  the amendment of the terms of any and all  outstanding  Options under the Plan
  to provide an Option  exercise  price per share  which is higher or lower than
  the then current exercise price per share of such outstanding Options.

           (k)  Conditions  on  Deliverv  of  Stock.  The  Company  will  not be
obligated  to  deliver  any  shares of Stock  pursuant  to the Plan or to remove
restrictions  from  shares  previously  delivered  under  the Plan (i) until all
conditions  of the Award have been  satisfied  or removed,  (ii)  until,  in the
opinion of the  Company's  counsel,  all  applicable  federal and state laws and
regulations  have been complied with,  (iii) if the outstanding  Stock is at the
time listed on any stock  exchange,  until the shares to be delivered  have been
listed or  authorized  to be listed on such  exchange  upon  official  notice of
notice of issuance,  and (iv) until all other legal matters in  connection  with
the  issuance and  delivery of such shares have been  approved by the  Company's
counsel.  If the sale of Stock has not been registered  under the Securities Act
of 1933, as amended,  the Company may require, as a condition to exercise of the
Award,  such   representations   or  agreements  as  the  Company  may  consider
appropriate to avoid violation of such Act and may require that the certificates
evidencing such Stock bear an appropriate legend restricting  transfer.  Section
11. Miscellaneous

           (a) No Riqht To Employment or other Status.  No person shall have any
  claim or right to be granted an Award,  and the grant of an Award shall not be
  construed as giving a Participant the right to continued employment or service
  for the  Company.  The  Company  expressly  reserves  the right at any time to
  dismiss a Participant free from any liability or claim under the Plan,  except
  as expressly provided in the applicable Award.

           (b) No  Riqhts  As  Stockholder.  Subject  to the  provisions  of the
  applicable  Award,  no  Participant or Designated  Beneficiary  shall have any
  rights as a  stockholder  with  respect  to any  shares of Common  Stock to be
  distributed under the Plan until he or she becomes the record holder thereof.
<PAGE>
           (c)  Exclusion  from Benefit  Computations.  No amounts  payable upon
  exercise of Awards granted under the Plan shall be considered salary, wages or
  compensation to Participants  for purposes of determining the amount or nature
  of benefits that Participants are entitled to under any insurance,  retirement
  or other benefit plans or programs of the Company.

(d) Effective Date and Term.

                    (i) Effective  Date.  The Plan shall become  effective  when
  adopted by the Board of Directors, but no Incentive Stock Option granted under
  the Plan shall  become  exercisable  unless and until the Plan shall have been
  approved by the Company's  stockholders.  If such stockholder  approval is not
  obtained  within twelve  months after the date of the Board's  adOption of the
  Plan,  no  Options  previously  granted  under the Plan  shall be deemed to be
  Incentive  Stock  Options  and no  Incentive  Stock  Options  shall be granted
  thereafter. Amendments to the Plan not requiring stockholder approval pursuant
  to Section  ll(e) below shall  become  effective  when adopted by the Board of
  Directors;  amendments  requiring  stockholder approval shall become effective
  when adopted by the Board of Directors,  but no Incentive Stock Option granted
  after the date of such amendment shall become  exercisable (to the extent that
  such  amendment  to the Plan was  required to enable the Company to grant such
  Incentive  Stock  Option to a  particular  Optionee)  unless  and  until  such
  amendment  shall have been  approved by the  Company's  stockholders.  If such
  stockholder  approval  is not  obtained  within  twelve  months of the Board's
  adOption of such  amendment,  any Incentive  Stock Options granted on or after
  the date of such amendment  shall  terminate to the extent that such amendment
  to the Plan was  required  to enable the  Company  to grant  such  Option to a
  particular  Optionee.  Subject to the  limitations  set forth in this  Section
  ll(d),  Awards may be made under the Plan at any time after the effective date
  and before the date fixed for termination of the Plan.

                   (ii)  Termination.  The Plan shall terminate upon the earlier
  of (i) the close of business on the day next  preceding the tenth  anniversary
  of the date of its  adOption  by the  Board of  Directors  or (ii) the date on
  which all shares  available for issuance under the Plan shall have been issued
  pursuant  to Awards  under the Plan.  Awards  outstanding  on such date  shall
  continue to have force and effect in  accordance  with the  provisions  of the
  instruments evidencing such Awards.
<PAGE>
           (e) Amendment of Plan. The Board may amend,  suspend or terminate the
  Plan or any portion  thereof at any time,  provided that no amendment shall be
  made without stockholder approval if such approval is necessary to comply with
  any applicable tax or regulatory  requirement,  including any requirements for
  compliance  with Rule 16b-3.  Prior to any such  approval,  Awards may be made
  under the Plan expressly subject to such approval.

                                          Adopted by the Board of Directors
                                          On August 31, 1994
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