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                                                                    Exhibit 10.4
                            MICHAEL BAKER CORPORATION
                           1995 STOCK INCENTIVE PLAN,
                       AS AMENDED EFFECTIVE APRIL 23, 1998

    The purposes of the 1995 Stock  Incentive Plan (the "Plan") are to encourage
eligible  employees of Michael Baker  Corporation  (the  "Corporation")  and its
subsidiaries  to  increase  their  efforts  to make  the  Corporation  and  each
Subsidiary  more  successful,  to  provide  an  additional  inducement  for such
employees  to remain  with the  Corporation  or a  Subsidiary,  to  reward  such
employees by providing an opportunity to acquire shares of the Common Stock, par
value $1.00 per share,  of the  Corporation  (the  "Common  Stock") on favorable
terms and to provide a means  through  which the  Corporation  may attract  able
persons to enter the employ of the Corporation or one of its  Subsidiaries.  For
the purposes of the Plan,  the term  "Subsidiary"  means any  Corporation  in an
unbroken chain of corporations  beginning with the  Corporation,  if each of the
corporations  other than the last  corporation  in the unbroken chain owns stock
possessing  at least fifty percent  (50%) or more of the total  combined  voting
power of all classes of stock in one of the other corporations in the chain.

                                    SECTION 1
                                 ADMINISTRATION

    The Plan  shall be  administered  by a  committee  (the  "Committee")  to be
appointed  from  time to time  by the  Corporation's  Board  of  Directors  (the
"Board")  which  hereafter  shall  consist  of not less than two  members of the
Board,  each of whom shall on January 1, 1995, or at the time of  appointment to
the Committee  subsequent thereto and at all times during service as a member of
the Committee be (i) a "disinterested person" as that term is then defined under
Rule 16b-3 under the  Securities  Exchange  Act of 1934,  as amended  (the "1934
Act") or any  successor  rule  and  (ii) an  "outside  director"  under  Section
162(m)(4)(c) of the Internal Revenue Code of 1986 (the "Code"), or any successor
provision.

    The Committee shall interpret the Plan and prescribe such rules, regulations
and procedures in connection  with the operation of the Plan as it shall deem to
be necessary and advisable for the  administration  of the Plan  consistent with
the purposes of the Plan. All questions of interpretation and application of the
Plan, or as to grants under the Plan,  shall be subject to the  determination of
the Committee, which shall be final and binding.

    The Committee shall keep records of action taken at its meetings. A majority
of the  Committee  shall  constitute a quorum at any meeting,  and the acts of a
majority of the members present at any meeting at which a quorum is present,  or
acts approved in writing by all the members of the Committees, shall be the acts
of the Committee.

                                    SECTION 2
                                   ELIGIBILITY

    Those key employees of the Corporation or any Subsidiary (including, but not
limited to,  covered  employees as defined in Section  162(m)(3) of the Code, or
any successor provision) who share responsibility for the management,  growth or
protection  of the  business  of the  Corporation  or any  Subsidiary  shall  be
eligible to be granted stock options as described herein.

    Subject to the  provisions of the Plan,  the  Committee  shall have full and
final authority,  in its discretion,  to grant stock options as described herein
and to determine the employees to whom any such grant shall be made and the


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number of shares to be covered  thereby.  In determining  the eligibility of any
employee,  as well as in determining  the number of shares covered by each grant
of  a  stock  option,   the  Committee  shall  consider  the  position  and  the
responsibilities  of the employee being considered,  the nature and value to the
Corporation  or a Subsidiary of his or her services,  his or her present  and/or
potential  contribution  to the success of the  Corporation  or a Subsidiary and
such other factors as the Committee may deem relevant.

                                    SECTION 3
                         SHARES AVAILABLE UNDER THE PLAN

    The  aggregate  number of shares of the Common Stock which may be issued and
as to which  grants of stock  options  may be made  under the Plan is  1,500,000
shares, subject to adjustment and substitution as set forth in Section 6. If any
stock option  granted under the Plan is canceled by mutual consent or terminates
or expires for any reason  without  having been exercised in full, the number of
shares  subject  thereto  shall again be available  for purposes of the Plan. If
shares  of  Common  Stock  are  forfeited  to the  Corporation  pursuant  to the
restrictions  applicable,  the shares so forfeited  shall not again be available
for purposes of the Plan unless during the period such shares were  outstanding,
the grantee  received no dividends or other  "benefits of  ownership"  from such
shares.  The shares which may be issued under the Plan may be either  authorized
but unissued  shares or treasury  shares or partly each,  as shall be determined
from time to time by the Board.

                                    SECTION 4
                             GRANT OF STOCK OPTIONS

    The Committee shall have authority,  in its discretion,  to grant "incentive
stock options" pursuant to Section 422 of the Code, to grant "nonstatutory stock
options" (i.e.,  stock options which do not qualify under Sections 422 or 423 of
the Code) or to grant both types of stock options (but not in tandem).

    During the  duration of the Plan,  the maximum  number of shares as to which
stock  options  may be granted and as to which  shares may be awarded  under the
Plan to any one employee during any calendar year is 100,000 shares,  subject to
adjustment and  substitution as set forth in Section 6. For the purposes of this
limitation,  any  adjustment  or  substitution  made  pursuant to Section 6 with
respect  to the  maximum  number of shares set forth in the  preceding  sentence
shall  also  be made  with  respect  to any  shares  subject  to  stock  options
previously  granted  under the plan to such  employee  during the same  calendar
year.

    Notwithstanding  any other  provision  contained in the Plan or in any stock
option  agreement  referred  to in  Section  5(F) but  subject  to the  possible
exercise of the Committee's discretion contemplated in the last sentence of this
Section 4, the aggregate  fair market  value,  determined as provided in Section
5(G) on the date of grant,  of the shares with respect to which  incentive stock
options are  exercisable  for the first time by an employee  during any calendar
year under all plans of the corporation  employing such employee,  any parent or
subsidiary  corporation of such  corporation and any predecessor  corporation of
any such corporation shall not exceed $100,000. If the date on which one or more
of such  incentive  stock options could first be exercised  would be accelerated
pursuant to any  provision  of the Plan or any stock option  agreement,  and the
acceleration of such exercise date would result in a violation of the limitation
set forth in the proceeding sentence, then,  notwithstanding any such provision,
but subject to the  provisions  of the next  succeeding  sentence,  the exercise
dates of such incentive  stock options shall be accelerated  only to the date or
dates, if any, that do not result in a violation  of such  limitation  and, in 


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such event,  the exercise  dates of the incentive  stock options with the lowest
option prices shall be  accelerated  to the earliest  such dates.  The Committee
may, in its discretion,  authorize the  acceleration of the exercise date of one
or more  incentive  stock  options even if such  acceleration  would violate the
$100,000  limitation  set forth in the first sentence of this paragraph and even
if such  incentive  stock  options are thereby  converted in whole or in part to
nonstatutory stock options.

    The Committee may accept the  cancellation  of outstanding  stock options in
return for the grant of new stock options for the same or a different  number of
shares and at the same or a different option price.

                                    SECTION 5
                      TERMS AND CONDITIONS OF STOCK OPTIONS

    Stock options granted under the Plan shall be subject to the following terms
and conditions:

     (A)  The purchase  price at which each stock  option may be exercised  (the
          "option  price")  shall  be  such  price  as  the  Committee,  in  its
          discretion,  shall  determine  but shall not be less than one  hundred
          percent  (100%) of the fair market value per share of the Common Stock
          covered by the stock  option on the date of grant,  except that in the
          case  of  an  incentive  stock  option  granted  to an  employee  who,
          immediately  prior to such grant,  owns stock possessing more than ten
          percent  (10%) of the total  combined  voting  power of all classes of
          stock of the Corporation or any Subsidiary (a "Ten Percent Employee"),
          the option price shall not be less than one hundred ten percent (110%)
          of such fair market  value on the date of grant.  For purposes of this
          Section  5(A),  the fair  market  value of the Common  Stock  shall be
          determined as provided in Section  5(G).  For purposes of this Section
          5(A), an individual  (i) shall be considered as owning not only shares
          of stock owned  individually  but also all shares of stock that are at
          the  time  owned,  directly  or  indirectly,  by or  for  the  spouse,
          ancestors,  lineal  descendants,  and brothers and sisters (whether by
          the  whole  or half  blood)  of such  individual  and  (ii)  shall  be
          considered as owning  proportionately  any shares  owned,  directly or
          indirectly, by or for any corporation, partnership, estate or trust in
          which such individual is a shareholder, partner or beneficiary.

     (B)  The  option  price for each  stock  option  shall be paid in full upon
          exercise  and  shall  be  payable  in cash in  United  States  dollars
          (including check,  bank draft or money order),  which may include cash
          forwarded  through  a broker  or  other  agent-sponsored  exercise  or
          financing program;  provided,  however,  that in lieu of such cash the
          person exercising the stock option may (if authorized by the Committee
          at the time of grant in the case of an incentive  stock option,  or at
          any time in the case of a  nonstatutory  stock  option) pay the option
          price in whole or in part by delivering to the  Corporation  shares of
          the Common  Stock  having fair market value on the date of exercise of
          the stock option, determined as provided in Section 5(G), equal to the
          option  price for the  shares  being  purchased;  except  that (i) any
          portion of the option price  representing  a fraction of a share shall
          in any event be paid in cash and (ii) no shares  of the  Common  Stock
          which have been held for less than six months may be delivered in


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          payment  of  the  option  price  of a  stock  option.  If  the  person
          exercising  a  stock  option   participates   in  a  broker  or  other
          agent-sponsored  exercise or financing  program,  the Corporation will
          cooperate with all reasonable  procedures of the broker or other agent
          to permit  participation by the person  exercising the stock option in
          the exercise or financing  program.  Notwithstanding  any procedure of
          the broker or other  agent-sponsored  program,  if the option price is
          paid in cash,  the exercise of the stock option shall not be deemed to
          occur and no  shares  of the  Common  Stock  will be issued  until the
          Corporation has received full payment in cash (including  check,  bank
          draft or money  order) for the  option  price from the broker or other
          agent.  The date of exercise  of a stock  option  shall be  determined
          under procedures  established by the Committee,  and as of the date of
          exercise the person  exercising  the stock option shall be  considered
          for all  purposes to be the owner of the shares with  respect to which
          the stock option has been exercised.  Payment of the option price with
          shares  shall not  increase  the number of shares of the Common  Stock
          which may be issued under the Plan as provided in Section 3.

     (C)  No stock option shall be exercisable by a grantee during the first six
          months of its term,  except that this limitation on exercise shall not
          apply if Section  7(B)  becomes  applicable.  No stock option shall be
          exercisable  after the expiration of ten years (five years in the case
          of incentive stock option granted to a Ten Percent  Employee) from the
          date of grant.  A stock option to the extent  exercisable  at any time
          may be exercised in whole or in part.

     (D)  No stock option shall be transferable by the grantee otherwise than by
          will,  or if the grantee  dies  intestate,  by the laws of descent and
          distribution  of the state of  domicile  of the grantee at the time of
          death.  All stock options shall be exercisable  during the lifetime of
          the grantee only by the grantee.

     (E)  Subject to the provisions of Section 4 in the case of incentive  stock
          options,  unless the Committee,  in its  discretion,  shall  otherwise
          determine:

           (i) If the  employment  of a grantee who is not  disabled  within the
               meaning of Section  422(c)(6) of the Code (a "Disabled  Grantee")
               is voluntarily or  involuntarily  terminated  with the consent of
               the  Corporation  or  Subsidiary  or a grantee  retires under any
               retirement  plan of the  Corporation  or a  Subsidiary,  any then
               outstanding  incentive stock option held by such grantee shall be
               exercisable by the grantee (but only to the extent exercisable by
               the grantee  immediately  prior to the termination of employment)
               at any time prior to the expiration  date of such incentive stock
               option or within three months  after the date of  termination  of
               employment, whichever is the shorter period;

          (ii) If the employment of a grantee who is not a Disabled Grantee


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               is voluntarily or  involuntarily  terminated  with consent of the
               Corporation or a Subsidiary,  any then  outstanding  nonstatutory
               stock option held by such  grantee  shall be  exercisable  by the
               grantee  (but  only  to the  extent  exercisable  by the  grantee
               immediately  prior to the  termination of employment) at any time
               prior to the expiration date of such nonstatutory stock option or
               within  one year  after the date of  termination  of  employment,
               whichever is the shorter period;

         (iii) If the  employment  of a grantee  who is a  Disabled  Grantee  is
               voluntarily or  involuntarily  terminated with the consent of the
               Corporation or a Subsidiary,  any then  outstanding  stock option
               held by such grantee shall be  exercisable by the grantee in full
               (whether or not so exercisable by the grantee  immediately  prior
               to the  termination  of  employment)  by the  grantee at any time
               prior to the  expiration  date of such stock option or within one
               year after the date of termination  of  employment,  whichever is
               the shorter period;

          (iv) If a grantee retires under any retirement plan of the Corporation
               or a Subsidiary,  any then outstanding  nonstatutory stock option
               held by such  grantee  shall be  exercisable  by the grantee (but
               only to the extent  exercisable by the grantee  immediately prior
               to such  retirement) at any time prior to the expiration  date of
               such  nonstatutory  stock  option or within three years after the
               date of retirement, whichever is the shorter period;

           (v) Following  the  death  of  a  grantee  during   employment,   any
               outstanding stock option held by the grantee at the time of death
               shall be  exercisable  in full (whether or not so  exercisable by
               the grantee immediately prior to the death of the grantee) by the
               person  entitled to do so under the will of the  grantee,  or, if
               the grantee shall fail to make  testamentary  disposition  of the
               stock option or shall die intestate,  by the legal representative
               of the grantee at any time prior to the  expiration  date of such
               stock  option  or  within  one  year  after  the  date of  death,
               whichever is the shorter period;

          (vi) Following the death of a grantee after  termination of employment
               during  a  period  when  a  stock  option  is  exercisable,   any
               outstanding stock option held by the grantee at the time of death
               shall be exercisable  by such person  entitled to do so under the
               will of the grantee by such legal representative (but only to the
               extent  the  stock   option  was   exercisable   by  the  grantee
               immediately  prior to the death of the grantee) at any time prior
               to the  expiration  date of such stock  option or within one year
               after the date of death, whichever is the shorter period; and

         (vii) If a grantee of a stock option (a) engages in the operation or


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               management  of a business  (whether as owner,  partner,  officer,
               director,  employee  or  otherwise  and  whether  during or after
               termination  of  employment)  which  is in  competition  with the
               Corporation or any of its Subsidiaries,  (provided, however, that
               this clause  shall not apply if Section  7(C)  applies  following
               termination of employment), (b) induces or attempts to induce any
               customer, supplier, licensee or other individual,  corporation or
               other business  organization having a business  relationship with
               the  Corporation  or any  of  its  Subsidiaries  to  cease  doing
               business with the  Corporation or any of its  Subsidiaries  or in
               any  way  interferes  with  the  relationship  between  any  such
               customer,  supplier, licensee or other person and the Corporation
               or any of its  Subsidiaries  or (c)  solicits any employee of the
               Corporation  or any of its  Subsidiaries  to leave the employment
               thereof or in any way interferes  with the  relationship  of such
               employee with the  Corporation  or any of its  Subsidiaries,  the
               Committee,  in its  discretion,  may  immediately  terminate  all
               outstanding stock options held by the grantee.  Whether a grantee
               has engaged in any of the activities referred to in the preceding
               sentence  which would cause the  outstanding  stock options to be
               terminated  shall  be  determined,  in  its  discretion,  by  the
               Committee,  and any such  determination by the Committee shall be
               final and binding.

     (F)  All stock options shall be confirmed by an agreement,  or an amendment
          thereto,  which shall be executed on behalf of the  Corporation by the
          President and Chief Executive Officer,  the Chief Financial Officer or
          any Vice  President  and by the grantee.  The  agreement  confirming a
          stock  option shall  specify  whether the stock option is an incentive
          stock option or a  nonstatutory  stock option.  The provisions of such
          agreements need not be identical.

     (G)  Fair market  value of the Common  Stock shall be the mean  between the
          following prices, as applicable,  for the date as of which fair market
          value is to be determined as quoted in The Wall Street  Journal (or in
          such other reliable  publication as the Committee,  in its discretion,
          may determine to rely upon):  (i) if the Common Stock is listed on the
          American or the New York Stock Exchange,  the highest and lowest sales
          prices  per  share of the  Common  Stock as  quoted  in the  Composite
          Transactions  listing  for such  exchange  on such  date,  (ii) if the
          Common  Stock is not listed on either such  exchange,  the highest and
          lowest sales prices per share of the Common Stock for such date on (or
          on  any  composite  index   including)  the  principal  United  States
          securities  exchange registered under the 1934 Act on which the Common
          Stock is  listed,  or (iii) if the  Common  Stock is not listed on any
          such  exchange,  the highest and lowest  sales prices per share of the
          Common Stock for such date on the National  Association  of Securities
          Dealers Automated Quotation System or any successor system then in use
          ("NASDAQ"). If there are no such sale price quotations for the date as
          of which fair market value is to be determined but there are such sale
          price quotations within a reasonable period both before and after such


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          date,  then fair market value shall be determined by taking a weighted
          average of the means  between the highest and lowest  sales prices per
          share of the Common  Stock as so quoted on the nearest date before and
          the nearest date after the date as of which fair market value is to be
          determined. The average should be weighted inversely by the respective
          numbers of trading days  between the selling  dates and the date as of
          which fair market value is to be determined. If there are no such sale
          price  quotations  on or within a  reasonable  period  both before and
          after the date as of which fair market value is to be determined, then
          fair market  value of the Common  Stock shall be the mean  between the
          bona fide bid and asked  prices per share of Common Stock as so quoted
          for such date on NASDAQ, or if none, the weighted average of the means
          between  such bona fide bid and asked  prices on the  nearest  trading
          date  before and the nearest  trading  date after the date as of which
          fair market value is to be determined, if both such dates are within a
          reasonable  period.  The  average  is to be  determined  in the manner
          described  above in this Section 5(G). If the fair market value of the
          Common Stock cannot be determined on the basis previously set forth in
          this  Section 5(G) for the date as of which fair market value is to be
          determined,  the  Committee  shall in good  faith  determine  the fair
          market value of the Common Stock on such date. Fair market value shall
          be  determined   without  regard  to  any  restriction  other  than  a
          restriction which, by its terms, will never lapse.

     (H)  The obligation of the  Corporation to issue shares of the Common Stock
          under  the  Plan  shall  be  subject  to (i)  the  effectiveness  of a
          registration  statement  under the Securities Act of 1933, as amended,
          with respect to such shares,  if deemed  necessary or  appropriate  by
          counsel for the Corporation,  (ii) the condition that the shares shall
          have been listed (or  authorized  for listing upon official  notice of
          issuance)  upon the American  Stock  Exchange or each such other stock
          exchange,  if any, on which the Common Stock shares may then be listed
          and (iii) all other  applicable  laws,  regulations,  rules and orders
          which may then be in effect.

     Subject  to the  foregoing  provisions  of this  Section  5 and  the  other
provisions of the Plan, any stock option granted under the Plan may be exercised
at such times and in such amounts and be subject to such  restrictions and other
terms and conditions,  if any, as shall be determined, in its discretion, by the
Committee  and set forth in the  agreement  referred to in Section  5(F),  or an
amendment thereto.


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                                    SECTION 6
                      ADJUSTMENT AND SUBSTITUTION OF SHARES

     If a dividend or other distribution shall be declared upon the Common Stock
payable in shares of the Common Stock,  the number of shares of the Common Stock
subject to any outstanding  stock options and the number of shares of the Common
Stock  which may be issued  under the Plan but are not  subject  to  outstanding
stock options and the maximum  number of shares as to which stock options may be
granted  and as to which  shares may be awarded  under the Plan to any  employee
during any calendar year under Section 4 on the date fixed for  determining  the
shareholders  entitled to receive such stock dividend or  distribution  shall be
adjusted by adding  thereto the number of shares of the Common Stock which would
have been  distributable  thereon if such  shares had been  outstanding  on such
date.

     If the  outstanding  shares of the Common  Stock  shall be changed  into or
exchangeable  for a  different  number  or kind of  shares  of  stock  or  other
securities  of  the   Corporation  or  another   corporation,   whether  through
reorganization, reclassification,  recapitalization, stock split-up, combination
of shares,  merger or  consolidation,  then there shall be substituted  for each
share of the Common Stock subject to any then  outstanding  stock option and for
each share of the Common  Stock which may be issued  under the Plan but which is
not then subject to any outstanding stock option,  the number and kind of shares
of stock or other  securities  into which each  outstanding  share of the Common
Stock shall be so changed or for which each such share shall be exchangeable.

     In case of any adjustment or  substitution as provided for in the first two
paragraphs of this Section 6, the aggregate  option price for all shares subject
to each then  outstanding  stock option prior to such adjustment or substitution
shall be the aggregate  option price for all shares of stock or other securities
(including  any fraction) to which such shares shall have been adjusted or which
shall have been  substituted  for such  shares.  Any new option  price per share
shall be carried to at least three  decimal  places with the last decimal  place
rounded upwards to the nearest whole number.

     If the outstanding  shares of the Common Stock shall be changed in value by
reason  of  any  spin-off,   split-off  or  split-up,  or  dividend  in  partial
liquidation, dividend in property other than cash, or extraordinary distribution
to shareholders of the Common Stock, the Committee shall make any adjustments to
any then outstanding stock option which it determines are equitably  required to
prevent dilution or enlargement of the rights of optionees which would otherwise
result from any such transaction.

     No adjustment or substitution  provided for in this Section 6 shall require
the  Corporation  to issue  or sell a  fraction  of a share  or other  security.
Accordingly,  all fractional  shares or other  securities  which result from any
such adjustment or  substitution  shall be eliminated and not carried forward to
any subsequent adjustment or substitution.

     If any such  adjustment  or  substitution  provided  for in this  Section 6
requires the approval of shareholders in order to enable the Corporation to


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grant incentive stock options,  then no such adjustment or substitution shall be
made without the required shareholder  approval.  Notwithstanding the foregoing,
in the case of incentive stock options,  if the effect of any such adjustment or
substitution  would be to cause the stock  option to fail to continue to qualify
as an incentive stock option or to cause a modification, extension or renewal of
such stock option  within the meaning of Section 424 of the Code,  the Committee
may elect that such adjustment or substitution  not be made but rather shall use
reasonable  efforts to effect  such other  adjustment  of each then  outstanding
stock option as the Committee, in its discretion, shall deem equitable and which
will not  result in any  disqualification,  modification,  extension  or renewal
(within the meaning of Section 424 of the Code) of such incentive stock option.

     Except as  provided  in this  Section 6, a grantee  shall have no rights by
reason  of any  issue by the  Corporation  of stock of any  class or  securities
convertible  into stock of any class, any subdivision or consolidation of shares
of stock of any class,  the payment of any stock  dividend or any other increase
or decrease in the number of shares of stock of any class.


                                    SECTION 7
                       ADDITIONAL RIGHTS IN CERTAIN EVENTS

(A)  Definitions

     For  purposes  of this  Section  7,  the  following  terms  shall  have the
following meanings:

     (1)  The term "Person"  shall be used as that term is used in Section 13(d)
          and 14(d) of the 1934 Act as in effect  on the  effective  date of the
          Plan.

     (2)  "Beneficial  Ownership"  shall be determined as provided in Rule 13d-3
          under the 1934 Act as in effect on the effective date of the Plan.

     (3)  "Voting  Shares" shall mean all securities of a company  entitling the
          holders  thereof to vote in an annual  election of directors  (without
          consideration  of the  rights  of any  class of stock  other  than the
          Common  Stock to elect  directors  by a separate  class  vote);  and a
          specified  percentage  of "Voting  Power" of a company shall mean such
          number of the Voting  Shares as shall  enable the  holders  thereof to
          cast such percentage of all the votes which could be cast in an annual
          election  of  directors  (without  consideration  of the rights of any
          class of stock  other  than  Common  Stock  to  elect  directors  by a
          separate class vote).

     (4)  "Tender  Offer" shall mean a tender offer or exchange offer to acquire
          securities  of the  Corporation  (other  than such  offer  made by the
          Corporation or any Subsidiary),  whether or not such offer is approved
          or opposed by the Board.

     (5)  "Continuing Directors" shall mean a director of the Corporation who


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          either (a) was a director of the  Corporation on the effective date of
          the Plan or (b) is an individual  whose  election,  or nomination  for
          election,  as a director of the  Corporation was approved by a vote of
          at least  two-thirds  of the  directors  then still in office who were
          Continuing   Directors   (other  than  an  individual   whose  initial
          assumption  of office is in  connection  with an actual or  threatened
          election  contest  relating  to  the  election  of  directors  of  the
          Corporation  which would be subject to Rule 14a-11 under the 1934 Act,
          or any successor Rule).

     (6)  "Section 7 Event" shall mean the date upon which any of the  following
          events occur:

          (a)  The Corporation  acquires actual  knowledge that any Person other
               than the  Corporation,  a  Subsidiary,  the  Corporation's  Stock
               Ownership  Plan  and  Trust  or  any  employee   benefit  plan(s)
               sponsored  by  the   Corporation   has  acquired  the  Beneficial
               Ownership,   directly  or   indirectly,   of  securities  of  the
               Corporation  entitling  such  Person to 20% or more of the Voting
               Power of the Corporation;

          (b)  A Tender Offer is made to acquire  securities of the  Corporation
               entitling the holders  thereof to 20% or more of the Voting Power
               of the Corporation; or

          (c)  A solicitation  subject to Rule 14a-11 under the 1934 Act (or any
               successor  Rule)  relating  to the  election or removal of 50% or
               more of the  members  of any class of the Board  shall be made by
               any  person  other than the  Corporation  or less than 51% of the
               members of the Board shall be Continuing Directors; or

          (d)  The  shareholders  of the  Corporation  shall  approve  a merger,
               consolidation,   share  exchange,   division  or  sale  or  other
               disposition of assets of the Corporation as a result of which the
               shareholders  of  the  Corporation   immediately  prior  to  such
               transaction shall not hold,  directly or indirectly,  immediately
               following such  transaction a majority of the Voting Power of (i)
               in the  case of a  merger  or  consolidation,  the  surviving  or
               resulting corporation,  (ii) in the case of a share exchange, the
               acquiring  corporation  or (iii) in the case of a  division  or a
               sale or other disposition of assets, each surviving, resulting or
               acquiring   corporation   which,    immediately   following   the
               transaction,  holds more than 10% of the  consolidated  assets of
               the Corporation immediately prior to the transaction;

provided,  however,  that (i) if securities  beneficially owned by a grantee are
included in  determining  the  Beneficial  Ownership of a Person  referred to in
paragraph 6(a), (ii) a grantee is required to be named pursuant to Item 2 of the
Schedule  14D-I (or any similar  successor  filing  requirement)  required to be
filed by the bidder making a Tender Offer referred to in paragraph 6(b) or (iii)
if a grantee is a "participant" as defined in Rule 14a-11 under the 1934


<PAGE>



Act (or any successor rule) in a solicitation  (other than a solicitation by the
Corporation) referred to in paragraph 6(c), then no Section 7 Event with respect
to such grantee shall be deemed to have occurred by reason of such event.

(B)  Acceleration of the Exercise Date of Stock Options.

     Subject  to the  provisions  of  Section 4 in the case of  incentive  stock
options,  unless the  agreement  referred to in Section  5(F),  or an  amendment
thereto, shall otherwise provide,  notwithstanding any other provision contained
in the Plan, in case any "Section 7 Event" occurs all outstanding  stock options
(other  than  those  held by a person  referred  to in the  proviso  to  Section
7(A)(6)) shall become immediately and fully exercisable whether or not otherwise
exercisable by their terms.

(C)  Extension of the Expiration Date of Stock Options.

     Subject  to the  provisions  of  Section 4 in the case of  incentive  stock
options,  unless the  agreement  referred to in Section  5(F),  or an  amendment
thereto, shall otherwise provide,  notwithstanding any other provision contained
in the Plan, all stock options held by a grantee (other than a grantee  referred
to in the proviso to Section 7(A)(6)) whose employment with the Corporation or a
Subsidiary  terminates  within  one year of any  Section 7 Event for any  reason
other  than  voluntary  termination  with the  consent of the  Corporation  or a
Subsidiary,  retirement  under  any  retirement  plan  of the  Corporation  or a
Subsidiary or death,  which are exercisable shall continue to be exercisable for
a period of one year from the date of such termination of employment,  but in no
event after the expiration date of the stock option.


                                    SECTION 8
          EFFECT OF THE PLAN ON THE RIGHTS OF EMPLOYEES AND EMPLOYER

     Neither  the  adoption  of the  Plan  nor any  action  of the  Board or the
Committee pursuant to the Plan shall be deemed to give any employee any right to
be granted a stock  option  under the Plan.  Nothing  in the Plan,  in any stock
option, or in any agreement  providing for a stock option shall confer any right
on any employee to continue in the employ of the  Corporation  or any Subsidiary
or interfere in any way with the rights of the  Corporation or any Subsidiary to
terminate the employment of any employee at any time.


                                    SECTION 9
                                   WITHHOLDING

     To the extent required by applicable Federal,  state, local or foreign law,
the person exercising the stock option shall make  arrangements  satisfactory to
the Corporation,  in its discretion, for the satisfaction of any withholding tax
obligations that arise in connection with the Plan. The Corporation shall not be
required  to issue any Common  Stock under the Plan until such  obligations  are
satisfied.


<PAGE>


                                   SECTION 10
                                    AMENDMENT

     The right to alter and amend the Plan at any time and from time to time and
the right to revoke or terminate  the Plan are hereby  specifically  reserved to
the Board;  provided  that no such  alteration  or  amendment of the Plan shall,
without  shareholder  approval  (i)  increase  the number of shares which may be
issued  under the Plan as set forth in  Section  3, (ii)  increase  the  maximum
number of shares as to which stock options may be granted and as to which shares
may be awarded  under the Plan to any one employee  during any one calendar year
as set forth in Section 4, (iii) materially increase the benefits accruing under
the Plan to persons  subject to the provisions of Section 16(b) of the 1934 Act,
(iv) materially  modify the requirements as to eligibility for  participation in
the Plan by persons  subject to the provisions of Section 16(b) of the 1934 Act,
(v) make any changes in the class of  employees  eligible  to receive  incentive
stock  options  under the Plan or (vi)  extend  the  duration  of the  Plan.  No
alteration, amendment, revocations or termination of the Plan shall, without the
written consent of the holder of stock options under the Plan,  adversely affect
the rights of such holder with respect thereto.


                                   SECTION 11
                       EFFECTIVE DATE AND DURATION OF PLAN

     The  effective  date of the Plan shall be January 1, 1995,  and the date of
adoption of the Plan by the Board shall be December 15, 1994, provided that such
adoption of the Plan by the Board is approved by a majority of the votes cast at
a duly held  meeting of  shareholders  held on or prior to December 1, 1995,  at
which a quorum  representing a majority of the  outstanding  voting stock of the
Corporation  is,  either in person or by proxy,  present  and  voting.  No stock
option  granted under the Plan may be exercised  until after such  approval.  No
stock option may be granted under the Plan subsequent to December 14, 2004.