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                                                                    EXHIBIT 10.4

                              CHASE INDUSTRIES INC.
                          1994 LONG-TERM INCENTIVE PLAN
                         (AS AMENDED AS OF MAY 14, 1997)


                            SCOPE AND PURPOSE OF PLAN

         Chase Industries Inc., a Delaware corporation (the "Corporation"), has
adopted this 1994 Long-Term Incentive Plan (the "Plan") to provide for the
granting of:

         (a) Incentive Options (hereafter defined) to certain Key Employees
(hereafter defined);

         (b) Nonstatutory Options (hereafter defined) to certain Key Employees
and Non-Employee Directors (hereafter defined);

         (c) Restricted Stock Awards (hereafter defined) to certain Key
Employees; and

         (d) Stock Appreciation Rights (hereafter defined) to certain Key
Employees.

         The purpose of the Plan is to provide an incentive for Key Employees
and directors of the Corporation or its Subsidiaries (hereafter defined) to
remain in the service of the Corporation or its Subsidiaries, to extend to them
the opportunity to acquire a proprietary interest in the Corporation so that
they will apply their best efforts for the benefit of the Corporation, and to
aid the Corporation in attracting able persons to enter the service of the
Corporation and its Subsidiaries.

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 "Award" means the grant of any form of Option, Restricted Stock
Award, or Stock Appreciation Right under the Plan, whether granted individually,
in combination, or in tandem, to a Holder pursuant to the terms, conditions, and
limitations that the Committee may establish in order to fulfill the objectives
of the Plan.

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

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



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         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 9.2 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 9.2 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 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 the 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
(f/k/a Chase Brass Industries, Inc.).

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

         1.13 "Disability" has the meaning given it in Subsection 10.3.

         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).



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         1.15 "Effective Date" means the later of (a) the date the Plan is
adopted by the Board of Directors, (b) the date the Plan is approved by the
stockholders of the Corporation and (c) the closing date of the Initial Public
Offering.

         1.16 "Eligible Individuals" means (a) Key Employees, (b) Non-Employee
Directors, and (c) any other Person that the Committee designates as eligible
for an Award (other than for Incentive Options) because the Person performs, or
has performed, bona fide consulting or advisory services for the Corporation or
any of its Subsidiaries (other than services in connection with the offer or
sale of securities in a capital-raising transaction) and the Committee
determines that the Person has a direct and significant effect on the financial
development of the Corporation or any of its Subsidiaries. Notwithstanding the
foregoing provisions of this Subsection 1.16, to ensure that the requirements of
the fourth sentence of Subsection 3.1 are satisfied, the Board of Directors may
from time to time specify individuals who shall not be eligible for the grant of
Awards or equity securities under any plan of the Corporation or its Affiliates.
Nevertheless, the Board of Directors may at any time determine that an
individual who has been so excluded from eligibility shall become eligible for
grants of Awards and grants of such other equity securities under any plans of
the Corporation or its Affiliates so long as that eligibility will not impair
the Plan's satisfaction of the conditions of Rule 16b-3.

         1.17 "Employee" means any employee of the Corporation or of any of its
Subsidiaries, including officers and directors of the Corporation who are also
employees of the Corporation or of 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 5.5.

         1.20 "Exercise Price" has the meaning given it in Subsection 5.4.

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

                  (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 on the last Business Day before the date in question
         or, if no such sale takes place on that Business Day, 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 of
         determining the Fair Market Value, then the last reported sales price
         so reported on the last Business Day before the date in question or, if
         no such sale takes place on that Business Day, 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 of determining the Fair
         Market Value, then the average of the high bid and low asked prices on
         the last Business Day before the date in question; or

                  (d) 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 or bid and asked prices therefor are not
         reported by 



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         NASDAQ (or the National Quotation Bureau Incorporated) as provided in
         Subsection 1.21(b) or Subsection 1.21(c) at the date of determining the
         Fair Market Value, then the value determined in good faith by the
         Committee, which determination shall be conclusive for all purposes; or

                  (e) If shares of Stock of the same class are listed or
         admitted to unlisted trading privileges as provided in Subsection
         1.21(a) or sales prices or bid and asked prices therefor are reported
         by NASDAQ (or the National Quotation Bureau Incorporated) as provided
         in Subsection 1.21(b) or Subsection 1.21(c) at the date of determining
         the Fair Market Value, but the volume of trading is so low that the
         Board of Directors determines in good faith that such prices are not
         indicative of the fair value of the Stock, then the value determined in
         good faith by the Committee, which determination shall be conclusive
         for all purposes notwithstanding the provisions of Subsections 1.21(a),
         (b), or (c).

For purposes of valuing Incentive Options, the Fair Market Value of Stock shall
be determined without regard to any restriction other than one that, by its
terms, will never lapse. For purposes of the redemption provided for in
Subsection 9.3(d)(v), Fair Market Value shall have the meaning and shall be
determined as set forth above; provided, however, that the Committee, with
respect to any such redemption, shall have the right to determine that the Fair
Market Value for purposes of the redemption should be an amount measured by the
value of the shares of Stock, other securities, cash, or property otherwise
being received by holders of shares of Stock in connection with the
Restructuring and upon that determination the Committee shall have the power and
authority to determine Fair Market Value for purposes of the redemption based
upon the value of such shares of stock, other securities, cash, or property. Any
such determination by the Committee, as evidenced by a resolution of the
Committee, shall be conclusive for all purposes.

         1.22 "Fair Value" means such value as is determined by a majority of
the "disinterested" directors of the Corporation, as evidenced by a resolution
of such disinterested directors, even if the disinterested directors of the
Corporation constitute less than a quorum. If the Corporation does not have any
disinterested directors, the Fair Value shall be such value as is determined by
a nationally recognized investment banking firm selected by the Corporation, the
expenses of which shall be borne by the Corporation.

         1.23 "Holder" means an Eligible Individual to whom an outstanding Award
has been granted or a transferee of any Award as permitted under Section 4.7.

         1.24 "Incentive Option" means an incentive stock option as defined
under Section 422 of the Code and regulations thereunder.

         1.25 "Initial Public Offering" means the first public offering of Stock
by the Corporation effected pursuant to an effective registration statement
under the Securities Act.

         1.26 "Key Employee" means any Employee whom the Committee identifies as
having a direct and significant effect on the performance of the Corporation or
any of its Subsidiaries.

         1.27 "Non-Employee Director" means a director of the Corporation who
while a director is not an Employee or an officer of the Corporation or any
subsidiary of the Corporation.

         1.28 "Nonstatutory Option" means a stock option that does not satisfy
the requirements of Section 422 of the Code or that is designated at the Date of
Grant or in the applicable Award Agreement to be an option other than an
Incentive Option.

         1.29 "Non-Surviving Event" means an event of Restructuring as described
in either Subsection 1.36(b) or Subsection 1.36(c).

         1.30 "Normal Retirement" means the separation of a Holder from
employment with the Corporation and 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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         1.31 "Option" means either an Incentive Option or a Nonstatutory
Option, or both.

         1.32 "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."

         1.33 "Plan" means the Corporation's 1994 Long-Term Incentive Plan, as
it may be amended from time to time.

         1.34 "Restricted Stock" means Stock that is nontransferable or subject
to substantial risk of forfeiture until specific conditions are met.

         1.35 "Restricted Stock Award" means the grant of or the right to
purchase, on the terms and conditions of Section 7 or that the Committee
otherwise determines, Restricted Stock.

         1.36 "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.

         1.37 "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 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.

         1.38 "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.

         1.39 "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.

         1.40 "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 Section 9.



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         1.41 "Stock Appreciation Right" 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, as appropriate, the Exercise Price of a related
Option or the Fair Market Value of the Stock on the Date of Grant of the Stock
Appreciation Right.

         1.42 "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.

         1.43 "Total Shares" has the meaning given it in Subsection 9.2.

         1.44 "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 THE PLAN

         2.1 Maximum Number of Shares. Subject to the provisions of Subsections
2.2 and 2.5 and Section 9 of this Plan, the aggregate number of shares of Stock
that may be issued, transferred or exercised pursuant to Awards under the Plan
shall be one million five hundred thousand (1,500,000) shares of Stock. Except
as provided in Section 8, awards to which shares of such Stock relate may be
awarded to any one Eligible Individual or allocated among the Eligible
Individuals, as determined by the Committee; provided that no more than 100,000
shares of Stock may be subject to Options and Stock Appreciation Rights granted
under this Plan to any single Eligible Individual during any two-year period.

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

                  (a) the following shall count against and decrease the number
         of shares of Stock that may be issued for purposes of Subsection 2.1:
         (i) shares of Stock subject to outstanding Options, outstanding shares
         of Restricted Stock, and shares subject to outstanding Stock
         Appreciation Rights granted independent of Options (based on a good
         faith estimate by the Corporation or the Committee of the maximum
         number of shares for which the Stock Appreciation Right may be settled
         (assuming payment in full in shares of Stock)), and (ii) in the case of
         Options granted in tandem with Stock Appreciation Rights, the greater
         of the number of shares of Stock that would be counted if one or the
         other alone was outstanding (determined as described in clause (i)
         above);

                  (b) the following shall be added back to the number of shares
         of Stock that may be issued for purposes of Subsection 2.1: (i) shares
         of Stock with respect to which Options, Stock Appreciation Rights
         granted independent of Options, or Restricted Stock Awards expire, are
         canceled, or otherwise terminate without being exercised, converted, or
         vested, as applicable, and (ii) in the case of Options granted in
         tandem with Stock Appreciation Rights, shares of Stock as to which an
         Option has been surrendered in connection with the exercise of a
         related ("tandem") Stock Appreciation Right, to the extent the number
         surrendered exceeds the number issued upon exercise of the Stock
         Appreciation Right;

                  (c) shares of Stock subject to Stock Appreciation Rights
         granted independent of Options (calculated as provided in clause (a)
         above) that are exercised and paid in cash shall be added back to the
         number of shares of Stock that may be issued for purposes of Subsection
         2.1;

                  (d) shares of Stock that are transferred by a Holder of an
         Award (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 Subsidiary's tax withholding
         obligations 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 Awards; and



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                  (e) if the number of shares of Stock counted against the
         number of shares that may be issued for purposes of Subsection 2.1 is
         based upon an estimate made by the Corporation or the Committee as
         provided in clause (a) above and the actual number of shares of Stock
         issued pursuant to the applicable Award is greater or less than the
         estimated number, then, upon such issuance, the number of shares of
         Stock that may be issued pursuant to Subsection 2.1 shall be further
         reduced by the excess issuance or increased by the shortfall, as
         applicable.

         Notwithstanding the provisions of this Subsection 2.2, (i) no Stock
shall be treated as issuable under the Plan to Eligible Individuals (A) subject
to Section 16 of the Exchange Act if otherwise prohibited from issuance under
Rule 16b-3 or (B) subject to Section 162(m) if otherwise prohibited from
issuance under Section 162(m) and (ii) the Committee may impose restrictions
which are more limited than set forth herein with respect to shares of stock
subject to Awards that may be added back to the number of shares of stock that
may be issued for purposes of Subsection 2.1.

         2.3 Description of Shares. The shares to be delivered under the 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 Awards.

         2.5 Reduction in Outstanding Shares of Stock. Nothing in this Section 2
shall impair the right of the Corporation to reduce the number of outstanding
shares of Stock pursuant to repurchases, redemptions, or otherwise; provided,
however, that no reduction in the number of outstanding shares of Stock shall
(a) impair the validity of any outstanding Award, whether or not that Award is
fully exercisable or fully vested, or (b) impair the status of any shares of
Stock previously issued pursuant to the exercise of an Award or thereafter
issued pursuant to a then-outstanding Award as duly authorized, validly issued,
fully paid, and nonassessable shares.

SECTION 3. ADMINISTRATION OF THE PLAN

         3.1 Committee. The Board of Directors may administer the Plan with
respect to all Eligible Individuals 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 Subsections 3.1, 3.2, and
3.3, and unless the context otherwise requires, references herein to the
Committee shall also refer to the Board of Directors as administrator of the
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 the Plan in all other applicable respects will
qualify transactions related to the Plan for the exemptions from Section 16(b)
of the Exchange Act provided by Rule 16b-3 and the 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 or Rule 16b-3 or Section 162(m) is amended to
require 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 Duration, Removal, Etc. The members of the Committee shall serve at
the discretion of the Board of Directors, which shall have the power, at any
time and from time to time, to remove members from or add members to the
Committee. Removal from the Committee may be with or without cause. Any
individual serving as a member of the Committee shall have the right to resign
from membership in the Committee by at least three days' written notice to the
Board of Directors. The Board of Directors, and not the remaining members of the
Committee, 



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shall have the power and authority to fill all vacancies on the Committee. The
Board of Directors shall promptly fill any vacancy that causes the number of
members of the Committee to be below two or any other number that Rule 16b-3 or
Section 162(m) may require from time to time.

         3.3 Meetings and Actions of Committee. The Board of Directors shall
designate which of the Committee members shall be the chairman of the Committee.
If the Board of Directors fails to designate a Committee chairman, the members
of the Committee shall elect one of the Committee members as chairman, who shall
act as chairman until he ceases to be a member of the Committee or until the
Board of Directors elects a new chairman. The Committee shall hold its meetings
at those times and places as the chairman of the Committee may determine. At all
meetings of the Committee, a quorum for the transaction of business shall be
required and a quorum shall be deemed present if at least a majority of the
members of the Committee are present. At any meeting of the Committee, each
member shall have one vote. All decisions and determinations of the Committee
shall be made by the majority vote or majority decision of all of its members
present at a meeting at which a quorum is present; provided, however, that any
decision or determination reduced to writing and signed by all of the members of
the Committee shall be as fully effective as if it had been made at a meeting
that was duly called and held. The Committee may make any rules and regulations
for the conduct of its business that are not inconsistent with the provisions of
the Plan, the Certificate of Incorporation of the Corporation, the by-laws of
the Corporation, and Rule 16b-3 and Section 162(m) so long as applicable, as the
Committee may deem advisable.

         3.4 Committee's Powers. Subject to the express provisions of the Plan
and Rule 16b-3, the Committee shall have the authority, in its sole and absolute
discretion, to (a) adopt, amend, and rescind administrative and interpretive
rules and regulations relating to the Plan; (b) determine the Eligible
Individuals to whom, and the time or times at which, Awards shall be granted;
(c) determine the amount of cash and the number of shares of Stock, Stock
Appreciation Rights, or Restricted Stock Awards, or any combination thereof,
that shall be the subject of each Award; (d) determine the terms and provisions
of each Award Agreement (which need not be identical), including provisions
defining or otherwise relating to (i) the term and the period or periods and
extent of exercisability of the Options, (ii) the extent to which the
transferability of shares of Stock issued or transferred pursuant to any Award
is restricted, (iii) the effect of termination of employment of a Holder on the
Award, and (iv) the effect of approved leaves of absence (consistent with any
applicable regulations of the Internal Revenue Service); (e) accelerate the time
of exercisability of any Option that has been granted; (f) construe the
respective Award Agreements and the Plan; (g) make determinations of the Fair
Market Value of the Stock pursuant to the Plan; (h) delegate its duties under
the Plan to such agents as it may appoint from time to time, provided that the
Committee may not delegate its duties with respect to making Awards to, or
otherwise with respect to Awards granted to, Eligible Individuals who are
subject to Section 16(b) of the Exchange Act or Section 162(m); (i) subject to
ratification by the Board of Directors, terminate, modify, or amend the Plan;
and (j) make all other determinations, perform all other acts, and exercise all
other powers and authority necessary or advisable for administering the Plan,
including the delegation of those ministerial acts and responsibilities as the
Committee deems appropriate. Subject to Rule 16b-3 and Section 162(m), the
Committee may correct any defect, supply any omission, or reconcile any
inconsistency in the Plan, in any Award, or in any Award Agreement in the manner
and to the extent it deems necessary or desirable to carry the 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 3.4 shall be final and conclusive.

SECTION 4.  ELIGIBILITY AND PARTICIPATION

         4.1 Eligible Individuals. Awards may be granted pursuant to the Plan
only to persons who are Eligible Individuals at the time of the grant thereof.

         4.2 Grant of Awards. Subject to the express provisions of the Plan, the
Committee shall determine which Eligible Individuals shall be granted Awards
from time to time. In making grants, the Committee shall take into consideration
the contribution that the potential Holder has made or may make to the success
of the Corporation or its Subsidiaries and such other considerations as the
Board of Directors may from time to time specify. The Committee shall also
determine the number of shares subject to each of the Awards and shall authorize
and cause the Corporation to grant Awards in accordance with those
determinations.



                                     - 8 -
<PAGE>   9

         4.3 Date of Grant. Subject to the penultimate sentence of this
Subsection 4.3 and clause (ii) of the first sentence of Subsection 10.9, the
date on which the Committee completes all action resolving to offer an Award to
an individual, including the specification of the number of shares of Stock to
be subject to the Award, shall be the date on which the Award covered by an
Award Agreement is granted (the "Date of Grant"), even though certain terms of
the Award Agreement may not be determined at that time and even though the Award
Agreement may not be executed until a later time. With respect to Awards granted
to Non-Employee Directors under Subsection 8.2(b) or 8.2(c), the Date of Grant
shall be the date identified in the applicable subsection. In no event shall a
Holder gain any rights in addition to those specified by the Committee in its
grant, regardless of the time that may pass between the grant of the Award and
the actual execution of the Award Agreement by the Corporation and the Holder.

         4.4 Award Agreements. Each Award granted under the Plan shall be
evidenced by an Award Agreement that is executed by the Corporation
incorporating those terms that the Committee shall deem necessary or desirable.
More than one Award may be granted under the Plan to the same Eligible
Individual and be outstanding concurrently. In the event an Eligible Individual
is granted both one or more Incentive Options and one or more Nonstatutory
Options, those grants shall be evidenced by separate Award Agreements, one for
each of the Incentive Option grants and one for each of the Nonstatutory Option
grants.

         4.5 Limitation for Incentive Options. Notwithstanding any provision
contained herein to the contrary, (a) a person shall not be eligible to receive
an Incentive Option unless he is an Employee of the Corporation or a corporate
Subsidiary (but not a partnership Subsidiary) and (b) a Person shall not be
eligible to receive an Incentive Option if, immediately before the time the
Option is granted, that person owns (within the meaning of Sections 422 and
424(d) of the Code) stock possessing more than ten percent of the total combined
voting power or value of all classes of outstanding stock of the Corporation or
a Subsidiary; provided, however, Subsection 4.5(b) shall not apply if, at the
time the Incentive Option is granted, the Exercise Price of the Incentive Option
is at least one hundred ten percent of Fair Market Value and the Incentive
Option is not, by its terms, exercisable after the expiration of five years from
the Date of Grant.

         4.6 No Right to Award. The adoption of the Plan shall not be deemed to
give any Person a right to be granted an Award.

SECTION 5. TERMS AND CONDITIONS OF OPTIONS

         Except as otherwise provided in Section 8 with respect to Awards to
Non-Employee Directors, all Options granted under the 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 5 (to the extent each term
and condition applies to the form of Option) and also to the terms and
conditions set forth in Sections 9 and 10; provided, however, that the Committee
may authorize an Award Agreement that expressly contains terms and provisions
that differ from the terms and provisions set forth in Subsections 9.2, 9.3, and
9.4 and any of the terms and provisions of Section 10 (other than Subsections
10.5, 10.8 and 10.9).

         5.1 Number of Shares. Each Award Agreement shall state the total number
of shares of Stock to which it relates.

         5.2 Vesting. Each Award Agreement shall state the time or periods in
which, or the conditions upon satisfaction of which, the right to exercise the
Option or a portion thereof shall vest and the number of shares of Stock for
which the right to exercise the Option shall vest at each such time, period, or
fulfillment of condition.

         5.3 Expiration of Options. Options may be exercised during the term
determined by the Committee and set forth in the Award Agreement; provided that
no Incentive Option shall by its terms be exercisable after the expiration of a
period of ten years commencing on the Date of Grant of the Incentive Option.

         5.4 Exercise Price. Each Award Agreement shall state the exercise price
per share of Stock (the "Exercise Price"); provided, however, that the exercise



                                     - 9 -
<PAGE>   10

price per share of Stock subject to an Incentive Option shall not be less than
the greater of (a) the par value per share of the Stock or (b) 100% of the Fair
Market Value per share of the Stock on the Date of Grant of the Option, and the
exercise price per share of Stock subject to a Nonstatutory Option shall not be
less than the par value per share of the Stock (but may be less than the Fair
Market Value of a share of the Stock on the Date of Grant).

         5.5 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 10.3, (c) be accompanied by the Exercise Price for all shares of
Stock for which the Option is being exercised, and (d) include such other
information, instruments, and documents as may be required to satisfy any other
condition to exercise contained in the Award Agreement. The Option shall not be
deemed to have been exercised unless all of the requirements of the preceding
provisions of this Subsection 5.5 have been satisfied.

         5.6 Incentive Option Exercises. Except as otherwise provided in
Subsection 10.3, during a Holder's lifetime, only the Holder may exercise an
Incentive Option.

         5.7 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) on the Committee's prior
consent, with shares of Stock owned by the Holder (including shares received
upon exercise of the Option or shares of Restricted Stock already held by the
Holder) 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 is delivered to the Corporation. If the
Committee elects to accept shares of Restricted Stock in payment of all or any
portion of the Exercise Price, then an equal number of shares issued pursuant to
the exercise shall be restricted on the same terms and for the restriction
period remaining on the shares used for payment.

         5.8 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 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.

         5.9 Payment of Taxes. The Committee may, in its discretion, require a
Holder to pay to the Corporation (or the Corporation's Subsidiary if the Holder
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 Holder incurs
by exercising an Option. In connection with the exercise of an Option requiring
tax withholding, a Holder may (a) direct the Corporation to withhold from the
shares of Stock to be issued to the Holder the number of shares necessary to
satisfy the Corporation'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 tax withholding
obligation, which tax withholding obligation is based on the shares' Fair Market
Value as of the later of the date of exercise or the date as of which the shares
of Stock issued in connection with such exercise become includable in the income
of the Holder; 



                                     - 10 -
<PAGE>   11

or (c) deliver sufficient cash to the Corporation to satisfy its tax withholding
obligations. Holders 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 Holder'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 Holder 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.

         5.10 Limitation on Aggregate Value of Shares That May Become First
Exercisable During Any Calendar Year Under an Incentive Option. Except as
otherwise provided in Subsection 9.3, with respect to any Incentive Option
granted under the Plan, the aggregate Fair Market Value of shares of Stock
subject to an Incentive Option and the aggregate Fair Market Value of shares of
Stock or stock of any Subsidiary (or a predecessor of the Corporation or a
Subsidiary) subject to any other incentive stock option (within the meaning of
Section 422 of the Code) of the Corporation or its Subsidiaries (or a
predecessor corporation of any such corporation) that first become purchasable
by a Holder in any calendar year may not (with respect to that Holder) exceed
$100,000, or such other amount as may be prescribed under Section 422 of the
Code or applicable regulations or rulings from time to time. As used in the
previous sentence, Fair Market Value shall be determined as of the Date of Grant
of the Incentive Option. For purposes of this Subsection 5.10, "predecessor
corporation" means (a) a corporation that was a party to a transaction described
in Section 424(a) of the Code (or which would be so described if a substitution
or assumption under that Section had been effected) with the Corporation, (b) a
corporation which, at the time the new incentive stock option (within the
meaning of Section 422 of the Code) is granted, is a Subsidiary of the
Corporation or a predecessor corporation of any such corporations, or (c) a
predecessor corporation of any such corporations. Failure to comply with this
provision shall not impair the enforceability or exercisability of any Option,
but shall cause the excess amount of shares to be reclassified in accordance
with the Code.

         5.11 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.

         5.12 Modification, Extension, and Renewal of Options. Subject to the
terms and conditions of and within the limitations of the Plan, Rule 16b-3, and
any consent required by the last sentence of this Subsection 5.12, the Committee
may (a) modify, extend, or renew outstanding Options granted under the Plan, (b)
accept the surrender of Options outstanding hereunder (to the extent not
previously exercised) and authorize the granting of new Options in substitution
for outstanding Options (to the extent not previously exercised), and (c) amend
the terms of an Incentive Option at any time to include provisions that have the
effect of changing the Incentive Option to a Nonstatutory Option. Nevertheless,
without the consent of the Holder, the Committee may not modify any outstanding
Options so as to specify a higher or lower Exercise Price or accept the
surrender of outstanding Incentive Options and authorize the granting of new
Options in substitution therefor specifying a higher or lower Exercise Price. In
addition, no modification of an Option granted hereunder shall, without the
consent of the Holder, alter or impair any rights or obligations under any
Option theretofore granted to such Holder under the Plan except, with respect to
Incentive Options, as may be necessary to satisfy the requirements of Section
422 of the Code or as permitted in clause (c) of this Subsection 5.12.

         5.13 Other Agreement Provisions. The Award Agreements authorized under
the Plan shall contain such provisions in addition to those required by the Plan
(including, without limitation, restrictions or the removal of restrictions upon
the exercise of the Option and the retention or transfer of shares thereby
acquired) as the Committee may deem advisable. Each Award Agreement shall
identify the Option evidenced thereby as an Incentive Option or Nonstatutory
Option, as the case may be, and no Award Agreement shall cover both an Incentive
Option and a Nonstatutory Option. Each Award Agreement relating to an Incentive
Option granted hereunder shall contain such limitations and restrictions upon
the exercise of the Incentive Option to which it relates as shall be necessary
for the Incentive Option to which such Award Agreement relates to constitute an
incentive stock option, as defined in Section 422 of the Code.



                                     - 11 -
<PAGE>   12

         5.14 Option Status. To the extent an Incentive Option (or any portion
thereof) fails to constitute an incentive stock option under Section 422 of the
Code, such portion of the Incentive Option which fails to so qualify shall be
deemed to be a Nonstatutory Option under this Plan.

SECTION 6. STOCK APPRECIATION RIGHTS

         All Stock Appreciation Rights granted under the 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 Stock Appreciation Right) and also the
terms and conditions set forth in Sections 9 and 10; provided, however, that the
Committee may authorize an Award Agreement related to a Stock Appreciation Right
that expressly contains terms and provisions that differ from the terms and
provisions set forth in Subsections 9.2, 9.3, and 9.4 and any of the terms and
provisions of Section 10 (other than Subsection 10.9).

         6.1 Form of Right. A Stock Appreciation Right may be granted to an
Eligible Individual (a) in connection with an Option, either at the time of
grant or at any time during the term of the Option, or (b) independent of an
Option.

         6.2 Rights Related to Options. A Stock Appreciation Right granted
pursuant to an Option shall entitle a Holder, upon exercise, to surrender that
Option or any portion thereof, to the extent unexercised, and to receive payment
of an amount computed pursuant to Subsection 6.2(b). That Option shall then
cease to be exercisable to the extent surrendered. Stock Appreciation Rights
granted in connection with an Option shall be subject to the terms of the Award
Agreement governing the Option, which shall comply with the following provisions
in addition to those applicable to Options:

                  (a) Exercise and Transfer. Subject to Subsection 10.8, a Stock
         Appreciation Right granted in connection with an Option 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.

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

                           (i) the difference obtained by subtracting the
                  Exercise Price of a share of Stock specified in the related
                  Option 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 as to which that Stock
                  Appreciation Right has been exercised.

         6.3 Right Without Option. A Stock Appreciation Right granted
independent of an Option shall be exercisable as determined by the Committee and
set forth in the Award Agreement governing the Stock Appreciation Right, which
Award Agreement shall comply with the following provisions:

                  (a) Number of Shares. Each Award Agreement shall state the
         total number of shares of Stock to which the Stock Appreciation Right
         relates.

                  (b) Vesting. Each Award Agreement shall state the time or
         periods in which the right to exercise the Stock Appreciation Right or
         a portion thereof shall vest and the number of shares of Stock for
         which the right to exercise the Stock Appreciation Right shall vest at
         each such time or period.

                  (c) Expiration of Rights. Each Award Agreement shall state the
         date at which the Stock Appreciation Rights shall expire if not
         previously exercised.



                                     - 12 -
<PAGE>   13

                  (d) Value of Right. Each Stock Appreciation Right shall
         entitle a Holder, upon exercise thereof, to receive payment of an
         amount determined by multiplying:

                           (i) the difference obtained by subtracting the Fair
                  Market Value of a share of Stock on the Date of Grant of the
                  Stock Appreciation Right from the Fair Market Value of a share
                  of Stock on the date of exercise of that Stock Appreciation
                  Right, by

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

         6.4 Limitations on Rights. Notwithstanding Subsections 6.2(b) and
6.3(d), the Committee may limit the amount payable upon exercise of a Stock
Appreciation Right. Any such limitation must be determined as of the Date of
Grant and be noted on the Award Agreement evidencing the Holder's Stock
Appreciation Right.

         6.5 Payment of Rights. Payment of the amount determined under
Subsection 6.2(b) or 6.3(d) and Subsection 6.4 may be made, in the sole
discretion of the Committee, unless specifically provided otherwise in the Award
Agreement, solely in whole shares of Stock valued at Fair Market Value on the
date of exercise of the Stock Appreciation Right, solely in cash, or in a
combination of cash and whole shares of Stock. If the Committee decides to make
full payment in shares of Stock and the amount payable results in a fractional
share, payment for the fractional share shall be made in cash.

         6.6 Payment of Taxes. The Committee may, in its discretion, require a
Holder to pay to the Corporation (or the Corporation's Subsidiary if the Holder
is an employee of a Subsidiary of the Corporation), at the time of the exercise
of a Stock Appreciation Right 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
Holder incurs by exercising a Stock Appreciation Right. In connection with the
exercise of a Stock Appreciation Right requiring tax withholding, a Holder may
(a) direct the Corporation to withhold from the shares of Stock to be issued to
the Holder the number of shares necessary to satisfy the Corporation'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 tax withholding obligation, which
tax withholding obligation is based on the shares' Fair Market Value as of the
later of the date of exercise or the date as of which the shares of Stock issued
in connection with such exercise become includable in the income of the Holder;
or (c) deliver sufficient cash to the Corporation to satisfy its tax withholding
obligation. Holders who elect to have Stock withheld pursuant to (a) or (b)
above must make the election at the time and in the manner that the Committee
prescribes. The Committee may, in its sole discretion, deny any Holder's request
to satisfy withholding obligation 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 Holder 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.

         6.7 Other Agreement Provisions. The Award Agreements authorized
relating to Stock Appreciation Rights shall contain such provisions in addition
to those required by the Plan (including, without limitation, restrictions or
the removal of restrictions upon the exercise of the Stock Appreciation Right
and the retention or transfer of shares thereby acquired) as the Committee may
deem advisable.

SECTION 7. RESTRICTED STOCK AWARDS

         All Restricted Stock Awards granted under the Plan shall comply with
and be subject to, and the related Award Agreements shall be deemed to include,
the terms and conditions set forth in this Section 7 and also to the terms and
conditions set forth in Sections 9 and 10; provided, however, that the Committee
may authorize an Award Agreement related to a Restricted Stock Award that
expressly contains terms and provisions that differ from the terms and
provisions set forth in Subsections 9.2, 9.3, and 9.4 and the terms and
provisions set forth in Section 10 (other than Subsections 10.8 and 10.9).



                                     - 13 -
<PAGE>   14

         7.1 Restrictions. All shares of Restricted Stock Awards granted or sold
pursuant to the Plan shall be subject to the following conditions:

                  (a) Transferability. The shares may not be sold, transferred,
         or otherwise alienated or hypothecated until the restrictions are
         removed or expire.

                  (b) Conditions to Removal of Restrictions. Conditions to
         removal or expiration of the restrictions may include, but are not
         required to be limited to, continuing employment or service as a
         director, officer, consultant, or advisor or achievement of performance
         objectives described in the Award Agreement.

                  (c) Legend. Each certificate representing Restricted Stock
         Awards granted pursuant to the Plan shall bear a legend making
         appropriate reference to the restrictions imposed.

                  (d) Possession. The Committee may require the Corporation to
         retain physical custody of the certificates representing Restricted
         Stock Awards during the restriction period and may require a Holder of
         the Award to execute stock powers in blank for those certificates and
         deliver those stock powers to the Corporation, or the Committee may
         require the Holder to enter into an escrow agreement providing that the
         certificates representing Restricted Stock Awards granted or sold
         pursuant to the Plan shall remain in the physical custody of an escrow
         holder until all restrictions are removed or expire.

                  (e) Other Conditions. The Committee may impose other
         conditions on any shares granted or sold as Restricted Stock Awards
         pursuant to the Plan as it may deem advisable, including without
         limitation (i) restrictions under the Securities Act or Exchange Act,
         (ii) the requirements of any securities exchange upon which the shares
         or shares of the same class are then listed, and (iii) any state
         securities law applicable to the shares.

         7.2 Expiration of Restrictions. The restrictions imposed in Subsection
7.1 on Restricted Stock Awards shall lapse as determined by the Committee and
set forth in the applicable Award Agreement, and the Corporation shall promptly
deliver to the Holder of the Restricted Stock Award a certificate representing
the number of shares for which restrictions have lapsed, free of any restrictive
legend relating to the lapsed restrictions. Each Restricted Stock Award may have
a different restriction period as determined by the Committee in its sole
discretion. The Committee may, in its discretion, prospectively reduce the
restriction period applicable to a particular Restricted Stock Award.

         7.3 Rights as Stockholder. Subject to the provisions of Subsections 7.1
and 10.9, the Committee may, in its discretion, determine what rights, if any, a
Holder shall have with respect to the Restricted Stock Awards granted or sold,
including the right to vote the shares and receive all dividends and other
distributions paid or made with respect thereto.

         7.4 Payment of Taxes. The Committee may, in its discretion, require a
Holder to pay to the Corporation (or the Corporation's Subsidiary if the Holder
is an employee of a Subsidiary of the Corporation) 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 Holder incurs by reason of the Restricted Stock Award. A Holder may (a)
direct the Corporation to withhold from the shares of Stock to be issued to the
Holder the number of shares necessary to satisfy the Corporation's obligation to
withhold taxes, that determination to be based on the shares' Fair Market Value
as of the date on which tax withholding is to be made; (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 tax withholding
obligation, which tax withholding obligation is based on the shares' Fair Market
Value as of the later of the date of issuance or the date as of which the shares
of Stock issued become includable in the income of the Holder; or (c) deliver
sufficient cash to the Corporation to satisfy its tax withholding obligations.
Holders who elect to have Stock withheld pursuant to (a) or (b) above must make
the election at the time and in the manner that the Committee prescribes. The
Committee may, in its sole discretion, deny any Holder's request to satisfy
withholding obligations through Stock instead of cash. In the event the
Committee subsequently determines that the aggregate Fair Market 



                                     - 14 -
<PAGE>   15

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 Holder shall pay to the Corporation,
immediately upon the Committee's request, the amount of that deficiency.

         7.5 Other Agreement Provisions. The Award Agreements relating to
Restricted Stock Awards shall contain such provisions in addition to those
required by the Plan as the Committee may deem advisable.

SECTION 8.  AWARDS TO NON-EMPLOYEE DIRECTORS

         Except as otherwise provided in this Section 8 or the applicable Award
Agreement, Awards granted pursuant to this Section 8 shall be subject to the
conditions of Section 5 to the extent permitted under Rule 16b-3.

         8.1 Ineligibility for Other Awards. Non-Employee Directors shall not be
eligible to receive any Awards under the Plan other than the Awards specified in
this Section 8 granted prior to May 14, 1997.

         8.2 Awards of Nonstatutory Options.

                  (a) Eligibility. Each Non-Employee Director of the Corporation
         elected as a member of the Board after the closing date of the Initial
         Public Offering and before May 14, 1997, was eligible for Awards as
         specified in Subsections 8.2(b) or 8.2(c) below; from and after May 14,
         1997, no Non-Employee Director shall be eligible for Awards under this
         Plan and no Awards will be granted under this Section 8.

                  (b) Awards to Non-Employee Directors at the Closing of Initial
         Public Offering. Each Non-Employee Director as of the closing date of
         the Initial Public Offering (including persons who are elected as a
         Non-Employee Director in conjunction with the closing of the Initial
         Public Offering) shall be awarded a Nonstatutory Option to purchase
         5,000 shares of Stock at an Exercise Price per share equal to the
         public offering price set forth on the cover page of the Corporation's
         final prospectus pursuant to which the Initial Public Offering is
         effected.

                  (c) Awards to Non-Employee Directors Elected or Appointed
         After the Closing of the Initial Public Offering. Each Non-Employee
         Director who is elected or appointed to the Board of Directors after
         the closing date of the Initial Public Offering and prior to May 14,
         1997, and has not served as a member of the Board of Directors before
         such date of election or appointment, shall be awarded a Nonstatutory
         Option to purchase 5,000 shares of Stock upon the date of such election
         or appointment to the Board of Directors at an Exercise Price per share
         equal to the average Fair Market Value of a share of Stock for the five
         trading days immediately preceding the Date of Grant.

         8.3 Available Stock. The automatic Awards specified in Subsection 8.2
shall be made in the amounts specified in Subsection 8.2 only if the number of
shares of Stock available to be issued, transferred or exercised pursuant to
Awards under this Plan (as calculated in Section 2) is sufficient to make all
automatic grants required to be made by Subsection 8.2 on the Date of Grant of
those automatic Awards. In the event that the number of shares of Stock that are
available to be issued, transferred, or exercised pursuant to Awards under the
Plan on the Date of Grant of the automatic Awards described in Subsection 8.2 is
insufficient to permit the grant of the entire number of shares specified in
Subsection 8.2, then the number of available shares shall be apportioned equally
among the automatic Awards made on that date, and the number of shares
apportioned to each automatic Award shall be the amount of shares automatically
subject to that automatic Award.

         8.4 Exercisability. Each Nonstatutory Option granted pursuant to this
Section 8 shall become exercisable with respect to 1,000 shares of Stock on each
of the first five anniversaries of the Date of Grant. Each Nonstatutory Option
awarded pursuant to this Section 8 shall expire 10 years after the Date of
Grant.

NOTE: THIS SECTION 8 IS AMENDED EFFECTIVE AS OF MAY 14, 1997, TO REFLECT THE
ADOPTION OF THE COMPANY'S 1997 NON- EMPLOYEE DIRECTOR STOCK OPTION PLAN PURSUANT
TO WHICH STOCK OPTIONS WILL BE GRANTED TO NEW NON-EMPLOYEE DIRECTORS ON
SUBSTANTIALLY THE SAME BASIS AS PROVIDED IN THIS SECTION 8.



                                     - 15 -
<PAGE>   16

SECTION 9. ADJUSTMENT PROVISIONS

         9.1 Adjustment of Awards and Authorized Stock. The terms of an Award
and the number of shares of Stock authorized pursuant to Subsection 2.1 for
issuance under the 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 the Plan as provided in Subsection 2.1 shall be increased
         proportionately, and the kind of shares or other securities available
         for the 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 Award shall be increased proportionately, and (iii) the price
         (including Exercise Price) for each share of Stock (or other kind of
         shares or securities) subject to then outstanding Awards shall be
         reduced proportionately, without changing the aggregate purchase price
         or value as to which outstanding Awards remain exercisable or subject
         to restrictions.

                  (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, (i) the maximum number of shares of
         Stock available for the Plan as provided in Subsection 2.1 shall be
         decreased proportionately, and the kind of shares or other securities
         available for the 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 Award shall be decreased proportionately, and (iii)
         the price (including Exercise Price) for each share of Stock (or other
         kind of shares or securities) subject to then outstanding Awards shall
         be increased proportionately, without changing the aggregate purchase
         price or value as to which outstanding Awards remain exercisable or
         subject to restrictions.

                  (c) Whenever the number of shares of Stock subject to
         outstanding Awards and the price for each share of Stock subject to
         outstanding Awards are required to be adjusted as provided in this
         Subsection 9.1, the Committee shall promptly prepare a notice setting
         forth, in reasonable detail, the event requiring adjustment, the amount
         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 Award after
         giving effect to the adjustments. The Committee shall promptly give
         each Holder such a notice.

                  (d) Adjustments under Subsections 9.1(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 the Plan on account of any
         such adjustments.

         9.2 Changes in Control. Upon the occurrence of a Change in Control,
subject to Subsection 1.7(b) (a) each Holder of an Option shall immediately be
granted corresponding Stock Appreciation Rights; (b) all outstanding Stock
Appreciation Rights and Options shall immediately become fully vested and
exercisable in full, including that portion of any Stock Appreciation Right or
Option that pursuant to the terms and provisions of the applicable Award
Agreement had not yet become exercisable (the total number of shares of Stock as
to which a Stock Appreciation Right or Option is exercisable upon the occurrence
of a Change in Control is referred to herein as the "Total Shares"); and (c) the
restriction period of any Restricted Stock Award shall immediately be
accelerated and the restrictions shall expire. If a Change in Control involves a
Restructuring or occurs in connection with 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 Award shall be entitled to purchase or receive (in
lieu of the Total Shares that the Holder would otherwise be entitled to purchase
or receive), as appropriate for the form of Award, the number of shares of



                                     - 16 -
<PAGE>   17

Stock, other securities, cash, or property to which that number of Total Shares
would have been entitled in connection with such Restructuring (and, for
Options, 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 9.2 shall impose on a Holder the
obligation to exercise any Award immediately before or upon the Change of
Control or cause the Holder to forfeit the right to exercise the Award during
the remainder of the original term of the Award because of a Change in Control.

         9.3 Restructuring Without Change in Control. In the event a
Restructuring shall occur at any time while there is any outstanding Award
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 outstanding Option or Stock Appreciation Right shall
         immediately become fully vested and exercisable in full merely because
         of the occurrence of the Restructuring;

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

                  (c) the restriction period of any Restricted Stock Award shall
         not immediately be accelerated and the restrictions expire merely
         because of the occurrence of the Restructuring; and

                  (d) at the option of the Committee, the Committee may (but
         shall not be required to) cause the Corporation to take any one or more
         of the following actions with respect to outstanding Awards other than
         Awards granted pursuant to Section 8 hereof:

                           (i) accelerate in whole or in part the time of the
                  vesting and exercisability of any one or more of the
                  outstanding Stock Appreciation Rights and Options so as to
                  provide that those Stock Appreciation Rights and Options shall
                  be exercisable before, upon, or after the consummation of the
                  Restructuring;

                           (ii) grant each Holder of an Option corresponding
                  Stock Appreciation Rights;

                           (iii) accelerate in whole or in part the expiration
                  of some or all of the restrictions on any Restricted Stock
                  Award;

                           (iv) if the Restructuring is in the form of a
                  Non-Surviving Event, cause the surviving entity to assume in
                  whole or in part any one or more of the outstanding Awards
                  upon such terms and provisions as the Committee deems
                  desirable; or

                           (v) redeem in whole or in part any one or more of the
                  outstanding Awards (whether or not then exercisable) in
                  consideration of a cash payment, as such payment may be
                  reduced for tax withholding obligations as contemplated in
                  Subsections 5.9, 6.6, or 7.4, as applicable, in an amount
                  equal to:

                                    (A) for Options and Stock Appreciation
                           Rights granted in connection with Options, the excess
                           of (1) 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 Award and as to which the Award
                           is being redeemed over (2) the Exercise Price for
                           that number of shares of Stock;

                                    (B) for Stock Appreciation Rights not
                           granted in connection with an Option, the excess of
                           (1) 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 Award and as to which the Award
                           is being redeemed over (2) the Fair Market Value of
                           the number of shares of Stock on the Date of Grant;
                           and



                                     - 17 -
<PAGE>   18

                                    (C) for Restricted Stock Awards, 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 Award and as to which the Award is being
                           redeemed.

The Corporation shall promptly notify each Holder of any election or action
taken by the Corporation under this Subsection 9.3. In the event of any election
or action taken by the Corporation pursuant to this Subsection 9.3 that requires
the amendment or cancellation of any Award Agreement as may be specified in any
notice to the Holder thereof, that the Holder shall promptly deliver that Award
Agreement to the Corporation in order for that amendment or cancellation to be
implemented by the Corporation and the Committee. The failure of the Holder to
deliver any such Award Agreement to the Corporation as provided in the preceding
sentence shall not in any manner affect the validity or enforceability of any
action taken by the Corporation and the Committee under this Subsection 9.3,
including without limitation any redemption of an Award as of the consummation
of a Restructuring. Any cash payment to be made by the Corporation pursuant to
this Subsection 9.3 in connection with the redemption of any outstanding Awards
shall be paid to the Holder thereof currently with the delivery to the
Corporation of the Award Agreement evidencing that Award; provided, however,
that any such redemption shall be effective upon the consummation of the
Restructuring notwithstanding that the payment of the redemption price may occur
subsequent to the consummation. If all or any portion of an outstanding Award is
to be exercised or accelerated upon or after the consummation of a Restructuring
that does not occur in connection with a Change in Control and is in the form of
a Non-Surviving Event, and as a part of that Restructuring shares of stock,
other securities, cash, or property shall be issuable or deliverable in exchange
for Stock, then the Holder of the Award shall thereafter be entitled to purchase
or receive (in lieu of the number of shares of Stock that the Holder would
otherwise be entitled to purchase or receive) the number of shares of Stock,
other securities, cash, or property to which such number of shares of Stock
would have been entitled in connection with the Restructuring (and, for Options,
upon payment of the 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)
and such Award Agreement shall be subject to adjustments that shall be as nearly
equivalent as may be practical to the adjustments provided for in this Section
9. Notwithstanding the provisions of this Subsection 9.3, the Committee shall
not have the power or authority to take any action pursuant to this Subsection
9.3 that causes the Plan not to be in compliance with the requirements of Rule
16b-3 and any such action purported to be taken by the Committee shall be null
and void and without any force or effect.

         9.4 Notice of Restructuring. The Corporation shall attempt to keep all
Holders informed with respect to any Restructuring or of any potential
Restructuring to the same extent that the Corporation's stockholders are
informed by the Corporation of any such event or potential event.

SECTION 10. ADDITIONAL PROVISIONS

         10.1 Termination of Employment. Except as provided below, if a Holder
is an Eligible Individual because the Holder is an Employee and if that
employment relationship is terminated for any reason other than (a) Normal
Retirement, (b) that Holder's death, or (c) that Holder's Disability
(hereinafter defined), then any and all Awards held by such Holder in such
Holder's capacity as an Employee as of the date of the termination that are not
yet exercisable (or for which restrictions have not lapsed) shall become null
and void as of the date of such termination and the portion, if any, of such
Awards that are exercisable as of the date of termination shall be exercisable



                                     - 18 -
<PAGE>   19

for a period of the lesser of (i) the remainder of the term of the Award or (ii)
the date which is 180 days after the date of termination. If a Holder is an
Eligible Individual because such Holder is an Employee and if that employment
relationship is terminated as a result of (a) Normal Retirement, (b) that
Holder's death, or (c) that Holder's Disability, then any and all Awards held by
such Holder in such Holder's capacity as an Employee as of the date of
termination that are not yet exercisable (or for which restrictions have not
lapsed) shall become exercisable (and the restrictions thereon, if any, shall
lapse) as of the date of termination, and all such Awards held by that Holder as
of the date of termination that are exercisable (either as a result of this
sentence or otherwise) shall be exercisable for a period of the lesser of (i)
the remainder of the term of the Award or (ii) the date which is three years
after the date of termination. Any portion of any such Award not exercised upon
the expiration of the lesser of the periods specified in (i) or (ii) of the
preceding two sentences shall be null and void upon the expiration of such
period, as applicable. If a Holder is an Eligible Individual because the Holder
is an Employee and if that employment relationship is terminated by the
Corporation for "cause" (hereafter defined), then any and all Awards held by
such Holder in such Holder's capacity as an Employee as of the date of the
termination shall become null and void as of the date of such termination.
"Cause" shall have the meanings given such term in the employment agreement of
the Holder (if any) with the Corporation or a Subsidiary of the Corporation;
provided, however, that if that Holder has no employment agreement, "cause"
shall mean, as determined by the Board of Directors in the sole discretion
exercised in good faith of the Board of Directors, (a) the breach by the Holder
of any nondisclosure, noncompetition, or other agreement to which the Holder and
the Corporation are parties, (b) the commission by the Holder of a felony or of
a misdemeanor involving moral turpitude, (c) the participation by the Holder in
any fraud, (d) dishonesty by the Holder that is detrimental to the best interest
of the Corporation, (e) the willful and continued failure by the Holder to
substantially perform his duties to the Corporation (other than any such failure
resulting from the Holder's incapacity due to physical or mental illness) after
written demand for substantial performance is delivered by the Corporation
specifically identifying the manner in which the Corporation believes the Holder
has not substantially performed his duties, or (f) the willful engaging by the
Holder in misconduct which is materially injurious to the Corporation,
monetarily or otherwise.

         10.2 Other Loss of Eligibility. If a Holder is an Eligible Individual
because the Holder is serving in a capacity other than as an Employee, and:

                  (a) if that capacity is terminated for any reason other than
         the Holder's death or Disability, then that portion, if any, of any and
         all Awards held by the Holder that were granted because of that
         capacity which are not yet exercisable (or for which restrictions have
         not lapsed) as of the date of the termination shall become null and
         void as of the date of the termination and, except as provided below,
         the portion, if any, of any and all Awards held by the Holder that are
         then exercisable as of the date of the termination shall survive the
         termination and shall be exercisable for a period of the lesser of (i)
         the remainder of the term of the Award or (ii) 180 days following the
         date such capacity is terminated;

                  (b) if that capacity is terminated by reason of the Holder's
         death or Disability, then the portion, if any, of any and all Awards
         held by the Holder that are not yet exercisable (or for which
         restrictions have not lapsed) as of the date of that termination for
         death or Disability shall become exercisable (and the restrictions
         thereon, if any, shall lapse), and all such Awards held by that Holder
         as of the date of termination that are exercisable (either as a result
         of this sentence or otherwise) shall be exercisable for the lesser of
         (i) the remainder of the term of the Award or (ii) three years after
         the date such capacity is terminated;

                  (c) if that capacity is terminated by reason of the Holder's
         resignation or retirement from the position as a member of the Board of
         Directors (including as a result of declining to accept a nomination or
         otherwise stand for reelection) on or after the date of the fifth
         annual meeting of stockholders of the Corporation held after the date
         on which such Holder was elected or appointed to the Board of Directors
         (other than as a result of Disability), any and all Awards held by the
         Holder that are exercisable as of the date of such resignation or
         retirement shall be exercisable for the lesser of (i) the remainder of
         the term of the Award or (ii) three years after the date of ceasing to
         serve as a director; or

                  (d) if that capacity is terminated by the Corporation for
         "cause" (hereafter defined), then any and all Awards held by the Holder
         that were granted because of that capacity shall become null and void
         as of the date of such termination. "Cause" shall have the meaning
         given such term in the contractual agreement of the Holder (if any)
         with the Corporation or a Subsidiary of the Corporation; provided,
         however, that if that Holder has no contractual agreement, "cause"
         shall mean, as determined by the Board of Directors in the sole
         discretion exercised in good faith of the Board of Directors, (i) the
         breach by the Holder of any other agreement to which the Holder and the
         Corporation are parties, (ii) the commission by the Holder of a felony
         or of a misdemeanor involving moral turpitude, (iii) the participation
         by the Holder in any fraud, (iv) dishonesty by the Holder that is
         detrimental to the best interest of the Corporation, (v) the willful
         and 



                                     - 19 -
<PAGE>   20

         continued failure by the Holder to substantially perform his duties to
         the Corporation (other than any such failure resulting from the
         Holder's incapacity due to physical or mental illness) after written
         demand for substantial performance is delivered by the Corporation
         specifically identifying the manner in which the Corporation believes
         the Holder has not substantially performed his duties, or (vi) the
         willful engaging by the Holder in misconduct which is materially
         injurious to the Corporation, monetarily or otherwise.

         Any portion of an Award not exercised upon the expiration of the lesser
of the periods specified in clauses (a), (b) or (c) of this Subsection 10.2
shall be null and void upon the expiration of such period, as applicable.

         10.3 Death or Disability. Upon the death or Disability of a Holder, any
and all Awards held by the Holder that are not yet exercisable (or for which
restrictions have not lapsed) 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 10.1 or Subsection 10.2, as
applicable. "Disability" shall have the meaning given it in the employment
agreement of the Holder; provided, however, that if that the Holder has no
employment agreement, "Disability" shall mean, 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 either
the Holder is unable to continue performing the duties he performed before such
impairment or the Holder's condition entitles him to disability benefits under
any insurance or employee benefit plan of the Corporation or its Subsidiaries
and that impairment or condition is cited by the Corporation as the reason for
termination of the Holder's employment or participation as a member of the Board
of Directors.

         10.4 Leave of Absence. With respect to an Award, the Committee may, in
its sole discretion, determine that any Holder who is on leave of absence for
any reason will be considered to still be in the employ of the Corporation,
provided that rights to that Award during a leave of absence will be limited to
the extent to which those rights were earned, vested, or exercisable when the
leave of absence began.

         10.5 Transferability of Awards.

                  (a) Permitted Transferees. The Committee may, in its
         discretion, permit a Holder to transfer all or any portion of an Option
         or Stock Appreciation Right, or authorize all or a portion of any
         Option or Stock Appreciation Right to be granted to an Eligible
         Individual 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
         Awards transferred as provided above shall be prohibited except
         subsequent transfers back to the original Holder of the Award and
         transfers to other Permitted Transferees of the original Holder. Award
         Agreements evidencing Options or Stock Appreciation Rights 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 10.5(a).

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

                  (c) Other Transfers. Except as expressly permitted by
         subsections 10.5(a) and 10.5(b), Awards 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 Award as
         contemplated by Subsections 10.5(a), 10.5(b) and 10.5(c), (i) such
         Award 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 



                                     - 20 -
<PAGE>   21

         to refer to the Permitted Transferee, the recipient under a qualified
         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 Award in accordance with the terms of this
         Plan and applicable law and (ii) the provisions of Subsections 10.1,
         10.2 and 10.3 hereof shall continue to be applied with respect to the
         original Holder and, following the occurrence of any such events
         described therein the Awards shall be exercisable by the Permitted
         Transferee, the recipient under a qualified 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 10.1, 10.2 and
         10.3.

                  (e) Procedures and Restrictions. Any Holder desiring to
         transfer an Award as permitted under Subsections 10.5(a) or 10.5(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, (ii) it may not be made in
         compliance with all applicable federal, state and foreign securities
         laws or (iii) with respect to any Award granted prior to October 21,
         1996 (the effective date of amendments to this Plan to convert this
         Plan to be in accordance with Rule 16b-3 as amended effective August
         15, 1996), such transfer would occur within six months after the date
         of grant of such Award.

                  (f) Registration. To the extent the issuance to any Permitted
         Transferee of any shares of Stock issuable pursuant to Awards
         transferred as permitted in this Subsection 10.5 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 Awards, the Corporation shall not have any
         obligation to register the issuance of any such shares of Stock to any
         such transferee.

                  (g) Option Status. To the extent a permitted transfer of an
         Incentive Option under this Section 10.5 would cause an Incentive
         Option (or any portion thereof) to fail to constitute an incentive
         stock option under Section 422 of the Code, such portion of the
         Incentive Option shall be deemed to be a Nonstatutory Option under this
         Plan.

         10.6 Forfeiture and Restrictions on Transfer. Each Award Agreement may
contain or otherwise provide for conditions giving rise to the forfeiture of the
Stock acquired pursuant to an Award or otherwise and may also provide for those
restrictions on the transferability of shares of the Stock acquired pursuant to
an Award or otherwise that the Committee in its sole and absolute discretion may
deem proper or advisable. The conditions giving rise to forfeiture may include,
but need not be limited to, the requirement that the Holder render substantial
services to the Corporation or its Subsidiaries for a specified period of time.
The restrictions on transferability may include, but need not be limited to,
options and rights of first refusal in favor of the Corporation and stockholders
of the Corporation other than the Holder of such shares of Stock who is a party
to the particular Award Agreement or a subsequent holder of the shares of Stock
who is bound by that Award Agreement.

         10.7 Delivery of Certificates of Stock. Subject to Subsection 10.8, the
Corporation shall promptly issue and deliver a certificate representing the
number of shares of Stock as to which (a) 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 requested, (b) a Stock
Appreciation Right has been exercised (to the extent the Committee determines to
pay such Stock Appreciation Right in shares of Stock pursuant to Subsection 6.5)
and upon receipt by the Corporation of any tax withholding as may be requested,
and (c) restrictions have lapsed with respect to a Restricted Stock Award and
upon receipt by the Corporation of any tax withholding as may be requested. The
value of the shares of Stock or cash transferable because of an Award under the
Plan shall not bear any interest owing to the passage of time, except as may be
otherwise provided in an Award Agreement. If a Holder is entitled to receive
certificates representing Stock received for more than one form of Award under
the Plan, separate Stock certificates shall be issued with respect to Incentive
Options and Nonstatutory Options.



                                     - 21 -
<PAGE>   22

         10.8 Conditions to Delivery of Stock. Nothing herein or in any Award
granted hereunder or any Award Agreement shall require the Corporation to issue
any shares with respect to any Award 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 or
Stock Appreciation Right, or at the time of any grant of a Restricted Stock
Award, the Corporation may, as a condition precedent to the exercise of such
Option or Stock Appreciation Right or vesting of any Restricted Stock Award,
require from the Holder of the Award (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 Award 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.

         10.9 Certain Directors and Officers. With respect to Holders who are
directors or officers of the Corporation or any of its Subsidiaries and who are
subject to Section 16(b) of the Exchange Act, Awards granted prior to the date
the stockholders of the Corporation shall have approved the Plan shall be
subject to such stockholder approval, may not be transferred or exercised, as
applicable, until such stockholder approval is obtained, and shall become null
and void on the first anniversary of the Effective Date if such stockholder
approval is not obtained on or before the Effective Date. In addition, no such
officer or director shall have shares of Stock withheld to pay tax withholding
obligations unless permitted under Rule 16b-3 and agreed to by the Committee.
Any election by any such officer or director to have tax withholding obligations
satisfied by the withholding of shares of Stock shall be irrevocable, shall be
communicated in writing to the Committee and shall be subject to prior approval
by Board of Directors, the Committee or the shareholders of the Corporation as
provided by Rule 16b-3. Any election by such an officer or director to receive
cash in full or partial settlement of a Stock Appreciation Right, as well as any
exercise by such individual of a Stock Appreciation Right for such cash, in
either case to the extent permitted under the applicable Award Agreement or
otherwise permitted by the Committee, shall be subject to prior approval by the
Board of Directors, the Committee or the shareholders of the Corporation as
provided by Rule 16b-3.

         10.10 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.

         10.11 Legend for Restrictions on Transfer. Each certificate
representing shares issued to a Holder pursuant to an Award granted under the
Plan shall, if such shares are subject to any transfer restriction, including a
right of first refusal, provided for under the Plan or an Award Agreement, bear
a legend that complies with applicable law with respect to the restrictions on
transferability contained in this Subsection 10.11, such as:

         THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
         RESTRICTIONS ON TRANSFERABILITY IMPOSED BY THAT CERTAIN INSTRUMENT
         ENTITLED "CHASE INDUSTRIES INC. 1994 LONG-TERM INCENTIVE PLAN" AS
         ADOPTED BY CHASE INDUSTRIES INC. (THE "CORPORATION"), AND DATED
         NOVEMBER 10, 1994, AND AN



                                     - 22 -
<PAGE>   23

         AGREEMENT THEREUNDER BETWEEN THE CORPORATION AND THE INITIAL HOLDER
         THEREOF DATED ___________, 199__, AND MAY NOT BE TRANSFERRED, SOLD, OR
         OTHERWISE DISPOSED OF EXCEPT AS THEREIN PROVIDED. THE CORPORATION WILL
         FURNISH A COPY OF SUCH INSTRUMENT AND AGREEMENT TO THE RECORD HOLDER OF
         THIS CERTIFICATE WITHOUT CHARGE ON REQUEST TO THE CORPORATION AT ITS
         PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE.

         10.12 Rights as a Stockholder. A Holder shall have no right as a
stockholder with respect to any shares covered by his Award until a certificate
representing those shares is issued in his 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 Section 9 hereof. Nevertheless,
dividends, dividend equivalent rights and voting rights may be extended to and
made part of any Award (other than Options or Stock Appreciation Rights)
denominated in Stock or units of Stock, subject to such terms, conditions and
restrictions as the Committee may establish. The Committee may also establish
rules and procedures for the crediting of interest on deferred cash payments and
dividend equivalents for deferred payment denominated in Stock or units of
Stock.

         10.13 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.

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

         10.15 Adjustments to Awards. Subject to the general limitations set
forth in Sections 5, 6, and 9, the Committee may make any adjustment in the
exercise price of, the number of shares subject to, or the terms of a
Nonstatutory Option or Stock Appreciation Right by canceling an outstanding
Nonstatutory Option or Stock Appreciation Right and regranting a Nonstatutory
Option or Stock Appreciation Right. Such adjustment shall be made by amending,
substituting, or regranting an outstanding Nonstatutory Option or Stock
Appreciation Right. Such amendment, substitution, or regrant may result in terms
and conditions that differ from the terms and conditions of the original
Nonstatutory Option or Stock Appreciation Right. The Committee may not, however,
impair the rights of any Holder of previously granted Nonstatutory Options or
Stock Appreciation Rights without that Holder's consent. If such action is
effected by amendment, such amendment shall be deemed effective as of the Date
of Grant of the amended Award.

         10.16 Remedies. The Corporation shall be entitled to recover from a
Holder reasonable attorneys' fees incurred in connection with the enforcement of
the terms and provisions of the Plan and any Award Agreement whether by an
action to enforce specific performance or for damages for its breach or
otherwise.

         10.17 Information Confidential. As partial consideration for the
granting of each Award hereunder, a Holder shall agree with the Corporation that
he will keep confidential all information and knowledge that he has relating to
the manner and amount of his participation in the Plan; provided, however, that
such information may be disclosed as required by law and may be given in
confidence to the Holder's spouse, tax or financial advisors, or to a financial
institution to the extent that such information is necessary to secure a loan.
In the event any breach of this promise comes to the attention of the Committee,
it shall take into consideration that breach in determining whether to recommend
the grant of any future Award to that Holder, as a factor mitigating against the
advisability of granting any such future Award to that Person.

         10.18 Consideration. No Option or Stock Appreciation Right shall be
exercisable and no restriction on any Restricted Stock Award shall lapse with
respect to a Holder unless and until the Holder thereof shall have paid cash or
property to, or performed services for, the Corporation or any of its
Subsidiaries that the Committee believes is equal to or greater in value than
the par value of the Stock subject to such Award.



                                     - 23 -
<PAGE>   24

SECTION 11. EFFECTIVENESS, DURATION AND AMENDMENT OF PLAN

         11.1 Effectiveness; Duration. Notwithstanding the provisions of the
Plan, Awards granted prior to the date the stockholders of the Corporation
approve the Plan shall be subject to such stockholder approval and may not be
transferred or exercised, as applicable, until such stockholder approval is
obtained. No Awards may be granted hereunder after the date that is ten years
after the Effective Date.

         11.2 Amendment. The Committee may, insofar as permitted by law and
subject to ratification of the Board of Directors, with respect to any shares
which, at the time, are not subject to Awards, suspend or discontinue the Plan
or revise or amend it in any respect whatsoever and may amend any provision of
the Plan or any Award Agreement to make the Plan or the Award Agreement, or
both, comply with Section 16(b) of the Exchange Act and the exemptions from
those sections in the regulations thereunder. The Committee may also, subject to
ratification of the Board of Directors, amend, modify, suspend, or terminate the
Plan for the purpose of meeting or addressing any changes in other legal
requirements applicable to the Corporation or the Plan or for any other purpose
permitted by law. The Plan may not be amended without the consent of the holders
of a majority of the shares of Stock then outstanding to (a) increase materially
the aggregate number of shares of Stock that may be issued under the Plan
(except for adjustments pursuant to Section 9 hereof), (b) increase materially
the benefits accruing to Eligible Individuals under the Plan, or (c) modify
materially the requirements about eligibility for participation in the Plan;
provided, however, that such amendments may be made without the consent of
stockholders of the Corporation to the extent applicable law and other legal
requirements (including Rule 16b-3 or Section 162(m)) permit such changes
without shareholder approval. Notwithstanding the provisions of this Subsection
11.2, the Committee specifically shall have the authority, subject to
ratification by the Board of Directors, to amend the Plan (without approval of
the holders of the shares of Stock then outstanding) to the extent required to
cause the Plan, as it relates to Options and Stock Appreciation Rights granted
to Eligible Individuals subject to Section 162(m), to comply with the
requirements for classification of Awards as "performance-based compensation"
under Section 162(m)(4)(C), except for such amendments that require such
stockholder approval under Section 162(m).

SECTION 12. GENERAL

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

         12.2 Right of the Corporation and Subsidiaries to Terminate Employment.
Nothing contained in the Plan, or in any Award Agreement, shall confer upon any
Holder the right 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 Holder's employment at any time.

         12.3 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 the
Plan or any Award 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' 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.

         12.4 Other Benefits. Participation in the Plan shall not preclude a
Holder from eligibility in any other stock or stock option plan of the
Corporation or any Subsidiary or any old age 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. Neither the adoption of the Plan by the Board of
Directors nor the submission of the Plan to the stockholders of the Corporation
for approval shall be construed as creating any 



                                     - 24 -
<PAGE>   25

limitations on the power of 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 the Plan and such arrangements may be either generally applicable or
applicable only in specific cases.

         12.5 Exclusion from Pension and Profit-Sharing Compensation. By
acceptance of an Award (regardless of form), as applicable, each Holder shall be
deemed to have agreed that the Award 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 Award shall be so considered for purposes of
determining the amount of any payment under any such plan. In addition, each
beneficiary of a deceased Holder shall be deemed to have agreed that the Award
will not affect the amount of any life insurance coverage, if any, provided by
the Corporation or a Subsidiary on the life of a Holder that is payable to the
beneficiary under any life insurance plan covering employees of the Corporation
or any Subsidiary.

         12.6 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.

         12.7 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 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.

         12.8 No Guarantee of Interests. Neither the Committee nor the
Corporation guarantees the Stock of the Corporation from loss or depreciation.

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

         12.10 Corporation Records. Records of the Corporation or its
Subsidiaries regarding a Holder's period of employment, termination of
employment and the reason therefor, leaves of absence, re-employment, and other
matters shall be conclusive for all purposes hereunder, unless determined by the
Committee to be incorrect.

         12.11 Information. The Corporation and its Subsidiaries 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 the Plan.

         12.12 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.

         12.13 Corporation Action. Any action required of the Corporation shall
be by resolution of its Board of Directors or by a person authorized to act by
resolution of the Board of Directors.



                                     - 25 -
<PAGE>   26

         12.14 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 the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included herein. If any of the terms or provisions of this Plan or
any Award Agreement conflict with the requirements of Rule 16b-3 (as those terms
or provisions are applied to Eligible Individuals who are subject to Section
16(b) of the Exchange Act) or Section 422 of the Code (with respect to Incentive
Options), then those conflicting terms or provisions shall be deemed inoperative
to the extent they so conflict with the requirements of Rule 16b-3 (unless the
Board of Directors or the Committee, as appropriate, has expressly determined
that the Plan or such Award should not comply with Rule 16b-3) or Section 422 of
the Code. With respect to Incentive Options, if this Plan does not contain any
provision required to be included herein under Section 422 of the Code, that
provision shall be deemed to be incorporated herein with the same force and
effect as if that provision had been set out at length herein; provided,
further, that, to the extent any Option that is intended to qualify as an
Incentive Option cannot so qualify, that Option (to that extent) shall be deemed
a Nonstatutory Option for all purposes of the Plan.

         12.15 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, 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.

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

         12.17 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.

         12.18 Governing Law. All questions arising with respect to the
provisions of the 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.

         12.19 Availability of Exempt Transactions. Notwithstanding the
provisions of the Plan, nothing contained in the 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 the Plan not to be in compliance with,
Rule 16b-3.

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


                                     - 26 -
<PAGE>   27

         IN WITNESS WHEREOF, Chase Industries Inc., acting by and through its
officer hereunto duly authorized, has executed this instrument, to be effective
as of May 14, 1997.

                              CHASE INDUSTRIES INC.


                              By: /s/ MICHAEL T SEGRAVES
                                  --------------------------------------------
                                  Michael T. Segraves,
                                  Vice President and Secretary



                                     - 27 -