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                                                                    EXHIBIT 10.6



                              CHASE INDUSTRIES INC.
             1997 EXECUTIVE DEFERRED COMPENSATION STOCK OPTION PLAN


                            SCOPE AND PURPOSE OF PLAN

         Chase Industries Inc., a Delaware corporation (the "Corporation"), has
adopted this 1997 Executive Deferred Compensation Stock Option Plan (this
"Plan") to provide for the granting of Options (hereafter defined) to Eligible
Individuals (hereafter defined).

         The purpose of this Plan is to enable the Corporation to provide
certain executive officers and key management employees from time to time
designated by the Committee (hereinafter defined) an opportunity to acquire
additional proprietary interests in the success of the Corporation, which will
more closely align the interest of participating employees in the Corporation
with that of the stockholders and result in an increased incentive for such
persons to remain with the Corporation and strive to maximize the success of the
Corporation.

SECTION 1. DEFINITIONS

         1.1 "Acquiring Person" means any Person other than (a) the Corporation,
any Subsidiary of the Corporation, any employee benefit plan of the Corporation
or of a Subsidiary of the Corporation or of a corporation owned directly or
indirectly by the stockholders of the Corporation in substantially the same
proportions as their ownership of Stock of the Corporation, or any trustee or
other fiduciary holding securities under an employee benefit plan of the
Corporation or of a Subsidiary of the Corporation or of a corporation owned
directly or indirectly by the stockholders of the Corporation in substantially
the same proportions as their ownership of Stock of the Corporation (b) Citicorp
Venture Capital, Ltd., a New York corporation ("CVC"), or (c) any Affiliate of
CVC that is directly controlled by Citicorp or Citibank, N.A., or otherwise is
in the same tier as CVC of Affiliates under the control of such entities
("Direct Affiliates"), but shall not include any entities that may be deemed an
Affiliate of CVC as a result of the investment by any Direct Affiliate in such
entity.

         1.2 "Affiliate" means (a) any Person who is directly or indirectly the
beneficial owner of at least 10% of the voting power of the outstanding Voting
Securities of the Corporation or (b) any Person controlling, controlled by, or
under common control with the Corporation or any Person contemplated in clause
(a) of this Subsection 1.2.

         1.3 "Annual Bonus" means the annual cash bonus compensation which a
Participant becomes entitled to receive for service as an Employee during a Plan
Year, exclusive of any amounts paid by the Corporation or its Subsidiaries to
such Participant for services rendered to the Corporation or its Subsidiaries in
a capacity other than as an Employee, as determined by the Compensation
Committee of the Board of Directors or pursuant to objective criteria approved
by the Compensation Committee.



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         1.4 "Award Agreement" means the written agreement between the
Corporation and a Holder evidencing the terms, conditions, and limitations of
the Options granted to that Holder.

         1.5 "Board of Directors" means the board of directors of the
Corporation.

         1.6 "Business Day" means any day other than a Saturday, a Sunday, or a
day on which banking institutions in the state of Ohio are authorized or
obligated by law or executive order to close.

         1.7 "Change in Control" means the event that is deemed to have occurred
if:

                  (a) any Acquiring Person is or becomes the "beneficial owner"
         (as defined in Rule 13d-3 under the Exchange Act), directly or
         indirectly, of securities of the Corporation representing fifty percent
         or more of the combined voting power of the then outstanding Voting
         Securities of the Corporation; or

                  (b) a public announcement is made of a tender or exchange
         offer by any Acquiring Person for fifty percent or more of the
         outstanding Voting Securities of the Corporation, and the Board of
         Directors approves or fails to oppose that tender or exchange offer in
         its statements in Schedule 14D-9 under the Exchange Act; provided,
         however, that the events to occur under Subsection 7.1 hereof shall not
         occur solely as a result of an event described in this clause (b)
         unless, within one year after the occurrence of such event, an event
         described in clauses (a), (c) or (d) hereof shall have occurred, in
         which case such events to occur under Subsection 7.1 hereof shall occur
         upon the occurrence of such event but shall be deemed to have been
         effective as of the time of the occurrence of the event described in
         this clause (b); or

                  (c) the stockholders of the Corporation approve a merger or
         consolidation of the Corporation with any other corporation or
         partnership (or, if no such approval is required, the consummation of
         such a merger or consolidation of the Corporation), other than a merger
         or consolidation that would result in the Voting Securities of the
         Corporation outstanding immediately before the consummation thereof
         continuing to represent (either by remaining outstanding or by being
         converted into Voting Securities of the surviving entity or of a parent
         of the surviving entity) a majority of the combined voting power of the
         Voting Securities and Convertible Voting Securities (on a fully-diluted
         basis assuming full conversion thereof) of the surviving entity (or its
         parent) outstanding immediately after that merger or consolidation; or

                  (d) the stockholders of the Corporation approve a plan of
         complete liquidation of the Corporation or an agreement for the sale or
         disposition by the Corporation of all or substantially all the
         Corporation's assets (or, if no such approval is required, the
         consummation of such a liquidation, sale, or disposition in one
         transaction or series of related transactions) other than a
         liquidation, sale or disposition of all or substantially all the
         Corporation's assets in one transaction or a series of related
         transactions to a Subsidiary of 



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         the Corporation or any other corporation owned directly or indirectly
         by the stockholders of the Corporation in substantially the same
         proportions as their ownership of stock in the Corporation.

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

         1.9 "Committee" means the committee appointed pursuant to Section 3 by
the Board of Directors to administer this Plan.

         1.10 "Convertible Voting Securities" means any and all options,
warrants, or other rights to purchase, or securities convertible into or
exchangeable or exercisable for, directly or indirectly, Voting Securities of
any Person.

         1.11 "Corporation" means Chase Industries Inc., a Delaware corporation.

         1.12 "Date of Grant" has the meaning given it in Subsection 4.3.

         1.13 "Disability" has the meaning given it in Subsection 9.2.

         1.14 "Disinterested Person" means a Person that meets the definition of
both a "Non-Employee Director" under Rule 16b-3(b)(3) and an "outside director"
under Section 162(m).

         1.15 "Effective Date" means the date this Plan is approved by the
stockholders of the Corporation.

         1.16 "Eligible Individuals" means Employees that the Committee
designates as eligible to participate in this Plan; provided that the class of
Employees that may be deemed as Eligible Individuals shall be limited to
executive officers of the Corporation and its Subsidiaries and key management
personnel of the Corporation and its Subsidiaries as determined by the
Committee.

         1.17 "Employee" means any employee of the Corporation or any of the
Subsidiaries, including officers and directors of the Corporation or any
Subsidiary who also are employees of the Corporation or any of its Subsidiaries.

         1.18 "Exchange Act" means the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder, or any successor law, as it may be
amended from time to time.

         1.19 "Exercise Notice" has the meaning given it in Subsection 6.3.

         1.20 "Exercise Price" means the price per share at which one share of
Stock may be purchased pursuant to an Option, as specified in Subsection 5.1.

         1.21 "Fair Market Value" means, for a particular day:



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                  (a) If shares of Stock of the same class are listed or
         admitted to unlisted trading privileges on any national or regional
         securities exchange at the date of determining the Fair Market Value,
         then the last reported sale price, regular way, on the composite tape
         of that exchange as of the date or dates on which Fair Market Value is
         to be determined or, if no such sale takes place on such date or dates,
         the average of the closing bid and asked prices, regular way, in either
         case as reported in the principal consolidated transaction reporting
         system with respect to securities listed or admitted to unlisted
         trading privileges on that securities exchange; or

                  (b) If shares of Stock of the same class are not listed or
         admitted to unlisted trading privileges as provided in Subsection
         1.21(a) and sales prices for shares of Stock of the same class in the
         over-the-counter market are reported by the National Association of
         Securities Dealers, Inc. Automated Quotations, Inc. ("NASDAQ") National
         Market System (or such other system then in use) at the date or dates
         of determining the Fair Market Value, then the last reported sales
         price so reported as of the date or dates on which Fair Market Value is
         to be determined or, if no such sale takes place on such date or dates,
         the average of the high bid and low asked prices so reported; or

                  (c) If shares of Stock of the same class are not listed or
         admitted to unlisted trading privileges as provided in Subsection
         1.21(a) and sales prices for shares of Stock of the same class are not
         reported by the NASDAQ National Market System (or a similar system then
         in use) as provided in Subsection 1.21(b), and if bid and asked prices
         for shares of Stock of the same class in the over-the-counter market
         are reported by NASDAQ (or, if not so reported, by the National
         Quotation Bureau Incorporated) at the date or dates of determining the
         Fair Market Value, then the average of the high bid and low asked
         prices on the last trading day before the date in question;

provided, that if information to establish Fair Market Value of the Stock
pursuant to this Subsection 1.21 is not available on any date or dates for which
Fair Market Value is to be determined, subclause (a), (b) or (c), as applicable,
shall be applied for the next preceding date on which such information is
available.

         1.22 "Holder" means a Participant to whom an outstanding Option has
been granted under this Plan or a transferee of any Option granted under this
Plan as permitted under Subsection 9.3.

         1.23 "Non-Surviving Event" means an event of Restructuring as described
in either Subsection 1.31(b) or Subsection 1.31(c).

         1.24 "Normal Retirement" means the separation of an Employee from
employment with the Corporation and/or its Subsidiaries on or after the
attainment of age 59 1/2 with the right to receive an immediate benefit under a
tax qualified retirement plan under Section 401(a) of the Code approved by the
Corporation or any Subsidiary thereof.



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         1.25 "Option" means an option to purchase Stock granted pursuant to
this Plan; Options granted under this Plan are not "incentive stock options"
under Section 422 of the Code.

         1.26 "Participant" means an Eligible Individual who has elected in
accordance with Section 4.2 to receive Options in lieu of receiving all or part
of such Eligible Individual's Annual Bonus.

         1.27 "Person" means any person or entity of any nature whatsoever,
specifically including (but not limited to) an individual, a firm, a company, a
corporation, a partnership, a trust, or other entity. A Person, together with
that Person's affiliates and associates (as "affiliate" and "associate" are
defined in Rule 12b-2 under the Exchange Act for purposes of this definition
only), and any Persons acting as a partnership, limited partnership, joint
venture, association, syndicate, or other group (whether or not formally
organized), or otherwise acting jointly or in concert or in a coordinated or
consciously parallel manner (whether or not pursuant to any express agreement),
for the purpose of acquiring, holding, voting, or disposing of securities of the
Corporation with that Person, shall be deemed a single "Person."

         1.28 "Plan" means the Chase Industries Inc. 1997 Executive Deferred
Compensation Stock Option Plan, as it may be amended from time to time.

         1.29 "Plan Year" means the twelve (12) consecutive month period
beginning January 1 and ending December 31.

         1.30 "Restructuring" means the occurrence of any one or more of the
following:

                  (a) The merger or consolidation of the Corporation with any
         Person, whether effected as a single transaction or a series of related
         transactions, with the Corporation remaining the continuing or
         surviving entity of that merger or consolidation and the Stock
         remaining outstanding and not changed into or exchanged for stock or
         other securities of any other Person or of the Corporation, cash, or
         other property;

                  (b) The merger or consolidation of the Corporation with any
         Person, whether effected as a single transaction or a series of related
         transactions, with (i) the Corporation not being the continuing or
         surviving entity of that merger or consolidation or (ii) the
         Corporation remaining the continuing or surviving entity of that merger
         or consolidation but all or a part of the outstanding shares of Stock
         are changed into or exchanged for stock or other securities of any
         other Person or the Corporation, cash, or other property; or

                  (c) The transfer, directly or indirectly, of all or
         substantially all of the assets of the Corporation (whether by sale,
         merger, consolidation, liquidation, or otherwise) to any Person,
         whether effected as a single transaction or a series of related
         transactions.

         1.31 "Rule 16b-3" means Rule 16b-3 under Section 16(b) of the Exchange
Act, or any successor rule, as it may be amended from time to time, and
references to paragraphs or clauses of 



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Rule 16b-3 shall refer to the corresponding paragraphs or clauses of Rule 16b-3
as it exists at the Effective Date or the comparable paragraph or clause of Rule
16b-3 as it may thereafter be amended.

         1.32 "Section 162(m)" means Section 162(m) of the Code, or any
successor section under the Code as it may be amended from time to time and as
interpreted by final or proposed regulations promulgated thereunder from time to
time.

         1.33 "Securities Act" means the Securities Act of 1933 and the rules
and regulations promulgated thereunder, or any successor law, as it may be
amended from time to time.

         1.34 "Stock" means the Corporation's authorized common stock, par value
$.01 per share, or any other securities that are substituted for the Stock as
provided in Subsection 7.1 or Section 8.

         1.35 "Stock Appreciation Right" or "SAR" means the right to receive an
amount equal to the excess of the Fair Market Value of a share of Stock (as
determined on the date of exercise) over the Exercise Price.

         1.36 "Subsidiary" means, with respect to any Person, any corporation,
or other entity of which a majority of the Voting Securities is owned, directly
or indirectly, by that Person.

         1.37 "Total Shares" has the meaning given it in Subsection 7.1.

         1.38 "Voting Securities" means (i) any securities that are entitled to
vote generally in the election of directors, in the admission of general
partners or in the selection of any other similar governing body and (ii) with
respect to the Corporation, all shares of the Corporation's nonvoting common
stock, par value $.01 per share (all of which are convertible into shares of the
Corporation's common stock, par value $.01 per share).

SECTION 2. SHARES OF STOCK SUBJECT TO THIS PLAN

         2.1 Maximum Number of Shares. Subject to the provisions of Subsection
2.2 and Section 8 of this Plan, the aggregate number of shares of Stock that may
be issued, transferred or exercised pursuant to Options under this Plan shall be
three HUNDRED THOUSAND (300,000) shares of Stock. Options with respect to such
shares of Stock shall be allocated among Eligible Individuals pursuant to the
formula set forth in Subsection 5.1; provided that no more than 100,00 shares of
stock may be subject to options granted to any single Eligible Individual during
any one Plan Year (or otherwise with respect to any Annual Bonus amount deferred
for any Plan Year by any single Eligible Individual).

         2.2 Limitation of Shares. For purposes of the limitations specified in
Subsection 2.1, the following principles shall apply:



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                  (a) the number of shares of Stock subject to outstanding
         Options shall count against and decrease the number of shares of Stock
         that may be issued for purposes of Subsection 2.1;

                  (b) the number of shares of Stock with respect to which
         Options have expired, are canceled, or otherwise terminate without
         being exercised, converted, or vested, as applicable, and, in the event
         SARs are granted pursuant to Subsection 7.1, shares of Stock as to
         which an Option has been surrendered in connection with the exercise of
         a related SAR shall be added back to the number of shares of Stock that
         may be issued for purposes of Subsection 2.1; and

                  (c) the number of shares of Stock that are transferred by a
         Holder of an Option (or withheld by the Corporation) as full or partial
         payment to the Corporation of the purchase price of shares of Stock
         subject to an Option or the Corporation's or any of its Subsidiary's
         tax withholding obligations, if any, shall not be added back to the
         number of shares of Stock that may be issued for purposes of Subsection
         2.1 and shall not again be subject to Options.

         Notwithstanding the provisions of this Subsection 2.2, the Committee
may impose restrictions which are more limited than set forth herein with
respect to shares of Stock subject to Options that may be added back to the
number of shares of Stock that may be issued for purposes of Subsection 2.1.

         2.3 Source of Shares. The shares to be delivered under this Plan shall
be made available from (a) authorized but unissued shares of Stock, (b) Stock
held in the treasury of the Corporation, or (c) previously issued shares of
Stock reacquired by the Corporation, including shares purchased on the open
market, in each situation as the Board of Directors or the Committee may
determine from time to time at its sole option.

         2.4 Registration and Listing of Shares. From time to time, the Board of
Directors and appropriate officers of the Corporation shall and are authorized
to take whatever actions are necessary to file required documents with
governmental authorities, stock exchanges, and other appropriate Persons to make
shares of Stock available for issuance pursuant to the exercise of Options.

SECTION 3. ADMINISTRATION OF PLAN

         3.1 Committee. The Board of Directors may administer this Plan or may
delegate all or part of that duty to the Committee; provided that the Committee
shall not have the power to appoint members of the Committee. Except for
references in this Subsection 3.1, and unless the context otherwise requires,
references herein to the Committee shall also refer to the Board of Directors as
administrator of this Plan. The Committee shall be constituted so that, as long
as Stock is registered under Section 12 of the Exchange Act, each member of the
Committee shall be a Disinterested Person and so that this Plan in all other
applicable respects will qualify transactions related to this Plan for the
exemptions from Section 16(b) of the Exchange Act provided by Rule 16b-3 and the



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exemption from the deductibility limitation imposed by Section 162(m) provided
by the performance-based compensation exception described in Section 162(m), to
the extent exemptions thereunder may be available. The number of Persons that
shall constitute the Committee shall be determined from time to time by a
majority of all the members of the Board of Directors and, unless that majority
of the Board of Directors determines otherwise, shall be no less than two
Persons. Notwithstanding the foregoing, the Board of Directors may designate the
Compensation Committee of the Board of Directors to serve as the Committee
hereunder, provided that each member of such Compensation Committee is a
Disinterested Person.

         3.2 Committee's Powers. Subject to the express provisions of this Plan
and Rule 16b-3, the Committee shall have such power and authority as may be
necessary or advisable to carry out its functions and duties as described in
this Plan, including the authority, in its sole and absolute discretion, to (a)
interpret this Plan and make such determination as it deems necessary for Plan
administration and to adopt, amend, and rescind administrative and interpretive
rules and regulations relating to this Plan; (b) redeem, pursuant to Subsection
7.2(d), outstanding Options and Stock Appreciation Rights; (c) construe the
respective Award Agreements and this Plan; (d) terminate, modify, or, subject to
Subsection 10.2, amend this Plan; and (e) make all other determinations, perform
all other acts, and exercise all other powers and authority necessary or
advisable for administering this Plan, including the delegation of those
ministerial acts and responsibilities as the Committee deems appropriate.
Subject to Rule 16b-3, Section 162(m) (to the extent an exemption pursuant
thereto is available) and the foregoing, the Committee may correct any defect,
supply any omission, or reconcile any inconsistency in this Plan, in any Option,
or in any Award Agreement in the manner and to the extent it deems necessary or
desirable to carry this Plan into effect, and the Committee shall be the sole
and final judge of that necessity or desirability. The determinations of the
Committee on the matters referred to in this Subsection 3.2 shall be final and
conclusive.

SECTION 4.  ELIGIBILITY AND PARTICIPATION

         4.1 Eligible Individuals. Options may be granted pursuant to this Plan
with respect to Annual Bonus amounts attributable to a Plan Year only to Persons
who are Eligible Individuals for all or part of the applicable Plan Year and who
have properly elected in accordance with Subsection 4.2 to be a Participant for
such Plan Year.

         4.2 Participation. An Eligible Individual shall become a Participant
for a Plan Year for purposes of Section 5 by filing with the secretary of the
Corporation prior to September 30 of such Plan Year an irrevocable written
election in a form prescribed by the Committee to receive Options in lieu of all
or a portion, in twenty-five percent (25%) increments, of the Eligible
Individual's Annual Bonus payable for performance in such current Plan Year;
provided that, in the discretion of the Committee, an Eligible Individual who
becomes an Employee after September 30 of any Plan Year may become a Participant
for purposes of Section 5 for such Plan Year by filing such an election within
the period of time after the commencement of such Employee's employment by the
Corporation or any Subsidiary of the Corporation as prescribed by the Committee.
Such written election shall become a part of the Participant's Award Agreement,
and a copy will be attached as an exhibit thereto.



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         4.3 Date of Grant. Notwithstanding that the Award Agreement may not be
executed until a later time, the date on which the Options covered by an Award
Agreement is granted (the "Date of Grant"), shall be (a) the date the
Compensation Committee of the Board of Directors establishes the amount of the
Annual Bonus on account of which such Options are being granted or (b) if the
Annual Bonus of a Participant is being determined by objective criteria, the
date the Compensation Committee confirms the attainment of such criteria and the
Annual Bonus amount resulting therefrom on account of which such Options are
being granted. In no event shall a Holder gain any rights in addition to those
specified by this Plan, as interpreted and administered by the Committee,
regardless of the time that may pass between the grant of the Options and the
actual execution of the Award Agreement by the Corporation and the Holder.

         4.4 Award Agreements. Each Option granted under this Plan shall be
evidenced by an Award Agreement in such form and containing such terms as the
Committee shall approve, and which shall not contain any provisions inconsistent
with the terms of this Plan. Options granted for a Plan Year shall be evidenced
by separate Award Agreements for each series of Options granted as provided by
Subsection 5.1.

SECTION 5.  GRANT OF STOCK OPTIONS

         5.1 Number of Shares. Subject to Subsections 5.4 and 5.5, and provided
that the Participant has filed with the Company a written election of deferral
of his or her Annual Bonus for the applicable Plan Year in accordance with
Subsection 4.2, a Participant shall be granted, as of the Date of Grant, Options
on account of each Annual Bonus (or portion thereof) deferred for a Plan Year in
four series, with the number of shares of Stock of each series determined in
accordance with the following formula:

<TABLE>
<S>                                          <C>
25% of the Annual Bonus Amount               Number of Shares (rounded up
to be Deferred for such Plan Year       =    to the nearest whole share)
-------------------------------------
50% of the average Fair Market 
Value of a share of Stock for the 
last five trading days of the 
applicable calendar quarter
</TABLE>

Subject to Subsection 5.4, the numerator of the above fraction shall be
determined according to the amount of Annual Bonus elected to be deferred for
the Plan Year by the Participant in accordance with Subsection 4.2. The
denominator of the above formula shall be determined for each series of Options
as of the end of each calendar quarter for the Plan Year to which the Annual
Bonus relates, with one series of Options being granted for each calendar
quarter in such Plan Year.

         5.2 Vesting. Each Option granted pursuant to this Section 5 shall
become exercisable in full on the Date of Grant.



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         5.3 Exercise Price. The per share Exercise Price of Options granted
pursuant to Subsection 5.1 shall be 50% of the average Fair Market Value of a
share of Stock for the last five trading days of the applicable calendar quarter
as provided in the last sentence of Subsection 5.1, such that each series of
Options granted to a Eligible Individual for a Plan Year shall have a separate
Exercise Price.

         5.4 Participation Commencing During a Plan Year. In the event a
Participant becomes an Employee after March 31 of a Plan Year and elects to
participate in the Plan for such Plan year by election to defer all or a portion
of his or her Annual Bonus for such Plan Year (including as permitted by the
proviso of Subsection 4.2), the numerator in the formula set forth in Subsection
5.1 shall be adjusted with respect to such Participant for such Plan Year to
reflect the portion of the deferred Annual Bonus attributable to each calendar
quarter (or portion thereof) remaining in the Plan Year to which any such
initial election relates from after the date such Eligible Individual first
becomes an Employee.

         5.5 Termination of Employment. Notwithstanding the provisions of
Subsection 6.1, if an Eligible Individual who has made an election pursuant to
Subsection 4.2 ceases to be an Employee prior to the Date of Grant of the
Options to which any such election relates, no Options will be granted to such
Person pursuant to Subsection 5.1. Any Bonus, if any, earned for the Plan Year
to which such election relates shall be paid in cash and, upon such payment, the
Corporation shall have no further obligation under this Plan to such Person
other than with respect to Options and SARs (if any) granted under this Plan and
outstanding as of the date such Person ceases to be an Employee.


SECTION 6.  TERMS AND CONDITIONS OF OPTIONS

         All options granted under this Plan shall comply with, and the related
Award Agreements shall be deemed to include and be subject to, the terms and
conditions set forth in this Section 6 (to the extent each term and condition
applies to the form of Option) and also to the terms and conditions set forth in
Sections 7, 8 and 9.

         6.1 Expiration of Options. Subject to the provisions in Section 9, each
Option shall expire ten (10) years after the Date of Grant of such Option.

         6.2 Exercise Price. Each Award Agreement shall state that the Exercise
Price shall be the exercise price per share of Stock as calculated pursuant to
Section 5.3.

         6.3 Method of Exercise. The Option shall be exercisable only by written
notice of exercise (the "Exercise Notice") delivered to the Corporation during
the term of the Option, which notice shall (a) state the number of shares of
Stock with respect to which the Option is being exercised; (b) be signed by the
Holder of the Option or, if the Holder is dead or becomes affected by a
Disability, by the person authorized to exercise the Option pursuant to
Subsection 9.2; (c) be accompanied by payment of the Exercise Price for all
shares of Stock for which the Option is being 



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exercised; (d) be accompanied by payment of or provide instructions for the
satisfaction of any amounts required to be withheld as provided in Subsection
6.8; and (e) include such other information, instruments, and documents as may
be required by payment of the Committee to evidence such Holder's authority to
exercise the Option or as otherwise required as provided by Subsection 9.5. The
Option shall not be deemed to have been exercised unless all of the requirements
of the preceding provisions of this Subsection 6.3 have been satisfied.

         6.4 Medium and Time of Payment. The Exercise Price of an Option shall
be payable in full upon the exercise of the Option (a) in cash or by an
equivalent means acceptable to the Committee; (b) with the Committee's prior
consent, with shares of Stock owned by the Holder (including shares received
upon exercise of the Option) and having a Fair Market Value at least equal to
the aggregate Exercise Price payable in connection with such exercise; or (c) by
any combination of clauses (a) and (b). If the Committee elects to accept shares
of Stock in payment of all or any portion of the Exercise Price, then (for
purposes of payment of the Exercise Price) those shares of Stock shall be deemed
to have a cash value equal to their aggregate Fair Market Value determined as of
the date the certificate for such shares, duly endorsed for transfer to the
Corporation and free from any restriction on transfer, is delivered to the
Corporation.

         6.5 Payment with Sale Proceeds. In addition, at the request of a Holder
and to the extent permitted by applicable law, the Committee may (but shall not
be required to) approve arrangements with a brokerage firm under which that
brokerage firm, on behalf of the Holder, shall pay to the Corporation the
Exercise Price of the Option being exercised and an amount to cover any
withholding obligations as provided in Subsection 6.8, and the Corporation shall
promptly deliver the exercised shares of Stock to the brokerage firm. To
accomplish this transaction, the Holder must deliver to the Corporation an
Exercise Notice containing irrevocable instructions from the Holder to the
Corporation to deliver the Stock certificates representing the shares of Stock
directly to the broker. Upon receiving a copy of the Exercise Notice
acknowledged by the Corporation, the broker shall sell that number of shares of
Stock or loan the Holder an amount sufficient to pay the Exercise Price and any
withholding obligations due. The broker then shall deliver to the Corporation
that portion of the sale or loan proceeds necessary to cover the Exercise Price
and any withholding obligations due. The Committee shall not approve any
transaction of this nature if the Committee believes that the transaction would
give rise to the Holder's liability for short-swing profits under Section 16(b)
of the Exchange Act.

         6.6 No Fractional Shares. The Corporation shall not in any case be
required to sell, issue, or deliver a fractional share with respect to any
Option. In lieu of the issuance of any fractional share of Stock, the
Corporation shall pay to the Holder an amount in cash equal to the same fraction
(as the fractional Stock) of the Fair Market Value of a share of Stock
determined as of the date of the applicable Exercise Notice.

         6.7 Available Stock. The Options to be granted, pursuant to Subsection
5.1 shall be made in the amounts specified therein only if, as of the Date of
Grant of any such Options, the number of shares of Stock available to be issued
pursuant to Options under this Plan (as calculated in Section 2) is sufficient
to make all grants of Options required to be made pursuant to Subsection 5.1 on
such 



                                      -11-
<PAGE>   12

Date of Grant. In the event that the number of shares of Stock that are
available to be issued pursuant to Options under this Plan on the Date of Grant
of such Options is insufficient to permit the grant of the entire number of
shares with respect to which Options are to be granted on such Date of Grant,
then the number of available shares shall be apportioned pro rata among the
Options to be granted on such Date of Grant, and the number of shares subject to
each Option shall be the number of shares apportioned to that Option. Any such
apportionment effective pursuant to the immediately preceding sentence shall be
pro rata among those Participants entitled to receive Options on such Date of
Grant, based on the number of Options to which each Participant is entitled to
receive pursuant to Subsection 5.1 as compared to the total number of Options to
which all Participants are entitled to receive on such Date of Grant pursuant to
Subsection 5.1. If any such pro ration of Options is effected, or if there shall
not be any shares of Stock available on any date on which Options are to be
granted, or if the Options granted to a single Eligible Individual would exceed
the 100,000 limitation of Subsection 2.1, the portion of deferred Annual Bonus
for which Options are not granted will be paid in cash as of the date such
Options were to be granted.

         6.8 Payment of Taxes. The Committee may, in its discretion, require a
Participant to pay to the Corporation (or the Corporation's Subsidiary if the
Participant is an employee of a Subsidiary of the Corporation), at the time of
the exercise of an Option or thereafter, the amount that the Committee deems
necessary to satisfy the Corporation's or its Subsidiary's current or future
obligation to withhold federal, state, or local income or other taxes that the
Participant incurs upon the exercise of an Option. In connection with the
exercise of an Option requiring tax withholding, a Participant may (a) direct
the Corporation to withhold from the shares of Stock to be issued upon such
exercise the number of shares necessary to satisfy the Corporation's or its
Subsidiary's obligation to withhold taxes, that determination to be based on the
shares' Fair Market Value as of the date of exercise; (b) deliver to the
Corporation sufficient shares of Stock (based upon the Fair Market Value as of
the date of such delivery) to satisfy the Corporation's or its Subsidiary's tax
withholding obligation; or (c) deliver sufficient cash to the Corporation to
satisfy the Corporation's or its Subsidiary's tax withholding obligations.
Participants who elect to use such a Stock withholding feature must make the
election at the time and in the manner that the Committee prescribes. The
Committee may, at its sole option, deny any Participant's request to satisfy
withholding obligations through Stock instead of cash. In the event the
Committee subsequently determines that the aggregate Fair Market Value (as
determined above) of any shares of Stock withheld or delivered as payment of any
tax withholding obligation is insufficient to discharge that tax withholding
obligation, then the Participant shall pay to the Corporation, immediately upon
the Committee's request, the amount of that deficiency in the form of payment
requested by the Committee.

SECTION 7.  EFFECTS OF CHANGE IN CONTROL

         7.1 Change in Control. Upon the occurrence of a Change in Control,
subject to Subsection 1.7(b), each Holder of an Option immediately shall be
granted one corresponding Stock Appreciation Right for each share of Stock
subject to an Option (the total number of shares of Stock as to which an Option
is exercisable upon the occurrence of a Change in Control is referred to herein
as the "Total Shares"). If a Change in Control involves a Restructuring or
occurs in connection with 


                                      -12-
<PAGE>   13

a series of related transactions involving a Restructuring and if such
Restructuring is in the form of a Non-Surviving Event and as a part of such
Restructuring shares of stock, other securities, cash, or property shall be
issuable or deliverable in exchange for Stock, then a Holder of an Option shall
be entitled to purchase or receive (in lieu of the Total Shares that the Holder
would otherwise be entitled to purchase or receive) the number of shares of
stock, other securities, cash, or property to which that number of Total Shares
would have been entitled in connection with such Restructuring at an aggregate
exercise price equal to the Exercise Price that would have been payable if that
number of Total Shares had been purchased on the exercise of the Option
immediately before the consummation of the Restructuring. Nothing in this
Subsection 7.1 shall impose on a Holder the obligation to exercise any Option
immediately before or upon the Change in Control or cause the Holder to forfeit
the right to exercise the Option during the remainder of the original term of
the Option because of a Change in Control.

         7.2 Restructuring Without Change in Control. In the event a
Restructuring shall occur at any time while there is any outstanding Option
hereunder and that Restructuring does not occur in connection with a Change in
Control or a series of related transactions involving a Change in Control, then:

                  (a) no Holder of an Option shall automatically be granted
         corresponding Stock Appreciation Rights;

                  (b) if the Restructuring is in the form of a Non-Surviving
         Event and, as part of that Restructuring, shares of stock, other
         securities, cash or property shall be issuable or deliverable in
         exchange for Stock, the surviving entity shall assume the obligations
         of the Corporation under this Plan and Options thereafter shall
         represent the right to purchase or receive (in lieu of the Total Shares
         that the Holder would otherwise be entitled to purchase or receive) the
         number of shares of stock, other securities, cash or property to which
         the number of Total Shares would have been entitled in connection with
         such Restructuring at an aggregate exercise price equal to the Exercise
         Price that would have been payable if that number of Total Shares had
         been purchased on the exercise of the Option immediately before the
         consummation of the Restructuring;

                  (c) the Corporation may (but shall not be required to) redeem
         in whole or in part any one or more of the outstanding Options in
         consideration of a cash payment, as such payment may be reduced for tax
         withholding obligations as contemplated in Subsection 6.8 in an amount
         equal to the excess of (i) the Fair Market Value, determined as of the
         date immediately preceding the consummation of the Restructuring, of
         the aggregate number of shares of Stock subject to the Options and as
         to which the Options being redeemed over (ii) the Exercise Price for
         that number of shares of Stock; any redemption of an Option pursuant
         this Subsection 7.2(c) shall also constitute the redemption of any
         corresponding Stock Appreciation Rights; provided, further, that any
         cash payments be made by the Corporation pursuant to this Subsection
         7.2(d) in connection with the redemption of any outstanding Option
         shall be paid to the Holder thereof at the time of delivery to the
         Corporation of the Award Agreement evidencing that Option, provided
         that any such redemption shall be 



                                      -13-
<PAGE>   14

         effective upon the consummation of the Restructuring notwithstanding
         that the payment of the Redemption Price may occur subsequent to the
         consummation or the failure of any Holder to deliver the applicable
         Award Agreement; and

                  (d) if a Participant becomes an employee of the surviving
         entity or any Subsidiary thereof, then, for purposes of Section 9.1(a)
         hereof, such Participant shall not be deemed to have ceased to be an
         Employee.

         7.3 Terms of Stock Appreciation Rights. A Stock Appreciation Right
granted pursuant to Subsection 7.1 shall entitle a Holder, upon exercise, to
surrender such Holder's Option or any portion thereof, to the extent
unexercised, and to receive payment of an amount computed pursuant to Subsection
7.3(b). That Option shall then cease to be exercisable to the extent
surrendered. Stock Appreciation Rights granted pursuant to Subsection 7.1(a)
shall be subject to the terms of the Award Agreement governing the Option, which
shall be deemed to incorporate the following provisions in addition to those
applicable to Options:

                  (a) Exercise and Transfer. A Stock Appreciation Right granted
         pursuant to Subsection 7.1(a) shall be exercisable only at such time or
         times and only to the extent that the related Option is exercisable and
         shall not be transferable except to the extent that the related Option
         is transferable as provided in Subsection 9.3.

                  (b) Value of Right. Upon the exercise of a Stock Appreciation
         Right, a Holder shall be entitled to receive payment from the
         Corporation of an amount in cash determined by multiplying:

                           (i) The difference obtained by subtracting the
                  Exercise Price from the Fair Market Value of a share of Stock
                  on the date of exercise of the Stock Appreciation Right, by

                           (ii) The number of shares of Stock as to which that
                  Stock Appreciation Right has been exercised.

                  (c) Award Agreements. Stock Appreciation Rights granted
         pursuant to Subsection 7.1(a) shall be evidenced by the Award
         Agreements evidencing the corresponding Options to which the Stock
         Appreciation Rights relate, which Award Agreements shall be deemed to
         incorporate the provisions of this Subsection 7.3. No separate Award
         Agreement shall be issued evidencing any Stock Appreciation Rights.

         7.4 Payment of Taxes. The Committee shall withhold from amounts payable
upon the exercise of an SAR the amount that the Committee deems necessary to
satisfy the Corporation's or its Subsidiary's current or future obligation to
withhold federal, state, or local income or other taxes that the Participant
incurs by exercising a Stock Appreciation Right.



                                      -14-
<PAGE>   15

         7.5 Notice of Change in Control or Restructuring. Upon the occurrence
of a Change in Control or a Restructuring without Change in Control, the
Corporation shall provide written notice to all Holders of Options of the
occurrence of such event and the effects resulting therefrom as provided in this
Section 7.

SECTION 8. ADJUSTMENT PROVISIONS

         8.1 Adjustment of Options and Authorized Stock. The terms of an Option
and the number of shares of Stock authorized pursuant to Subsection 2.1 for
issuance under this Plan shall be subject to adjustment from time to time, in
accordance with the following provisions:

                  (a) If at any time, or from time to time, the Corporation
         shall subdivide as a whole (by reclassification, by a stock split, by
         the issuance of a distribution on Stock payable in Stock, or otherwise)
         the number of shares of Stock then outstanding into a greater number of
         shares of Stock, then (i) the maximum number of shares of Stock
         available for this Plan as provided in Subsection 2.1 shall be
         increased proportionately, and the kind of shares or other securities
         available for this Plan shall be appropriately adjusted, (ii) the
         number of shares of Stock (or other kind of shares or securities) that
         may be acquired under any Option (and to which any corresponding Stock
         Appreciation Right, if any, relates) shall be increased
         proportionately, and (iii) the Exercise Price for each share of Stock
         (or other kind of shares or securities) subject to then outstanding
         Options (and corresponding Stock Appreciation Rights, if any) shall be
         reduced proportionately, without changing the aggregate Exercise Price
         or value as to which outstanding Options (and corresponding Stock
         Appreciation Rights, if any) remain exercisable.

                  (b) If at any time, or from time to time, the Corporation
         shall consolidate as a whole (by reclassification, reverse stock split,
         or otherwise) the number of shares of Stock then outstanding into a
         lesser number of shares of Stock, then (i) the maximum number of shares
         of Stock available for this Plan as provided in Subsection 2.1 shall be
         decreased proportionately, and the kind of shares or other securities
         available for this Plan shall be appropriately adjusted; (ii) the
         number of shares of Stock (or other kind of shares or securities) that
         may be acquired under any Option (and to which any corresponding Stock
         Appreciation Right, if any, relates) shall be decreased
         proportionately; and (iii) the Exercise Price for each share of Stock
         (or other kind of shares or securities) subject to then outstanding
         Options (and corresponding Stock Appreciation Rights, if any) shall be
         increased proportionately, without changing the aggregate Exercise
         Price or value as to which outstanding Options (and corresponding Stock
         Appreciation Rights, if any) remain exercisable.

                  (c) Whenever the number of shares of Stock subject to
         outstanding Options (and corresponding Stock Appreciation Rights, if
         any) and the price for each share of Stock subject to outstanding
         Options (and corresponding Stock Appreciation Rights, if any) are
         required to be adjusted as provided in this Subsection 8.1, the
         Committee shall promptly prepare a notice setting forth, in reasonable
         detail, the event requiring adjustment, the amount 



                                      -15-
<PAGE>   16

         of the adjustment, the method by which such adjustment was calculated,
         and the change in price and the number of shares of Stock, other
         securities, cash, or property purchasable subject to each Option (and
         corresponding Stock Appreciation Rights, if any) after giving effect to
         the adjustments. The Committee shall promptly provide a copy of such
         notice to each Holder.

                  (d) Adjustments under Subsections 8.1(a) and (b) shall be made
         by the Committee, and its determination as to what adjustments shall be
         made and the extent thereof shall be final, binding, and conclusive. No
         fractional interest shall be issued under this Plan on account of any
         such adjustments.

SECTION 9. ADDITIONAL PROVISIONS

         9.1      Loss of Eligibility.

                  (a) If a Participant ceases to be an Employee for any reason
         other than the Participant's death, Disability or Normal Retirement,
         then any and all Options held by the Participant (or any permitted
         transferee) as of the date the Participant ceases to be an Employee
         ("Termination Date") shall survive the termination and shall be
         exercisable for a period of the lesser of (i) the remainder of the term
         of the Option or (ii) 180 days following the Termination Date.

                  (b) If a Participant ceases to be an Employee by reason of the
         Participant's death, Disability or Normal Retirement, then any and all
         Options held by the Participant (or any permitted transferee) as of the
         Termination Date shall survive the termination and shall be exercisable
         for the lesser of (i) remainder of the term of the Options or (ii)
         three years after the Termination Date.

                  (c) Notwithstanding the foregoing, the Committee may, in its
         sole discretion, determine that any Participant who is on leave of
         absence for any reason will be considered to still be an Employee for
         purposes of this Section 9.1.

         Any portion of an Option not exercised upon the expiration of the
applicable periods specified above shall be null and void upon the expiration of
such period.

         9.2 Death or Disability. Upon the death or Disability of a Holder, any
and all Options held by the Holder that have not been exercised as of the date
of the Holder's death or Disability may be exercised by, in the case of the
Holder's Disability, the Holder, his guardian or his legal representative or, in
the case of the Holder's death, by the Holder's legal representatives, heirs,
legatees, or distributees, in each case for the periods prescribed in Subsection
9.1. "Disability" shall mean (i) with respect to a Participant, as determined by
the Board of Directors in the sole discretion exercised in good faith of the
Board of Directors, a physical or mental impairment of sufficient severity that
(a) either the Participant is unable to continue performing the duties he
performed before such impairment or the Participant's condition entitles him or
her to disability benefits under 



                                      -16-
<PAGE>   17

         any insurance or employee benefit plan of the Corporation or its
         Subsidiaries or any other customary general disability policy owned by
         or maintained for the benefit of the Participant, and (b) that
         impairment or condition is cited by the Corporation as the reason for
         termination of the Non-Employee Director's participation as a member of
         the Board of Directors and (ii) with respect to a Holder that is a
         permitted transferee under Subsection 9.3, the appointment of a legal
         guardian or representative of such Holder.

         9.3      Transferability of Options.

                  (a) Permitted Transferees. The Committee may, in its
         discretion, permit a Holder to transfer all or any portion of an
         Option, or authorize all or a portion of any Option to be granted to a
         Participant to be on terms which permit transfer by such Holder, to (i)
         the spouse, children or grandchildren of the Holder ("Immediate Family
         Members"), (ii) a trust or trusts for the exclusive benefit of such
         Immediate Family Members, or (iii) a partnership in which such
         Immediate Family Members are the only partners (collectively,
         "Permitted Transferees"); provided that (x) there may be no
         consideration for any such transfer and (y) subsequent transfers of
         Options transferred as provided above shall be prohibited except
         subsequent transfers back to the original Holder of the Option and
         transfers to other Permitted Transferees of the original Holder. Award
         Agreements evidencing Options with respect to which such
         transferability is authorized at the time of grant must be approved by
         the Committee, and must expressly provide for transferability in a
         manner consistent with this Subsection 9.3(a).

                  (b) Domestic Relations Orders. Options may be transferred
         pursuant to domestic relations orders entered or approved by a court of
         competent jurisdiction upon delivery to the Corporation of written
         notice of such transfer and a certified copy of such order.

                  (c) Other Transfers. Except as expressly permitted by
         subsections 9.3(a) and 9.3(b), Options requiring exercise shall not be
         transferable other than by will or the laws of descent and
         distribution.

                  (d) Effect of Transfer. Following the transfer of any Option
         as contemplated by Subsections 9.3(a), 9.3(b) and 9.3(c), (i) such
         Option shall continue to be subject to the same terms and conditions as
         were applicable immediately prior to transfer, provided that the term
         "Holder" shall be deemed to refer to the Permitted Transferee, the
         recipient under a domestic relations order, or the estate or heirs of a
         deceased Holder, as applicable, to the extent appropriate to enable the
         Holder to exercise the transferred Option in accordance with the terms
         of this Plan and applicable law and (ii) the provisions of Subsection
         9.1 hereof shall continue to be applied with respect to the original
         Holder and, following the occurrence of any such events described
         therein the Options shall be exercisable by the Permitted Transferee,
         the recipient under a domestic relations order, or the estate or heirs
         of a deceased Holder, as applicable, only to the extent and for the
         periods specified in Subsections 9.1 and 9.2.



                                      -17-
<PAGE>   18

                  (e) Procedures and Restrictions. Any Holder desiring to
         transfer an Option as permitted under Subsections 9.3(a) or 9.3(b)
         shall make application therefor in the manner and time specified by the
         Committee and shall comply with such other requirements as the
         Committee may require to assure compliance with all applicable
         securities laws. The Committee shall not give permission for such a
         transfer if (i) it would give rise to short-swing liability under
         Section 16(b) of the Exchange Act, or (ii) it may not be made in
         compliance with all applicable federal, state and foreign securities
         laws.

                  (f) Registration. To the extent the issuance to any Permitted
         Transferee of any shares of Stock issuable pursuant to Options
         transferred as permitted in this Subsection 9.3 is not registered
         pursuant to the effective registration statement of the Corporation
         generally covering the shares to be issued pursuant to this Plan to
         initial Holders of Options, the Corporation shall not have any
         obligation to register the issuance of any such shares of stock to any
         such transferee.

                  (g) Effect on Stock Appreciation Rights. If at the time any
         Option is transferred as permitted under this Subsection 9.3 a
         corresponding Stock Appreciation Right shall have been granted with
         respect to such Option pursuant to Subsection 7.1(a) of this Plan, then
         the transfer of such Option shall also constitute a transfer of the
         corresponding Stock Appreciation Right, and Stock Appreciation Rights
         shall not be transferable other than as part of a transfer of the
         Option to which it relates as provided in this Subsection 9.3.

         9.4 Delivery of Certificates of Stock. Subject to Subsection 9.5, the
Corporation shall promptly issue and deliver a certificate representing the
number of shares of stock as to which an Option has been exercised after the
Corporation receives an Exercise Notice and upon receipt by the Corporation of
the Exercise Price and any tax withholding as may be required. The value of the
shares of stock or cash deliverable upon the exercise of an Option or Stock
Appreciation Right under this Plan shall not bear any interest owing to the
passage of time, except as may be otherwise provided in an Award Agreement.

         9.5 Conditions to Delivery of Stock. Nothing herein or in any Option
granted hereunder or any Award Agreement shall require the Corporation to issue
any shares with respect to any Option if that issuance would, in the opinion of
counsel for the Corporation, constitute a violation of the Securities Act or any
similar or superseding statute or statutes, any other applicable statute or
regulation, or the rules of any applicable securities exchange or securities
association, as then in effect. At the time of any exercise of an Option the
Corporation may, as a condition precedent to the exercise of such Option,
require from the Holder of the Option (or in the event of his death, his legal
representatives, heirs, legatees, or distributees) such written representations,
if any, concerning the Holder's intentions with regard to the retention or
disposition of the shares of Stock being acquired pursuant to the Option and
such written covenants and agreements, if any, as to the manner of disposal of
such shares as, in the opinion of counsel to the Corporation, may be necessary
to ensure that any disposition by that Holder (or in the event of the Holder's
death, his legal representatives, heirs, legatees, or distributees) will not
involve a violation of the Securities Act or any similar or superseding statute
or statutes, any other applicable state or federal statute or regulation, or any
rule of any applicable securities exchange or securities association, as then in
effect.



                                      -18-
<PAGE>   19
         9.6 Stockholder Approval. Options shall not be granted under this Plan
prior to the date the stockholders of the Corporation shall have approved this
Plan. This Plan shall become null and void as of December 31, 1997, if such
stockholder approval is not obtained on or before such date.

         9.7 Rights as a Stockholder. A Holder shall have no right as a
stockholder with respect to any shares of Stock covered by an Option until a
certificate representing those shares is issued in such Holder's name. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash or other property) or distributions or other rights for which the record
date is before the date that certificate is issued, except as contemplated by
Sections 7 and 8 hereof.

         9.8 Furnish Information. Each Holder shall furnish to the Corporation
all information requested by the Corporation to enable it to comply with any
reporting or other requirement imposed upon the Corporation by or under any
applicable statute or regulation.

         9.9 Obligation to Exercise. The granting of an Option hereunder shall
impose no obligation upon a Holder to exercise the same or any part thereof.

         9.10 Consideration. No Option or Stock Appreciation Right shall be
exercisable unless and until the Holder thereof shall have paid cash or property
to the Corporation that the Committee believes is equal to or greater in value
than the par value of the Stock subject to such Option.

         9.11 Securities Act Legend. Certificates for shares of Stock, when
issued, may have the following legend, or statements of other applicable
restrictions, endorsed thereon and may not be immediately transferable:

         THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
         SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED,
         TRANSFERRED, OR OTHERWISE DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES
         EVIDENCE SATISFACTORY TO THE ISSUER (WHICH, IN THE DISCRETION OF THE
         ISSUER, MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER)
         THAT SUCH OFFER, SALE, PLEDGE, TRANSFER, OR OTHER DISPOSITION WILL NOT
         VIOLATE APPLICABLE FEDERAL OR STATE LAWS.

This legend shall not be required for shares of Stock issued pursuant to an
effective registration statement under the Securities Act.



                                      -19-
<PAGE>   20

SECTION 10. EFFECTIVENESS, DURATION AND AMENDMENT OF PLAN

         10.1 Effectiveness; Duration. This Plan shall become effective upon the
Effective Date, and no Options may be granted hereunder after the date that is
ten years after the Effective Date. This Plan shall terminate upon the later of
(i) the complete exercise or lapse of the last outstanding Option or (ii) the
last date upon which Options may be granted hereunder.

         10.2 Amendment. The Committee may, insofar as permitted by law, with
respect to any shares which, at the time, are not subject to outstanding
Options, suspend or discontinue this Plan, provided that no suspension or
discontinuation of this Plan shall adversely affect the rights of any Holder of
any outstanding Option at the time of such suspension or discontinuation or any
Participant who has an election in effect pursuant to Subsection 4.2, in each
case without such Holder's or Participant's consent, as applicable. Furthermore,
the Committee may revise or amend this Plan in any respect without approval of
the outstanding Voting Securities of the Company except to the extent any such
approval shall be required under any applicable law or the rules of any
securities exchange on which the Stock is traded as in effect at the time of
such amendment; provided, however, that (i) the Committee may not amend or
otherwise revise the terms of this Plan in any manner that would adversely
affect the rights of any Holder of any Option outstanding or any Participant who
has an election pursuant to Subsection 4.2 in effect at the time of any such
amendment or revision without such Holder's or Participant's consent, as
applicable, and (ii) the Committee will not amend this Plan to increase
materially the aggregate number of shares of stock that may be issued under this
Plan (except for adjustments pursuant to Section 9 hereof) without the
affirmative vote of a majority of the votes cast on a proposal for such
amendment presented at a duly held meeting of stockholders of the Company at
which a quorum is, either in person or by proxy, present.

SECTION 11. GENERAL

         11.1 Application of Funds. The proceeds received by the Corporation
from the sale of shares pursuant to Options may be used for any general
corporate purpose.

         11.2 Right of the Corporation to Terminate Status as Employee. Nothing
contained in this Plan, or in any Award Agreement, shall confer upon any Holder
the right to continue to serve as an Employee or interfere in any way with the
rights of the Corporation or the Board of Directors to terminate the Holder's
participation as an Employee with or without cause.

         11.3 No Liability for Good Faith Determinations. Neither the members of
the Board of Directors nor any member of the Committee shall be liable for any
act, omission or determination taken or made in good faith with respect to this
Plan or any Option granted under it; and members of the Board of Directors and
the Committee shall be entitled to indemnification and reimbursement by the
Corporation in respect of any claim, loss, damage, or expense (including
attorneys' fees, the costs of settling any suit, provided such settlement is
approved by independent legal counsel selected by the Corporation, and amounts
paid in satisfaction of a judgment, except a judgment based on a finding of bad
faith) arising therefrom to the full extent permitted by law and under any
directors' 



                                      -20-
<PAGE>   21

and officers' liability or similar insurance coverage that may from time to time
be in effect. This right to indemnification shall be in addition to, and not a
limitation on, any other indemnification rights any member of the Board of
Directors or the Committee may have.

         11.4 Other Benefits. Participation in this Plan shall not preclude a
Holder from eligibility in any other stock or stock option plan of the
Corporation or any Subsidiary or any benefit, insurance, pension, profit
sharing, retirement, bonus, or other extra compensation plans that the
Corporation or any Subsidiary has adopted, or may, at any time, adopt for the
benefit of its Employees, except as such participation therein may be limited by
the terms of any such other plan. Neither the adoption of this Plan by the
Compensation Committee nor the submission of this Plan to the stockholders of
the Corporation for approval shall be construed as creating any limitations on
the power of the Compensation Committee or the Board of Directors to adopt such
other incentive arrangements as it may deem desirable, including without
limitation the granting of stock options and the awarding of stock and cash
otherwise than under this Plan and such arrangements may be either generally
applicable or applicable only in specific cases.

         11.5 Exclusion from Pension and Profit-Sharing Compensation. By
electing to participate in this Plan as provided in Subsection 4.2, each
Participant shall be deemed to have agreed that any compensation paid or deemed
paid by the Corporation or any of its Subsidiaries to such Participant on
account of the Options (and any corresponding SARs) granted hereunder in amounts
in excess of the amount of Annual Bonus deferred hereunder is special incentive
compensation that will not be taken into account in any manner as salary,
compensation, or bonus in determining the amount of any payment under any
pension, retirement, or other employee benefit plan of the Corporation or any
Subsidiary unless any pension, retirement, or other employee benefit plan of the
Corporation or any Subsidiary expressly provides that such amount shall be so
considered for purposes of determining the amount of any payment under any such
plan. In addition, each beneficiary of a deceased Participant shall be deemed to
have agreed that such excess compensation will not affect the amount of any life
insurance coverage, if any, provided by the Corporation or any of its
Subsidiaries on the life of a Participant that is payable to the beneficiary
under any life insurance plan covering employees of the Corporation or any of
its Subsidiaries.

         11.6 Execution of Receipts and Releases. Any payment of cash or any
issuance or transfer of shares of stock to a Holder, or to his legal
representative, heir, legatee, or distributee, in accordance with the provisions
hereof, shall, to the extent thereof, be in full satisfaction of all claims of
such persons hereunder. The Committee may require any Holder, legal
representative, heir, legatee, or distributee, as a condition precedent to such
payment, to execute a release and receipt therefor in such form as it shall
determine.

         11.7 Unfunded Plan. Insofar as it provides for awards of cash and
Stock, the Plan shall be unfunded. Although bookkeeping accounts may be
established with respect to Holders who are entitled to cash, Stock, or rights
thereto under the Plan, any such accounts shall be used merely as a bookkeeping
convenience. The Corporation shall not be required to segregate any assets that
may at any time be represented by cash, Stock, or rights thereto, nor shall the
Plan be construed as providing for such segregation, nor shall the Corporation
nor the Board of Directors nor the 



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<PAGE>   22

Committee be deemed to be a trustee of any cash, Stock, or rights thereto to be
granted under the Plan. Any liability of the Corporation to any Holder with
respect to a grant of cash, Stock, or rights thereto under the Plan shall be
based solely upon any contractual obligations that may be created by the Plan
and any Award Agreement; no such obligation of the Corporation shall be deemed
to be secured by any pledge or other encumbrance on any property of the
Corporation. Neither the Corporation nor the Board of Directors nor the
Committee shall be required to give any security or bond for the performance of
any obligation that may be created by the Plan.

         11.8 No Guarantee of Interests. Neither the Committee nor the
Corporation guarantees the Stock of the Corporation from loss or depreciation
and neither shall have any liability to any Holder as a result thereof.

         11.9 Payment of Expenses. All expenses incident to the administration,
termination, or protection of this Plan, including, but not limited to, legal
and accounting fees, shall be paid by the Corporation or its Subsidiaries.

         11.10 Corporation Records. Records of the Corporation or its
Subsidiaries regarding a Participant's period of service as an Employee,
termination of service as an Employee and the reason therefor, and other matters
shall be conclusive for all purposes hereunder, unless determined by the
Committee to be incorrect.

         11.11 Information. The Corporation shall, upon request or as may be
specifically required hereunder, furnish or cause to be furnished all of the
information or documentation which is necessary or required by the Committee to
perform its duties and functions under this Plan.

         11.12 No Liability of Corporation. The Corporation assumes no
obligation or responsibility to a Holder or his legal representatives, heirs,
legatees, or distributees for any act of, or failure to act on the part of, the
Committee.

         11.13 Corporation Action. Any action required of the Corporation shall
be by resolution of the Board of Directors, the Compensation Committee, or by a
person authorized to act by resolution of the Board of Directors.

         11.14 Severability. If any provision of this Plan is held to be illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining provisions hereof, but such provision shall be fully severable and
this Plan shall be construed and enforced as if the illegal or invalid provision
had never been included herein.

         11.15 Notices. Whenever any notice is required or permitted hereunder,
such notice must be in writing and personally delivered or sent by mail. Any
notice required or permitted to be delivered hereunder shall be deemed to be
delivered on the date on which it is actually received, addressed to the
applicable party as specified in the applicable Award Agreement. The Corporation
or a Holder may change, at any time and from time to time, by written notice to
the other, the address which it or he had previously specified for receiving
notices. Until changed in accordance herewith, 



                                      -22-
<PAGE>   23

the Corporation and each Holder shall specify as its and his address for
receiving notices the address set forth in the Award Agreement pertaining to the
shares to which such notice relates. Any person entitled to notice hereunder may
waive such notice.

         11.16 Successors. This Plan shall be binding upon each Holder, his
legal representatives, heirs, legatees, and distributees, upon the Corporation,
its successors and assigns and upon the Committee and its successors.

         11.17 Headings. The titles and headings of Sections and Subsections are
included for convenience of reference only and are not to be considered in
construction of the provisions hereof.

         11.18 Governing Law. All questions arising with respect to the
provisions of this Plan shall be determined by application of the laws of the
State of Delaware, without giving effect to any conflict of law provisions
thereof, except to the extent Delaware law is preempted by federal law.
Questions arising with respect to the provisions of an Award Agreement that are
matters of contract law shall be governed by the laws of the state specified in
the Award Agreement, except to the extent Delaware corporate law conflicts with
the contract law of such state, in which event Delaware corporate law, without
giving effect to any conflict of law provisions thereof, shall govern. The
obligation of the Corporation to sell and deliver Stock hereunder is subject to
applicable federal and state laws and to the approval of any governmental
authority required in connection with the authorization, issuance, sale, or
delivery of such Stock.

         11.19 Availability of Exempt Transactions. Notwithstanding the
provisions of this Plan, nothing contained in this Plan shall prohibit any
transactions permitted by Rule 16a-2(d) promulgated under the Exchange Act to
the extent such transactions are approved by the Committee and are not in
violation of, and do not otherwise cause this Plan not to be in compliance with,
Rule 16b-3.

         11.20 Word Usage. Words used in the masculine shall apply to the
feminine where applicable, and wherever the context of this Plan dictates, the
plural shall be read as the singular and the singular as the plural.

         This Plan has been approved by the Compensation Committee of the
Company as of March 31, 1997, and was approved by the stockholders of the
Company as of May 14, 1997.



         ATTEST:    /s/ Michael T. Segraves
                    -----------------------------------
                    Michael T. Segraves,
                    Secretary



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