<PAGE>   1

                                                                  Exhibit 10.4

                           LAUREL CAPITAL GROUP, INC.
                             1996 STOCK OPTION PLAN

                                   ARTICLE I
                           ESTABLISHMENT OF THE PLAN

        Laurel Capital Group, Inc. (the "Corporation") hereby establishes this
1996 Stock Option Plan (the "Plan") upon the terms and conditions hereinafter
stated.

                                   ARTICLE II
                              PURPOSE OF THE PLAN

        The purpose of this Plan is to improve the growth and profitability of
the Corporation and its Subsidiary Companies by providing Employees and
Non-Employee Directors with a proprietary interest in the Corporation as an
incentive to contribute to the success of the Corporation and its Subsidiary
Companies, and rewarding those Employees for outstanding performance and the
attainment of targeted goals. All Incentive Stock Options issued under this
Plan are intended to comply with the requirements of Section 422 of the Code,
and the regulations thereunder, and all provisions hereunder shall be read,
interpreted and applied with that purpose in mind.

                                  ARTICLE III
                                  DEFINITIONS

        3.01 "Award" means an Option or Stock Appreciation Right granted
pursuant to the terms of this Plan.

        3.02 "Bank" means Laurel Savings Bank, the wholly owned subsidiary of
the Corporation.

        3.03 "Board" means the Board of Directors of the Corporation.

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

        3.05 "Committee" means a committee of two or more directors appointed
by the Board pursuant to Article IV hereof, none of whom shall be an Officer or
Employee of the Corporation.

        3.06 "Common Stock" means shares of the common stock, $.01 par value
per share, of the Corporation.

        3.07 "Disability" means any physical or mental impairment which
qualifies an Employee for disability benefits under the applicable long-term
disability plan maintained by the Corporation or a Subsidiary Company, or, if
no such plan applies, which would qualify such Employee for disability benefits
under the Federal Social Security System.

        3.08 "Effective Date" means the day upon which the Board approves this
Plan.

        3.09 "Employee" means any person who is employed by the Corporation or
a Subsidiary Company, or is an Officer of the Corporation or a Subsidiary
Company, but not including directors who are not also Officers of or otherwise
employed by the Corporation or a Subsidiary Company.

                                       1


<PAGE>   2



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

        3.11 "Fair Market Value" shall be equal to the fair market value per
share of the Corporation's Common Stock on the date an Award is granted. For
purposes hereof, the Fair Market Value of a share of Common Stock shall be the
closing sale price of a share of Common Stock on the date in question (or, if
such day is not a trading day in the U.S. markets, on the nearest preceding
trading day), as reported with respect to the principal market (or the
composite of the markets, if more than one) or national quotation system in
which such shares are then traded, or if no such closing prices are reported,
the mean between the high bid and low asked prices that day on the principal
market or national quotation system then in use, or if no such quotations are
available, the price furnished by a professional securities dealer making a
market in such shares selected by the Committee.

        3.12 "Incentive Stock Option" means any Option granted under this Plan
which the Board intends (at the time it is granted) to be an incentive stock
option within the meaning of Section 422 of the Code or any successor thereto.

        3.13 "Non-Employee Director" means a member of the Board who is not an
Officer or Employee of the Corporation or any Subsidiary Company.

        3.14 "Non-Qualified Option" means any Option granted under this Plan
which is not an Incentive Stock Option.

        3.15 "Officer" means an Employee whose position in the Corporation or
Subsidiary Company is that of a corporate officer, as determined by the Board.

        3.16 "Option" means a right granted under this Plan to purchase Common
Stock.

        3.17 "Optionee" means an Employee or Non-Employee Director or former
Employee or Non-Employee Director to whom an Option is granted under the Plan.

        3.18 "Retirement" means a termination of employment upon or after
attainment of age sixty-five (65) or such earlier age as may be specified in
any applicable qualified pension benefit plan maintained by the Corporation or
a Subsidiary Company.

        3.19 "Stock Appreciation Right" means a right to surrender an Option in
consideration for a payment by the Corporation in cash and/or Common Stock, as
provided in the discretion of the Committee in accordance with Section 8.10.

        3.20 "Subsidiary Companies" means those subsidiaries of the
Corporation, including the Bank, which meet the definition of "subsidiary
corporations" set forth in Section 425(f) of the Code, at the time of granting
of the Option in question.

                                   ARTICLE IV
                           ADMINISTRATION OF THE PLAN

        4.01 DUTIES OF THE COMMITTEE. The Plan shall be administered and
interpreted by the Committee, as appointed from time to time by the Board
pursuant to Section 4.02. The Committee shall have the authority in its
absolute discretion to adopt, amend and rescind such rules, regulations and
procedures as, in its opinion, may be advisable in the administration of the
Plan, including, without limitation, rules, regulations and procedures which
(i) deal with satisfaction of an Optionee's tax withholding obligation pursuant
to Section 12.02 hereof, (ii) include arrangements to facilitate the Optionee's
ability to borrow funds for payment of the exercise

                                       2


<PAGE>   3



or purchase price of an Award, if applicable, from securities brokers and
dealers, and (iii) include arrangements which provide for the payment of some
or all of such exercise or purchase price by delivery of previously-owned
shares of Common Stock or other property and/or by withholding some of the
shares of Common Stock which are being acquired. The interpretation and
construction by the Committee of any provisions of the Plan, any rule,
regulation or procedure adopted by it pursuant thereto or of any Award shall be
final and binding.

        4.02 APPOINTMENT AND OPERATION OF THE COMMITTEE. The members of the
Committee shall be appointed by, and will serve at the pleasure of, the Board.
The Board from time to time may remove members from, or add members to, the
Committee, provided the Committee shall continue to consist of two or more
members of the Board, none of whom shall be an Officer or Employee of the
Corporation. The Committee shall act by vote or written consent of a majority
of its members. Subject to the express provisions and limitations of the Plan,
the Committee may adopt such rules, regulations and procedures as it deems
appropriate for the conduct of its affairs. It may appoint one of its members
to be chairman and any person, whether or not a member, to be its secretary or
agent. The Committee shall report its actions and decisions to the Board at
appropriate times but in no event less than one time per calendar year.

        4.03 REVOCATION FOR MISCONDUCT. The Committee may by resolution
immediately revoke, rescind and terminate any Option, or portion thereof, to
the extent not yet vested, or any Stock Appreciation Right, to the extent not
yet exercised, previously granted or awarded under this Plan to an Employee who
is discharged from the employ of the Corporation or a Subsidiary Company for
cause, which, for purposes hereof, shall mean termination because of the
Employee's personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order. Options
granted to a Non-Employee Director who is removed for cause pursuant to the
Corporation's Articles of Incorporation shall terminate as of the effective
date of such removal.

        4.04 LIMITATION ON LIABILITY. No member of the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan, any rule, regulation or procedure adopted by it pursuant thereto or any
Awards granted under it. If a member of the Committee is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
by reason of anything done or not done by him in such capacity under or with
respect to the Plan, the Corporation shall, subject to the requirements of
applicable laws and regulations, indemnify such member against all liabilities
and expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in the best interests of the Corporation and its
Subsidiary Companies and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful.

        4.05 COMPLIANCE WITH LAW AND REGULATIONS. All Awards granted hereunder
shall be subject to all applicable federal and state laws, rules and
regulations and to such approvals by any government or regulatory agency as may
be required.  The Corporation shall not be required to issue or deliver any
certificates for shares of Common Stock prior to the completion of any
registration or qualification of or obtaining of consents or approvals with
respect to such shares under any Federal or state law or any rule or regulation
of any government body, which the Corporation shall, in its sole discretion,
determine to be necessary or advisable. Moreover, no Option or Stock
Appreciation Right may be exercised if such exercise would be contrary to
applicable laws and regulations.

        4.06 RESTRICTIONS ON TRANSFER. The Corporation may place a legend upon
any certificate representing shares acquired pursuant to an Award granted
hereunder noting that the transfer of such shares may be restricted by
applicable laws and regulations.

                                       3


<PAGE>   4



                                   ARTICLE V
                                  ELIGIBILITY

        Awards may be granted to such Employees or Non-Employee Directors of
the Corporation and its Subsidiary Companies as may be designated from time to
time by the Committee. Awards may not be granted to individuals who are not
Employees or Non-Employee Directors of either the Corporation or its Subsidiary
Companies.  Non-Employee Directors shall be eligible to receive only
Non-Qualified Options pursuant to Section 8.02 of the Plan.

                                   ARTICLE VI
                        COMMON STOCK COVERED BY THE PLAN

        6.01 OPTION SHARES. The aggregate number of shares of Common Stock
which may be issued pursuant to this Plan, subject to adjustment as provided in
Article IX, shall be 75,562 which is equal to 4.99% of the issued and
outstanding shares of Common Stock as of September 30, 1996, the voting record
date for the 1996 Annual Meeting. None of such shares shall be the subject of
more than one Award at any time, but if an Option as to any shares is
surrendered before exercise, or expires or terminates for any reason without
having been exercised in full, or for any other reason ceases to be
exercisable, the number of shares covered thereby shall again become available
for grant under the Plan as if no Awards had been previously granted with
respect to such shares. Notwithstanding the foregoing, if an Option is
surrendered in connection with the exercise of a Stock Appreciation Right, the
number of shares covered thereby shall not be available for grant under the
Plan.

        6.02 SOURCE OF SHARES. The shares of Common Stock issued under the Plan
may be authorized but unissued shares, treasury shares or shares purchased by
the Corporation on the open market or from private sources for use under the
Plan.

                                  ARTICLE VII
                                DETERMINATION OF
                         AWARDS, NUMBER OF SHARES, ETC.

        The Committee shall, in its discretion, determine from time to time
which Employees will be granted Awards under the Plan, the number of shares of
Common Stock subject to each Award, whether each Option will be an Incentive
Stock Option or a Non-Qualified Stock Option and the exercise price of an
Option. In making all such determinations there shall be taken into account the
duties, responsibilities and performance of each respective Employee, his
present and potential contributions to the growth and success of the
Corporation, his salary and such other factors as the Committee shall deem
relevant to accomplishing the purposes of the Plan. Non-Employee Directors
shall be eligible to receive only Non-Qualified Options pursuant to Section
8.02 of the Plan.

                                  ARTICLE VIII
                     OPTIONS AND STOCK APPRECIATION RIGHTS

        Each Option granted hereunder shall be on the following terms and
conditions:

        8.01 STOCK OPTION AGREEMENT. The proper Officers on behalf of the
Corporation and each Optionee shall execute a Stock Option Agreement which
shall set forth the total number of shares of Common Stock to which it
pertains, the exercise price, whether it is a Non-Qualified Option or an
Incentive Stock Option, and such other terms, conditions, restrictions and
privileges as the Committee in each instance shall deem appropriate,

                                       4


<PAGE>   5



provided they are not inconsistent with the terms, conditions and provisions of
this Plan. Each Optionee shall receive a copy of his executed Stock Option
Agreement.

        8.02 (A) INITIAL GRANTS TO NON-EMPLOYEE DIRECTORS. Non-Qualified
Options to purchase shares of Common Stock shall be initially granted to each
Non-Employee Director as of the day that the Plan is approved by stockholders
of the Corporation, effective at such time and with a per share exercise price
equal to the Fair Market Value of a share of Common Stock on such date.

               (B) VESTING AND EXERCISE OF OPTIONS. Non-Qualified Options
granted to Non-Employee Directors shall be vested and exercisable over three
years at the rate of 33.3% per year commencing on the date of grant.

        8.03   OPTION EXERCISE PRICE.

               (A) INCENTIVE STOCK OPTIONS. The per share price at which the
subject Common Stock may be purchased upon exercise of an Incentive Stock
Option shall be no less than one hundred percent (100%) of the Fair Market
Value of a share of Common Stock at the time such Incentive Stock Option is
granted, except as provided in Section 8.10(b).

               (B) NON-QUALIFIED OPTIONS. The per share price at which the
subject Common Stock may be purchased upon exercise of a Non-Qualified Option
shall be established by the Committee at the time of grant, but in no event
shall be less than the greater of (i) the par value or (ii) one hundred percent
(100%) of the Fair Market Value of a share of Common Stock at the time such
Non-Qualified Option is granted.

        8.04  VESTING AND EXERCISE OF OPTIONS.

               (A) GENERAL RULES. Incentive Stock Options and Non-Qualified
Options granted to Employees shall become vested and exercisable at the rate,
to the extent and subject to such limitations as may be specified by the
Committee, provided, however, that in the case of any Option exercisable within
the first six months following the date the Option is granted, the shares of
Common Stock received upon the exercise of such Option may not be sold or
disposed of by the Optionee for the first six months following the date of
grant. Notwithstanding the foregoing, no vesting shall occur on or after an
Optionee's employment or service with the Corporation and all Subsidiary
Companies is terminated for any reason other than his death or Disability. In
determining the number of shares of Common Stock with respect to which Options
are vested and/or exercisable, fractional shares will be rounded up to the
nearest whole number if the fraction is 0.5 or higher, and down if it is less.

               (B) ACCELERATED VESTING UPON DEATH, DISABILITY OR RETIREMENT.
Unless the Committee shall specifically state otherwise at the time an Option
is granted, all Options granted under this Plan shall become vested and
exercisable in full on the date an Optionee terminates his employment or
service with the Corporation or a Subsidiary Company because of his death,
Disability or Retirement.

               (C) ACCELERATED VESTING FOR CHANGES IN CONTROL. Notwithstanding
the general rule described in Section 8.04(a), all outstanding Options shall
become immediately vested and exercisable in the event there is a change in
control of the Corporation. A "change in control of the Corporation" for this
purpose shall mean a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Exchange Act, or any successor thereto, whether or not the
Corporation in fact is required to comply with Regulation 14A thereunder.

                                       5


<PAGE>   6



        8.05  DURATION OF OPTIONS.

               (A) GENERAL RULE. Except as provided in Sections 8.05(b) and
8.10, each Option or portion thereof granted to Employees shall be exercisable
at any time on or after it vests and becomes exercisable until the earlier of
(i) ten (10) years after its date of grant or (ii) three (3) months after the
date on which the Optionee ceases to be employed by the Corporation and all
Subsidiary Companies, unless the Committee in its discretion decides at the
time of grant to extend such period of exercise upon termination of employment
or service from three (3) months to a period not exceeding five (5) years. Each
Option or portion thereof granted to Non-Employee Directors shall be
exercisable at any time on or after it vests until ten (10) years after the
date of grant.

               (B) EXCEPTION FOR TERMINATION DUE TO DEATH, DISABILITY OR
RETIREMENT. If an Employee dies while in the employ or service of the
Corporation or a Subsidiary Company or terminates employment or service with
the Corporation or a Subsidiary Company as a result of Disability or Retirement
without having fully exercised his Options, the Optionee or the executors,
administrators, legatees or distributees of his estate shall have the right,
during the twelve-month period following the earlier of his death, Disability
or Retirement, to exercise such Options to the extent vested on the date of
such death, Disability or Retirement. If a Non- Employee Director dies while
serving as a Non-Employee Director or within three (3) years following the
termination of service as a Non-Employee Director as a result of Disability,
Retirement or resignation without fully exercising his Options, the
Non-Employee Director's executors, administrators, legatees or distributees of
his estate shall have the right, during the twelve-month period following such
death, to exercise such Options. In no event, however, shall any Option be
exercisable more than ten (10) years from the date it was granted.

        8.06 NONASSIGNABILITY. Options shall not be transferable by an Optionee
except by will or the laws of descent or distribution, and during an Optionee's
lifetime shall be exercisable only by such Optionee or the Optionee's guardian
or legal representative.

        8.07 MANNER OF EXERCISE. Options may be exercised in part or in whole
and at one time or from time to time. The procedures for exercise shall be set
forth in the written Stock Option Agreement provided for in Section 8.01 above.

        8.08 PAYMENT FOR SHARES. Payment in full of the purchase price for
shares of Common Stock purchased pursuant to the exercise of any Option shall
be made to the Corporation upon exercise of the Option. All shares sold under
the Plan shall be fully paid and nonassessable. Payment for shares may be made
by the Optionee in cash or, at the discretion of the Committee, by delivering
shares of Common Stock (including shares acquired pursuant to the exercise of
an Option) or other property equal in Fair Market Value to the purchase price
of the shares to be acquired pursuant to the Option, by withholding some of the
shares of Common Stock which are being purchased upon exercise of an Option, or
any combination of the foregoing. Notwithstanding the foregoing, payment may
also be made by delivering a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the Corporation the
amount of sale or loan proceeds to pay the exercise price.

        8.09 VOTING AND DIVIDEND RIGHTS. No Optionee shall have any voting or
dividend rights or other rights of a stockholder in respect of any shares of
Common Stock covered by an Option prior to the time that his name is recorded
on the Corporation's stockholder ledger as the holder of record of such shares
acquired pursuant to an exercise of an Option.

        8.10 ADDITIONAL TERMS APPLICABLE TO INCENTIVE STOCK OPTIONS. All
Options issued under the Plan as Incentive Stock Options will be subject, in
addition to the terms detailed in Sections 8.01 to 8.09 above, to those
contained in this Section 8.10.

                                       6


<PAGE>   7



               (A) Notwithstanding any contrary provisions contained elsewhere
in this Plan and as long as required by Section 422 of the Code, the aggregate
Fair Market Value, determined as of the time an Incentive Stock Option is
granted, of the Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year, under
this Plan and stock options that satisfy the requirements of Section 422 of the
Code under any other stock option plan or plans maintained by the Corporation
(or any parent or Subsidiary Company), shall not exceed $100,000.

               (B) LIMITATION ON TEN PERCENT STOCKHOLDERS. The price at which
shares of Common Stock may be purchased upon exercise of an Incentive Stock
Option granted to an individual who, at the time such Incentive Stock Option is
granted, owns, directly or indirectly, more than ten percent (10%) of the total
combined voting power of all classes of stock issued to stockholders of the
Corporation or any Subsidiary Company, shall be no less than one hundred and
ten percent (110%) of the Fair Market Value of a share of the Common Stock of
the Corporation at the time of grant, and such Incentive Stock Option shall by
its terms not be exercisable after the earlier of the date determined under
Section 8.04 or the expiration of five (5) years from the date such Incentive
Stock Option is granted.

               (C) NOTICE OF DISPOSITION; WITHHOLDING; ESCROW. An Optionee
shall immediately notify the Corporation in writing of any sale, transfer,
assignment or other disposition (or action constituting a disqualifying
disposition within the meaning of Section 421 of the Code) of any shares of
Common Stock acquired through exercise of an Incentive Stock Option, within two
(2) years after the grant of such Incentive Stock Option or within one (1) year
after the acquisition of such shares, setting forth the date and manner of
disposition, the number of shares disposed of and the price at which such
shares were disposed of. The Corporation shall be entitled to withhold from any
compensation or other payments then or thereafter due to the Optionee such
amounts as may be necessary to satisfy any withholding requirements of Federal
or state law or regulation and, further, to collect from the Optionee any
additional amounts which may be required for such purpose. The Committee may,
in its discretion, require shares of Common Stock acquired by an Optionee upon
exercise of an Incentive Stock Option to be held in an escrow arrangement for
the purpose of enabling compliance with the provisions of this Section 8.10(c).

        8.11   STOCK APPRECIATION RIGHTS.

               (A) GENERAL TERMS AND CONDITIONS. The Committee may, but shall
not be obligated to, authorize the Corporation, on such terms and conditions as
it deems appropriate in each case, to grant rights to Optionees to surrender an
exercisable Option, or any portion thereof, in consideration for the payment by
the Corporation of an amount equal to the excess of the Fair Market Value of
the shares of Common Stock subject to the Option, or portion thereof,
surrendered over the exercise price of the Option with respect to such shares
(any such authorized surrender and payment being hereinafter referred to as a
"Stock Appreciation Right"). Such payment, at the discretion of the Committee,
may be made in shares of Common Stock valued at the then Fair Market Value
thereof, or in cash, or partly in cash and partly in shares of Common Stock.

        The terms and conditions set with respect to a Stock Appreciation Right
may include (without limitation), subject to other provisions of this Section
8.11 and the Plan, the period during which, date by which or event upon which
the Stock Appreciation Right may be exercised; the method for valuing shares of
Common Stock for purposes of this Section 8.11; a ceiling on the amount of
consideration which the Corporation may pay in connection with exercise and
cancellation of the Stock Appreciation Right; and arrangements for income tax
withholding. The Committee shall have complete discretion to determine whether,
when and to whom Stock Appreciation Rights may be granted. Notwithstanding the
foregoing, the Corporation may not permit the exercise of a Stock Appreciation
Right issued pursuant to this Plan until this Plan has been outstanding for at
least six months from the date of grant.

               (B) TIME LIMITATIONS. If a holder of a Stock Appreciation Right
terminates service with the Corporation as an Officer or Employee, the Stock
Appreciation Right may be exercised only within the period,

                                       7


<PAGE>   8



if any, within which the Option to which it relates may be exercised.
Notwithstanding the foregoing, any election by an Optionee to exercise the
Stock Appreciation Rights provided in this Plan shall be made during the period
beginning on the third business day following the release for publication of
quarterly or annual financial information required to be prepared and
disseminated by the Corporation pursuant to the requirements of the Exchange
Act and ending on the twelfth business day following such date. The required
release of information shall be deemed to have been satisfied when the
specified financial data appears on or in a wire service, financial news
service or newspaper of general circulation or is otherwise first made publicly
available.

               (C) EFFECTS OF EXERCISE OF STOCK APPRECIATION RIGHTS OR OPTIONS.
Upon the exercise of a Stock Appreciation Right, the number of shares of Common
Stock available under the Option to which it relates shall decrease by a number
equal to the number of shares for which the Stock Appreciation Right was
exercised. Upon the exercise of an Option, any related Stock Appreciation Right
shall terminate as to any number of shares of Common Stock subject to the Stock
Appreciation Right that exceeds the total number of shares for which the Option
remains unexercised.

               (D) TIME OF GRANT. A Stock Appreciation Right may be granted
concurrently with the Option to which it relates or at any time thereafter
prior to the exercise or expiration of such Option.

               (E) NON-TRANSFERABLE. The holder of a Stock Appreciation Right
may not transfer or assign the Stock Appreciation Right otherwise than by will
or in accordance with the laws of descent and distribution, and during a
holder's lifetime a Stock Appreciation Right may be exercisable only by the
holder.

                                   ARTICLE IX
                        ADJUSTMENTS FOR CAPITAL CHANGES

        The aggregate number of shares of Common Stock available for issuance
under this Plan, the number of shares to which any Award relates and the
exercise price per share of Common Stock under any Option shall be
proportionately adjusted for any increase or decrease in the total number of
outstanding shares of Common Stock issued subsequent to the effective date of
this Plan resulting from a split, subdivision or consolidation of shares or any
other capital adjustment, the payment of a stock dividend, or other increase or
decrease in such shares effected without receipt or payment of consideration by
the Corporation. If, upon a merger, consolidation, reorganization, liquidation,
recapitalization or the like of the Corporation, the shares of the
Corporation's Common Stock shall be exchanged for other securities of the
Corporation or of another corporation, each recipient of an Award shall be
entitled, subject to the conditions herein stated, to purchase or acquire such
number of shares of Common Stock or amount of other securities of the
Corporation or such other corporation as were exchangeable for the number of
shares of Common Stock of the Corporation which such optionees would have been
entitled to purchase or acquire except for such action, and appropriate
adjustments shall be made to the per share exercise price of outstanding
Options.

                                   ARTICLE X
                     AMENDMENT AND TERMINATION OF THE PLAN

        The Board may, by resolution, at any time terminate or amend the Plan
with respect to any shares of Common Stock as to which Awards have not been
granted, subject to any required stockholder approval or any stockholder
approval which the Board may deem to be advisable for any reason, such as for
the purpose of obtaining or retaining any statutory or regulatory benefits
under tax, securities or other laws or satisfying any applicable stock exchange
listing requirements. The Board may not, without the consent of the holder of
an Award, alter or impair any Award previously granted or awarded under this
Plan as specifically authorized herein. Notwithstanding anything contained in
this Plan to the contrary, the provisions of Articles V, VII and VIII of this
Plan relating to Awards granted to Non-Employee Directors shall not be amended
more than once

                                       8


<PAGE>   9


every six months, other than to comport with changes in the Code, the Employee
Retirement Income Security Act of 1974, as amended, or the rules and
regulations promulgated under such statutes.

                                   ARTICLE XI
                               EMPLOYMENT RIGHTS

        Neither the Plan nor the grant of any Awards hereunder nor any action
taken by the Committee or the Board in connection with the Plan shall create
any right on the part of any Employee or Non-Employee Director of the
Corporation or a Subsidiary Company to continue in such capacity.

                                  ARTICLE XII
                                  WITHHOLDING

        12.01 TAX WITHHOLDING. The Corporation may withhold from any cash
payment made under this Plan sufficient amounts to cover any applicable
withholding and employment taxes, and if the amount of such cash payment is
insufficient, the Corporation may require the Optionee to pay to the
Corporation the amount required to be withheld as a condition to delivering the
shares acquired pursuant to an Award. The Corporation also may withhold or
collect amounts with respect to a disqualifying disposition of shares of Common
Stock acquired pursuant to exercise of an Incentive Stock Option, as provided
in Section 8.10(c).

        12.02 METHODS OF TAX WITHHOLDING. The Committee is authorized to adopt
rules, regulations or procedures which provide for the satisfaction of an
Optionee's tax withholding obligation by the retention of shares of Common
Stock to which the Employee would otherwise be entitled pursuant to an Award
and/or by the Optionee's delivery of previously-owned shares of Common Stock or
other property.

                                  ARTICLE XIII
                        EFFECTIVE DATE OF THE PLAN; TERM

        13.01 EFFECTIVE DATE OF THE PLAN. This Plan shall become effective on
the Effective Date; however, no Awards may be granted hereunder unless this
Plan is approved by the requisite vote of the holders of the outstanding voting
shares of the Corporation at a meeting of stockholders of the Corporation held
within twelve (12) months of the Effective Date.

        13.02 TERM OF PLAN. Unless sooner terminated, this Plan shall remain in
effect for a period of ten (10) years ending on the tenth anniversary of the
Effective Date. Termination of the Plan shall not affect any Awards previously
granted and such Awards shall remain valid and in effect until they have been
fully exercised or earned, are surrendered or by their terms expire or are
forfeited.

                                  ARTICLE XIV
                                 MISCELLANEOUS

        14.01 GOVERNING LAW. To the extent not governed by Federal law, this
Plan shall be construed under the laws of the Commonwealth of Pennsylvania.

        14.02 PRONOUNS. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun, and the singular shall include the plural.


                                       9