Document:

EXHIBIT 10.3
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                                SUN BANCORP, INC.
                              AMENDED AND RESTATED
                             1997 STOCK OPTION PLAN

1.       Purpose of Plan.
         ---------------

         The  purpose  of the Sun  Bancorp,  Inc.  1997 Stock  Option  Plan (the
"Plan")  contained  herein is to  provide  additional  incentive  to  employees,
officers,  directors and advisory directors of Sun Bancorp, Inc. (the "Company")
and each present or future subsidiary corporation of the Company, by encouraging
them to invest in shares of the Company's  common stock  ("Common  Stock"),  and
thereby to acquire a  proprietary  interest  in the  business of the Company and
each present or future  subsidiary  corporation  of the Company and an increased
personal interest in their continued success and progress, to the mutual benefit
of the shareholders and recipient of stock option awards.

2.       Aggregate Number of Shares.
         --------------------------

         1,035,370  shares of Common  Stock (par value $1.00 per share) shall be
the   aggregate   number  of  shares  which  may  be  issued  under  this  Plan.
Notwithstanding  the  foregoing,  in the event of any change in the  outstanding
shares of Common Stock by reason of a stock dividend,  stock split,  combination
of  shares,  recapitalization,   merger,  consolidation,   transfer  of  assets,
reorganization,  conversion,  or other event that the Board of  Directors of the
Company or the Executive Compensation Committee (the "Committee"),  deems in its
sole discretion to be similar  circumstances,  the aggregate  number and kind of
shares which may be issued under this Plan shall be approximately  adjusted in a
manner determined in the sole discretion of the Committee.  Reacquired shares of
Common  Stock as well as  unissued  shares  may be used for the  purpose of this
Plan.   Shares  of  Common  Stock  subject  to  options  which  have  terminated
unexercised,  either in whole or in part,  shall be available for future options
granted under this Plan.

3.       Class of Individuals Eligible to Receive Options.
         ------------------------------------------------

         (a) All  officers  and  employees of the Company and of any present and
future  subsidiary  corporation of the Company are eligible to receive an option
or options under this Plan. The officers,  employees and advisory  directors who
shall, in fact,  receive an option or options shall be selected by the Committee
in its sole discretion, except as otherwise specified in Section 4 hereof.

         (b)  All  directors  of  the  Company  and of any  present  and  future
subsidiary  corporation  of the  Company  are  eligible  to receive an option or
options under this Plan in accordance with Section 16 hereof.

4.       Administration of Plan.
         ----------------------

         (a) This Plan shall be  administered  by the Board of  Directors of the
Company or the  Committee,  which will be appointed by the Board of Directors of
the Company.  The  Committee  shall consist of a minimum of two and a maximum of
seven members of the Company's  Board of  Directors.  All persons  designated as
members  of  the  Committee  shall  meet  the  requirements  of a  "Non-Employee
Director" within

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the meaning of Rule 16b-3 (17 CFR  ss.240.16b-3)  under the Securities  Exchange
Act of 1934, as amended  ("Exchange Act"). The Board of Directors of the Company
or the Committee  shall,  in addition to its other  authority and subject to the
provisions of this Plan,  have authority in its sole discretion to determine who
are the  officers,  employees  and  advisory  directors  of the Company and each
present and future  subsidiary  corporation  of the Company  eligible to receive
options under this Plan, which officers,  employees and advisory directors shall
in fact be  granted  an  option  or  options,  whether  the  option  shall be an
incentive  stock option or a  non-qualified  stock option,  the time or times at
which the options  shall be  granted,  the rate of option  exercisability,  and,
subject  to  Section  5  hereof,  the  price at  which  each of the  options  is
exercisable and the duration of the option.

         (b) The  Committee  shall  adopt  such  rules  for the  conduct  of its
business and administration of this Plan as it considers  desirable.  A majority
of the members of the Committee shall constitute a quorum for all purposes.  The
vote or written  consent  of a majority  of the  members of the  Committee  on a
particular matter shall constitute the act of the Committee on such matter.  The
Committee  shall have the  exclusive  right to construe the Plan and the options
issued  pursuant  to  it,  correct  defects,   supply  omissions  and  reconcile
inconsistencies  to the extent  necessary to effectuate the Plan and the options
issued  pursuant to it, and such action shall be final,  binding and  conclusive
upon all parties concerned. No member of the Committee or the Board of Directors
shall be liable for any act or  omission  (whether  or not  negligent)  taken or
omitted in good faith, or for the exercise of an authority or discretion granted
in connection with this Plan to the Committee or the Board of Directors,  or for
the acts or  omissions  of any other  members of the  Committee  or the Board of
Directors.  Subject to the numerical  limitations  on Committee  membership  set
forth in Section  4(a) hereof,  the Board of  Directors  may at any time appoint
additional members of the Committee and may at any time remove any member of the
Committee with or without cause. Vacancies in the Committee, however caused, may
be filled by the Board of Directors if it so desires.

5.       Incentive Stock Options and Nonqualified Stock Options.
         ------------------------------------------------------

         (a) Options issued pursuant to this Plan may be either  incentive stock
options granted  pursuant to Section 5(b) hereof or  nonqualified  stock options
granted  pursuant to Section 5(c) hereof,  as  determined by the  Committee.  An
"incentive stock option" is an option which satisfies all of the requirements of
Section 422 of the Internal  Revenue Code of 1986, as amended (the "Code"),  and
the regulations  thereunder,  and a nonqualified stock option is an option which
does not satisfy the  requirements  of Code Section 422. The Committee may grant
both an  incentive  stock  option and a  nonqualified  stock  option to the same
person,  or more than one of each type of option to the same person.  The option
price for both  incentive  stock options and  nonqualified  stock options issued
under this Plan shall equal at least the fair market  value of the Common  Stock
as of the  date of the  grant  of the  option,  such  fair  market  value  being
determined  by the  Committee  in  accordance  with  its  interpretation  of the
requirements of Section 422 of the Code and the regulations thereunder.

         (b) Incentive  stock options shall expire not later than ten years from
the date of grant by action of the Committee,  unless  terminated  earlier under
the  option  terms;  provided  that in the case of an  Employee  who owns  stock
representing  more than ten percent (10%) of the Common Stock outstanding at the
time the Incentive Stock Option is granted,  the term of  exercisability  of the
Incentive  Stock Option shall not exceed five (5) years.  Notwithstanding  other
provisions hereof, the aggregate fair market value (determined as of the time an
incentive  stock  option is granted) of the stock for which any  employee may be
granted  incentive stock options in any calendar year (under all incentive stock
option  plans,  as  defined in Section  422 of the Code,  of the  Company or any
present or future parent or subsidiary of the Company)

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shall not exceed  $100,000.  In the case of an Employee  who owns  Common  Stock
representing more than ten percent (10%) of the outstanding  Common Stock at the
time the Incentive Stock Option is granted,  the Incentive Stock Option exercise
price  shall not be less than one  hundred  and ten  percent  (110%) of the Fair
Market Value of the Common Stock on the date that the Incentive  Stock Option is
granted.  No Incentive  Stock Option may be exercised  unless the Optionee shall
have been in the employ of the Company at all times during the period  beginning
with the date of grant of any such Incentive Stock Option and ending on the date
three (3)  months  prior to the date of  exercise  of any such  Incentive  Stock
Option.  At the time of  granting  an  incentive  stock  option  hereunder,  the
Committee shall  determine in its  discretion,  the terms and conditions of such
option for any person who receives an option pursuant to the Plan  ("Optionee"),
provided that the option continues to be an incentive stock option. In the event
that any Optionee's  employment with the Company shall terminate for any reason,
other than  disability  or death,  all of any such  Optionee's  Incentive  Stock
Options,  and all of any such Optionee's rights to purchase or receive Shares of
Common Stock pursuant thereto, shall automatically  terminate on (A) the earlier
of (i) or (ii): (i) the respective  expiration dates of any such Incentive Stock
Options, or (ii) the expiration of not more than three (3) months after the date
of such termination of employment; or (B) at such later date as is determined by
the  Committee  at the  time of the  grant  of  such  Option  or at the  time of
termination of  employment,  if the individual was entitled to exercise any such
Incentive  Stock  Options at the date of such  termination  of  employment,  and
further that such Option shall thereafter be deemed a Nonqualified Stock Option.
In the event that a  Subsidiary  ceases to be a Subsidiary  of the Company,  the
employment of all of its employees who are not immediately  thereafter employees
of the Company  shall be deemed to terminate  upon the date such  Subsidiary  so
ceases to be a Subsidiary of the Company.  Each of the options granted  pursuant
to this Section 5(b) is intended, if possible, to be an "incentive stock option"
as that  term  is  defined  in  Section  422 of the  Code  and  the  regulations
thereunder.  In the  event  this Plan or any  option  granted  pursuant  to this
Section 5(b) is any way inconsistent  with the applicable legal  requirements of
the Code or the regulations  thereunder for an incentive stock option, this Plan
and such option shall be deemed  automatically  amended as of the date hereof to
conform  to such legal  requirements,  if such  conformity  may be  achieved  by
amendment.

         (c)  Nonqualified  stock  options  shall  expire ten years and ten days
after the date they are  granted,  unless  terminated  earlier  under the option
terms.  At the time of  granting a  nonqualified  stock  option  hereunder,  the
Committee  shall  determine in its  discretion,  the terms and conditions of any
such options,  provided that the option exercise price is not less than the fair
market value of the Common Stock as of the date of such grant.

         (d)  Neither  the  Company  nor any  present  or future  affiliated  or
subsidiary   corporation  of  the  Company,   nor  their  officers,   directors,
shareholders,  stock option plan committees,  employees or agents shall have any
liability  to any  Optionee in the event an option  granted  pursuant to Section
5(b) hereof does not qualify as an "incentive stock option" as that term is used
in Section 422 of the Code and the regulations  thereunder,  or in the event any
Optionee does not obtain the tax benefits of such an incentive stock option,  or
in the event any option granted pursuant to Section 5(c) hereof is an "incentive
stock option."

6.       Six Month Holding Period.
         ------------------------

         With  respect to options  awarded to  officers  and  employees  who are
subject to the reporting  requirements  under Section 16(a) of the Exchange Act,
subject to vesting requirements, if applicable, except in the event of the death
or disability of the Optionee or a Change in Control of the Company, a

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minimum of six months must elapse between the date of the grant of an option and
the date of the sale of the Common Stock  received  through the exercise of such
option.

7.       Cashless Exercise.
         -----------------

         Subject to vesting  requirements,  if  applicable,  an Optionee who has
held an option for at least six months may engage in the "cashless  exercise" of
the option.  Upon a cashless  exercise,  an Optionee  gives the Company  written
notice of the  exercise  of the option  together  with an order to a  registered
broker-dealer or equivalent third party, to sell part or all of the Common Stock
under  option  ("Optioned  Stock") and to deliver  enough of the proceeds to the
Company to pay the option exercise price and any applicable  withholding  taxes.
If  the  Optionee  does  not  sell  the  Optioned  Stock  through  a  registered
broker-dealer  or  equivalent  third  party,  the  Optionee can give the Company
written  notice of the  exercise of the option and the third party  purchaser of
the  Optioned  Stock  shall pay the option  exercise  price plus any  applicable
withholding taxes to the Company.

8.       Transferability.
         ---------------

         An  incentive  stock  option  granted  pursuant  to the  Plan  shall be
exercised  during an  Optionee's  lifetime  only by the  Optionee to whom it was
granted and shall not be assignable or transferable otherwise than by will or by
the laws of descent  and  distribution.  A  nonqualified  stock  option  granted
pursuant to the Plan may, with the prior written  consent of the  Committee,  be
assignable  or  transferable  during the  Optionee's  lifetime.  In  determining
whether  consent shall be given to an Optionee with regard to the  assignment or
transfer of a nonqualified  stock option,  it shall be at the sole discretion of
the Committee.

9.       Modification, Amendment, Suspension and Termination.
         ---------------------------------------------------

         Options shall not be granted pursuant to this Plan after the expiration
of ten  years  from  and  after  the  date of the  adoption  of the  Plan by the
Company's Board of Directors.  The Board of Directors  reserves the right at any
time,  and from time to time,  to modify  or amend  this Plan in any way,  or to
suspend or terminate  it,  effective  as of such date,  which date may be either
before or after the taking of such  action,  as may be specified by the Board of
Directors;  provided, however, that such action shall not affect options granted
under the Plan prior to the  actual  date on which such  action  occurred.  If a
modification  or  amendment  of  this  Plan  is  required  by  the  Code  or the
regulations  thereunder  to be  approved by the  shareholders  of the Company in
order to permit the  granting  of  "incentive  stock  options"  (as that term is
defined in Section 422 of the Code and regulations  thereunder)  pursuant to the
modified or amended Plan, such  modification or amendment shall also be approved
by the  shareholders  of the Company in such manner as is prescribed by the Code
and the regulations thereunder.  If the Board of Directors voluntarily submits a
proposed  modification,  amendment,  suspension or termination  for  shareholder
approval, such submission shall not require any future modifications, amendments
(whether or not relating to the same provision or subject  matter),  suspensions
or terminations to be similarly submitted for shareholder approval.

         Notwithstanding  any other  provision  contained  in this Plan,  in the
event of a change in any federal or state law,  rule or  regulation  which would
make the exercise of all or part of any previously  granted  option  unlawful or
subject the Company to any penalty, the Committee may restrict any such exercise
without the consent of the Optionee or other  holder  thereof in order to comply
with any such law, rule or regulation or to avoid any such penalty.

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10.      Recapitalization, Merger, Consolidation, Change in Control and Other
         -----------------------------------------------------------------------
         Transactions.
         -------------

         (a) Subject to any required action by the  shareholders of the Company,
within the sole discretion of the Committee,  the aggregate  number of shares of
Common Stock for which options may be granted hereunder, the number of shares of
Common Stock  covered by each  outstanding  option,  and the exercise  price per
share of Common Stock of each option, shall all be proportionately  adjusted for
any  increase  or  decrease  in the number of issued and  outstanding  shares of
Common Stock resulting from a subdivision or consolidation of shares (whether by
reason of merger, consolidation,  recapitalization,  reclassification, split-up,
combination  of shares,  or otherwise) or the payment of a stock dividend or any
other increase or decrease in the number of such shares of Common Stock effected
without  the  receipt or payment of  consideration  by the  Company  (other than
Common Stock held by dissenting shareholders).

         (b) All outstanding options previously granted shall become immediately
exercisable in the event of a Change in Control of the Company, as determined by
the  Committee.  "Change  in  Control"  shall  mean:  (i) the sale of all,  or a
material   portion,   of  the  assets  of  the  Company;   (ii)  the  merger  or
recapitalization of the Company whereby the Company is not the surviving entity;
or (iii) the acquisition,  directly or indirectly,  of the beneficial  ownership
(within the meaning of that term as it is used in Section  13(d) of the Exchange
Act and the rules and regulations promulgated thereunder) of twenty-five percent
(25%) or more of the outstanding voting securities of the Company by any person,
trust,  entity or group.  This  limitation  shall not apply to the  purchase  of
shares by  underwriters in connection with a public offering of Common Stock, or
the purchase of shares of up to 25% of any class of securities of the Company by
a  tax-qualified  employee  stock benefit plan which is exempt from the approval
requirements, as now in effect or as may hereafter be amended. The term "person"
refers to an individual or a corporation, partnership, trust, association, joint
venture, pool, syndicate,  sole proprietorship,  unincorporated  organization or
any other form of entity not  specifically  listed  herein.  The decision of the
Committee as to whether a Change in Control has occurred shall be conclusive and
binding.

         In the event of such a Change in Control,  the  Committee and the Board
of Directors of the Company will take one or more of the following actions to be
effective as of the date of such Change in Control:

                  (i) provide that such options shall be assumed,  or equivalent
options  shall  be  substituted,  ("Substitute  Options")  by the  acquiring  or
succeeding  corporation (or an affiliate  thereof),  provided that: (A) any such
Substitute  Options  exchanged  for  incentive  stock  options  shall  meet  the
requirements of Section 424(a) of the Code, and (B) the shares of stock issuable
upon  the  exercise  of such  Substitute  Options  shall  constitute  securities
registered in accordance  with the  Securities  Act of 1933, as amended,  ("1933
Act") or such  securities  shall be exempt from such  registration in accordance
with  Sections  3(a)(2) or 3(a)(5) of the 1933 Act,  (collectively,  "Registered
Securities"),  or in  the  alternative,  if the  securities  issuable  upon  the
exercise of such Substitute Options shall not constitute Registered  Securities,
then the  Optionee  will  receive  upon  consummation  of the  Change in Control
transaction a cash payment for each option  surrendered  equal to the difference
between (1) the fair market value of the  consideration  to be received for each
share of Common Stock in the Change in Control  transaction  times the number of
shares  of  Common  Stock  subject  to  such  surrendered  options,  and (2) the
aggregate exercise price of all such surrendered options, or

                  (ii) in the  event of a  transaction  under the terms of which
the holders of the Common Stock will receive  upon  consummation  thereof a cash
payment (the "Merger Price") for each share of Common

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Stock exchanged in the Change in Control transaction,  to make or to provide for
a cash payment to the Optionees  equal to the difference  between (A) the Merger
Price times the number of shares of Common Stock subject to such options held by
each  Optionee  (to the extent then  exercisable  at prices not in excess of the
Merger  Price)  and (B) the  aggregate  exercise  price of all such  surrendered
options in exchange for such surrendered options.

         (c) Notwithstanding any provisions of the Plan to the contrary, subject
to any required action by the  shareholders of the Company,  in the event of any
Change in Control, recapitalization,  merger, consolidation, exchange of Shares,
spin-off, reorganization, tender offer, partial or complete liquidation or other
extraordinary  corporate action or event, the Committee, in its sole discretion,
shall have the power, prior or subsequent to such action or event to:

                   (i) appropriately adjust the number of shares of Common Stock
subject to each option, the option exercise price per share of Common Stock, and
the  consideration  to be given or received by the Company  upon the exercise of
any outstanding option;

                  (ii)    cancel any or all previously granted options, provided
that appropriate  consideration is paid to the Optionee in connection therewith;
and/or

                  (iii) make such other  adjustments in connection with the Plan
as  the  Committee,  in  its  sole  discretion,   deems  necessary,   desirable,
appropriate or advisable;  provided,  however,  that no action shall be taken by
the Committee which would cause incentive stock options granted  pursuant to the
Plan to fail to meet the  requirements  of Section  422 of the Code  without the
consent of the Optionee.

         Except as expressly provided in Sections 10(a), 10(b) and 10(e) hereof,
no  Optionee  shall  have any rights by reason of the  occurrence  of any of the
events described in this Section 10.

         (d) The Committee  shall at all times have the power to accelerate  the
exercise date of options previously granted under the Plan.

         (e) Upon the payment of a special or  non-recurring  cash dividend that
has the effect of a return of capital to the  shareholders,  the option exercise
price per share shall be adjusted proportionately.

11.    Conditions Upon Issuance of Common Stock; Limitations on Option Exercise;
       -------------------------------------------------------------------------
       Cancellation of Option Rights.
       ------------------------------

         (a) Common Stock shall not be issued with respect to any option granted
under the Plan unless the issuance and delivery of such shares shall comply with
all relevant  provisions of applicable law, including,  without limitation,  the
1933 Act, the rules and regulations promulgated thereunder, any applicable state
securities laws and the requirements of any stock exchange upon which the Common
Stock may then be listed.

         (b)  The   inability   of  the   Company   to  obtain   any   necessary
authorizations,  approvals or letters of non-objection  from any regulatory body
or authority deemed by the Company's legal counsel to be necessary to the lawful
issuance  and sale of any Common  Stock  issuable  hereunder  shall  relieve the
Company  of any  liability  with  respect  to the  non-issuance  or sale of such
shares.

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         (c) As a  condition  to the  exercise  of an option,  the  Company  may
require  the  Optionee to make such  representations  and  warranties  as may be
necessary  to assure the  availability  of an  exemption  from the  registration
requirements of federal or state securities law.

         (d)  Notwithstanding   anything  herein  to  the  contrary,   upon  the
termination  of  employment  or service  of an  Optionee  by the  Company or its
subsidiaries  for  "cause"  (as  determined  by the Board of  Directors  in good
faith),  all options held by such Optionee  shall cease to be  exercisable as of
the date of such termination of employment or service.

         (e) Upon the  exercise of an option by an Optionee  (or the  Optionee's
personal  representative),  the Committee,  in its sole and absolute discretion,
may make a cash  payment to the  Optionee,  in whole or in part,  in lieu of the
delivery  of shares of Common  Stock.  Such cash  payment  to be paid in lieu of
delivery  of Common  Stock  shall be equal to the  difference  between  the fair
market value of the Common Stock on the date of exercise and the exercise  price
per  share  of the  option.  Such  cash  payment  shall be in  exchange  for the
cancellation  of such option.  Such cash payment  shall not be made in the event
that such  transaction  would result in liability to the Optionee or the Company
under Section 16(b) of the Exchange Act, and regulations promulgated thereunder.

12.      Withholding Tax.
         ---------------

         The Company  shall have the right to deduct  from all  amounts  paid in
cash with respect to the cashless  exercise of options  under the Plan any taxes
required  by law to be withheld  with  respect to such cash  payments.  Where an
Optionee or other person is entitled to receive  shares of Common Stock pursuant
to the  exercise of an option,  the Company  shall have the right to require the
Optionee  or such other  person to pay the Company the amount of any taxes which
the Company is required to withhold  with respect to such Common  Stock,  or, in
lieu  thereof,  to retain,  or to sell without  notice,  a number of such shares
sufficient to cover the amount required to be withheld.

13.      Effectiveness of Plan; Shareholder Ratification.
         -----------------------------------------------

         This  Plan  shall  become   effective  on  the  date  of  its  adoption
("Effective  Date") by the Company's  Board of Directors  subject,  however,  to
ratification by the  shareholders of the Company in such manner as is prescribed
by the Code and the  regulations  thereunder.  Options may be granted under this
Plan prior to obtaining  such  shareholder  ratification,  provided such options
shall not be exercisable until such shareholder ratification, is obtained.

14.      General Conditions.
         ------------------

         (a) Nothing  contained in this Plan or any option  granted  pursuant to
this Plan shall  confer upon any employee the right to continue in the employ of
the Company or any present or future  affiliated and  subsidiary  corporation of
the  Company,  or  interfere  in any way with the rights of the  Company and any
affiliated or subsidiary  corporation of the Company to terminate his employment
in any way.

         (b)  Corporate  action  constituting  an offer of stock for sale to any
employee under the terms of the options to be granted  hereunder shall be deemed
completed as of the date when the Committee  authorizes  the grant of the option
to the  employee,  regardless  of when the option is actually  delivered  to the
employee or acknowledged or agreed to by him.

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         (c) The term "subsidiary corporation" as used throughout this Plan, and
the options granted pursuant to this Plan,  shall (except as otherwise  provided
in the  option  form)  have  the  meaning  that  is  ascribed  to  that  term by
subsections  424(f) and (g) of the Code,  and the Company  shall be deemed to be
the grantor corporation for purposes of applying such meaning.

         (d)  References  in this Plan to the Code shall be deemed to also refer
to the  corresponding  provisions  of any  amendments  thereto and to any future
United States revenue law.

         (e)  The use of the masculine pronoun shall include the feminine gender
whenever appropriate.

         (f) Notwithstanding  anything herein to the contrary, in no event shall
shares of Common Stock subject to Options granted to any individual  exceed more
than 80% of the total number of shares of Common Stock  authorized  for delivery
under the Plan.

15.      Award of Options to Directors.
         -----------------------------

         Nonqualified  Stock  Options to purchase  15,000 shares of Common Stock
will be granted to each  Director  who is not an  employee of the Company or any
subsidiary  as of the  Effective  Date,  at an exercise  price equal to the fair
market  value of the Common  Stock on such date of grant.  Such  options will be
first exercisable as of such date of grant,  subject to ratification of the Plan
by  the  shareholders  of  the  Company.  Such  Options  shall  continue  to  be
exercisable  for a period of ten years and ten days  following the date of grant
without regard to the continued  services of such Director.  In the event of the
Optionee's death,  such Options may be exercised by the personal  representative
of his estate or person or persons to whom his rights  under such  Option  shall
have passed by will or by the laws of descent and  distribution.  Options may be
granted to newly  appointed or elected  non-employee  Directors  within the sole
discretion  of the  Committee.  The  exercise  price per  Share of such  Options
granted  shall be equal to the fair market value of the Common Stock at the time
such Options are granted.  Unless otherwise  inapplicable,  or inconsistent with
the  provisions  of this  paragraph,  the  Options to be  granted  to  Directors
hereunder shall be subject to all other provisions of this Plan.

16.      Reload Options.
         --------------

         The Committee  shall have the authority to specify at the time of Grant
of an Option that an Optionee  shall be granted the right to a further Option (a
"Reload Option") in the event such optionee exercises all or a part of an Option
(an "Original Option"),  by surrendering already owned shares of Common Stock in
full or partial  payment of the Option Price under such  Original  Option.  Each
such Reload  Option  shall be granted on the date of  exercise  of the  Original
Option,  shall cover a number of shares of Common Stock not  exceeding the whole
number of shares of Common  Stock  surrendered  in payment  of the Option  Price
under such Original  Option,  and any shares of Common Stock used to satisfy any
taxes  incident to the  exercise of the  Original  Option,  shall have an Option
Price equal to the Fair Market Value of the Common Stock on the date of Grant of
such Reload Option,  shall expire on the stated  expiration date of the Original
Option and shall be subject to such other terms and  conditions as the Committee
may determine.

                                        8Exhibit 10.23

                                 PROMISSORY NOTE

US$38 million

July 2, 1999

                  PDVSA Finance Ltd. ("PDVSA Finance"), for value received,
hereby unconditionally promises to pay to the order of PDV America, Inc., or to
its assigns (the "Lender"), in lawful money of the United States of America, the
principal amount of Thirty Eight Million Dollars (US$38 million) (the "Loan") in
installments as described below. PDVSA Finance further promises to pay interest
on the unpaid principal amount of the Loan at the interest rate and on the dates
described below.

1.   General

                  1.1. General. PDVSA Finance covenants and agrees that, so long
as any amount payable under the Loan remains unpaid it shall observe and perform
each of the covenants and obligations set forth in Article 4 and Article 7 of
the Fiscal and Paying Agency Agreement, (the "Fiscal Agency Agreement"), dated
May 14, 1998, among PDVSA Finance and The Chase Manhattan Bank, as Fiscal Agent,
and Chase Manhattan Bank Luxembourg S.A., as Paying Agent, which Articles are
incorporated by reference in this promissory note as if fully set forth herein,
in accordance with their terms. Capitalized terms used in this promissory note
have the meanings specified in the Fiscal Agency Agreement unless otherwise
defined herein. This promissory note constitutes a Debt Agreement as defined in
the Fiscal Agency Agreement.

2.  Definitions

                  2.1. Definitions. For purposes of this Note, the following
terms shall have the meanings indicated:

                  "Business Day" means a day that in the city in which Loan
amounts are payable, is not a day on which banking institutions are authorized
or required by law or regulation to close.

                  "Dollars" or "$" means the lawful currency of the United
States of America.

                  "Loan" means the loan to PDVSA Finance evidenced hereby.

                  "Make-Whole Premium" means a premium determined as of the
Business Day prior to the prepayment date for a prepayment being made pursuant
to Section 3.2 of this promissory note, in respect of the outstanding Loan
amount (or the portion thereof) to be prepaid, equal to the amount (but not less
than zero) obtained by subtracting (a) the sum of the unpaid principal amount of
such Loan (or the portion thereof) being prepaid and the amount of interest
thereon accrued to such prepayment date, from (b) the Current Value of the
amount of principal and interest on such Loan (or the portion thereof) being
prepaid that would otherwise have become due on and after the date of such
determination if the Note were not being prepaid (each such amount of principal
or interest being referred to herein as an "Amount Payable"). The "Current
Value" means such Amount Payable discounted (on a monthly basis) to its present
value on the date of determination, in accordance with the following formula:

<PAGE>

                                         Amount Payable
                         Current Value = --------------
                                          (1 + d/12)n

where "d" is the sum of (i) 50 basis points, plus (ii) the Treasury Yield per
annum expressed as a decimal, and "n" is an exponent (which need not be an
integer) equal to the number of monthly periods and portions thereof (any such
portion of a period to be determined by dividing the number of days in such
portion of such period by the total number of days in such period, both computed
on the basis of twelve 30-day months in a 360-day year) between the date of such
determination and the due date of the Amount Payable. The "Treasury Yield" shall
be determined by reference to the yields for U.S. Treasury Notes as indicated
(currently on page "500" thereof) on the Telerate Screen for actively traded
U.S. Treasury Notes at approximately 10:00 a.m. (New York City time) on the
Business Day next preceding such prepayment date or, if such yields shall not be
reported as of such time or the yields reported as of such time shall not be
ascertainable, by reference to the most recent Federal Reserve Statistical
Release H.15 (519) which has become publicly available at least two Business
Days prior to such prepayment date, and shall be the most recent weekly average
yield on actively traded U.S. Treasury Notes adjusted to a constant maturity
equal to the then remaining weighted average life of the outstanding principal
amount of the Note (the "Remaining Life"), computed by dividing (A) the sum of
all remaining principal payments into (B) the total of the products obtained by
multiplying (1) the amount of each remaining principal payment by (2) the number
of years (calculated to the nearest one-twelfth) which will elapse between the
date as of which such computation is made and the due date of each remaining
principal payment. If the Remaining Life is not equal to the constant maturity
of a U.S. Treasury Note for which a weekly average yield is given, the Treasury
Yield shall be obtained by linear interpolation (calculated to the nearest
one-twelfth of a year) from the weekly average yields of (x) the actively traded
U.S. Treasury Note with the average life closest to and greater than the
Remaining Life and (y) the actively traded U.S. Treasury Note with the average
life closest to and less than the Remaining Life, except that if the Remaining
Life is less than one year, the weekly average yield on actively traded U.S.
Treasury Notes adjusted to a constant maturity of one year shall be used. The
Treasury Yield shall be computed to the fifth decimal place (one-thousandth of a
percentage point) and then rounded to the fourth decimal place (one-hundredth of
a percentage point).

                  "Next Payment of Scheduled Debt Service" means on any date of
determination for any Debt Agreement, the amount of the first payment of
Scheduled Debt Service in respect of Indebtedness outstanding under such Debt
Agreement that is scheduled to be paid in cash after such date of determination.
For this purpose, amounts scheduled to be paid on the same date shall be treated
as a single payment whether such amounts shall be principal, interest or
otherwise.

                   "Note" means this promissory note of PDVSA Finance evidencing
the payment obligations of PDVSA Finance in respect of the Loan.

                   "Payment Date" means each February 15, May 15, August 15 and
November 15 of each year. If a Payment Date falls on any day which is not a
Business Day, such Payment Date will be postponed to the next day which is a
Business Day.

                  "Taxes" has the meaning assigned to that term in Section 6.1
below.

                                       2
<PAGE>

3.  Repayment

                  3.1. Repayment. (a) PDVSA Finance shall repay the outstanding
principal amount of the Loan commencing on August 15, 2012 in 8 equal quarterly
installments of principal as illustrated in Exhibit A.

                  (b) In the event of any prepayment pursuant to Section 3.2
hereof, the remaining unpaid installments of principal of the Loan will be
ratably reduced by an aggregate amount equal to the principal amount so being
repaid.

                  3.2. Optional Prepayment. PDVSA Finance may prepay the Loan,
at any time, in whole or in part, in an integral multiple of $1,000,000 at the
Prepayment Price as provided in this Section 3.2. The Prepayment Price shall be
an amount equal to 100% of the outstanding principal amount to be prepaid
together with accrued and unpaid interest thereon together with an amount equal
to the Make-Whole Premium, if any, calculated as of the Business Day prior to
the prepayment date. PDVSA Finance shall no later than the third Business Day
preceding the date it designates for any prepayment, give the Lender written
notice of the amount to be prepaid on such date. Any notice so given will be
irrevocable.

4.  Interest

                  4.1. Rate. Interest shall be payable in arrears quarterly on
each Payment Date commencing on August 15, 1999 as illustrated in Exhibit A.
Except as otherwise expressly provided in Section 4.2, interest shall accrue on
the outstanding principal amount of the Loan, at a rate per annum equal to
10.395 percent (10.395%).

                  4.2. Interest on Late Payments. If PDVSA Finance shall fail to
pay when due any installment of principal of or interest on the Note, it shall
pay the Lender on demand interest on the amount in default (after giving effect
to any applicable grace period) from the date such payment became due until
payment in full at the rate of 1% over the applicable per annum interest rate.

5. Payments; Computations

                  5.1. Making of Payments. Each payment by PDVSA Finance to the
Lender under this Note shall be made in Dollars pursuant to the terms of Section
3.02 of the Fiscal Agency Agreement or, if the Fiscal Agency Agreement shall no
longer be in effect, pursuant to such other instructions as the Lender may give
by prior written notice to PDVSA Finance.

                  5.2. Computations. Accrued interest on the Loan shall be
calculated on the basis of a 360-day year of twelve 30-day months and shall be
payable quarterly in arrears on each Payment Date.

6.  Taxes

                  6.1. Taxes. All payments by PDVSA Finance hereunder shall be
made free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings imposed by the
Cayman Islands or Venezuela or any political subdivision or taxing authority
therein (all such taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If any Taxes shall be
required by law to be deducted from or in respect of any amount payable
hereunder, (i) the amount payable by PDVSA Finance shall be increased as may be

                                       3
<PAGE>

necessary so that after making all required deductions the Lender shall receive
an amount equal to the sum it would have received had no such deductions been
made, (ii) PDVSA Finance shall make such deductions and (iii) PDVSA Finance
shall pay the full amount deducted to the relevant taxing authority in
accordance with applicable law. Within 30 days after the date of any payment of
Taxes by PDVSA Finance in respect of any payment hereunder, PDVSA Finance will
furnish to the Lender the original or a certified copy of a receipt evidencing
payment thereof.

7.  Events of Default

                  7.1. Events of Default. If one or more of the following events
of default (each an "Event of Default") shall occur and be continuing, the
Lender shall be entitled to the remedies set forth in Sections 7.2 and
7.3 hereof.

                  (a) Default in the payment of all or any part of the principal
on the Loan and when the same shall become due and payable either at maturity,
upon any prepayment, or otherwise; or

                  (b) Default in the payment of any installments of interest
upon or other amount in respect of the Loan (other than principal) as and when
the same shall become due and payable, and continuance of such default for a
period of 5 days; or

                  (c) The occurrence of any "Event of Default" set forth in the
Fiscal Agency Agreement; or

                  (d) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of PDVSA Finance, PDVSA-P&G or PDVSA in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, sequestrator (or similar official) of PDVSA Finance, PDVSA-P&G or
PDVSA, as appropriate, or for all or any substantial part of its Property or
ordering the winding up or liquidation of its affairs or its dissolution or
reorganization, and in each case such decree or order shall remain unstayed and
in effect for a period of 60 consecutive days; or (ii) PDVSA Finance, PDVSA-P&G
or PDVSA shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consent to the
entry of an order for relief in an involuntary case under any such law, or
consent to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of PDVSA
Finance, PDVSA-P&G or PDVSA, as appropriate, or for all or any substantial part
of its Property, or make any general assignment for the benefit of creditors or
admits its inability to pay its debts as they come due; or

                  (e) Failure by PDVSA Finance to remedy a breach of any
covenant set forth herein in any material respect (other than those covenants
incorporated by reference in Section 1.1) within 60 days after PDVSA Finance
became aware or should have become aware of such breach; or

                  (f) It becomes unlawful for PDVSA Finance to perform any of
its obligations under the Fiscal Agency Agreement or the Note; or

                  (g) At any time, and for 7 consecutive Business Days, the
aggregate amount of cash and Permitted Investments held in, or credited to, the
Liquidity Facility (including Acceptable Letters of Credit held in lieu of cash
or Permitted Investments pursuant to Section 5.03 of the Fiscal Agency

                                       4
<PAGE>

Agreement) is less than an amount, determined at such time, equal to the sum of
Next Payments of Scheduled Debt Service for all Debt Agreements pursuant to
which Indebtedness is outstanding on such date; or

                  (h) PDVSA Finance (or any entity that has assumed its
obligations thereunder) revokes or terminates the Fiscal Agency Agreement or the
Note or the Fiscal Agency Agreement or the Note ceases to be in full force and
effect other than pursuant to its terms or is repudiated by PDVSA Finance.

                  7.2. Default Remedies. (a) If any Event of Default shall occur
and be continuing, the Lender may, by notice to PDVSA Finance, declare all
amounts payable hereunder by PDVSA Finance that would otherwise be due after the
date of such declaration to be immediately due and payable, whereupon all such
amounts shall become immediately due and payable, all without diligence,
presentment, demand or payment, protest or notice of any kind, which are
expressly waived by the PDVSA Finance, subject to paragraph (b) below.

                  (b) The Lender shall be deemed to agree that it shall only be
entitled to receive payment (in respect of the Loan), and shall not ask, demand,
sue for, take or receive from PDVSA Finance, by set-off or in any other manner,
or retain, payment (in whole or in part) of such amounts other than the Lender's
ratable share of amounts, if any, on deposit in the Retention Account
established and maintained with the Fiscal Agent; provided that such agreement
shall automatically cease to have any force and effect upon the occurrence and
during the continuance of any Event of Default of the type referred to in
Section 7.01(a), (c), (d), (g), (h), (i), (k)(ii), (l) or (m) of the Fiscal
Agency Agreement as specified therein. The foregoing shall not limit the right
of any person to enforce the Receivables Documents against any party thereto or
to exercise any right thereunder.

                  7.3. Rights Not Exclusive. The rights provided for herein are
cumulative and are not exclusive of any other rights, powers, privileges or
remedies provided by law.

8.  General

                  8.1. Choice of Law. This Note shall be governed by and
construed and interpreted in accordance with the law of the State of New York.

                  8.2. Jurisdiction. PDVSA Finance agrees that any legal suit,
action or proceeding relating to this Note may be brought in the federal courts
of the United States for the Southern District of New York (and the courts of
appeal thereto), and if they cannot or will not hear such an action, then in the
state courts of the County and State of New York (and the courts of appeal
thereto), waives any claim that such proceeding has been brought in an
inconvenient forum and irrevocably submits to and accepts the nonexclusive
jurisdiction of such courts in any such proceeding. PDVSA Finance agrees to
appoint CT Corporation System (the "Authorized Agent"), with an office on the
date hereof at 1633 Broadway, New York, New York 10019, United States, as its
agent to receive on behalf of PDVSA Finance and its property service of copies
of the summons and complaint and any other process which may be served in any
such action or proceeding. The Authorized Agent may be served in any such action
which may be instituted in any such court. PDVSA Finance agrees to take any and
all action, including the filing of any and all documents and instruments that
may be necessary to continue such appointment in full force and effect as
aforesaid. Service of process upon the Authorized Agent and written notice of
such service to PDVSA

                                       5
<PAGE>

Finance (mailed or delivered to PDVSA Finance at its address as set forth
herein) shall be deemed effective service of process upon PDVSA Finance.

                  8.3. Notices. All notices pursuant to this Note shall be given
in writing and sent by certified or registered mail, postage-prepaid or by
facsimile transmission. All such notices shall be sent to the telecopier number
or address (as the case may be) specified for the intended recipient on the
signature page hereof, or to such other number or address as such recipient may
have last specified by notice to the other party. All such notices shall be
effective upon receipt.

                  8.4. Assignment. This Note shall be binding upon and inure to
the benefit of the Lender and PDVSA Finance and their respective successors and
assigns; provided, however, that PDVSA Finance may not assign any of its rights
or delegate any of its obligations under this Note without the prior written
consent of the Lender.

                  (b) The Lender may at any time assign any of its rights (in
whole but not in part) under this Note and shall promptly give written notice
thereof to PDVSA Finance. PDVSA Finance shall, from time to time at the request
of the Lender, execute and deliver such documents as may be necessary to give
full force and effect to any such assignment.

                  8.5. Enforcement Expenses. PDVSA Finance shall reimburse the
Lender on demand for all reasonable expenses incurred as a consequence of, or in
connection with, any Event of Default or the preservation or enforcement of any
right of the Lender under this Note.

                  8.6. Waiver of Immunity. To the extent that PDVSA Finance
(including any of its revenues, assets or properties) has or hereafter may
acquire any immunity from jurisdiction of any court, from service or notice,
attachment prior to judgment, attachment in aid of execution of judgment, or any
other legal process for enforcement of judgment in any action or proceeding in
any manner arising out of the Fiscal Agency Agreement or the transactions
contemplated hereby, PDVSA Finance hereby irrevocably agrees not to plead or
claim, and irrevocably waives any such immunity, and any defense based on such
immunity, in respect of its obligations arising out of the Fiscal Agency
Agreement and the transactions contemplated hereby. Without limiting the
foregoing, PDVSA Finance hereby expressly and irrevocably waives (and agrees not
to plead or claim or raise as a defense) any sovereign immunity under the
Foreign Sovereign Immunities Act of 1976, as amended, 28 U.S.C. ss.ss. 1602-1611
from (i) any action or proceeding in any Federal or state court in the United
States arising out of the Fiscal Agency Agreement and the transactions
contemplated thereby and (ii) attachment prior to judgment, attachment in aid of
execution, or execution of a judgment arising out of the Fiscal Agency Agreement
and the transactions contemplated thereby against the revenues, assets or
properties of PDVSA Finance located in the United States.

                                       6

<PAGE>

                  IN WITNESS HEREOF, PDVSA Finance has caused this Instrument to
be duly executed.

                                     PDVSA FINANCE LTD.

                                     Address: Caledonian Bank & Trust Ltd.
                                              Caledonian House
                                              Mary Street, P.O. Box 1043
                                              George Town, Grand Cayman
                                              Cayman Islands
                                              Attn:
                                              Telecopier:

                                                By:    /s/ Mark P. Lewis
                                                   -------------------------
                                                    Name:
                                                    Title: Attorney-in-fact

                                       7
<PAGE>

                                                                       Exhibit A

                              Amortization Schedule
                            (in millions of US dollars)

   Payment              Principal            Interest          Balance after
    Date                 Payment             Payment         Principal Payment
    ----                 -------             -------         -----------------

  8/15/99                 $0.0             $0.48279000            $38.0
 11/15/99                  0.0              0.98752500             38.0
  2/15/00                  0.0              0.98752500             38.0
  5/15/00                  0.0              0.98752500             38.0
  8/15/00                  0.0              0.98752500             38.0
 11/15/00                  0.0              0.98752500             38.0
  2/15/01                  0.0              0.98752500             38.0
  5/15/01                  0.0              0.98752500             38.0
  8/15/01                  0.0              0.98752500             38.0
 11/15/01                  0.0              0.98752500             38.0
  2/15/02                  0.0              0.98752500             38.0
  5/15/02                  0.0              0.98752500             38.0
  8/15/02                  0.0              0.98752500             38.0
 11/15/02                  0.0              0.98752500             38.0
  2/15/03                  0.0              0.98752500             38.0
  5/15/03                  0.0              0.98752500             38.0
  8/15/03                  0.0              0.98752500             38.0
 11/15/03                  0.0              0.98752500             38.0
  2/15/04                  0.0              0.98752500             38.0
  5/15/04                  0.0              0.98752500             38.0
  8/15/04                  0.0              0.98752500             38.0
 11/15/04                  0.0              0.98752500             38.0
  2/15/05                  0.0              0.98752500             38.0
  5/15/05                  0.0              0.98752500             38.0
  8/15/05                  0.0              0.98752500             38.0
 11/15/05                  0.0              0.98752500             38.0
  2/15/06                  0.0              0.98752500             38.0
  5/15/06                  0.0              0.98752500             38.0
  8/15/06                  0.0              0.98752500             38.0
 11/15/06                  0.0              0.98752500             38.0
  2/15/07                  0.0              0.98752500             38.0
  5/15/07                  0.0              0.98752500             38.0
  8/15/07                  0.0              0.98752500             38.0
 11/15/07                  0.0              0.98752500             38.0
  2/15/08                  0.0              0.98752500             38.0
  5/15/08                  0.0              0.98752500             38.0
  8/15/08                  0.0              0.98752500             38.0
 11/15/08                  0.0              0.98752500             38.0
  2/15/09                  0.0              0.98752500             38.0
  5/15/09                  0.0              0.98752500             38.0
  8/15/09                  0.0              0.98752500             38.0
 11/15/09                  0.0              0.98752500             38.0
  2/15/10                  0.0              0.98752500             38.0
  5/15/10                  0.0              0.98752500             38.0

<PAGE>

   Payment              Principal            Interest          Balance after
    Date                 Payment             Payment         Principal Payment
    ----                 -------             -------         -----------------

  8/15/10                  0.0              0.98752500             38.0
 11/15/10                  0.0              0.98752500             38.0
  2/15/11                  0.0              0.98752500             38.0
  5/15/11                  0.0              0.98752500             38.0
  8/15/11                  0.0              0.98752500             38.0
 11/15/11                  0.0              0.98752500             38.0
  2/15/12                  0.0              0.98752500             38.0
  5/15/12                  0.0              0.98752500             38.0
  8/15/12                  4.75             0.98752500             33.25
 11/15/12                  4.75             0.86408438             28.50
  2/15/13                  4.75             0.74064375             23.75
  5/15/13                  4.75             0.61720313             19.00
  8/15/13                  4.75             0.49376250             14.25
 11/15/13                  4.75             0.37032188              9.50
  2/15/14                  4.75             0.24688125              4.75
  5/15/14                  4.75             0.12344063              0.0

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