Document:

Exhibit 4.3

         THE  SECURITIES  EVIDENCED  HEREBY HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933 OR APPLICABLE  STATE  SECURITIES  LAWS.  THESE SECURITIES
HAVE BEEN  ACQUIRED  FOR  INVESTMENT  AND MAY NOT BE  OFFERED  FOR  SALE,  SOLD,
PLEDGED,  ASSIGNED OR OTHERWISE  DISPOSED OF, AND NO TRANSFER OF THE  SECURITIES
WILL BE MADE BY THE  COMPANY  OR ITS  TRANSFER  AGENT,  IN THE  ABSENCE  OF SUCH
REGISTRATION  OR AN OPINION  OF  COUNSEL  ACCEPTABLE  TO THE  COMPANY  THAT SUCH
REGISTRATION IS NOT REQUIRED.

                        WARRANT FOR PURCHASE OF SHARES OF
                                 COMMON STOCK OF
                             medtox scientifIc, inc.

                                  July 31, 2000

         For value  received,  _________________,  ______,  or their  registered
assigns (the "Holder"), is entitled to purchase from MEDTOX Scientific,  Inc., a
Delaware  corporation  (the  "Company"),  at any time  during  the five (5) year
period commencing on the date hereof, 23,000 fully paid and nonassessable shares
of the  Company's  Common  Stock,  $0.15 par value  (such  class of stock  being
hereinafter  referred to as the "Common  Stock" and such Common  Stock as may be
acquired  upon  exercise  hereof being  hereinafter  referred to as the "Warrant
Stock"), at the price of $12.50 per share.

         This  Warrant  is  subject  to  the  following  provisions,  terms  and
conditions:

1. The rights  represented  by this Warrant may be  exercised by the Holder,  in
whole or in part (but not as to a fractional share of Common Stock),  by written
notice of exercise delivered to the Company accompanied by the surrender of this
Warrant  (properly  endorsed if required) at the principal office of the Company
and upon payment to it, by cash,  certified  check or bank draft, of the warrant
exercise  price for such shares.  The Company  agrees that the Warrant  Stock so
purchased shall be and is deemed to be issued as of the close of business on the
date on which this Warrant shall have been surrendered and payment made for such
Warrant  Stock as  aforesaid.  Certificates  for the shares of Warrant  Stock so
purchased  shall be  delivered  to the  Holder  within 15 days  after the rights
represented  by this  Warrant  shall have been so  exercised,  and,  unless this
Warrant has expired, a new Warrant  representing the number of shares of Warrant
Stock,  if any, with respect to which this Warrant has not been exercised  shall
also be delivered to the Holder within such time. Notwithstanding the foregoing,
however,  the Company  shall not be required  to deliver  any  certificates  for
shares of Warrant Stock, except in accordance with the provisions and subject to
the limitations of Paragraph 5 below.

2. The Company covenants and agrees that all shares of Warrant Stock that may be
issued upon the exercise of this Warrant will, upon issuance, be duly authorized
and  issued,  fully paid and  nonassessable  and free from all taxes,  liens and
charges with respect to the issuance thereof.  The Company further covenants and

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agrees that until expiration of this Warrant, the Company will at all times have
authorized,  and reserved for the purpose of issuance or transfer  upon exercise
of this  Warrant,  a sufficient  number of shares of Common Stock to provide for
the exercise of this Warrant.

3.       The foregoing provisions are, however, subject to the following:

(a)      The Warrant  exercise price shall be subject to adjustment from time to
         time as  hereinafter  provided.  Upon each  adjustment  of the  Warrant
         exercise price, the holder of this Warrant shall thereafter be entitled
         to  purchase,  at  the  Warrant  exercise  price  resulting  from  such
         adjustment,  the number of shares  obtained by multiplying  the Warrant
         exercise price in effect  immediately  prior to such  adjustment by the
         number of shares purchasable  pursuant hereto immediately prior to such
         adjustment  and  dividing the product  thereof by the Warrant  exercise
         price resulting from such adjustment.

(b)      In case the Company shall at any time subdivide the outstanding  Common
         Stock into a greater number of shares or declare a dividend  payable in
         Common Stock, the Warrant exercise price in effect immediately prior to
         such subdivision shall be proportionately  reduced, and conversely,  in
         case the  outstanding  Common  Stock shall be  combined  into a smaller
         number of shares,  the  Warrant  exercise  price in effect  immediately
         prior to such combination shall be proportionately increased.

(c)  If any capital  reorganization or  reclassification of the capital stock of
     the  Company,  or  consolidation  or merger  of the  Company  with  another
     corporation,  or the  sale of all or  substantially  all of its  assets  to
     another  corporation shall be effected in such a way that holders of Common
     Stock   shall  be  entitled  to  receive   stock,   securities   or  assets
     ("substituted  property")  with  respect to or in exchange  for such Common
     Stock,  then,  as a  condition  of such  reorganization,  reclassification,
     consolidation,  merger or sale, the Holder shall have the right to purchase
     and receive upon the basis and upon the terms and  conditions  specified in
     this  Warrant and in lieu of the Common  Stock of the  Company  immediately
     theretofore  purchasable  and  receivable  upon the  exercise of the rights
     represented hereby, such substituted  property as would have been issued or
     delivered to the Holder if it had  exercised  this Warrant and had received
     upon   exercise   of  this   Warrant   the  Common   Stock  prior  to  such
     reorganization,  reclassification,   consolidation,  merger  or  sale.  The
     Company  shall not effect any such  consolidation,  merger or sale,  unless
     prior to the consummation thereof the successor  corporation (if other than
     the Company) resulting from such consolidation or merger or the corporation
     purchasing  such assets  shall  assume by written  instrument  executed and
     mailed to the Holder at the last  address of the  Holder  appearing  on the
     books of the Company,  the  obligation to deliver to the Holder such shares
     of  stock,  securities  or  assets  as, in  accordance  with the  foregoing
     provisions, the Holder may be entitled to purchase.

(d)      If the Company  takes any other  action,  or if any other event  occurs
         which does not come within the scope of the  provisions  of  Paragraphs
         3(b) or 3(c),  but which should  result in an adjustment in the Warrant
         exercise  price  and/or the number of shares  subject to the Warrant in
         order  to  fairly  protect  the  purchase  rights  of  the  Holder,  an
         appropriate  adjustment  in such  purchase  rights shall be made by the
         Company.
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(e)      Upon any adjustment of the Warrant  exercise  price,  the Company shall
         give written notice  thereof,  by first-class  mail,  postage  prepaid,
         addressed  to the  Holder at the  address of the Holder as shown on the
         books of the Company,  which  notice  shall state the Warrant  exercise
         price resulting from such  adjustment and the increase or decrease,  if
         any,  in the  number  of  shares  purchasable  at such  price  upon the
         exercise of this Warrant, setting forth in reasonable detail the method
         of calculation and the facts upon which such calculation is based.

4.       This Warrant  shall not entitle the Holder to any voting  rights or
         other rights as a  shareholder  of the Company.

5. The Holder,  by  acceptance  hereof,  represents  and warrants that (a) it is
acquiring this Warrant for its own account for investment  purposes only and not
with a view to its resale or distribution and (b) it has no present intention to
resell or  otherwise  dispose  of all or any part of this  Warrant.  Other  than
pursuant to registration under federal and state securities laws or an exemption
from such registration, the availability of which the Company shall determine in
its sole  discretion,  (y) the  Company  will not  accept the  exercise  of this
Warrant or issue  certificates  for shares of Warrant Stock and (z) neither this
Warrant  nor any  shares of  Warrant  Stock may be sold,  pledged,  assigned  or
otherwise disposed of (whether  voluntarily or  involuntarily).  The Company may
condition such issuance or sale, pledge,  assignment or other disposition on the
receipt from the party to whom this Warrant is to be so  transferred  or to whom
Warrant  Stock is to be  issued or so  transferred  of any  representations  and
agreements requested by the Company in order to permit such issuance or transfer
to be made pursuant to exemptions from registration under federal and applicable
state securities  laws. Each  certificate  representing the Warrant (or any part
thereof)  and any shares of Warrant  Stock  shall be  stamped  with  appropriate
legends setting forth these  restrictions  on  transferability.  The Holder,  by
acceptance  hereof,  agrees  to  give  written  notice  to  the  Company  before
exercising or transferring  this Warrant or  transferring  any shares of Warrant
Stock of the Holder's  intention to do so, describing  briefly the manner of any
proposed  exercise or transfer.  Within  thirty (30) days after  receiving  such
written notice,  the Company shall notify the Holder as to whether such exercise
or transfer may be effected.

6. This Warrant  shall be  transferable  only on the books of the Company by the
Holder in person, or by duly authorized  attorney,  on surrender of the Warrant,
properly assigned.

7. Neither this Warrant nor any term hereof may be changed,  waived,  discharged
or terminated  orally but only by an  instrument in writing  signed by the party
against which  enforcement  of the change,  waiver,  discharge or termination is
sought.

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer and to be dated as of the date set forth above.

                                     MEDTOX SCIENTIFIC, INC.

                                     By______________________________________
                                        Name:
                                        Title:Exhibit 10.46
                                     MEDTOX
                        RESTATED EQUITY COMPENSATION PLAN

              as amended and restated effective as of May 10, 2000

                         ARTICLE I - GENERAL PROVISIONS

1.1      The Plan is designed,  for the benefit of the  Company,  to attract and
         retain for the Company  personnel of exceptional  ability;  to motivate
         such personnel through added incentives to make a maximum  contribution
         to greater  profitability;  to develop and maintain a highly  competent
         management  team;  and to be  competitive  with  other  companies  with
         respect to executive compensation.

1.2      Awards  under the Plan may be made to  Participants  in the form of (i)
         Incentive Stock Options;  (ii) Nonqualified Stock Options;  (iii) Stock
         Appreciation  Rights;  (iv) Restricted  Stock; (v) Deferred Stock; (vi)
         Stock Awards;  (vii) Performance  Shares;  and (viii) Other Stock-Based
         Awards and other forms of equity-based  compensation as may be provided
         and are permissible under this Plan and the law.

1.3      The Plan, shall be effective  October 26, 1993 (the "Effective  Date"),
         subject to the approval of shareholders of the Company on such date.

                            ARTICLE II - DEFINITIONS

DEFINITIONS.  Except where the context otherwise indicates, the following
definitions apply:

2.1      "Acceleration Event" means the occurrence of an event defined in
         Article XIII of the Plan.

2.2      "Act" means the Securities Exchange Act of 1934, as now in effect or as
         hereafter  amended.  (All  citations  to  sections  of the Act or rules
         thereunder  are to such sections or rules as they may from time to time
         be amended or renumbered.)

2.3      "Agreement" means the written agreement evidencing each Award granted
         to a Participant under the Plan.

2.4      "Award" means an award granted to a Participant in accordance  with the
         provisions of the Plan, including,  but not limited to, a Stock Option,
         Stock Right,  Restricted or Deferred Stock,  Stock Awards,  Performance
         Shares, other Stock-Based Award, or any combination of the foregoing.

2.5      "Board" means the Board of Directors of MEDTOX SCIENTIFIC, INC.
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2.6      "Code" means the Internal  Revenue Code of 1986, as now in effect or as
         hereafter  amended.  (All citations to sections of the Code are to such
         sections as they may from time to time be amended or renumbered.)

2.7      "Committee"  means the  Compensation  Committee or such other committee
         consisting of three or more members as may be appointed by the Board to
         administer this Plan pursuant to Article III. To the extent required by
         Rule 16b-3 under the Act, the Committee  shall  consist of  individuals
         who are  members  of the Board  and  Disinterested  Persons.  Committee
         members  may also be  appointed  for such  limited  purposes  as may be
         provided by the Board.

2.8      "Company" means MEDTOX SCIENTIFIC,  INC., a Delaware  corporation,  and
         its  successors  and  assigns.  The term  "Company"  shall  include any
         corporation which is a member of a controlled group of corporations (as
         defined in Section 414(b) of the Code, as modified by Section 415(h) of
         the Code) which includes the Company; any trade or business (whether or
         not incorporated)  which is under common control (as defined in Section
         414(c) of the Code, as modified by Section 415(h) of the Code) with the
         Company;  any  organization  (whether or not  incorporated)  which is a
         member of an affiliated  service group (as defined in Section 414(m) of
         the Code) which includes the Company;  and any other entity required to
         be aggregated  with the Company  pursuant to regulations  under Section
         414(o)  of the  Code.  With  respect  to  all  purposes  of  the  Plan,
         including,   but  not   limited  to,  the   establishment,   amendment,
         termination,   operation  and   administration   of  the  Plan,  MEDTOX
         SCIENTIFIC,  INC.  shall be  authorized  to act on  behalf of all other
         entities included within the definition of Company.

2.9      "Deferred Stock" means the stock awarded under Article IX of the Plan.

2.10     "Disability" means disability as determined under procedures
         established by the Committee or in any Award.

2.11     "Discount  Stock  Options" means the  Nonqualified  Stock Options which
         provide for an exercise price of less than the Fair Market Value of the
         Stock at the date of the Award.

2.12     "Disinterested Person" shall have the meaning set forth in Rule 16b-3
         under the Act.

2.13     "Early  Retirement"  means  retirement from active  employment with the
         Company,  with the express  consent of the  Committee,  pursuant to the
         early  retirement  provisions  established  by the  Committee or in any
         Award.

2.14     "Eligible  Participant" means any employee of the Company,  as shall be
         determined by the  Committee,  as well as any other  person,  including
         directors,  subject to such limitations  imposed on a person designated

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         as a Disinterested Person, whose participation the Committee determines
         is in the best interest of the Company,  subject to  limitations as may
         be provided by the Code, the Act or the Committee.

2.15     "Fair Market Value"  means,  with respect to any given day, the closing
         price of the Stock reported on the stock exchange on which the Stock is
         then listed for such day,  as reported by such source as the  Committee
         may select,  provided  there was a sale of at least 100 shares of Stock
         on such  date.  If there was not a sale of at least 100 shares of Stock
         on such day,  the Fair Market  Value shall be  determined  based on the
         closing  price of the Stock  reported  on the stock  exchange as of the
         last date on which  there  was a sale of at least 100  shares of Stock.
         The Committee may establish an alternative  method of determining  Fair
         Market Value.

2.16     "Incentive Stock Option" means a Stock Option granted under Article IV
         of the Plan, and as defined in Section 422 of the Code.

2.17     "Limited  Stock  Appreciation  Rights"  means a Stock  Right  which  is
         exercisable only in the event of a Change in Control and/or a Potential
         Change in Control,  as  described  in Section  6.9 of this Plan,  which
         provides for an amount payable  solely in cash,  equal to the excess of
         the Stock  Appreciation  Right Fair Market Value of a share of Stock on
         the day the  Stock  Right  is  surrendered  over  the  price at which a
         Participant could exercise a related Stock Option to purchase the share
         of Stock.

2.18     "Nonqualified Stock Option" means a Stock Option granted under Article
         V of the Plan.

2.19     "Normal  Retirement"  means retirement from active  employment with the
         Company on or after age 65, or pursuant to such other  requirements  as
         may be established by the Committee or in any Award.

2.20     "Option Grant Date" means, as to any Stock Option, the latest of:

         (a)      the date on which the Committee grants the Stock Option by
                  entering into an Award Agreement with the Participant;

         (b)      the date the Participant receiving the Stock Option becomes
                  an employee of the Company, to the extent employment status
                  is a condition of the grant or a requirement of the Code or
                  the Act; or

         (c)      such other date (later than the dates described in (i) and
                  (ii) above) as the Committee may designate.

2.21     "Participant"  means  an  Eligible  Participant  to  whom an  Award  of
         equity-based  compensation has been granted and who has entered into an
         Agreement evidencing the Award.
<PAGE>

2.22     "Performance  Share"  means an Award under  Article XI of the Plan of a
         unit valued by  reference  to a  designated  number of shares of Stock,
         which value may be paid to the Participant by delivery of such property
         as the Committee shall determine, including without limitation, cash or
         Stock, or any combination thereof, upon achievement of such Performance
         objectives  during  the  Performance  Period  as  the  Committee  shall
         establish at the time of such Award or thereafter.

2.23     "Plan" means the MEDTOX SCIENTIFIC, INC. Equity Compensation Plan, as
         amended from time to time.

2.24     "Restricted  Stock"  means an Award of Stock under  Article VIII of the
         Plan,  which Stock is issued with the  restriction  that the holder may
         not sell,  transfer,  pledge,  or assign such Stock and with such other
         restrictions  as the  Committee,  in its sole  discretion,  may impose,
         including without limitation, any restriction on the right to vote such
         Stock, and the right to receive any cash dividends,  which restrictions
         may lapse  separately  or in  combination  at such  time or  times,  in
         installments or otherwise, as the Committee may deem appropriate.

2.25     "Restriction  Period" means the period  commencing on the date an Award
         of Restricted Stock is granted and ending on such date as the Committee
         shall determine.

2.26     "Retirement" means Normal or Early Retirement.

2.27     "Stock" means shares of common stock of MEDTOX SCIENTIFIC, INC., as
         may be adjusted pursuant to the provisions of Section 3.11.

2.28     "Stock Appreciation Right" means a Stock Right, as described in Article
         VI of this Plan,  which  provides for an amount payable in Stock and/or
         cash, as determined by the  Committee,  equal to the excess of the Fair
         Market  Value  of a  share  of  Stock  on the day the  Stock  Right  is
         exercised  over the price at which the  Participant  could  exercise  a
         related Stock Option to purchase the share of Stock.

2.29     "Stock  Appreciation Right Fair Market Value" means a value established
         by the  Committee for the exercise of a Stock  Appreciation  Right or a
         Limited Stock  Appreciation  Right.  If such exercise occurs during any
         quarterly  "window  period," as  specified by Rule 16b-3 under the Act,
         the Committee  may  establish a common value for exercises  during such
         window period.

2.30     "Stock Award" means an Award of Stock granted in payment of
         compensation, as provided in Article X of the Plan.

2.31     "Stock  Option"  means an Award under Article IV or V of the Plan of an

<PAGE>

         option to purchase  Stock.  A Stock  Option may be either an  Incentive
         Stock Option or a Nonqualified Stock Option.

2.32     "Stock Right" means an Award under Article VI of the Plan.  A Stock
         Right may be either a Stock Appreciation Right or a Limited Stock
         Appreciation Right.

2.33     "Termination of Employment" means the discontinuance of employment of a
         Participant  with the  Company  for any reason.  The  determination  of
         whether a Participant has discontinued  employment shall be made by the
         Committee in its  discretion.  In determining  whether a Termination of
         Employment  has  occurred,  the Committee may provide that service as a
         consultant  or service with a business  enterprise in which the Company
         has a  significant  ownership  interest  shall be treated as employment
         with the Company. The Committee shall have the discretion,  exercisable
         either at the time the Award is granted or at the time the  Participant
         terminates  employment,  to establish as a provision  applicable to the
         exercise  of one or more  Awards  that  during  the  limited  period of
         exercisability  following  Termination of Employment,  the Award may be
         exercised  not only with  respect  to the number of shares of Stock for
         which it is  exercisable  at the time of the  Termination of Employment
         but also with respect to one or more subsequent  installments for which
         the  Award  would  have  become  exercisable  had  the  Termination  of
         Employment not occurred.

                          ARTICLE III - ADMINISTRATION

3.1      This Plan shall be  administered by the Committee.  A Committee  member
         who is not a Disinterested  Person,  with respect to action to be taken
         by the  Committee,  shall not be able to participate in the decision to
         the extent  prescribed by Rule 16b-3 under the Act. The  Committee,  in
         its discretion,  may delegate to one or more of its members such of its
         powers as it deems appropriate.  The Committee also may limit the power
         of any member to the extent  necessary  to comply with Rule 16b-3 under
         the Act or any other law.  Members of the Committee  shall be appointed
         originally,  and as  vacancies  occur,  by the  Board,  to serve at the
         pleasure of the Board. The Board may serve as the Committee,  if by the
         terms of the Plan all Board members are otherwise  eligible to serve on
         the Committee.

3.2      The Committee  shall meet at such times and places as it determines.  A
         majority of its members shall constitute a quorum,  and the decision of
         a majority of those present at any meeting at which a quorum is present
         shall constitute the decision of the Committee.  A memorandum signed by
         all of its members  shall  constitute  the  decision  of the  Committee
         without necessity, in such event, for holding an actual meeting.

3.3      The Committee shall have the exclusive right to interpret, construe and
         administer  the Plan, to select the persons who are eligible to receive

<PAGE>

         an Award,  and to act in all matters  pertaining  to the granting of an
         Award and the contents of the Agreement evidencing the Award, including
         without  limitation,  the determination of the number of Stock Options,
         Stock Rights, shares of Stock or Performance Shares subject to an Award
         and the form,  terms,  conditions  and duration of each Award,  and any
         amendment thereof consistent with the provisions of the Plan. All acts,
         determinations and decisions of the Committee made or taken pursuant to
         grants of  authority  under the Plan or with  respect to any  questions
         arising in connection with the administration and interpretation of the
         Plan,  including  the  severability  of any and  all of the  provisions
         thereof, shall be conclusive,  final and binding upon all Participants,
         Eligible Participants and their beneficiaries.

3.4      The  Committee  may adopt such rules,  regulations  and  procedures  of
         general  application for the  administration  of this Plan, as it deems
         appropriate.

3.5      Without  limiting the  foregoing  Sections  3.1,  3.2, 3.3 and 3.4, and
         notwithstanding  any other  provisions  of the Plan,  the  Committee is
         authorized  to take such action as it  determines  to be  necessary  or
         advisable,  and fair and equitable to Participants,  with respect to an
         Award in the event of an Acceleration Event as defined in Article XIII.
         Such action may  include,  but shall not be limited  to,  establishing,
         amending or waiving the forms,  terms,  conditions  and  duration of an
         Award and the Award  Agreement,  so as to provide for  earlier,  later,
         extended  or  additional  times for  exercise  or  payments,  differing
         methods  for  calculating  payments,  alternate  forms and  amounts  of
         payment, an accelerated release of restrictions or other modifications.
         The  Committee  may take such  actions  pursuant to this Section 3.5 by
         adopting  rules  and  regulations  of  general   applicability  to  all
         Participants or to certain  categories of  Participants,  by including,
         amending  or  waiving  terms and  conditions  in an Award and the Award
         Agreement, or by taking action with respect to individual Participants.

3.6      The  aggregate  number of shares of Stock which are subject to an Award
         under the Plan shall be an amount equal to sixteen percent (16%) of the
         Company's Common Stock,  issued and outstanding from time to time. Such
         shares of Stock shall be made available  from  authorized and un-issued
         shares of the  Company.  All of such  shares of Stock may be subject to
         Incentive Stock Option Awards pursuant to Article IV hereof.

               (a) If, for any reason, any shares of Stock or Performance Shares
          awarded or subject to  purchase  under the Plan are not  delivered  or
          purchased,  or are reacquired by the Company,  for reasons  including,
          but not limited to, a forfeiture of Restricted  Stock or  termination,
          expiration  or  cancellation  of  a  Stock  Option,   Stock  Right  or
          Performance  Share,  or any  other  termination  of an  Award  without
          payment  being made in the form of Stock,  whether  or not  Restricted
          Stock, such shares of Stock or Performance Shares shall not be charged
          against the aggregate  number of shares of Stock  available for Awards
          under the Plan, and may again be available for Award under the Plan.
<PAGE>

               (b) For all  purposes  under the  Plan,  each  Performance  Share
          awarded shall be counted as one share of Stock subject to an Award.

               (c) To the  extent a Stock  Right  granted in  connection  with a
          Stock Option is exercised  without  payment  being made in the form of
          Stock,  whether or not  Restricted  Stock,  the shares of Stock  which
          otherwise  would have been  issued upon the  exercise of such  related
          Stock  Option  shall not be charged  against the  aggregate  number of
          shares of Stock  subject  to Awards  under the Plan,  and may again be
          available for Award under the Plan.

3.7      Each Award granted under the Plan shall be evidenced by a written Award
         Agreement. Each Award Agreement shall be subject to and incorporate, by
         reference or  otherwise,  the  applicable  terms and  conditions of the
         Plan, and any other terms and  conditions,  not  inconsistent  with the
         Plan, required by the Committee.

3.8      The Company shall not be required to issue or deliver any certificates
         for shares of Stock prior to:

         (a)      the listing of such shares on any stock exchange on which the
                  Stock may then be listed; and

         (b)      the completion of any  registration or  qualification  of such
                  shares of Stock  under any federal or state law, or any ruling
                  or regulation of any government  body which the Company shall,
                  in its discretion, determine to be necessary or advisable.

3.9      All  certificates  for shares of Stock  delivered  under the Plan shall
         also be subject to such stop-transfer  orders and other restrictions as
         the  Committee may deem  advisable  under the rules,  regulations,  and
         other requirements of the Securities and Exchange Commission, any stock
         exchange upon which the Stock is then listed and any applicable federal
         or state laws,  and the  Committee  may cause a legend or legends to be
         placed on any such  certificates to make appropriate  reference to such
         restrictions. In making such determination, the Committee may rely upon
         an opinion of counsel for the Company.

3.10     Subject to the restrictions on Restricted Stock, as provided in Article
         VIII of the Plan and in the  Restricted  Stock  Award  Agreement,  each
         Participant who receives an Award of Restricted Stock shall have all of
         the  rights of a  shareholder  with  respect  to such  shares of Stock,
         including  the right to vote the  shares to the  extent,  if any,  such
         shares   possess   voting  rights  and  receive   dividends  and  other
         distributions.  Except as provided otherwise in the Plan or in an Award
         Agreement, no Participant awarded a Stock Option, Stock Right, Deferred
         Stock,  Stock  Award or  Performance  Share  shall  have any right as a
         shareholder  with respect to any shares of Stock  covered by his or her
         Stock Option,  Stock Right,  Deferred Stock, Stock Award or Performance
         Share prior to the date of issuance to him or her of a  certificate  or

<PAGE>

         certificates for such shares of Stock.

3.11     If  any  reorganization,   recapitalization,   reclassification,  stock
         split-up,  stock dividend,  or consolidation of shares of Stock, merger
         or  consolidation  of the Company or sale or other  disposition  by the
         Company  of all or a portion  of its  assets,  any other  change in the
         Company's  corporate  structure,  or any  distribution  to shareholders
         other than a cash dividend results in the outstanding  shares of Stock,
         or any securities  exchanged therefor or received in their place, being
         exchanged  for a different  number or class of shares of Stock or other
         securities of the Company,  or for shares of Stock or other  securities
         of any other  corporation;  or new,  different or additional  shares or
         other  securities  of the  Company  or of any other  corporation  being
         received by the holders of outstanding  shares of Stock, then equitable
         adjustments shall be made by the Committee in:

         (a)      the limitation of the aggregate number of shares of Stock that
                  may be awarded as set forth in Section 3.6 of the Plan;

         (b)      the number and class of Stock that may be subject to an Award,
                  and which have not been issued or transferred under an
                  outstanding Award;

         (c)      the  purchase  price  to be paid  per  share  of  Stock  under
                  outstanding Stock Options and the number of shares of Stock to
                  be transferred in settlement of outstanding Stock Rights; and

         (d)      the terms,  conditions or  restrictions of any Award and Award
                  Agreement,  including the price payable for the acquisition of
                  Stock;  provided,  however,  that all adjustments  made as the
                  result of the  foregoing  in respect of each  Incentive  Stock
                  Option shall be made so that such Stock Option shall  continue
                  to be an Incentive Stock Option,  as defined in Section 422 of
                  the Code.

3.12     In addition to such other rights of indemnification as they may have as
         directors or as members of the Committee,  the members of the Committee
         shall  be  indemnified  by the  Company  against  reasonable  expenses,
         including   attorney's  fees,  actually  and  necessarily  incurred  in
         connection  with the defense of any action,  suit or proceeding,  or in
         connection with any appeal therein, to which they or any of them may be
         a party by reason of any  action  taken or  failure  to act under or in
         connection with the Plan or any Award granted  thereunder,  and against
         all  amounts  paid  by  them  in  settlement  thereof,   provided  such
         settlement is approved by  independent  legal  counsel  selected by the
         Company, or paid by them in satisfaction of a judgment or settlement in
         any such action,  suit or proceeding,  except as to matters as to which
         the Committee member has been negligent or engaged in misconduct in the
         performance  of  his  duties;  provided,  that  within  60  days  after
         institution of any such action, suit or proceeding,  a Committee member
         shall in writing offer the Company the opportunity, at its own expense,
         to handle and defend the same.
<PAGE>

3.13     The  Committee  may  require  each  person  purchasing  shares of Stock
         pursuant to a Stock  Option or other Award under the Plan to  represent
         to and agree  with the  Company  in writing  that he is  acquiring  the
         shares  of  Stock  without  a  view  to   distribution   thereof.   The
         certificates  for such shares of Stock may include any legend which the
         Committee deems appropriate to reflect any restrictions on transfer.

3.14     The Committee  shall be authorized to make  adjustments  in performance
         based  criteria  or in the  terms  and  conditions  of other  Awards in
         recognition of unusual or nonrecurring  events affecting the Company or
         its financial statements or changes in applicable laws,  regulations or
         accounting principles. The Committee may correct any defect, supply any
         omission  or  reconcile  any  inconsistency  in the  Plan or any  Award
         Agreement  in the manner and to the extent it shall deem  desirable  to
         carry it into effect. In the event the Company shall assume outstanding
         employee  benefit awards or the right or obligation to make future such
         awards in connection  with the  acquisition  of another  corporation or
         business  entity,  the  Committee  may,  in its  discretion,  make such
         adjustments  in the  terms of Awards  under  the Plan as it shall  deem
         appropriate.

3.15     The Committee shall have full power and authority to determine whether,
         to what  extent  and  under  what  circumstances,  any  Award  shall be
         canceled or  suspended.  In  particular,  but without  limitation,  all
         outstanding  Awards  to any  Participant  may be  canceled  if (a)  the
         Participant,  without the consent of the  Committee,  while employed by
         the Company or after termination of such employment, becomes associated
         with,  employed by, renders services to, or owns any interest in, other
         than any non-substantial  interest, as determined by the Committee, any
         business that is in  competition  with the Company or with any business
         in which the Company has a  substantial  interest as  determined by the
         Committee;  or  (b)  is  terminated  for  cause  as  determined  by the
         Committee.

                      ARTICLE IV - INCENTIVE STOCK OPTIONS

4.1      Each  provision of this Article IV and of each  Incentive  Stock Option
         granted  hereunder shall be construed in accordance with the provisions
         of Section 422 of the Code, and any provision  hereof that cannot be so
         construed shall be disregarded.

4.2      Incentive Stock Options shall be granted only to Eligible  Participants
         who are in the active  employment  of the Company,  each of whom may be
         granted one or more such  Incentive  Stock Options for a reason related
         to his  employment  at such time or times  determined  by the Committee
         following  the Effective  Date until  October 26, 2003,  subject to the
         following conditions:

         (a)      The  Incentive  Stock Option price per share of Stock shall be
                  set in the Award Agreement, but shall not be less than 100% of
                  the Fair Market  Value of the Stock on the Option  Grant Date.

<PAGE>

                  If the Optionee  owns more than 10% of the  outstanding  Stock
                  (as determined  pursuant to Section 424(d) of the Code) on the
                  Option Grant Date, the Incentive  Stock Option price per share
                  shall not be less than  110% of the Fair  Market  Value of the
                  Stock on the Option Grant Date.

               (b) The Incentive  Stock Option and its related  Stock Right,  if
          any, may be exercised in whole or in part from time to time within ten
          (10) years from the Option  Grant Date (five (5) years if the Optionee
          owns more than 10% of the Stock on the  Option  Grant  Date),  or such
          shorter  period as may be  specified  by the  Committee  in the Award;
          provided,  that in any event,  the Incentive  Stock Option and related
          Stock Right shall lapse and cease to be  exercisable  upon,  or within
          such period following,  a Termination of Employment as shall have been
          determined by the  Committee  and as specified in the Incentive  Stock
          Option  Award  Agreement or its related  Stock Right Award  Agreement;
          provided,  however,  that  such  period  following  a  Termination  of
          Employment shall not exceed three months unless  employment shall have
          terminated:

               (i) as a result  of death or  Disability,  in which  event,  such
          period  shall  not  exceed  one  year  after  the  date  of  death  or
          Disability; and

               (ii) as a result of death, if death shall have occurred following
          a Termination  of Employment  and while the Incentive  Stock Option or
          Stock Right was still  exercisable,  in which event, such period shall
          not exceed one year after the date of death;  provided,  further, that
          such period  following a Termination  of Employment  shall in no event
          extend the original  exercise  period of the Incentive Stock Option or
          any related Stock Right.

         (c)      The aggregate  Fair Market Value,  determined as of the Option
                  Grant  Date,  of the  shares of Stock  with  respect  to which
                  Incentive  Stock  Options  are first  exercisable  during  any
                  calendar  year by any  Eligible  Participant  shall not exceed
                  $100,000;  provided,  however,  to the extent  permitted under
                  Section 422 of the Code:

                  (i)      if a Participant's employment is terminated by reason
                           of death, Disability or Retirement and the portion of
                           any   Incentive   Stock   Option  that  is  otherwise
                           exercisable   during  the   post-termination   period
                           applied  without  regard to the  $100,000  limitation
                           contained in section 422(b)(6) of the Code is greater
                           than the portion of such  option that is  immediately
                           exercisable as an Incentive  Stock Option during such
                           post-termination   period  under  Section  422,  such
                           excess  shall  be  treated  as a  Nonqualified  Stock
                           Option; and

                  (ii)     if the  exercise  of an  Incentive  Stock  Option  is
                           accelerated by reason of an Acceleration  Event,  any
                           portion of such Award that is not  exercisable  as an

<PAGE>

                           Incentive  Stock  Option by  reason  of the  $100,000
                           limitation contained in Section 422(b)(6) of the Code
                           shall be treated as a Nonqualified Stock Option.

         (d)      The Committee may adopt any other terms and  conditions  which
                  it determines should be imposed for the Incentive Stock Option
                  to qualify under Section 422 of the Code, as well as any other
                  terms and conditions not inconsistent  with this Article IV as
                  determined by the Committee.

4.3      The  Committee  may at any time offer to buy out for a payment in cash,
         Stock,  Deferred  Stock or Restricted  Stock an Incentive  Stock Option
         previously granted, based on such terms and conditions as the Committee
         shall  establish and  communicate  to the  Participant at the time that
         such offer is made.

4.4      If  the  Incentive  Stock  Option  Award  Agreement  so  provides,  the
         Committee  may  require  that all or part of the  shares of Stock to be
         issued upon the  exercise of an  Incentive  Stock Option shall take the
         form of Deferred or Restricted Stock, which shall be valued on the date
         of exercise,  as determined by the Committee,  on the basis of the Fair
         Market Value of such  Deferred  Stock or  Restricted  Stock  determined
         without   regard  to  the  deferral   limitations   and/or   forfeiture
         restrictions involved.

                     ARTICLE V - NONQUALIFIED STOCK OPTIONS

5.1      One or more Stock Options may be granted as Nonqualified  Stock Options
         to Eligible  Participants  to purchase  shares of Stock at such time or
         times  determined  by the  Committee,  following  the  Effective  Date,
         subject to the terms and conditions set forth in this Article V.

5.2      The  Nonqualified  Stock  Option  price  per  share of  Stock  shall be
         established  in the  Award  Agreement  and may be less than 100% of the
         Fair  Market  Value at the time of the grant,  or at such later date as
         the Committee shall determine.

5.3      The Nonqualified  Stock Option and its related Stock Right, if any, may
         be exercised in full or in part from time to time within such period as
         may be specified by the Committee or in the Award Agreement;  provided,
         that, in any event, the Nonqualified Stock Option and the related Stock
         Right  shall  lapse and cease to be  exercisable  upon,  or within such
         period  following,   Termination  of  Employment  as  shall  have  been
         determined by the Committee and as specified in the Nonqualified  Stock
         Option  Award  Agreement  or Stock  Right  Award  Agreement;  provided,
         however, that such period following Termination of Employment shall not
         exceed three months unless employment shall have terminated:

         (a)      as a result of Retirement or Disability,  in which event, such
                  period shall not exceed one year after the date of  Retirement

<PAGE>

                  or  Disability,  or within such longer period as the Committee
                  may specify; and

         (b)      as a  result  of  death,  or  if  death  shall  have  occurred
                  following  a   Termination   of   Employment   and  while  the
                  Nonqualified   Stock   Option   or  Stock   Right   was  still
                  exercisable,  in which event,  such period may exceed one year
                  after the date of death,  as provided by the  Committee  or in
                  the Award Agreement.

5.4      The  Nonqualified  Stock Option Award  Agreement  may include any other
         terms and conditions not inconsistent with this Article V or in Article
         VII, as determined by the Committee.

                     ARTICLE VI - STOCK APPRECIATION RIGHTS

6.1      A Stock Appreciation Right may be granted to an Eligible Participant in
         connection  with an  Incentive  Stock  Option or a  Nonqualified  Stock
         Option  granted  under  Article IV or Article V of this Plan, or may be
         granted independent of any related Stock Option.

6.2      A related  Stock  Appreciation  Right shall entitle a holder of a Stock
         Option,  within  the period  specified  for the  exercise  of the Stock
         Option,  to  surrender  the  unexercised  Stock  Option,  or a  portion
         thereof,  and to  receive  in  exchange  therefor  a payment in cash or
         shares of Stock having an aggregate  value equal to the amount by which
         the Fair Market  Value of each share of Stock  exceeds the Stock Option
         price per share of Stock, times the number of shares of Stock under the
         Stock Option, or portion thereof, which is surrendered.

6.3      Each  related  Stock  Appreciation  Right  granted  hereunder  shall be
         subject to the same terms and  conditions  as the related Stock Option,
         including limitations on transferability, and shall be exercisable only
         to the extent such Stock Option is exercisable  and shall  terminate or
         lapse  and  cease to be  exercisable  when  the  related  Stock  Option
         terminates or lapses. The grant of Stock Appreciation Rights related to
         Incentive  Stock  Options  must be  concurrent  with  the  grant of the
         Incentive Stock Options.  With respect to  Nonqualified  Stock Options,
         the grant either may be concurrent  with the grant of the  Nonqualified
         Stock  Options,  or  in  connection  with  Nonqualified  Stock  Options
         previously  granted under Article V, which are unexercised and have not
         terminated or lapsed.

6.4      The  Committee  shall have sole  discretion  to  determine in each case
         whether  the  payment   with   respect  to  the  exercise  of  a  Stock
         Appreciation Right will be in the form of all cash or all Stock, or any
         combination  thereof.  If payment is to be made in Stock, the number of
         shares of Stock shall be  determined  based on the Fair Market Value of
         the Stock on the date of exercise. If the Committee elects to make full
         payment in Stock,  no  fractional  shares of Stock  shall be issued and

<PAGE>

         cash payments shall be made in lieu of fractional shares.

6.5      The  Committee  shall  have  sole  discretion  as to the  timing of any
         payment made in cash or Stock, or a combination thereof,  upon exercise
         of Stock  Appreciation  Rights.  Payment  may be made in a lump sum, in
         annual  installments  or may be otherwise  deferred;  and the Committee
         shall have sole discretion to determine  whether any deferred  payments
         may bear amounts equivalent to interest or cash dividends.

6.6      Upon exercise of a Stock  Appreciation  Right,  the number of shares of
         Stock  subject  to  exercise  under  any  related  Stock  Option  shall
         automatically  be reduced by the number of shares of Stock  represented
         by the Stock Option or portion thereof which is surrendered.

6.7      Notwithstanding  any other  provision  of the Plan,  the  exercise of a
         Stock   Appreciation  Right  is  required  to  satisfy  the  applicable
         requirements under Rule 16b-3 of the Act.

6.8      The Committee,  in its sole  discretion,  may also provide that, in the
         event of a Change in Control and/or a Potential  Change in Control,  as
         defined in Article  XIII,  the amount to be paid upon the exercise of a
         Stock  Appreciation  Right or Limited Stock Appreciation Right shall be
         based on the Change in  Control  Price,  as  defined  in Section  13.9,
         subject to such terms and conditions as the Committee may specify.

6.9      In  its  sole  discretion,   the  Committee  may  grant  Limited  Stock
         Appreciation  Rights under this Article VI. Limited Stock  Appreciation
         Rights  become  exercisable  only in the event of a Change  in  Control
         and/or a  Potential  Change  in  Control,  subject  to such  terms  and
         conditions as the Committee, in its sole discretion,  may specify. Such
         Limited Stock  Appreciation  Rights shall be settled  solely in cash. A
         Limited  Stock  Appreciation  Right  shall  entitle  the  holder of the
         related  Stock Option to surrender  such Stock  Option,  or any portion
         thereof,  to the extent  unexercised in respect of the number of shares
         of  Stock  as  to  which  such  Limited  Stock  Appreciation  Right  is
         exercised,  and to  receive  a cash  payment  equal  to the  difference
         between (a) the Stock Appreciation Right Fair Market Value, at the date
         of  surrender,  of a share of Stock  for which  the  surrendered  Stock
         Option or  portion  thereof is then  exercisable,  and (b) the price at
         which a Participant  could  exercise a related Stock Option to purchase
         the  share  of  Stock.  Such  Stock  Option  shall,  to the  extent  so
         surrendered,  thereupon  cease  to  be  exercisable.  A  Limited  Stock
         Appreciation   Right  shall  be  subject  to  such  further  terms  and
         conditions  as the  Committee  shall,  in  its  sole  discretion,  deem
         appropriate,  including  any  restrictions  necessary  to  comply  with
         Section 16(b) of the Act.

            ARTICLE VII - INCIDENTS OF STOCK OPTIONS AND STOCK RIGHTS

7.1      Each Stock  Option  and Stock  Right  shall be granted  subject to such
         terms and conditions, if any, not inconsistent with this Plan, as shall

<PAGE>

         be  determined  by  the  Committee,  including  any  provisions  as  to
         continued employment as consideration for the grant or exercise of such
         Stock Option or Stock Right and any  provisions  which may be advisable
         to  comply  with  applicable  laws,   regulations  or  rulings  of  any
         governmental authority.

7.2      A  Stock  Option  or  Stock  Right  shall  not be  transferable  by the
         Participant  other  than  by  will  or  by  the  laws  of  descent  and
         distribution,  or, to the extent otherwise  allowed by Rule 16b-3 under
         the Act, or other  applicable  law,  pursuant  to a qualified  domestic
         relations  order  as  defined  by the Code or the  Employee  Retirement
         Income Security Act, or the rules thereunder,  and shall be exercisable
         during the lifetime of the  Participant  only by him or by his guardian
         or legal representative.

7.3      Shares of Stock purchased upon exercise of a Stock Option shall be paid
         for in such  amounts,  at such  times and upon  such  terms as shall be
         determined by the Committee,  subject to  limitations  set forth in the
         Stock Option Award  Agreement.  Without  limiting  the  foregoing,  the
         Committee may establish payment terms for the exercise of Stock Options
         which  permit  the  Participant  to deliver  shares of Stock,  or other
         evidence of ownership of Stock satisfactory to the Company, with a Fair
         Market Value equal to the Stock Option price as payment.

7.4      No  cash  dividends  shall  be paid  on  shares  of  Stock  subject  to
         unexercised Stock Options. The Committee may provide,  however,  that a
         Participant   to  whom  a  Stock  Option  has  been  granted  which  is
         exercisable  in whole or in part at a future  time for  shares of Stock
         shall be  entitled to receive an amount per share equal in value to the
         cash dividends, if any, paid per share on issued and outstanding Stock,
         as of the dividend record dates occurring during the period between the
         date of the grant and the time  each such  share of Stock is  delivered
         pursuant to exercise of such Stock  Option or the related  Stock Right.
         Such  amounts  (herein  called  "dividend  equivalents")  may,  in  the
         discretion of the Committee, be:

         (a)      paid in cash or Stock either from time to time prior to, or at
                  the time of the delivery of, such Stock, or upon expiration of
                  the Stock Option if it shall not have been fully exercised; or

         (b)      converted into  contingently  credited  shares of Stock,  with
                  respect to which  dividend  equivalents  may  accrue,  in such
                  manner,  at such value, and deliverable at such time or times,
                  as may be determined by the Committee.

         Such  Stock,  whether  delivered  or  contingently  credited,  shall be
         charged against the limitations set forth in Section 3.6.

7.5      The  Committee,  in its  sole  discretion,  may  authorize  payment  of
         interest  equivalents on dividend equivalents which are payable in cash
         at a future time.
<PAGE>

7.6      In the event of Disability or death, the Committee, with the consent of
         the Participant or his legal representative,  may authorize payment, in
         cash or in  Stock,  or  partly  in cash and  partly  in  Stock,  as the
         Committee may direct,  of an amount equal to the difference at the time
         between the Fair Market  Value of the Stock  subject to a Stock  Option
         and the option  price in  consideration  of the  surrender of the Stock
         Option.

7.7      If a  Participant  is  required  to pay to the  Company an amount  with
         respect  to  income  and  employment  tax  withholding  obligations  in
         connection  with exercise of a Nonqualified  Stock Option,  and/or with
         respect to certain  dispositions of Stock acquired upon the exercise of
         an Incentive Stock Option, the Committee, in its discretion and subject
         to such rules as it may adopt,  may permit the  Participant  to satisfy
         the obligation,  in whole or in part, by making an irrevocable election
         that a portion  of the total Fair  Market  Value of the shares of Stock
         subject to the Nonqualified Stock Option and/or with respect to certain
         dispositions  of Stock acquired upon the exercise of an Incentive Stock
         Option,  be paid in the form of cash in lieu of the  issuance  of Stock
         and that  such cash  payment  be  applied  to the  satisfaction  of the
         withholding obligations. The amount to be withheld shall not exceed the
         statutory minimum federal and state income and employment tax liability
         arising from the Stock Option exercise transaction. Notwithstanding any
         other  provision of the Plan,  any  election  under this Section 7.7 is
         required to satisfy the applicable requirements under Rule 16b-3 of the
         Act.

7.8      The Committee may permit the voluntary surrender of all or a portion of
         any Stock  Option  granted  under the Plan to be  conditioned  upon the
         granting  to the  Participant  of a new Stock  Option for the same or a
         different number of shares of Stock as the Stock Option surrendered, or
         may require such surrender as a condition precedent to a grant of a new
         Stock  Option to such  Participant.  Subject to the  provisions  of the
         Plan,  such new Stock  Option shall be  exercisable  at the same price,
         during  such  period  and on such  other  terms and  conditions  as are
         specified by the Committee at the time the new Stock Option is granted.
         Upon surrender, the Stock Options surrendered shall be canceled and the
         shares of Stock  previously  subject to them shall be available for the
         grant of other Stock Options.

                         ARTICLE VIII - RESTRICTED STOCK

8.1      Restricted  Stock  Awards  may be made to  certain  Participants  as an
         incentive for the  performance of future  services that will contribute
         materially  to the  successful  operation  of the  Company.  Awards  of
         Restricted  Stock may be made either alone, in addition to or in tandem
         with other  Awards  granted  under the Plan and/or cash  payments  made
         outside of the Plan.

8.2      With respect to Awards of Restricted Stock, the Committee shall:
<PAGE>

         (a)      determine  the  purchase  price,  if any,  to be paid for such
                  Restricted Stock, which may be equal to or less than par value
                  and may be zero, subject to such minimum  consideration as may
                  be required by applicable law;

         (b)      determine the length of the Restriction Period;

         (c)      determine any restrictions applicable to the Restricted Stock
                  such as service or performance, other than those set forth in
                  this Article VIII;

         (d)      determine if the restrictions  shall lapse as to all shares of
                  Restricted Stock at the end of the Restriction Period or as to
                  a portion of the shares of  Restricted  Stock in  installments
                  during the Restriction Period; and

         (e)      determine  if  dividends  and  other   distributions   on  the
                  Restricted  Stock are to be paid currently to the  Participant
                  or paid to the Company for the account of the Participant.

8.3      Awards of Restricted Stock must be accepted within a period of 60 days,
         or such shorter  period as the  Committee  may specify,  by executing a
         Restricted  Stock Award Agreement and paying whatever price, if any, is
         required.  The prospective  recipient of a Restricted Stock Award shall
         not have any rights with respect to such Award,  unless such  recipient
         has executed a Restricted  Stock Award  Agreement  and has  delivered a
         fully  executed  copy  thereof  to the  Committee,  and  has  otherwise
         complied with the applicable terms and conditions of such Award.

8.4      Except  when  the  Committee  determines  otherwise,  or  as  otherwise
         provided in the  Restricted  Stock Award  Agreement,  if a  Participant
         terminates  employment  with the  Company  for any  reason  before  the
         expiration of the Restriction  Period,  all shares of Restricted  Stock
         still subject to restriction  shall be forfeited by the Participant and
         shall be reacquired by the Company.

8.5      Except  as  otherwise  provided  in this  Article  VIII,  no  shares of
         Restricted  Stock received by a Participant  shall be sold,  exchanged,
         transferred,  pledged, hypothecated or otherwise disposed of during the
         Restriction Period.

8.6      To the  extent not  otherwise  provided  in a  Restricted  Stock  Award
         Agreement,  in cases of death,  Disability or Retirement or in cases of
         special circumstances,  the Committee,  if it finds that a waiver would
         be  appropriate,  may elect to waive any or all remaining  restrictions
         with respect to such Participant's Restricted Stock.

8.7      In  the  event  of  hardship  or  other  special   circumstances  of  a
         Participant   whose   employment  with  the  Company  is  involuntarily
         terminated,  the  Committee  may  waive  in whole or in part any or all

<PAGE>

         remaining  restrictions with respect to any or all of the Participant's
         Restricted  Stock,  based on such factors and criteria as the Committee
         may deem appropriate.

8.8      The certificates representing shares of Restricted Stock may either:

         (a)      be held in custody by the Company until the Restriction Period
                  expires or until restrictions thereon otherwise lapse, and the
                  Participant  shall  deliver  to  the  Company  a  stock  power
                  endorsed in blank relating to the Restricted Stock; and/or

         (b)      be issued to the Participant and registered in the name of the
                  Participant,  and shall bear an appropriate restrictive legend
                  and shall be subject to appropriate stop-transfer orders.

8.9      Except as provided in this  Article  VIII,  a  Participant  receiving a
         Restricted  Stock  Award  shall  have,  with  respect  to the shares of
         Restricted  Stock  covered  by  any  Award,  all  of  the  rights  of a
         shareholder  of the Company,  including the right to vote the shares to
         the extent,  if any, such shares possess voting rights and the right to
         receive any  dividends;  provided,  however,  the Committee may require
         that  any  dividends  on such  shares  of  Restricted  Stock  shall  be
         automatically  deferred and reinvested in additional  Restricted  Stock
         subject  to the  same  restrictions  as the  underlying  Award,  or may
         require that  dividends and other  distributions  on  Restricted  Stock
         shall be paid to the Company for the  account of the  Participant.  The
         Committee  shall  determine  whether  interest  shall  be  paid on such
         amounts, the rate of any such interest,  and the other terms applicable
         to such amounts.

8.10     If and when the Restriction  Period expires without a prior  forfeiture
         of  the   Restricted   Stock  subject  to  such   Restriction   Period,
         unrestricted  certificates  for such shares  shall be  delivered to the
         Participant.

8.11     In order to better  ensure  that Award  payments  actually  reflect the
         performance  of the  Company and the  service of the  Participant,  the
         Committee  may  provide,   in  its  sole   discretion,   for  a  tandem
         performance-based or other Award designed to guarantee a minimum value,
         payable in cash or Stock to the recipient of a Restricted  Stock Award,
         subject to such performance,  future service,  deferral and other terms
         and conditions as may be specified by the Committee.

<PAGE>
                           ARTICLE IX - DEFERRED STOCK

9.1      Shares of Deferred Stock together with cash dividend equivalents, if so
         determined by the Committee,  may be issued either alone or in addition
         to  other  Awards  granted  under  the  Plan in the  discretion  of the
         Committee.  The Committee  shall determine the individuals to whom, and
         the time or times at which,  such  Awards  will be made,  the number of
         shares to be awarded, the price, if any, to be paid by the recipient of
         a Deferred Stock Award,  the time or times within which such Awards may
         be subject to forfeiture,  and all other conditions of the Awards.  The
         Committee may condition Awards of Deferred Stock upon the attainment of
         specified  performance  goals or such other  factors or criteria as the
         Committee may determine.

9.2      Deferred Stock Awards shall be subject to the following terms and
         conditions:

         (a)      Subject  to the  provisions  of this  Plan and the  applicable
                  Award  Agreement,  Deferred  Stock  Awards  may  not be  sold,
                  transferred,  pledged, assigned or otherwise encumbered during
                  the period  specified  by the  Committee  for purposes of such
                  Award  (the  "Deferral  Period").  At  the  expiration  of the
                  Deferral  Period,  or the Elective  Deferral Period defined in
                  Section  9.3,  share  certificates  shall be  delivered to the
                  Participant, or his legal representative, in a number equal to
                  the number of shares of Stock  covered by the  Deferred  Stock
                  Award.

                  Based on service,  performance  and/or  such other  factors or
                  criteria  as  the  Committee  may  determine,  the  Committee,
                  however,  at or after grant, may accelerate the vesting of all
                  or any part of any  Deferred  Stock  Award  and/or  waive  the
                  deferral limitations for all or any part of such Award.

         (b)      Unless otherwise determined by the Committee, amounts equal to
                  any dividends that would have been payable during the Deferral
                  Period with  respect to the number of shares of Stock  covered
                  by a  Deferred  Stock  Award if such  shares of Stock had been
                  outstanding  shall be automatically  deferred and deemed to be
                  reinvested in additional  Deferred Stock,  subject to the same
                  deferral limitations as the underlying Award.

         (c)      Except to the extent otherwise provided in this Plan or in the
                  applicable  Award  Agreement,  upon  Termination of Employment
                  during the  Deferral  Period for a given  Award,  the Deferred
                  Stock  covered  by  such  Award  shall  be  forfeited  by  the
                  Participant;  provided, however, the Committee may provide for
                  accelerated  vesting in the event of Termination of Employment
                  due to death,  Disability  or  Retirement,  or in the event of
                  hardship or other special circumstances as the Committee deems
                  appropriate.

         (d)      The Committee may require that a designated  percentage of the

<PAGE>

                  total Fair Market  Value of the shares of Deferred  Stock held
                  by one or more  Participants  be  paid in the  form of cash in
                  lieu of the  issuance  of Stock and that such cash  payment be
                  applied to the  satisfaction  of the federal and state  income
                  and employment tax withholding  obligations  that arise at the
                  time the Deferred Stock becomes free of all restrictions.  The
                  designated percentage shall be equal to the minimum income and
                  employment  tax  withholding  rate in effect at the time under
                  applicable federal and state laws.

         (e)      The Committee may provide one or more Participants  subject to
                  the  mandatory  cash  payment  with an  election to receive an
                  additional percentage of the total value of the Deferred Stock
                  in the  form of a cash  payment  in lieu  of the  issuance  of
                  Deferred Stock. The additional percentage shall not exceed the
                  difference  between  50% and the  designated  percentage  cash
                  payment.

         (f)      The Committee may impose such further terms and  conditions on
                  partial cash  payments  with  respect to Deferred  Stock as it
                  deems  appropriate,  including any  restrictions  necessary to
                  comply with Section 16(b) of the Act.

9.3      A Participant  may elect to further defer receipt of Deferred Stock for
         a specified  period or until a specified event (the "Elective  Deferral
         Period"),  subject in each case to the Committee's approval and to such
         terms as are  determined by the  Committee.  Subject to any  exceptions
         adopted by the Committee, such election must generally be made at least
         12 months prior to completion  of the Deferral  Period for the Deferred
         Stock Award in question,  or for the applicable  installment of such an
         Award.

9.4      Each Award shall be confirmed by, and subject to the terms of, a
         Deferred Stock Award Agreement.

9.5      In  order to  better  ensure  that  the  Award  actually  reflects  the
         performance  of the  Company and the  service of the  Participant,  the
         Committee  may  provide,   in  its  sole   discretion,   for  a  tandem
         performance-based or other Award designed to guarantee a minimum value,
         payable in cash or Stock to the  recipient  of a Deferred  Stock Award,
         subject to such performance,  future service,  deferral and other terms
         and conditions as may be specified by the Committee.

                            ARTICLE X - STOCK AWARDS

10.1     A Stock Award shall be granted only in payment of compensation that has
         been  earned  or  as  compensation  to  be  earned,  including  without
         limitation,  compensation  awarded  concurrently  with or  prior to the
         grant of the Stock Award.

10.2     For the  purposes  of this Plan,  in  determining  the value of a Stock

<PAGE>

         Award,  all shares of Stock subject to such Stock Award shall be valued
         at not less than 100% of the Fair Market  Value of such shares of Stock
         on the date such Stock Award is granted,  regardless of whether or when
         such shares of Stock are issued or transferred to the  Participant  and
         whether or not such shares of Stock are subject to  restrictions  which
         affect their value.

10.3     Shares of Stock  subject to a Stock Award may be issued or  transferred
         to the  Participant  at the time the Stock Award is granted,  or at any
         time subsequent  thereto,  or in installments from time to time, as the
         Committee shall  determine.  If any such issuance or transfer shall not
         be made to the Participant at the time the Stock Award is granted,  the
         Committee may provide for payment to such  Participant,  either in cash
         or  shares of  Stock,  from  time to time or at the time or times  such
         shares of Stock shall be issued or transferred to such Participant,  of
         amounts not exceeding  the  dividends  which would have been payable to
         such  Participant in respect of such shares of Stock, as adjusted under
         Section 3.11, if such shares of Stock had been issued or transferred to
         such Participant at the time such Stock Award was granted. Any issuance
         payable  in shares of Stock  under the terms of a Stock  Award,  at the
         discretion of the Committee,  may be paid in cash on each date on which
         delivery  of shares of Stock  would  otherwise  have been  made,  in an
         amount  equal to the Fair  Market  Value on such date of the  shares of
         Stock which would otherwise have been delivered.

10.4     A Stock Award shall be subject to such terms and conditions,  including
         without  limitation,  restrictions on the sale or other  disposition of
         the  Stock  Award or of the  shares  of  Stock  issued  or  transferred
         pursuant  to  such  Stock  Award,  as the  Committee  shall  determine;
         provided,  however,  that  upon the  issuance  or  transfer  of  shares
         pursuant to a Stock Award, the Participant, with respect to such shares
         of  Stock,  shall be and  become a  shareholder  of the  Company  fully
         entitled  to receive  dividends,  to vote to the extent,  if any,  such
         shares  possess  voting  rights and to exercise  all other  rights of a
         shareholder except to the extent otherwise provided in the Stock Award.
         Each Stock Award shall be  evidenced  by a written  Award  Agreement in
         such form as the Committee shall determine.

                         ARTICLE XI - PERFORMANCE SHARES

11.1     Awards of Performance Shares may be made to certain  Participants as an
         incentive for the  performance of future  services that will contribute
         materially  to the  successful  operation  of the  Company.  Awards  of
         Performance  Shares may be made  either  alone,  in  addition  to or in
         tandem with other Awards  granted  under the Plan and/or cash  payments
         made outside of the Plan.

11.2     With respect to Awards of Performance  Shares,  which may be issued for
         no  consideration  or such  minimum  consideration  as is  required  by
         applicable law, the Committee shall:

         (a)      determine and designate from time to time those Participants

<PAGE>

                  to whom Awards of Performance Shares are to be made;

         (b)      determine the performance period (the "Performance Period")
                  and/or performance objectives (the "Performance Objectives")
                  applicable to such Awards;

         (c)      determine the form of settlement of a Performance Share; and

         (d)      generally  determine  the  terms and  conditions  of each such
                  Award. At any date, each Performance  Share shall have a value
                  equal to the Fair  Market  Value,  determined  as set forth in
                  Section 2.15.

11.3     Performance  Periods may  overlap,  and  Participants  may  participate
         simultaneously  with respect to Performance  Shares for which different
         Performance Periods are prescribed.

11.4     The Committee shall  determine the Performance  Objectives of Awards of
         Performance Shares. Performance Objectives may vary from Participant to
         Participant and between Awards and shall be based upon such performance
         criteria  or   combination   of  factors  as  the  Committee  may  deem
         appropriate,  including  for  example,  but  not  limited  to,  minimum
         earnings  per share or  return on  equity.  If during  the  course of a
         Performance  Period  there shall  occur  significant  events  which the
         Committee  expects  to  have a  substantial  effect  on the  applicable
         Performance  Objectives  during such period,  the  Committee may revise
         such Performance Objectives.

11.5     The  Committee  shall  determine  for each  Participant  the  number of
         Performance  Shares  which  shall  be  paid to the  Participant  if the
         applicable  Performance  Objectives  are exceeded or met in whole or in
         part.

11.6     If  a  Participant   terminates  service  with  the  Company  during  a
         Performance  Period because of death,  Disability,  Retirement or under
         other circumstances in which the Committee in its discretion finds that
         a waiver would be appropriate,  that Participant,  as determined by the
         Committee,  may be entitled to a payment of  Performance  Shares at the
         end of the  Performance  Period  based  upon the  extent  to which  the
         Performance Objectives were satisfied at the end of such period and pro
         rated  for the  portion  of the  Performance  Period  during  which the
         Participant  was  employed  by  the  Company;  provided,  however,  the
         Committee  may provide  for an earlier  payment in  settlement  of such
         Performance  Shares in such amount and under such terms and  conditions
         as the  Committee  deems  appropriate  or  desirable.  If a Participant
         terminates service with the Company during a Performance Period for any
         other  reason,  then  such  Participant  shall not be  entitled  to any
         payment with respect to that  Performance  Period  unless the Committee
         shall otherwise determine.

11.7     Each  Award of a  Performance  Share  shall be paid in whole  shares of
         Stock,  or cash,  or a  combination  of Stock and cash as the Committee

<PAGE>

         shall determine,  with payment to be made as soon as practicable  after
         the end of the relevant Performance Period.

11.8     The  Committee  shall  have  the  authority  to  approve   requests  by
         Participants  to defer  payment  of  Performance  Shares  on terms  and
         conditions  approved by the  Committee and set forth in a written Award
         Agreement  between  the  Participant  and the Company  entered  into in
         advance of the time of receipt  or  constructive  receipt of payment by
         the Participant.

                     ARTICLE XII - OTHER STOCK-BASED AWARDS

12.1     Other  awards that are valued in whole or in part by  reference  to, or
         are otherwise based on, Stock ("Other Stock-Based  Awards"),  including
         without   limitation,    convertible   preferred   stock,   convertible
         debentures,  exchangeable securities, phantom stock and Stock awards or
         options  valued  by  reference  to book  value or  performance,  may be
         granted either alone or in addition to or in tandem with Stock Options,
         Stock Rights,  Restricted Stock, Deferred Stock or Stock Awards granted
         under the Plan and/or cash awards made outside of the Plan.

         Subject  to the  provisions  of the  Plan,  the  Committee  shall  have
         authority to determine the Eligible  Participants  to whom and the time
         or times at which such  Awards  shall be made,  the number of shares of
         Stock subject to such Awards,  and all other  conditions of the Awards.
         The  Committee  also may  provide for the grant of shares of Stock upon
         the completion of a specified Performance Period.

         The  provisions of Other  Stock-Based  Awards need not be the same with
         respect to each recipient.

12.2     Other Stock-Based Awards made pursuant to this Article XII shall be
         subject to the following terms and conditions:

         (a)      Subject  to  the   provisions  of  this  Plan  and  the  Award
                  Agreement,  shares of Stock  subject to Awards made under this
                  Article XII may not be sold, assigned, transferred, pledged or
                  otherwise encumbered prior to the date on which the shares are
                  issued,  or,  if  later,  the  date on  which  any  applicable
                  restriction, performance or deferral period lapses.

         (b)      Subject to the provisions of this Plan and the Award Agreement
                  and unless  otherwise  determined by the Committee at the time
                  of the Award, the recipient of an Award under this Article XII
                  shall be  entitled  to  receive,  currently  or on a  deferred
                  basis,   interest  or   dividends   or  interest  or  dividend
                  equivalents  with  respect to the number of shares  covered by
                  the  Award,  as  determined  at the  time of the  Award by the
                  Committee,  in its  sole  discretion,  and the  Committee  may

<PAGE>

                  provide  that such  amounts,  if any,  shall be deemed to have
                  been reinvested in additional Stock or otherwise reinvested.

         (c)      Any Award under this Article XII and any Stock  covered by any
                  such  Award  shall  vest  or be  forfeited  to the  extent  so
                  provided  in  the  Award  Agreement,   as  determined  by  the
                  Committee, in its sole discretion.

         (d)      Upon the Participant's Retirement,  Disability or death, or in
                  cases of special circumstances, the Committee may, in its sole
                  discretion,  waive  in  whole  or in  part  any  or all of the
                  remaining limitations imposed hereunder,  if any, with respect
                  to any or all of an Award under this Article XII.

         (e)      Each Award under this Article XII shall be confirmed by, and
                  subject to the terms of, an Award Agreement.

         (f)      Stock,  including securities convertible into Stock, issued on
                  a bonus basis under this Article XII may be issued for no cash
                  consideration.

12.3     Other Stock-Based Awards may include a phantom stock Award, which is
         subject to the following terms and
         conditions:

         (a)      The Committee shall select the Eligible  Participants  who may
                  receive phantom stock Awards.  The Eligible  Participant shall
                  be awarded a phantom stock unit, which shall be the equivalent
                  to a share of Stock.

         (b)      Under an Award of phantom stock,  payment shall be made on the
                  dates or dates as specified  by the  Committee or as stated in
                  the Award Agreement and phantom stock Awards may be settled in
                  cash, Stock, or some combination thereof.

         (c)      The Committee  shall determine such other terms and conditions
                  of each Award as it deems necessary in its sole discretion.

                       ARTICLE XIII - ACCELERATION EVENTS

13.1     For the purposes of the Plan, an Acceleration  Event shall occur in the
         event of a  "Potential  Change in Control," or "Change in Control" or a
         "Board-Approved Change in Control", as those terms are defined below.

13.2     A "Change in Control" shall be deemed to have occurred if:

               (a) Any  "Person"  as  defined  in  Section  3(a)(9)  of the Act,
          including a "group" (as that term is used in Sections 13(d)(3)

<PAGE>

                  and 14(d)(2) of the Act),  but  excluding  the Company and any
                  employee  benefit plan sponsored or maintained by the Company,
                  including any trustee of such plan acting as trustee, who:

                    (i)  makes a tender or exchange  offer for any shares of the
                         Company's  Stock (as defined  below)  pursuant to which
                         any shares of the  Company's  Stock are  purchased  (an
                         "Offer"); or

                    (ii) together with its  "affiliates"  and  "associates"  (as
                         those  terms are  defined in Rule 12b-2  under the Act)
                         becomes the  "Beneficial  Owner" (within the meaning of
                         Rule  13d-3  under  the  Act)  of at  least  20% of the
                         Company's Stock (an "Acquisition");

               (b)  The   shareholders  of  the  Company  approve  a  definitive
          agreement  or plan to merge or  consolidate  the Company  with or into
          another   corporation,   to  sell  or  otherwise  dispose  of  all  or
          substantially   all  of  its  assets,  or  to  liquidate  the  Company
          (individually, a "Transaction"); or

               (c) When,  during any period of 24 consecutive  months during the
          existence of the Plan, the  individuals  who, at the beginning of such
          period, constitute the Board (the "Incumbent Directors") cease for any
          reason  other than death to  constitute  at least a majority  thereof;
          provided,  however,  that a  director  who was not a  director  at the
          beginning of such 24 month  period  shall be deemed to have  satisfied
          such 24  month  requirement,  and be an  Incumbent  Director,  if such
          director  was  elected  by,  or on the  recommendation  of or with the
          approval of, at least  two-thirds of the directors who then  qualified
          as Incumbent Directors either actually, because they were directors at
          the beginning of such 24 month period,  or by prior  operation of this
          Section 13.2(c).

13.3     A  "Board-Approved  Change in Control" shall be deemed to have occurred
         if the  Offer,  Acquisition  or  Transaction,  as the case  may be,  is
         approved by a majority of the Directors serving as members of the Board
         at the time of the Potential Change in Control or Change in Control.

13.4     A "Potential Change in Control" means the happening of any one of the
         following:

         (a)      The approval by shareholders of an agreement by the Company,
                  the consummation of which would result in a Change in Control
                  of the Company, as defined in Section 13.2; or

         (b)      The   acquisition   of  Beneficial   Ownership,   directly  or
                  indirectly,  by any  entity,  person or group,  other than the
                  Company or any Company  employee  benefit plan,  including any
                  trustee of such plan acting as such trustee,  of securities of

<PAGE>

                  the Company  representing five percent or more of the combined
                  voting power of the Company's  outstanding  securities and the
                  adoption  by the Board of a  resolution  to the effect  that a
                  Potential  Change in Control of the Company has  occurred  for
                  the purposes of this Plan.

13.5     Upon the occurrence of an Acceleration  Event,  subject to the approval
         of  the   Committee   if  the   Acceleration   Event   results  from  a
         Board-Approved  Change in  Control,  all then  outstanding  Performance
         Shares with respect to which the applicable  Performance Period has not
         been completed shall be paid as soon as practicable as follows:

         (a)      all  Performance   Objectives   applicable  to  the  Award  of
                  Performance  Shares shall be deemed to have been  satisfied to
                  the  extent  necessary  to  result in  payment  of 100% of the
                  Performance Shares covered by the Award; and

         (b)      the applicable Performance Period shall be deemed to have
                  ended on the date of the Acceleration
                  Event;

         (c)      the payment to the Participant  shall be the amount determined
                  either by the  Committee,  in its sole  discretion,  or in the
                  manner stated in the Award  Agreement.  This amount shall then
                  be  multiplied  by a fraction,  the  numerator of which is the
                  number of full calendar  months of the applicable  Performance
                  Period that have elapsed prior to the date of the Acceleration
                  Event,  and the  denominator  of which is the total  number of
                  months in the original Performance Period; and

         (d)      upon the making of any such payment, the Award Agreement as to
                  which it relates  shall be deemed  canceled  and of no further
                  force and effect.

13.6     Upon the occurrence of an Acceleration  Event,  subject to the approval
         of  the   Committee   if  the   Acceleration   Event   results  from  a
         Board-Approved  Change in Control,  the Committee in its discretion may
         declare  any or all  then  outstanding  Stock  Options,  and any or all
         related  Stock  Rights   outstanding  for  at  least  six  months,  not
         previously exercisable and vested as immediately  exercisable and fully
         vested, in whole or in part.

13.7     Upon the occurrence of an Acceleration  Event,  subject to the approval
         of  the   Committee   if  the   Acceleration   Event   results  from  a
         Board-Approved Change in Control, the Committee in its discretion,  may
         declare the  restrictions  applicable  to Awards of  Restricted  Stock,
         Deferred  Stock or Other  Stock-Based  Awards to have lapsed,  in which
         case the Company shall remove all restrictive legends and stop-transfer
         orders  applicable to the  certificates  for such shares of Stock,  and
         deliver such  certificates to the  Participants in whose names they are
         registered.

13.8     The value of all outstanding  Stock Options,  Stock Rights,  Restricted
         Stock,  Deferred  Stock,  Performance  Shares,  Stock  Awards and Other
         Stock-Based  Awards, in each case to the extent vested,  shall,  unless

<PAGE>

         otherwise  determined  by the  Committee in its sole  discretion  at or
         after  grant but prior to any Change in  Control,  be cashed out on the
         basis of the "Change in Control  Price," as defined in Section  13.9 as
         of the date such Change in Control or such Potential  Change in Control
         is  determined to have occurred or such other date as the Committee may
         determine prior to the Change in Control.

13.9     For  purposes  of Section  13.8,  "Change in Control  Price"  means the
         highest  price per share of Stock paid in any  transaction  reported on
         the exchange on which the Stock is then  traded,  or paid or offered in
         any bona fide  transaction  related to a Potential or actual  Change in
         Control of the Company at any time during the 60 day period immediately
         preceding  the   occurrence  of  the  Change  in  Control,   or,  where
         applicable, the occurrence of the Potential Change in Control event, in
         each case as determined  by the  Committee  except that, in the case of
         Incentive Stock Options and Stock Appreciation Rights, or Limited Stock
         Appreciation  Rights,  relating to such Incentive  Stock Options,  such
         price  shall be based  only on  transactions  reported  for the date on
         which the optionee exercises such Stock Appreciation Rights, or Limited
         Stock Appreciation Rights.

                     ARTICLE XIV - AMENDMENT AND TERMINATION

14.1     The Board, upon recommendation of the Committee,  or otherwise,  at any
         time and from time to time,  may amend or  terminate  the Plan. To the
         extent  required  by Rule 16b-3 under the Act,  no  amendment,  without
         approval by the Company's shareholders, shall:

         (a)      alter the group of persons eligible to participate in the
                  Plan;

         (b)      except as provided in Section 3.6, increase the maximum number
                  of shares of Stock or Stock  Options or Stock Rights which are
                  available for Awards under the Plan;

         (c)      extend the period during which Incentive Stock Option Awards
                  may be granted beyond September 15, 2003;

         (d)      limit or restrict the powers of the Committee with respect to
                  the administration of this Plan;

         (e)      change  the  definition  of an  Eligible  Participant  for the
                  purpose of an Incentive  Stock Option or increase the limit or
                  the value of shares of Stock for which an Eligible Participant
                  may be granted an Incentive Stock Option;

         (f)      materially increase the benefits accruing to Participants
                  under this Plan;

         (g)      materially modify the requirements as to eligibility for
                  participation in this Plan; or
<PAGE>

         (h)      change any of the provisions of this Article XIV.

14.2     No amendment to or discontinuance of this Plan or any provision thereof
         by the Board or the  shareholders  of the  Company  shall,  without the
         written  consent  of the  Participant,  adversely  affect,  as shall be
         determined  by the  Committee,  any Award  theretofore  granted to such
         Participant under this Plan;  provided,  however, the Committee retains
         the right and power to:

         (a)      annul any Award if the Participant is terminated for cause as
                  determined by the Committee;

         (b)      provide for the forfeiture of shares of Stock or other gain
                  under an Award as determined by the Committee for competing
                  against the Company; and

         (c)      convert any outstanding Incentive Stock Option to a
                  Nonqualified Stock Option.

14.3     If an  Acceleration  Event has  occurred,  no amendment or  termination
         shall  impair the rights of any person with  respect to an  outstanding
         Award as provided in Article XIII.

                      ARTICLE XV - MISCELLANEOUS PROVISIONS

15.1     Nothing in the Plan or any Award  granted  hereunder  shall confer upon
         any Participant any right to continue in the employ of the Company,  or
         to serve as a director thereof,  or interfere in any way with the right
         of the Company to terminate his or her  employment at any time.  Unless
         specifically provided otherwise,  no Award granted under the Plan shall
         be deemed salary or compensation for the purpose of computing  benefits
         under any employee benefit plan or other arrangement of the Company for
         the  benefit  of its  employees  unless  the  Company  shall  determine
         otherwise.  No Participant shall have any claim to an Award until it is
         actually granted under the Plan. To the extent that any person acquires
         a right to receive payments from the Company under the Plan, such right
         shall,  except as otherwise  provided by the  Committee,  be no greater
         than the right of an unsecured  general  creditor of the  Company.  All
         payments to be made  hereunder  shall be paid from the general funds of
         the Company,  and no special or separate fund shall be established  and
         no  segregation  of  assets  shall be made to  assure  payment  of such
         amounts,  except as provided in Article VIII with respect to Restricted
         Stock and except as otherwise provided by the Committee.

15.2     The Company may make such provisions and take such steps as it may deem
         necessary or  appropriate  for the  withholding  of any taxes which the
         Company  is  required  by any  law or  regulation  of any  governmental
         authority,  whether federal,  state or local,  domestic or foreign,  to

<PAGE>

         withhold in connection  with any Stock Option or the exercise  thereof,
         any Stock Right or the  exercise  thereof,  or in  connection  with any
         other  type of  equity-based  compensation  provided  hereunder  or the
         exercise  thereof,  including,  but not limited to, the  withholding of
         payment of all or any portion of such Award or another Award under this
         Plan until the  Participant  reimburses  the Company for the amount the
         Company  is  required  to  withhold  with  respect  to such  taxes,  or
         canceling any portion of such Award or another Award under this Plan in
         an amount  sufficient to reimburse itself for the amount it is required
         to so withhold,  or selling any property  contingently  credited by the
         Company  for the  purpose of paying  such Award or another  Award under
         this Plan,  in order to withhold or reimburse  itself for the amount it
         is required to so withhold.

15.3     The Plan and the grant of Awards  shall be  subject  to all  applicable
         federal and state laws, rules, and regulations and to such approvals by
         any United States  government or regulatory  agency as may be required.
         Any provision  herein  relating to compliance with Rule 16b-3 under the
         Act shall not be applicable with respect to  participation  in the Plan
         by Participants who are not subject to Section 16(b) of the Act.

15.4     The terms of the Plan shall be binding upon the Company, and its
         successors and assigns.

15.5     Neither a Stock Option, Stock Right, nor any other type of equity-based
         compensation  provided for hereunder,  shall be transferable  except as
         provided for herein.  Unless otherwise  provided by the Committee or in
         an Award Agreement, transfer restrictions shall only apply to Incentive
         Stock  Options as  required  in Article IV and to the extent  otherwise
         required by federal or state securities laws. If any Participant  makes
         such a transfer in  violation  hereof,  any  obligation  of the Company
         shall forthwith terminate.

15.6     This Plan and all actions taken hereunder shall be governed by the laws
         of the  State  of  Delaware,  except  to the  extent  preempted  by the
         Employee Retirement Income Security Act of 1974, as amended.

15.7     The Plan is intended to constitute an "unfunded" plan for incentive and
         deferred  compensation.  With respect to any payments not yet made to a
         Participant  by the Company,  nothing  contained  herein shall give any
         such  Participant  any rights that are greater  than those of a general
         creditor of the Company.  In its sole  discretion,  the  Committee  may
         authorize  the  creation  of trusts or other  arrangements  to meet the
         obligations  created  under  the  Plan to  deliver  shares  of Stock or
         payments  in lieu of or with  respect  to Awards  hereunder;  provided,
         however,  that,  unless the  Committee  otherwise  determines  with the
         consent of the affected  Participant,  the  existence of such trusts or
         other  arrangements  is consistent  with the  "unfunded"  status of the
         Plan.

15.8     Each  Participant  exercising  an Award  hereunder  agrees  to give the
         Committee   prompt   written  notice  of  any  election  made  by  such
         Participant  under Section 83(b) of the Code, or any similar  provision
         thereof.
<PAGE>

15.9     If any provision of this Plan or an Award Agreement is or becomes or is
         deemed invalid, illegal or unenforceable in any jurisdiction,  or would
         disqualify  the  Plan or any  Award  Agreement  under  any  law  deemed
         applicable  by the  Committee,  such  provision  shall be  construed or
         deemed  amended  to  conform  to  applicable  laws or if it  cannot  be
         construed  or  deemed  amended  without,  in the  determination  of the
         Committee,  materially  altering  the  intent  of the Plan or the Award
         Agreement,  it shall be stricken  and the  remainder of the Plan or the
         Award Agreement shall remain in full force and effect.

                                          MEDTOX SCIENTIFIC, INC.

ATTEST:                        By:  ______________________________
                                             Authorized Officer
(Corporate Seal)

-----------------------------
                    Secretary

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