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                                                                   EXHIBIT 10.15

                          GENERAL DYNAMICS CORPORATION

                            SUPPLEMENTAL SAVINGS AND
                              STOCK INVESTMENT PLAN

                          Effective 1 January 1983 and
                             restated for amendments
                             through 1 January 1998

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                          GENERAL DYNAMICS CORPORATION
                            SUPPLEMENTAL SAVINGS AND
                              STOCK INVESTMENT PLAN

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                      <C>
INTRODUCTION...............................................................................1

SECTION 1   Definitions....................................................................2

SECTION 2   Supplemental Benefits Due to Limitations
            Under Defined Contribution Plans...............................................4

SECTION 3   Special Supplemental Benefits..................................................7

SECTION 4   Miscellaneous Provisions.......................................................8

SECTION 5   Amendment and Termination of Plan.............................................10
</TABLE>

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                          GENERAL DYNAMICS CORPORATION
                            SUPPLEMENTAL SAVINGS AND
                              STOCK INVESTMENT PLAN

                                  INTRODUCTION

This Plan is established effective 1 January 1983, restated as of 1 January
1987, and restated again as of 1 January 1998 so as to strengthen the ability of
the Corporation and its Subsidiaries to attract and retain persons of
outstanding competence upon which, in large measure, continued growth and
profitability depend.

The Plan is intended to supplement benefits that may be provided under any plans
of the Corporation and its Subsidiaries, as they may be in effect from time to
time, that are qualified under Section 401 of the Internal Revenue Code of 1986,
as amended. The Corporation shall not be required to fund, in any way, any of
the benefits provided under this Plan prior to the time payments become due to
persons hereunder.

The Plan is intended to be an unfunded deferred compensation plan for a select
group of management or highly compensated employees and an unfunded excess
benefit plan within the meanings of Sections 3(36), 201(2), 201(7), and
301(a)(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and shall be construed and interpreted accordingly.

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                                    SECTION 1

                                   DEFINITIONS

Where the following words and phrases appear in the Plan, they shall have the
respective meanings set forth below, unless the context clearly indicates to the
contrary. Some of the words and phrases used in the Plan are not defined in this
Section 1, but, for convenience, are defined as they are introduced into the
text.

1.1     Plan shall mean the General Dynamics Corporation Supplemental Savings
        and Stock Investment Plan effective 1 January 1983, restated effective 1
        January 1987, and restated again effective 1 January 1998, as it shall
        be amended from time to time.

1.2     Corporation or Company shall mean General Dynamics Corporation, a
        Delaware corporation, and any successor thereof.

1.3     Subsidiary shall mean any corporation of which General Dynamics
        Corporation owns, directly or indirectly, fifty percent (50%) or more of
        the outstanding voting stock.

1.4     Employee shall mean any person who is regularly employed as a full-time,
        salaried or hourly employee by the Corporation or its Subsidiaries in
        any capacity including officers (and also including directors who
        regularly render services to the Corporation or its Subsidiaries as
        regular full-time employees), and who is not covered by a collective
        bargaining agreement.

1.5     Highly Compensated Employee shall mean an individual as described in
        Code Section 414(q) as amended.

1.6     Member shall mean an employee who satisfies the eligibility criteria
        described at Section 2.1.

1.7     Retirement Plan shall mean any plan, fund or program which was
        theretofore or is hereafter established or maintained by the Corporation
        and/or its Subsidiaries and which is qualified under Section 401 of the
        Code to the extent that by its express terms or as a result of
        surrounding circumstances such plan, fund, or program

        (a)     provides retirement income to Employees, or

        (b)     results in a deferral of income by Employees for periods
                extending to the termination of covered employment or beyond,

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        regardless of the method of calculating the contributions made to the
        Plan, the method of calculating the benefits under the Plan or the
        method of distributing benefits from the Plan.

1.8     Defined Contribution Plan or "DC Plan" shall mean a qualified Retirement
        Plan maintained by the Corporation which provides for an individual
        account for each covered employee and for benefits based solely upon the
        amount contributed to the Employee's account, and any income, expenses,
        gains and losses, and any other amounts which may be allocated to such
        account. Without limitation, this will include the General Dynamics
        Savings and Stock Investment Plan and Hourly Employees Savings and Stock
        Investment Plan and such other Plans as may be established from time to
        time and included hereunder.

1.9     Code shall mean the Internal Revenue Code of 1986, as amended from time
        to time.

1.10    ERISA shall mean Public Law No. 93-406, the Employee Retirement Income
        Security Act of 1974, as amended from time to time.

1.11.   Matched Employee Contributions or Matched Salary Deferrals shall mean
        employee contributions or salary deferrals made by an Employee to a
        Defined Contribution Plan which are the basis for an allocation of a
        Company contribution to the Defined Contribution Plan.

1.12    Company Contributions shall mean amounts contributed to a Defined
        Contribution Plan by the Corporation or its subsidiaries which are
        either (a) determined with reference to amounts of matched employee
        contributions or matched salary deferrals or (b) determined
        independently thereof but allocated with respect to such contributions,
        deferrals, or employee compensation.

1.13    Prior Plan shall mean the General Dynamics Corporation Supplemental
        Savings and Stock Investment Plan effective 1 January 1983, restated 1
        January 1987.

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                                    SECTION 2

                    SUPPLEMENTAL BENEFITS DUE TO LIMITATIONS
                        UNDER DEFINED CONTRIBUTION PLANS

2.1     Participation. Eligibility for participation in any benefits provided
        under this Plan shall be extended to selected Highly Compensated
        Employees who are active Members under any Defined Contribution Plan who
        elect to defer salary or make contributions pursuant to this Plan and
        whose Employee Contributions or Salary Deferrals to a Defined
        Contribution Plan are restricted due to the limitations of Code Section
        402(g) (limiting the maximum permitted elective deferral to such Plan)
        or 401(a)(17) (limiting the maximum annual compensation which may be
        considered under a Retirement Plan).

2.2     Benefits. An account shall be established on behalf of a Member entitled
        to any benefits under this Section 2. All amounts accrued for the
        benefit of Members under the Prior Plan shall remain credited to their
        accounts. Such account shall be credited with an amount equal to (a)
        minus (b) plus (c) as follows:

        (a)     As of each accounting date, the amount of Matched Employee
                Contributions, Matched Salary Deferrals and Company
                Contributions that would have been credited to the benefit of a
                Member under the various Defined Contributions Plans in which
                the Member participates if no limitations were imposed under
                Code Sections 401(a)(17) and 402(g) as described in Section 2.1
                above. Member contributions and salary deferrals credited to a
                Member under this paragraph 2.2(a) shall be credited pursuant to
                an election by the Member to defer the receipt of the
                appropriate portion of his compensation. Notwithstanding the
                foregoing, unmatched contributions may be credited under this
                paragraph 2.2(a) in certain circumstances for Members in the
                following groups: Bath Iron Works, General Dynamics Armament
                Systems, Inc. and General Dynamics Defense Systems, Inc.,
                General Dynamics Advanced Technology Systems, Inc. and General
                Dynamics Information Systems.

        (b)     The amount of Matched Employee Contributions, Matched Salary
                Deferrals and Company Contributions actually credited to the
                benefit of the Member under the various Defined Contribution
                Plans.

        (c)     An amount equivalent to an investment return on any balance in
                the account as of the close of the immediately preceding
                accounting date. The amount added shall be the same as the
                investment return actually recognized on each fund or investment
                in the Defined Contribution Plan that the balances in this Plan
                would have earned if the balances had been invested in the
                Defined Contribution Plan under the investment options actually
                selected by the Member thereunder.

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        No amount shall be credited to any account maintained pursuant to this
        Section 2: (1) for any pay period in which a Member does not contribute
        the maximum amount of Employee Contributions or make the maximum Salary
        Deferral permitted under the various Defined Contributions Plans or (2)
        with respect to any salary deferrals or contributions which a Member
        made (or could have made but for the limitations described in paragraph
        2.1) if the Company contributions are not made to the Defined
        Contribution Plan with respect to such Member deferrals and
        contributions. An "accounting date" is each day on which the financial
        markets and the federal banking wire system are open for business.

2.3     Payment and Nonforfeitability of Benefits and Maintenance of Accounts.
        All benefits accrued under this Section 2 shall be paid under the same
        conditions, rules and restrictions as would apply to the benefits as if
        they were provided under a Defined Contribution Plan except as provided
        below or elsewhere in this Plan:

        (a)     If a Member makes an investment fund transfer or investment
                option change pursuant to the provisions of a DC Plan, the
                identical investment fund transfer or investment option change
                shall be performed in this Plan but no such transfer or change
                shall be permitted in this Plan unless made in the DC Plan.
                Notwithstanding the foregoing, the Corporation may, in its
                discretion, approve transfers or changes in this Plan where no
                transfer or change is possible in the DC Plan due to loans and
                withdrawals.

        (b)     Members shall not be entitled to receive distributions or make
                withdrawals of any portion of their account balances while
                employed by the Corporation or any of its Subsidiaries.

        (c)     Upon separation from service with the Corporation and its
                Subsidiaries, the entire nonforfeitable balance of a Member's
                account (valued as of the accounting date coincident with or
                immediately following the date of separation) shall be paid to
                the Member within 90 days following the end of the month in
                which the separation occurred. However, any Member who retires
                from the service of the Corporation after attaining age 55 may,
                by a written statement filed with the Corporation within 60 days
                before the separation occurred, irrevocably elect to defer
                commencement of such payments until a specific date which may be
                as late as the Member's attaining age 70 1/2. If deferral is
                elected, the Member may choose to have the account balance
                subsequently paid in a lump sum or in annual installments (which
                will commence as soon as practicable after the conclusion of the
                deferral period and will be payable annually thereafter) not to
                exceed 15 installments. To the extent consistent with the above
                requirements, deferrals and installment payments of
                distributions shall be governed by the provisions of the DC Plan
                covering deferrals of distribution and installment payments.

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        (e)     All account balances shall be paid in cash. No Member shall have
                any right to receive payment in any other form.

        (f)     The provisions of the DC Plan concerning Benefit Limitations and
                Top Heavy Conditions shall not apply to benefits accrued under
                this Plan.

        (g)     Upon the death of a Member prior to the entire balance of the
                Member's account having been paid, the entire unpaid balance
                shall be payable to the Member's beneficiary as determined under
                the DC Plan in which the Member was last actually participating.

        The Corporation shall promulgate such other additional rules and
        procedures governing the operation of this Plan as it may, from time to
        time and in its best judgment, determine are necessary.

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                                    SECTION 3

                          SPECIAL SUPPLEMENTAL BENEFITS

3.1     Participation. Recognizing the need to make special retirement and other
        compensation or employee benefit provisions for certain Employees, the
        Corporation may, from time to time and in its best judgment, designate
        such other groups of select management or highly compensated employees
        as being eligible to receive benefits under this Plan. Any such
        employees or groups of employees will be described in Special Appendices
        attached to this Plan.

3.2     Benefits. Such Supplemental Benefits may be provided only to select
        management or highly compensated employees in such amounts as the
        Corporation determines are appropriate.

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                                    SECTION 4

                            MISCELLANEOUS PROVISIONS

4.1     Construction. In the construction of the Plan the masculine shall
        include the feminine and the singular the plural in all cases where such
        meanings would be appropriate. This Plan shall be construed, governed,
        regulated and administered according to the laws of the State of
        Virginia.

4.2     Employment. Participation in the Plan shall not give any Employee the
        right to be retained in the employ of the Corporation or its
        Subsidiaries, or upon dismissal or upon his voluntary termination of
        employment, to have any right, legal or equitable, under the Plan or any
        portion thereof, except as expressly granted by the Plan.

4.3     Nonalienability of Benefits. No benefit under the Plan shall be subject
        in any manner to anticipation, alienation, sale, transfer, assignment,
        pledge, encumbrance or charge, and any attempt so to anticipate,
        alienate, sell, transfer, assign, pledge, encumber or charge the same
        shall be void, and no such benefit shall in any manner be liable for or
        subject to the debts, liabilities, engagements or torts of the person
        entitled to such benefit, except as specifically provided in the Plan.

4.4     Facility of Payment. If any recipient of benefits is, in the judgment of
        the Corporation, legally incapable of personally receiving and giving a
        valid receipt for any payment due him under the Plan, the Corporation
        may, unless and until claims shall have been made by a duly appointed
        guardian or committee of such person, make such payment or any part
        thereof to such person's spouse, children or other legal entity deemed
        by the Corporation to have incurred expenses or assumed responsibility
        for the expenses of such person. Any payment so made shall be a complete
        discharge of any liability under the Plan for such payment.

4.5     Obligation to Pay Amounts Hereunder.

        (a)     No trust fund, escrow account or other segregation of assets
                need be established or made by the Corporation to guarantee,
                secure or assure the payment of any amount payable hereunder.
                The Corporation's obligation to make payments pursuant to this
                Plan shall constitute only a general contractual liability of
                the Corporation to individuals entitled to benefits hereunder
                and other actual or possible payees hereunder in accordance with
                the terms hereof. Payments hereunder shall be made only from
                such funds of the Corporation as it shall determine, and no
                individual entitled to benefits hereunder shall have any
                interest in any particular asset of the Corporation by reason of
                the existence of this Plan. It is expressly understood as a
                condition for receipt of any benefits under

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                this Plan, that the Corporation is not obligated to create a
                trust fund or escrow account, or to segregate any asset of the
                Corporation in any fashion.

        (b)     The Corporation may, in its sole discretion, establish
                segregated funds, escrow accounts or trust funds whose primary
                purpose would be for the provision of benefits under this Plan.
                If such funds or accounts are established, however, individuals
                entitled to benefits hereunder shall not have any identifiable
                interest in any such funds or accounts nor shall such
                individuals be entitled to any preference or priority with
                respect to the assets of such funds or accounts. These funds and
                accounts would still be available to judgment creditors of the
                Corporation and to all creditors in the event of the
                Corporation's insolvency or bankruptcy.

4.6     Administration. The Plan shall be administered by the Company. The
        Company shall have the discretionary authority to construe and interpret
        the provisions of the Plan and make factual determinations thereunder,
        including the power to determine the rights or eligibility of employees
        or Members and any other persons, and the amounts of their benefits
        under the Plan, and to remedy ambiguities, inconsistencies or omissions,
        and such determinations shall be binding on all parties.

4.7     Claims Appeal Procedure. Upon receipt of a claim for benefits under the
        Plan, the Company shall notify the Member, the Member's beneficiary or
        authorized representative of any action taken within 90 days of
        receiving the claim. If the claim is denied, the denial shall be set
        forth in writing and shall include the specific reasons for the denial,
        with reference to pertinent Plan provisions on which the denial is
        based, and shall describe the procedure for perfecting the claim, or for
        requesting a review of the denial. Within 60 days after receiving a
        notification of denial of a claim, a Member or the Member's beneficiary
        may request that the Company make a full and fair review of the denial.
        In connection with this request, the Member may review pertinent
        documents and submit issues or comments in writing. The Company will
        make a final decision on the claim within 120 days of the request for
        review. Any decision made by the Company in good faith shall be final
        and binding on all parties.

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                                    SECTION 5

                      AMENDMENT AND TERMINATION OF THE PLAN

5.1     Amendment. The Chairman of the Board of Directors of the Corporation
        reserves the right to modify or amend this Plan in whole or in part,
        effective as of any specified date; provided, however, that the Chairman
        shall have no authority to modify or amend the Plan to:

        (a)     reduce any benefit accrued hereunder based on service and
                compensation to the date of amendment unless such action is
                necessary to prevent this Plan from being subject to any
                provision of Title 1, Subtitle B, Parts 2, 3 or 4 of ERISA;

        (b)     permit the accrual, holding or payment of actual shares of
                General Dynamics Common Stock under the Plan.

5.2     Termination.

        (a)     The Chairman of the Board of Directors of the Corporation
                reserves the right to terminate this Plan, in whole or in part.
                This Plan shall be automatically terminated upon a dissolution
                of the Corporation (but not upon a merger, consolidation,
                reorganization, recapitalization or acquisition of a controlling
                interest in the voting stock of the Corporation by another);
                upon the Corporation being legally adjudicated bankrupt; upon
                the appointment of a receiver or trustee in bankruptcy with
                respect to the Corporation's assets and business if such
                appointment is not set aside within ninety (90) days thereafter;
                or upon the making by the Corporation of an assignment for the
                benefit of creditors.

        (b)     Upon a termination of this Plan no additional Employees shall
                become entitled to benefits hereunder; all benefits accrued
                through the date of termination will become immediately
                nonforfeitable as to each Member; no additional benefits (other
                than the allocation of "income" or "earnings" on the Member's
                contributions) shall be accrued hereunder for subsequent payment
                and all benefits accrued to date shall be distributed to the
                Members as soon as practicable.<PAGE>   1

                                                                   EXHIBIT 10.16

                          GENERAL DYNAMICS CORPORATION

                        1997 INCENTIVE COMPENSATION PLAN

1.      Purpose. This plan is an amendment and restatement of the 1988 Incentive
        Compensation Plan; it is renamed the "1997 Incentive Compensation Plan"
        and is referred to hereinafter as the "Plan." The purpose of the Plan is
        to provide General Dynamics Corporation and its subsidiaries (the
        "Company") with an effective means of attracting, retaining, and
        motivating officers and other key employees and to provide them with
        incentives to enhance the growth and profitability of the Company.

2.      Eligibility. Any officer or key employee of the Company in an executive,
        administrative, professional, scientific, engineering, technical, or
        advisory capacity is eligible for an award under the Plan.

3.      Committee. The Plan shall be administered by the Compensation Committee
        (the "Committee") of the Board of Directors of the Company comprised of
        two or more members of the Board of Directors, none of whom shall be
        employees of the Company. Except as otherwise expressly provided in the
        Plan, the Committee shall have full power and authority to interpret and
        administer the Plan, to determine the officers and key employees to
        receive awards and the amounts and types of the awards, to adopt, amend,
        and rescind rules and regulations, and to establish terms and
        conditions, not inconsistent with the provisions of the Plan, for the
        administration and implementation of the Plan, provided, however, that
        the Committee may not, after the date of any award, make any changes
        that would adversely affect the rights of a recipient under any award
        without the consent of the recipient. The determination of the Committee
        on these matters shall be final and conclusive and binding on the
        Company and all participants.

        Code Section 162(m) Subcommittee. Notwithstanding the foregoing
        paragraph, the Plan shall be administered by a subcommittee of the
        Committee (the "Subcommittee") with respect to persons covered by the
        deduction limitation of Section 162(m) of the Internal Revenue Code of
        1986, as amended (the "Code"). The Subcommittee shall comprise two or
        more members of the Committee, all of whom shall be "outside directors"
        as that term is used in Code Section 162(m). With respect to such
        persons subject to Code Section 162(m), the Subcommittee shall have all
        of the powers, rights, and duties granted to the Committee under this
        Plan and each reference to the "Committee" herein shall be deemed to be
        a reference to the "Subcommittee."

4.      Awards. Awards may be made by the Committee in such amounts as it shall
        determine in cash, in common stock of the Company ("Common Stock"), in
        options to purchase Common Stock of the Corporation ("Stock Options"),
        or in shares of Common Stock subject to certain restrictions
        ("Restricted Stock"), or any combination thereof. Awards of Stock
        Options shall be limited to awards for such number of shares as shall be
        allocated for that purpose by the Board of Directors and approved by the
        shareholders.

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5.      Code Section 162(m) Awards. Awards to persons covered by the deduction
        limitation of Code Section 162(m), as described by Code Section
        162(m)(3), shall be subject to the following additional limitations:

        a.      Adjustments. The Subcommittee shall have no discretion to
                increase an award of Stock Options and/or Restricted Stock once
                granted, except that adjustments are permitted under Sections 11
                and 12 of this Plan to the extent permissible under regulations
                interpreting Code Section 162(m).

        b.      Maximum Awards. Awards of Stock Options and/or Restricted Stock
                under the Plan shall be limited as follows:

                (1)     Awards of Stock Options shall be limited to 500,000
                        shares awarded to any one individual for any calendar
                        year and shall be issued at fair market value.

                (2)     Awards of Restricted Stock shall be limited to 100,000
                        shares awarded to any one individual for any calendar
                        year. Notwithstanding the foregoing, Restricted Stock
                        granted under the Restricted Stock Performance Formula,
                        described below, shall be limited to an initial grant of
                        100,000 shares, but shall be adjusted upwards or
                        downwards in accordance with that formula.

        c.      Performance Goals. The Subcommittee, in its sole discretion,
                shall establish performance goals applicable to awards of
                Restricted Stock in such a manner as shall permit payments with
                respect thereto to qualify as "performance-based compensation"
                as described in Code Section 162(m)(4)(C). Such awards shall be
                based on attainment of, over a specified period of individual
                performance, specified targets or other parameters relating to
                one or more of the following business criteria: market price of
                Common Stock, earnings per share, net profits, total shareholder
                return, return of shareholders' equity, cash flow, and
                cumulative return on net assets employed. In addition, awards of
                Restricted Stock may be based on the Restricted Stock
                Performance Formula, described below.

6.      Restricted Stock Performance Formula. Awards of Restricted Stock may be
        granted pursuant to the formula described in this section, referred to
        herein as the "Restricted Stock Performance Formula." The Committee
        shall make an initial grant of shares of Restricted Stock (the "Initial
        Grant"). At the end of a specified performance period (determined by the
        Committee), the number of shares in the Initial Grant shall be increased
        or decreased based on the increase or decrease in the value of the
        Common Stock over the performance period.

        The increase or decrease described in the preceding paragraph shall be
        determined in the following manner:

                At the end of each performance period, the fair market value (as
                defined in Section 7 below) of the Common Stock is compared to
                the fair market value per share on the grant date. That
                difference is multiplied by the number of shares of Restricted
                Stock to be earned at the end of each performance period and the
                resulting product is divided by the fair market value at the end
                of the performance period. The number of shares of Common Stock
                so determined is added to (in the case of a higher fair market
                value) or subtracted from (in the case of a lower fair market
                value) the number of shares of Restricted Stock to be earned at
                that time. Once the number of

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                shares of Restricted Stock has been adjusted, restrictions will
                continue to be imposed for a period of time.

7.      Common Stock. In the case of awards in Common Stock, the number of
        shares shall be determined by dividing the amount of the award by the
        average between the highest and lowest quoted selling prices of the
        Company's Common Stock on the New York Stock Exchange on the date of the
        award. The average is referred to throughout this Plan as the "fair
        market value."

8.      Dividend Equivalents and Interest.

        a.      Dividends. If any award in Common Stock or Restricted Stock is
                to be paid on a deferred basis, the recipient may be entitled,
                on terms and conditions to be established, to receive a payment
                of, or credit equivalent to, any dividend payable with respect
                to the number of shares of Common Stock or Restricted Stock
                which, as of the record date for the dividend, has been awarded
                or made payable to the recipient but not delivered.

        b.      Interest. If any award in cash is to be paid on a deferred
                basis, the recipient may be entitled, on terms and conditions to
                be established, to be paid interest on the unpaid amount.

9.      Restricted Stock Awards. Restricted Stock represents awards made in
        Common Stock in which the shares granted may not be sold, transferred,
        pledged, assigned, or otherwise alienated or hypothecated except upon
        passage of time, or upon satisfaction of other conditions, or both, in
        every case as provided by the Committee in its sole discretion. The
        recipient of an award of Restricted Stock shall be entitled to vote the
        shares awarded and to the payment of dividend equivalents on the shares
        from the date the award of shares is made; and, in addition, all Special
        Distributions (as defined in Section 11 hereof) thereon shall be
        credited to an account similar to the Account described in Section 11.
        The recipient of an award of Restricted Stock shall have a
        nonforfeitable interest in amounts credited to such account in
        proportion to the lapse of restrictions on the Restricted Stock to which
        such amounts relate. For example, when restrictions lapse on fifty
        percent (50%) of the Restricted Stock granted in an award, the holder of
        such Restricted Stock shall have a nonforfeitable interest in fifty
        percent (50%) of the amount credited to his account which is
        attributable to such Restricted Stock. The holder of Restricted Stock
        shall receive a payment in cash of any amount in his account as soon as
        practicable after the lapse of restrictions relating thereto.

10.     Stock Option Awards.

        a.      Available Shares. Shares available for awards of Stock Options
                under the Plan at the effective date of the restatement of the
                Plan shall be available for awards of Stock Options under the
                Plan. Shares available for awards of Stock Options may be
                authorized but unissued shares or may be treasury shares. If any
                option awarded under the Plan or any predecessor plan shall
                expire, terminate, or be canceled for any reason without having
                been exercised in full, the corresponding number of unpurchased
                shares which were reserved for issuance upon exercise thereof
                shall again be available for the purposes of the Plan.

        b.      Type of Options. Options shall be in the form of incentive stock
                options, non-statutory stock options, or both, as the Committee
                may determine. The term "incentive stock option" means any
                option, or portion thereof, awarded under the Plan which meets
                the applicable requirements of Section 422 of the Internal
                Revenue Code, as it may be amended from time to time. The term

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                "non-statutory stock option" means any option, or portion
                thereof, awarded under the Plan which does not qualify as an
                incentive stock option.

        c.      Incentive Stock Option Limitation. For incentive stock options
                granted under the Plan, the aggregate fair market value
                (determined as of the date the option is awarded) of the number
                of whole shares with respect to which incentive stock options
                are exercisable for the first time by any employee during any
                calendar year under all plans of the Company shall not exceed
                $100,000.

        d.      Purchase Price. The purchase price of the Common Stock under
                each option shall be determined by the Committee, but shall not
                be less than 100 percent of the fair market value of the Common
                Stock on the date of the award of the option.

        e.      Terms and Conditions. The Committee shall, in its discretion,
                establish (i) the term of each option, which in the case of
                incentive stock options shall not be more than ten years, (ii)
                the terms and conditions upon which and the times when each
                option shall be exercised, and (iii) the terms and conditions
                under which options may be exercised after termination of
                employment for any reason for periods not to exceed three years
                after termination of employment but not beyond the term
                established above.

        f.      Purchase by Cash or Stock. The purchase price of shares
                purchased upon the exercise of any stock option shall be paid
                (i) in full in cash, or (ii) in whole or in part (in combination
                with cash) in full shares of Common Stock owned by the optionee
                and valued at its fair market value on the date of exercise, all
                pursuant to procedures approved by the Committee.

        g.      Transferability. Options shall not be transferable. During the
                lifetime of the person to whom an option has been awarded, it
                may be exercisable only by such person or one acting in his
                stead or in a representative capacity. Upon or after the death
                of the person to whom an option is awarded, an option may be
                exercised by the optionee's legatee or legatees under his last
                will, or by the option holder's personal representative or
                distributee's executive, administrator, or personal
                representative or designee in accordance with the terms of the
                option.

11.     Adjustments for Special Distributions. The Committee shall have the
        authority to change all Stock Options granted under this Plan to adjust
        equitably the purchase price thereof to reflect a special distribution
        to shareholders or other extraordinary corporate action involving
        distributions or payments to shareholders (collectively referred to as
        "Special Distributions"). In the event of any Special Distribution, the
        Committee may, to the extent that it determines in its judgment that the
        adjustment of the purchase price of Stock Options does not fully reflect
        such Special Distribution, increase the number of shares of Common Stock
        covered by such Stock Options or cause to be created a Special
        Distribution account (the "Account") in the name of each individual to
        whom Stock Options have been granted hereunder (sometimes herein
        referred to as a "Grantee") to which shall be credited an amount
        determined by the Committee, or, in the case of non-cash Special
        Distributions, make appropriate comparable adjustments for or payments
        to or for the benefit of the Grantee.

        Amounts credited to the Account in accordance with the preceding rules
        shall be credited with interest, accrued monthly, at an annual rate
        equal to the higher of Moody's Corporate Bond Yield Average or the prime
        rate in effect from time to time, and such interest shall be credited in
        accordance with rules to be established by the Committee.
        Notwithstanding the foregoing, at no time

                                  Page: 4 of 7
<PAGE>   5

        shall the Committee permit the amount credited to the Grantee's Account
        to exceed ninety percent (90%) of the purchase price of the Grantee's
        outstanding Stock Options to which such amount relates. To the extent
        that any credit would cause the Account to exceed that limitation, such
        excess shall be distributed to the Grantee in cash.

        Amounts credited to the Grantee's Account shall be paid to the Grantee
        or, if the Grantee is deceased, his or her beneficiary at the time that
        the options to which it relates are exercised or expire, whichever
        occurs first.

        The Account shall for all purposes be deemed to be an unfunded promise
        to pay money in the future in certain specified circumstances. As to
        amounts credited to the Account, a Grantee shall have no rights greater
        than the rights of a general unsecured creditor of the Company, and
        amounts credited to the Grantee's Account shall not be assignable or
        transferable other than by will or the laws of descent and distribution,
        and such amounts shall not be subject to the claims of the Grantee's
        creditors.

12.     Adjustments and Reorganizations. The Committee may make such adjustments
        to awards granted under the Plan (including the terms, exercise price,
        and otherwise) as it deems appropriate in the event of changes that
        impact the Company, the Company's share price, or share status.

        In the event of any merger, reorganization, consolidation, change of
        control, recapitalization, separation, liquidation, stock dividend,
        stock split, extraordinary dividend, spin-off, split-up, rights
        offering, share combination, or other change in the corporate structure
        of the Company affecting the Common Stock, the number and kind of shares
        that may be delivered under the Plan shall be subject to such equitable
        adjustment as the Committee, in its sole discretion, may deem
        appropriate. The determination of the Committee on these matters shall
        be final and conclusive and binding on the Company and all participants.

        In the preceding paragraph, "change of control" means any of the
        following events:

        a.      An acquisition (other than directly from the Company) of any
                voting securities of the Company by any person who previously
                was the beneficial owner of less than ten percent of the
                combined voting power of the Company's outstanding voting
                securities and who immediately after such acquisition is the
                beneficial owner of 30 percent or more of the combined voting
                power of the Company's then outstanding voting securities;
                provided that, in determining whether a change of control has
                occurred, voting securities which are acquired by (i) an
                employee benefit plan (or a trust forming a part thereof)
                maintained by the Company or any subsidiary of the Company, (ii)
                the Company or any subsidiary of the Company, or (iii) any
                person in connection with a Non-Control Transaction (as
                hereinafter defined), will not constitute an acquisition which
                results in a change of control;

        b.      Approval by stockholders of the Company of:

                (1)     a merger, consolidation, or reorganization involving the
                        Company, unless:

                                (A)     the stockholders of the Company
                                        immediately before such merger,
                                        consolidation, or reorganization will
                                        own, directly or indirectly, immediately
                                        following such merger, consolidation, or
                                        reorganization, at least 51 percent of
                                        the combined voting power of the
                                        outstanding voting securities of the

                                  Page: 5 of 7
<PAGE>   6

                                        corporation resulting from such merger,
                                        consolidation, or reorganization (the
                                        "Surviving Company") in substantially
                                        the same proportion as their ownership
                                        of the voting securities of the Company
                                        immediately before such merger,
                                        consolidation, or reorganization; and

                                (B)     the individuals who were members of the
                                        Board immediately prior to the execution
                                        of the agreement providing for such
                                        merger, consolidation, or reorganization
                                        constitute a majority of the members of
                                        the Board of Directors of the Surviving
                                        Company; and

                                (C)     no person (other than the Company, any
                                        subsidiary of the Company, any employee
                                        benefit plan (or any trust forming a
                                        part thereof) maintained by the Company,
                                        the Surviving Company, any subsidiary of
                                        the Surviving Company, or any person
                                        who, immediately prior to such merger,
                                        consolidation, or reorganization, was
                                        the beneficial owner of 20 percent or
                                        more of the then outstanding voting
                                        securities of the Company) is the
                                        beneficial owner of 20 percent or more
                                        of the combined voting power of the
                                        Surviving Company's then outstanding
                                        voting securities;

                                (D)     a transaction described in clauses (A)
                                        through (C) above is referred to herein
                                        as a "Non-Control Transaction;"

                (2)     the complete liquidation or dissolution of the Company;
                        or

                (3)     an agreement for sale or other disposition of all or
                        substantially all of the assets of the Company to any
                        person (other than a transfer to a subsidiary of the
                        Company).

        c.      Notwithstanding the foregoing, a change of control will not be
                deemed to occur solely because any person (a "Subject Person")
                acquires beneficial ownership of more than the permitted amount
                of the outstanding voting securities of the Company as a result
                of the acquisition of voting securities by the Company which, by
                reducing the number of voting securities outstanding, increases
                the proportional number of shares beneficially owned by the
                Subject Person, provided that if a change of control would occur
                (but for the operation of this sentence) as a result of the
                acquisition of voting securities by the Company, and after such
                share acquisition by the Company, the Subject Person becomes the
                beneficial owner of any additional voting securities which
                increases the percentage of the then outstanding voting
                securities beneficially owned by the Subject Person, then a
                change of control will be deemed to have occurred.

13.     Tax Withholding. The Company shall have the right to (i) make deductions
        from any settlement of an award under the Plan, including the delivery
        or vesting of shares, or require shares or cash or both be withheld from
        any award, in each case in an amount sufficient to satisfy withholding
        of any federal, state, or local taxes required by law, or (ii) take such
        other action as may be necessary or appropriate to satisfy any such
        withholding obligations. The Committee may determine the manner in which
        such tax withholding may be satisfied, and may permit shares of Common
        Stock (rounded up to the next whole number) to be used to satisfy
        required tax withholding based on the fair market value of any such
        shares of Common Stock, as of the appropriate time of each award.

                                  Page: 6 of 7
<PAGE>   7

14.     Expenses. The expenses of administering the Plan shall be borne by the
        Company.

15.     Amendments. The Board of Directors of the Company shall have complete
        power and authority to amend the Plan, provided that the Board of
        Directors shall not, without shareholder approval, adopt any amendment
        which would (a) increase the number of shares for which options may be
        awarded under the Plan, (b) modify the class of employees eligible to
        receive awards, (c) extend the period during which incentive stock
        options may be awarded, or (d) materially increase the benefits of
        employees receiving awards under the Plan. No amendment to the Plan may,
        without the consent of the individual to whom the award shall
        theretofore have been awarded, adversely affect the rights of an
        individual under the award.

16.     Effective Date of the Plan. The Plan shall become effective on its
        adoption by the Board of Directors of the Company on February 5, 1997,
        subject to approval at the 1997 Annual Meeting of Shareholders.

17.     Termination. The Board of Directors of the Company may terminate the
        Plan or any part thereof at any time, provided that no termination may,
        without the consent of the individual to whom any award shall
        theretofore have been made, adversely affect the rights of an individual
        under the award.

18.     Other Actions. Nothing contained in the Plan shall be deemed to preclude
        other compensation plans which may be in effect from time to time or be
        construed to limit the authority of the Company to exercise its
        corporate rights and powers, including, but not by way of limitation,
        the right of the Company (a) to award options for proper corporate
        purposes otherwise than under the Plan to an employee or other person,
        firm, corporation, or association, or (b) to award options to, or assume
        the option of, any person in connection with the acquisition, by
        purchase, lease, merger, consolidation, or otherwise, of the business
        and assets (in whole or in part) of any person, firm, corporation, or
        association.

                                  Page: 7 of 7

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