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                                                                    Exhibit 10.7

                            TETRA TECHNOLOGIES, INC.

                       Nonqualified Stock Option Agreement

            This Agreement (the "Agreement") is effective as of April 1, 1996
(the "Grant Date"), among TETRA Technologies, Inc., a Delaware corporation (the
"Company"), and Allen T. McInnes ("Optionee").

            In connection with the initial employment of Optionee with the
Company as an executive officer, in order to incentivize Optionee and to afford
Optionee the opportunity to purchase shares of common stock, par value $0.01 per
share, of the Company ("Stock"), and in consideration of the mutual agreements
set forth herein, the Company and Optionee hereby agree as follows:

            1. Grant of Option. The Company hereby grants to Optionee the right
and option (the "Option") to purchase all or any part of an aggregate of 284,977
shares of Stock, on the terms and conditions set forth herein. The Option, if
not previously exercised, shall expire and not be exercisable after ten years
from the Grant Date, unless earlier terminated as provided below. It is not
intended that the Option qualify as an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), but rather the Option shall be a non-qualified stock option.

            2. Purchase Price. The purchase price of Stock purchased upon
exercise of the Option shall be $16.875 per share.

            3. Exercise of Option. Subject to the earlier expiration of the
Option as herein provided and subject to the terms and conditions contained
herein, to the extent vested, the Option may be exercised, by written notice to
the Company at its principal executive office addressed to the attention of the
Secretary of the Company, at any time and from time to time on and after the
Grant Date, such exercise to be effective at the time of receipt of such written
notice at the Company's principal executive office during normal business hours,
but any exercise of the Option must be for a minimum of 100 shares of Stock (or,
if less, for all remaining shares subject to the Option). The Option shall vest
and be exercisable only in accordance with the following schedule:

<TABLE>
<CAPTION>
                  Date                         Cumulative Shares Vested At Date*
                  ----                         ---------------------------------

<S>                                            <C>
                Grant Date                               33 1/3%
       1st Anniversary of Grant Date                     66 2/3%
 2nd Anniversary of Grant Date and thereafte                100%
</TABLE>

--------------------------------------------------------------------------------

                  *     For exercise dates falling between such dates, the
                        cumulative Shares that will be vested and exercisable
                        shall be equal to (i) the cumulative Shares vested as of
                        the immediately preceding date plus (ii) .0278
                        multiplied by the total number of Shares covered by the
                        Option multiplied by the number of full months since the
                        immediately preceding date.

            If, upon the exercise of the Option, Optionee purchases less than
the full percentage of Stock that may be purchased at the time of such exercise,
Optionee's right to purchase the Stock not so purchased shall continue until the
expiration date or earlier termination of the Option. Optionee (or the person
permitted to exercise the Option in the event of Optionee's death) shall be and
have all of the rights and privileges of a shareholder of record of the Company
with respect to shares acquired upon exercise of the Option, effective upon such
exercise.

            4. Payment of Exercise Price. The purchase price of shares as to
which the Option is exercised shall be paid in full at the time of exercise (i)
in cash or by check payable and acceptable to the Company, (ii) by tendering to
the Company shares of Stock owned by Optionee for at least six months and having
an aggregate Market Value Per Share (as determined by the Management and
Compensation Committee of the Board of Directors of the Company (the
"Committee")), as of the date of exercise and tender that is not greater than
the full

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purchase price for the shares with respect to which the Option is being
exercised and by paying any remaining amount of the purchase price as provided
in (i) above, or (iii) at Optionee's written direction, the Company shall
deliver certificates for the shares of Stock for which the Option is being
exercised to a broker for sale on behalf of Optionee, provided that Optionee has
irrevocably instructed such broker to remit directly to the Company on
Optionee's behalf the full amount of the purchase price from the proceeds of
such sale. In the event that Optionee elects to make payment as allowed under
clause (ii) above, the Committee may, upon confirming that Optionee owns the
number of additional shares being tendered, authorize the issuance of a new
certificate for the number of shares being acquired pursuant to the exercise of
the Option less the number of shares being tendered upon the exercise and return
to Optionee (or not require surrender of) the certificate for the shares being
tendered upon the exercise. Payment instruments will be received subject to
collection.

            5. Non-Transferability. The Option may not be transferred by
Optionee otherwise than by will or the laws of descent and distribution.

            6. Termination of Employment. In the event of termination of an
Optionee's employment due to death, retirement on or after reaching age 65 (or
if prior to age 65, with the consent of the Committee) or permanent disability
(such three events being a "Qualified Termination"), the Option may be exercised
by Optionee (or his estate, personal representative or beneficiary) at any time
within the twelve-month period following such Qualified Termination to the full
extent that Optionee was entitled to exercise the same on the day immediately
prior to such termination.

            If Optionee's employment is terminated for any reason other than a
Qualified Termination, the Option may be exercised at any time within the
three-month period following such termination to the full extent that Optionee
was entitled to exercise the same on the day immediately prior to such
termination.

            Notwithstanding any other provision contained in the this Section 6
or elsewhere herein, the Option shall not be exercisable after the tenth
anniversary of the Grant Date.

            7. Withholding of Tax. To the extent that the exercise of the Option
is a taxable event with respect to which the Company has a duty to withhold for
federal or state income tax purposes, Optionee shall pay to the Company at the
time of such exercise (or if Optionee is subject to Section 16(b), Optionee may
direct the Company to withhold from the exercise a number of Shares with an
aggregate Market Value Per Share equal to) such amount of money as the Company
may require to meet its obligation under applicable tax laws or regulations,
and, if Optionee fails to do so, the Company is authorized, in its sole
discretion, either to withhold from any cash remuneration then or thereafter
payable to Optionee any tax required to be withheld by reason of such resulting
compensation income or otherwise refuse to issue or transfer any shares
otherwise required to be issued pursuant to the terms hereof.

            8. Employment Relationship. For purposes of the Agreement, Optionee
shall be considered to be in the employment of the Company as long as Optionee
remains an employee of either the Company, a parent or subsidiary corporation
(as defined in Section 424 of the Code) of the Company, or a corporation or a
parent or subsidiary of such corporation assuming or substituting a new
agreement for this Agreement. Any question as to whether and when there has been
a termination of such employment, for purposes of this Agreement, and the cause
of such termination, for purposes of this Agreement, shall be determined by the
Committee, and its determination shall be final. Nothing herein shall give
Optionee any right to continued employment or affect in any manner the right of
the Company or any subsidiary or parent corporation to terminate the employment
of Optionee.

            9. Recapitalization or Reorganization

            A. The existence of the Option shall not affect in any way the right
or power of the Board or the stockholders of the Company to make or authorize
any adjustment, recapitalization, reorganization or other change in the
Company's capital structure or its business, any merger or consolidation of the
Company, any issue of bonds, debentures, preferred or prior preference stocks
ahead of or affecting Stock or the rights thereof, the dissolution or

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liquidation of the Company or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding.

            B. The shares underlying the Option are shares of Stock as presently
constituted, but if, and whenever, prior to the expiration of the Option, the
Company shall effect a subdivision or consolidation of shares of Stock or the
payment of a stock dividend on Stock without receipt of consideration by the
Company, the remaining shares of Stock available under the Plan and the number
of shares of Stock with respect to which the Option may thereafter be exercised
(i) in the event of an increase in the number of outstanding shares, shall be
proportionately increased and the Exercise Price per share shall be
proportionately reduced, and (ii) in the event of a reduction in the number of
outstanding shares, shall be proportionately reduced, and the Exercise Price per
share shall be proportionately increased.

            C. Except as may otherwise be expressly provided in the Plan, the
issuance by the Company of shares of stock of any class or securities
convertible into shares of stock of any class, for cash, property, labor or
services, upon direct sale, upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company convertible
into such shares or other securities, and in any case whether or not for fair
value, shall not affect, and no adjustment by reason thereof shall be made with
respect to, the number of shares of Stock underlying the Option or the Exercise
Price per share thereof.

            D. If the Company effects a recapitalization or otherwise materially
changes its capital structure (both of the foregoing are herein referred to as a
"Fundamental Change"), then thereafter upon any exercise of the Option the
Optionee shall be entitled to purchase under the Option, in lieu of the number
of shares of Stock as to which the Option shall then be exercisable, the number
and class of shares of stock and securities to which the optionee would have
been entitled pursuant to the terms of the Fundamental Change if, immediately
prior to such Fundamental Change, the optionee had been the holder of record of
the number of shares of Stock as to which the Option is then exercisable.

            E. If a Corporate Change (as defined below) shall occur, then as of
its Effective Date (as defined below) the Committee, acting in its sole
discretion without the consent or approval of the Optionee, shall effect one or
more of the following Alternatives (as defined below) or a combination of
Alternatives with respect to the Option.

            A "Corporate Change" shall have occurred if:

                  (i) the Company shall not be the surviving entity in any
            merger or consolidation (or survives only as a subsidiary of another
            entity),

                  (ii) the Company sells, exchanges, disposes or otherwise
            transfers all or substantially all of its assets to any other person
            or entity (other than a wholly-owned subsidiary),

                  (iii) any person or entity (including a "group" as
            contemplated by Section 13(d)(3) of the 1934 Act) after the date
            hereof acquires or gains ownership or control of (including, without
            limitation, power to vote) more than 50% of the outstanding shares
            of Stock,

                  (iv) the Company is to be dissolved and liquidated, or

                  (v) as a result of or in connection with a contested election
            of directors, the persons who were directors of the Company before
            such election shall cease to constitute a majority of the Board.

            The "Effective Date" shall be a date selected by the Committee,
which (a) in the event of the occurrence of a Corporate Change specified in
clause (i), (ii) or (iv) above, shall be no later than a date determined by the
Committee to be far enough in advance of the date of such Corporate Change to
permit the Optionee to exercise the Option to purchase shares of Stock and
participate therewith in such Corporate Change or (b) in the event of the

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occurrence of a Corporate Change specified in Clause (iii) or (v) above, shall
be no later than thirty days after such Corporate Change.

            For purposes of the Corporate Changes described in (iii) and (v)
above, the "Committee" shall be either the Committee as constituted prior to the
occurrence of such Corporate Change or, if no Committee had been appointed, the
Board as constituted prior to the occurrence of such Corporate Change.

            The "Alternatives" are:

                  (1) In the case of a Corporate Change specified in clauses
            (i), (ii) or (iv), the Committee may accelerate the time at the
            Option may be exercised so that the Option may be exercised in full
            for a limited period of time on or before a specified date fixed by
            the Committee, after which specified date the unexercised Option and
            all rights of the Optionee thereunder shall terminate;

                  (2) The Committee may accelerate the time at the Option may be
            exercised so that the Option may be exercised in full for its then
            remaining term; or

                  (3) The Committee may require the mandatory surrender to the
            Company of the Option (irrespective of whether the Option is then
            exercisable by its terms) as of a date, before or not later than
            sixty days after such Corporate Change, specified by the Committee,
            and in such event the Committee shall thereupon cancel the Option
            and the Company shall pay to the Optionee an amount of cash equal to
            the excess of the Market Value Per Share (determined as of the date
            such Corporate Change is effective) of the aggregate shares of Stock
            subject to the Option (whether or not then vested), over the
            aggregate Exercise Price of such shares.

            The Alternatives may be made conditional on the occurrence of any of
the Corporate Changes specified in clauses (i) through (v) above.
Notwithstanding the foregoing, the Committee shall not select an Alternative
(unless consented to by the Optionee) such that, if the Optionee exercised his
accelerated Option pursuant to Alternative (1) or (2) and participated in a
transaction specified in clause (i), (ii) or (iv) or received cash pursuant to
Alternative (3), the Alternative would result in the Optionee owing any money by
virtue of operation of Section 16(b) of the 1934 Act. If all such Alternatives
have such a result, the Committee shall take such action, which is hereby
authorized, to put the Optionee in as close to the same position as he would
have been in had Alternative (1), (2) or (3) been selected but without resulting
in any payment by the Optionee pursuant to Section 16(b) of the 1934 Act.

            Notwithstanding the foregoing, (1) with the consent of the optionee,
the Committee may in lieu of the foregoing make such provision with respect to
any Corporate Change as it deems appropriate, and (2) in the event that a
Corporate Change described in Clauses (i), (ii) or (iii) occurs, but such
Corporate Change does not result in any effective change in ownership or control
of the Company, the Committee shall make such adjustments in the number of
shares subject to the Option, the Exercise Price thereof, and such other terms
and provisions of the Option as the Committee may determine to be appropriate
and equitable.

            10. Withholding for Taxes

            Any cash payment under the Plan shall be reduced by any amounts
required to be withheld or paid with respect thereto under all present or future
federal, state and local taxes and other laws and regulations that may be in
effect as of the date of each such payment ("Tax Amounts"). Any issuance of
Stock pursuant to the exercise of the Option shall not be made until appropriate
arrangements have been made for the payment of any amounts that may be required
to be withheld or paid with respect thereto. Such arrangements may, at the
discretion of the Committee, include any arrangements similar to those
permissible for payment of the Exercise Price of the Option.

            11. Preemption by Applicable Laws and Regulations

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            Anything herein to the contrary notwithstanding, if, at any time
specified herein for the making of any determination or the issuance or other
distribution of shares of Stock, any law, regulation or requirement of any
governmental authority having jurisdiction in the premises shall require either
the Company or the Optionee (or the Optionee's beneficiary), as the case may be,
to take any action in connection with any such determination, the shares then to
be issued or distributed, the issue or distribution of such shares or the making
of such determination or payment, as the case may be, shall be deferred until
such action shall have been taken.

            12. Unregistered Shares

         The shares of Stock to be issued upon exercise of the Option has not
been registered under any securities laws and may not be sold or distributed
unless (1) a registration statement under the Securities Act of 1933, as
amended, with respect to such shares shall then be in effect or (2) the
availability of an exemption from such registration shall be established to the
satisfaction of counsel to the Company. If, at any time in the opinion of
counsel for the Company, it is necessary or desirable, in order to comply with
any then applicable laws or regulations relating to the sale of securities, for
the Optionee to agree to hold any shares of Stock issued to him for investment
and without intention to resell or distribute the same and for the Optionee to
agree to dispose of such shares only in compliance with such laws and
regulations, the Optionee will, upon the request of the Company, execute and
deliver to the Company a further agreement to such effect.

            13. Miscellaneous

            A. No Rights as a Stockholder. The Optionee shall have no rights as
a stockholder with respect to shares covered by the Option until the date of the
issuance of shares to the Optionee pursuant hereto. No adjustment will be made
for dividends or other distributions or rights for which the record date is
prior to the date of such issuance.

            B. No Right to Corporate Assets. Nothing contained herein shall be
construed as giving Optionee or his beneficiaries or any other person any equity
or other interest of any kind in any assets of the Company or any Affiliate or
creating a trust of any kind or a fiduciary relationship of any kind between the
Company or an Affiliate and any such person.

            C. No Restriction on Corporate Action. Nothing contained herein
shall be construed to prevent the Company or any Affiliate from taking any
corporate action that is deemed by the Company or such Affiliate to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Optionee. Neither the Optionee nor any beneficiary of his
or any other person shall have any claim against the Company or any Affiliate as
a result of any such action.

            D. Non-assignability. Neither the Optionee nor his beneficiaries
shall have the power or right to sell, exchange, pledge, transfer, assign or
otherwise encumber or dispose of their interest arising under the Option; nor
shall such interest be subject to seizure for the payment of the Optionee's or
such beneficiary's debts, judgments, alimony, or separate maintenance or be
transferable by operation of law in the event of the Optionee's or such
beneficiary's bankruptcy or insolvency and to the extent any such interest
arising hereunder is awarded to a spouse pursuant to any divorce proceeding,
such interest shall be deemed to be terminated and forfeited notwithstanding any
vesting provisions or other terms herein.

            E. Application of Funds. The proceeds received by the Company from
the sale of shares pursuant hereto will be used for general corporate purposes.

            F. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under Optionee. This Agreement and all actions taken hereunder shall be governed
by and constructed in accordance with the laws of the State of Delaware, except
for the choice of law principles thereof. The Committee shall have authority to
construe the terms of the Agreement, and the Committee's determinations shall be
final and binding on Optionee.

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            IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and Optionee has executed this agreement as of the day and year first
above written.

                                    TETRA Technologies, Inc.

                                    By:    /Tom H. Delimitros/
                                       -----------------------------------------
                                           Tom H. Delimitros, Chairman
                                           Management and Compensation Committee
                                           of the Board of Directors

                                    Optionee

                                           /Allen T. McInnes/
                                       -----------------------------------------
                                           Allen T. McInnes, President and CEO

                                                                          Page 6<PAGE>

                                                                    Exhibit 10.8

                            TETRA Technologies, Inc.

                             1990 STOCK OPTION PLAN

                             I. Purpose of the Plan

      The TETRA Technologies, Inc. 1990 Stock Option Plan (the "Plan") is
intended to provide a means whereby certain key employees of TETRA Technologies,
Inc., a Delaware corporation (the "Company"), and its Affiliates (as defined
below) may develop a sense of proprietorship and personal involvement in the
development and financial success of the Company and its Affiliates, and to
encourage them to remain with and devote their best efforts to the business of
the Company and its Affiliates, thereby advancing the interests of the Company
and its stockholders. Accordingly, the Company may make awards ("Awards") to
certain employees in the form of stock options ("Options") with respect to
shares of the Company's common stock, par value $0.01 per share ("Stock"), and
in the form of stock appreciation rights ("Rights"). Options may either be
nonqualified stock options ("Nonqualified Options") or options ("Incentive Stock
Options") which are intended to qualify as incentive stock options under Section
422A of the Internal Revenue Code of 1986, as amended (the "Code"). Rights may
be granted either separately or in tandem with Options. For purposes of the
Plan, an "Affiliate" shall be any corporation which is a parent or subsidiary
corporation of the Company within the meaning of Section 424 of the Code.

                               II. Administration

      The Plan shall be administered by the Board of Directors of the Company
(the "Board") or such committee of members of the Board as the Board may appoint
(the "Committee"); provided that so long as the Company is subject to the
reporting requirements of the Securities Exchange Act of 1934 ("1934 Act"), the
members of the Committee shall be "disinterested persons" within the meaning of
paragraph (d)(3) of Rule 16b-3 which has been adopted by the Securities and
Exchange Commission under the 1934 Act, as such Rule or its equivalent is then
in effect ("Rule 16b-3"). Committee members may resign at any time by delivering
written notice to the Board. Vacancies in the Committee, however caused, shall
be filled by the Board. The Committee is authorized to interpret the Plan and
may from time to time adopt such rules and regulations, not inconsistent with
the provisions of the Plan, as it may deem advisable to carry out the Plan. The
Committee shall act by a majority of its members in office and the Committee may
act either by vote at a telephonic or other meeting or by a memorandum or other
written instrument signed by all of the members of the Committee.

      The Committee shall have the sole authority to determine the terms and
provisions of the Option agreements and Rights agreements (collectively, the
"Agreements") entered into in connection with Awards under the Plan; to prepare
and distribute, in such manner as the Committee determines to be appropriate,
information about the Plan; and to make all other determinations deemed
necessary or advisable for the administration of the Plan. The Committee may
vary the terms and provisions of the Agreements in its discretion.

      The day-to-day administration of the Plan may be carried out by such
officers and employees of the Company as shall be designated from time to time
by the Committee. Members of the Committee shall not receive compensation for
their services as members, but all expenses and liabilities they incur in
connection with the administration of the Plan shall be borne by the Company.
The Committee may employ attorneys, consultants, accountants, appraisers,
brokers or other persons, and the Committee, the Board, the Company and the
officers and employees of the Company shall be entitled to rely upon the advice,
opinions or valuations of any such persons. The interpretation and construction
by the Committee of any provisions of the Plan or of any Award under the Plan
and any determination by the Committee under any provision of the Plan or any
such Award shall be final and conclusive for all purposes. Neither the Committee
nor any member thereof shall be liable for any act, omission, interpretation,
construction or determination made in connection with the Plan in good faith,
and the members of the Committee shall be entitled to indemnification and
reimbursement by the Company in respect of any claim, loss, damage or expense
(including counsel fees) arising therefrom to the full

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extent permitted by law. The members of the Committee shall be named as insureds
under any directors and officers liability insurance coverage that may be in
effect from time to time.

      The Committee shall have authority to grant Options, to determine the
purchase price of the Stock covered by each Option (the "Exercise Price"), the
term of each Option, the key employees to whom, and the times at which, Options
shall be granted, whether the Option shall be a Nonqualified Option or an
Incentive Stock Option and the number of shares to be covered by each Option; to
determine which Options shall be accompanied by Rights; and to grant Rights
without or in tandem with accompanying Options, to determine the key employees
to whom, and the time or times at which, such Rights shall be granted, and the
Exercise Price of, the term of, and the number of shares of Stock subject to a
Right. All decisions made by the Committee in selecting the persons to whom
Awards shall be granted, in establishing the number of shares covered by each
Award and the other terms and provisions thereof, and in construing the
provisions of the Plan and the Agreements shall be final.

      Only key employees of the Company and its Affiliates shall be eligible to
receive Awards under the Plan. In making an Award to an employee, the Committee
shall take into consideration the contribution the employee has made or may make
to the success of the Company or its Affiliates and such other considerations as
the Committee shall determine. The Committee shall also have the authority to
consult with and receive recommendations from officers and other employees of
the Company and its Affiliates with regard to these matters. In no event shall
any employee, his legal representatives, heirs, legatees, distributees, or
successors have any right to participate in the Plan, except to such extent, if
any, as the Committee shall determine.
                         III. Shares Subject to the Plan

      The aggregate number of shares which may be issued under Awards granted
under the Plan shall not exceed 3,950,000 shares of Stock of the Company. Such
shares may consist of authorized but unissued shares of Stock or previously
issued shares reacquired by the Company. Any of such shares which remain unsold
and which are not subject to outstanding Awards at the termination of the Plan
shall cease to be subject to the Plan, but until termination of the Plan and the
expiration of all Awards granted under the Plan, the Company shall at all times
make available a sufficient number of shares to meet the requirements of the
Plan and the outstanding Awards. If any Award in whole or in part, expires or
terminates unexercised or is cancelled or forfeited, the shares theretofore
subject to such Award may again be subject to an Award granted under the Plan.
The aggregate number of shares which may be issued under Awards granted under
the Plan shall be subject to adjustment as provided in Article V hereof.
Exercise of an Award in any manner shall result in a decrease in the number of
shares of Stock which may thereafter be available for purposes of the Plan by
the number of shares as to which the Award is exercised or cancelled.

                        IV. Grants of Options and Rights

            A. Options. Options granted under the Plan shall be of such type
      (Nonqualified Option or Incentive Stock Option) and for such number of
      shares of Stock and subject to such terms and conditions, which may
      include without limitation the achievement of specific goals, as the
      Committee shall designate. The Committee may grant Options at any time and
      from time to time through, but not after, December 31, 2004 to any
      individual eligible to receive the same.

                  No employee shall be eligible to receive any Incentive Stock
      Option if, on the Grant Date (as defined below), such employee owns
      (including ownership through the attribution provisions of Section 425 of
      the Code), in excess of 10% of the outstanding voting stock of the Company
      or an Affiliate unless the Exercise Price for the shares of Stock subject
      to the Option is at least 110% of the Market Value Per Share of the shares
      of Stock on the date the Option is granted (the "Grant Date").

                  To the extent that the aggregate Market Value Per Share
      (determined at the Grant Date) of Stock with respect to which Incentive
      Stock Options (determined without regard to this sentence) are exercisable
      for the first time by any individual during any calendar year (under all
      plans of the Company and its Affiliates) exceeds $100,000, such Options
      shall be treated as Nonqualified Options (this sentence shall be applied
      by taking Incentive Stock Options into account in the order in which they
      were granted).

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            B. Rights. A Right shall entitle the holder thereof to receive from
      the Company an amount equal to the Market Value Per Share on the exercise
      date, over the Exercise Price, multiplied by the total number of shares of
      Stock for which the Right is exercised. The amount payable by the Company
      upon the exercise of a Right may be paid in cash or in shares of Stock or
      in any combination thereof as the Committee in its sole discretion shall
      determine, but no fractional shares shall be issuable pursuant to any
      Right. Rights may be granted by the Committee to any individual eligible
      to receive the same at any time and from time to time through, but not
      after, December 31, 2004. A Right may, but need not, relate to a specific
      Option granted under this Plan. If a Right relates to a specific Option,
      it may be granted either concurrently with the Option or at any time prior
      to the exercise, termination, cancellation or expiration of such Option.

                  The Committee may fix such waiting periods, exercise dates or
      other limitations as it shall deem appropriate with respect to Rights
      granted under the Plan including, without limitation, the achievement of
      specific goals; provided, however, that each Right granted hereunder shall
      be exercisable only upon consent of the Committee; and provided further,
      that and Right that relates to a specific Option shall be exercisable only
      when and to the extent that the Option to which it relates is exercisable.

            C. Terms of Options and Rights. Options and Rights granted pursuant
      to this Plan shall be evidenced by Agreements that shall comply with and
      be subject to the following terms and conditions and may contain such
      other provisions, consistent with this Plan, as the Committee shall deem
      advisable. Rights that relate to a specific Option, however, may be
      evidenced by the Agreement setting forth the Option to which such Rights
      relate, or an amendment thereto. References herein to an Agreement shall
      include, to the extent applicable, any amendments to such Agreement.

                  1. Payment of Option Exercise Price. Upon exercise of an
            Option, the full Exercise Price for the shares with respect to which
            the Option is being exercised shall be payable to the Company (i) in
            cash or by check payable and acceptable to the Company, (ii) subject
            to the approval of the Committee, by tendering to the Company shares
            of Stock owned by the optionee having an aggregate Market Value Per
            Share as of the date of exercise and tender that is not greater than
            the full Exercise Price for the shares with respect to which the
            Option is being exercised and by paying any remaining amount of the
            Exercise Price as provided in (i) above, or (iii) subject to such
            instructions as the Committee may specify, at the optionee's written
            request the Company may deliver certificates for the shares of Stock
            for which the Option is being exercised to a broker for sale on
            behalf of the optionee, provided that the optionee has irrevocably
            instructed such broker to remit directly to the Company on the
            optionee's behalf the full amount of the Exercise Price from the
            proceeds of such sale. In the event that the optionee elects to make
            payment as allowed under clause (ii) above, the Committee may, upon
            confirming that the optionee owns the number of additional shares
            being tendered, authorize the issuance of a new certificate for the
            number of shares being acquired pursuant to the exercise of the
            Option less the number of shares being tendered upon the exercise
            and return to the optionee (or not require surrender of) the
            certificate for the shares being tendered upon the exercise. Payment
            instruments will be received subject to collection.

                  2. Number of Shares. Each Agreement shall state the total
            number of shares of Stock that are subject to the Option and/or
            Right.

                  3. Exercise Price. The Exercise Price for each Option and
            Right shall be fixed by the Committee at the Grant Date, but in no
            event may the Exercise Price per share be less than the Market Value
            Per Share on the Grant Date.

                  4. Market Value Per Share. The "Market Value Per Share" as of
            any particular date shall be determined by any fair and reasonable
            means determined by the Committee, which may include, if the Stock
            is listed for trading on a national or regional stock exchange, the
            closing price quoted on such exchange which is published in The Wall
            Street Journal reports for the day of the grant, or if no trade of
            the Stock shall have been reported for such date, the closing price
            quoted on such exchange which is published in The Wall Street
            Journal reports for the next day prior thereto on which a trade of
            the

                                                                        [Page 3]
<PAGE>

            Stock was so reported, or if the shares are not so listed or
            admitted to trading, the average of the highest reported bid and
            lowest reported asked prices as furnished by the National
            Association of Securities Dealers, Inc., through NASDAQ, or through
            a similar organization if NASDAQ is no longer reporting such
            information. If shares of the Stock are not listed or admitted to
            trading on any exchange or quoted through NASDAQ or any similar
            organization, the "Market Value Per Share" shall be determined by
            the Committee in good faith using any fair and reasonable means
            selected in its discretion.

                  5. Term. The term of each Option and/or Right shall be
            determined by the Committee at the Grant Date; provided, however,
            that each Option and/or Right shall, notwithstanding anything in the
            Plan or an Agreement to the contrary, expire not more than ten years
            from the Grant Date or, if earlier, the date specified in the
            Agreement.

                  6. Date of Exercise. In the discretion of the Committee, each
            Agreement may contain a provision not inconsistent with Article V.E.
            stating that the Option and/or Right granted therein may not be
            exercised in whole or in part for a period or periods of time
            specified in such Agreement, subject to Article V.E., and except as
            so specified therein, any Option or Right may be exercised in whole
            at any time or in part from time to time during its term. The
            Committee may, however, at any time, in its sole discretion amend
            any outstanding Option or Right to accelerate the time that such
            Option or Right shall be exercisable or to provide that the time for
            exercising such Option or Right shall be accelerated upon the
            occurrence of a specified event.

                  7. Termination of Employment. In the event that an
            individual's employment with the Company and its Affiliates shall
            terminate for reasons other than (i) retirement pursuant to a
            retirement plan of the Company or one of its Affiliates
            ("retirement"), (ii) permanent disability or (iii) death, the
            individual's Options and/or Rights shall be exercisable by him,
            subject to subsections 5 and 6 above, only within three months after
            such termination, but only to the extent the Option and/or Right was
            exercisable immediately prior to such termination of employment,
            unless the Committee, in its discretion and on an individual basis,
            provides with respect to senior management and other key employees
            that the Options and/or Rights granted to such employees remain
            exercisable following termination of employment for the full term of
            the Options and/or Rights

                        If, however, any termination of employment is due to
            retirement or permanent disability, the individual shall have the
            right, subject to the provisions of subsections 5 and 6 above, to
            exercise any Option and/or any Right at any time within the 12
            months after such termination of employment, but only to the extent
            that the Option and/or Right was exercisable immediately prior to
            such termination of employment.

                        Whether any termination of employment is due to
            retirement or permanent disability and whether an authorized leave
            of absence or absence on military or government service or for other
            reasons shall constitute a termination of employment for the
            purposes of the Plan shall be determined by the Committee.

                        If an individual shall die while entitled to exercise an
            Option and/or Right, the individual's estate, personal
            representative or beneficiary, as the case may be, shall have the
            right, subject to the provisions of subsections 5 and 6 above, to
            exercise the Option and/or Right, if any, at any time within 12
            months from the date of the optionee's death, to the extent that the
            optionee was entitled to exercise the same on the day immediately
            prior to the optionee's death.

                        The Committee may, in its discretion, accelerate the
            exercisability of all or part of an individual's Option and/or
            Rights that are not exercisable as of the date of retirement,
            permanent disability or death.

            D. Individual Limits. No person may receive Options and Rights with
      respect to more than 400,000 shares of Stock during any calendar year.

                                                                        [Page 4]
<PAGE>

            E. The right of an individual to exercise an Option or Right shall
      terminate to the extent that such Option or Right is exercised and, to the
      extent that a Right relates to a specific Option, the exercise of the
      Right shall terminate a corresponding portion of the related Option and,
      conversely, to the extent that such optionee exercises the related Option,
      a corresponding portion of such Right shall terminate.

            F. Options and Rights may be granted under the Plan from time to
      time in substitution for stock options and stock appreciation rights held
      by employees of corporations who become key employees of the Company or of
      any Affiliate as a result of a merger or consolidation of the employer
      corporation with the Company or such Affiliate, or the acquisition by the
      Company or an Affiliate of assets of the employer corporation or the
      acquisition by the Company or an Affiliate of stock of the employer
      corporation, with the result that such employer corporation becomes an
      Affiliate.

                      V. Recapitalization or Reorganization

            A. The existence of the Plan and the Awards granted hereunder shall
      not affect in any way the right or power of the Board or the stockholders
      of the Company to make or authorize any adjustment, recapitalization,
      reorganization or other change in the Company's capital structure or its
      business, any merger or consolidation of the Company, any issue of bonds,
      debentures, preferred or prior preference stocks ahead of or affecting
      Stock or the rights thereof, the dissolution or liquidation of the Company
      or any sale or transfer of all or any part of its assets or business, or
      any other corporate act or proceeding.

            B. The shares with respect to which Awards may be granted are shares
      of Stock as presently constituted, but if, and whenever, prior to the
      termination of the Plan or the expiration of an Award theretofore granted,
      the Company shall effect a subdivision or consolidation of shares of Stock
      or the payment of a stock dividend on Stock without receipt of
      consideration by the Company, the remaining shares of Stock available
      under the Plan and the number of shares of Stock with respect to which
      such Award may thereafter be exercised (i) in the event of an increase in
      the number of outstanding shares, shall be proportionately increased and
      the Exercise Price per share shall be proportionately reduced, and (ii) in
      the event of a reduction in the number of outstanding shares, shall be
      proportionately reduced, and the Exercise Price per share shall be
      proportionately increased.

            C. Except as may otherwise be expressly provided in the Plan, the
      issuance by the Company of shares of stock of any class or securities
      convertible into shares of stock of any class, for cash, property, labor
      or services, upon direct sale, upon the exercise of rights or warrants to
      subscribe therefor, or upon conversion of shares or obligations of the
      Company convertible into such shares or other securities, and in any case
      whether or not for fair value, shall not affect, and no adjustment by
      reason thereof shall be made with respect to, the number of shares of
      Stock available under the Plan or subject to Awards theretofore granted or
      the Exercise Price per share of outstanding Awards.

            D. If the Company effects a recapitalization or otherwise materially
      changes its capital structure (both of the foregoing are herein referred
      to as a "Fundamental Change"), then thereafter upon any exercise of an
      Option theretofore granted the optionee shall be entitled to purchase
      under such Option, in lieu of the number of shares of Stock as to which
      such Option shall then be exercisable, the number and class of shares of
      stock and securities to which the optionee would have been entitled
      pursuant to the terms of the Fundamental Change if, immediately prior to
      such Fundamental Change, the optionee had been the holder of record of the
      number of shares of Stock as to which such Option is then exercisable.

            E. If a Corporate Change (as defined below) shall occur, then as of
      its Effective Date (as defined below) the Committee, acting in its sole
      discretion without the consent or approval of any optionee, shall effect
      one or more of the following Alternatives (as defined below) or a
      combination of Alternatives with respect to all outstanding Awards.

                                                                        [Page 6]
<PAGE>

                  A "Corporate Change" shall have occurred if:

                  (i) the Company shall not be the surviving entity in any
            merger or consolidation (or survives only as a subsidiary of another
            entity),

                  (ii) the Company sells, exchanges, disposes or otherwise
            transfers all or substantially all of its assets to any other person
            or entity (other than a wholly-owned subsidiary),

                  (iii) any person or entity (including a "group" as
            contemplated by Section 13(d)(3) of the 1934 Act) after the date
            hereof acquires or gains ownership or control of (including, without
            limitation, power to vote) more than 50% of the outstanding shares
            of Stock,

                  (iv) the Company is to be dissolved and liquidated, or

                  (v) as a result of or in connection with a contested election
            of directors, the persons who were directors of the Company before
            such election shall cease to constitute a majority of the Board.

            The "Effective Date" shall be a date selected by the Committee,
      which (a) in the event of the occurrence of a Corporate Change specified
      in clause (i), (ii) or (iv) above, shall be no later than a date
      determined by the Committee to be far enough in advance of the date of
      such Corporate Change to permit each optionee to exercise such optionee's
      Options to purchase shares of Stock and participate therewith in such
      Corporate Change or (b) in the event of the occurrence of a Corporate
      Change specified in Clause (iii) or (v) above, shall be no later than
      thirty days after such Corporate Change.

            For purposes of the Corporate Changes described in (iii) and (v)
      above, the "Committee" shall be either the Committee as constituted prior
      to the occurrence of such Corporate Change or, if no Committee had been
      appointed, the Board as constituted prior to the occurrence of such
      Corporate Change.

            The "Alternatives" are:

                  (1) In the case of a Corporate Change specified in clauses
            (i), (ii) or (iv), the Committee may accelerate the time at which
            Awards then outstanding may be exercised so that such Awards may be
            exercised in full for a limited period of time on or before a
            specified date fixed by the Committee, after which specified date
            all unexercised Awards and all rights of optionees thereunder shall
            terminate;

                  (2) The Committee may accelerate the time at which Awards then
            outstanding may be exercised so that such Awards may be exercised in
            full for their then remaining term; or

                  (3) The Committee may require the mandatory surrender to the
            Company of outstanding Awards held by such optionees (irrespective
            of whether such Awards are then exercisable under the provisions of
            the Plan) as of a date, before or not later than sixty days after
            such Corporate Change, specified by the Committee, and in such event
            the Committee shall thereupon cancel such Awards and the Company
            shall pay to each optionee an amount of cash equal to the excess of
            the Market Value Per Share (determined as of the date such Corporate
            Change is effective) of the aggregate shares of Stock subject to
            such Award (whether or not then vested), over the aggregate Exercise
            Price of such shares.

            The Alternatives may be made conditional on the occurrence of any of
      the Corporate Changes specified in clauses (i) through (v) above and may
      vary among individual optionees. Notwithstanding the foregoing, the
      Committee shall not select an Alternative (unless consented to be the
      optionee) such that, if an optionee exercised his accelerated Award
      pursuant to Alternative (1) or (2) and participated in a transaction
      specified in clause (i), (ii) or (iv) or received cash pursuant to
      Alternative (3), the Alternative would result in the optionee's owing any
      money by virtue of operation of Section 16(b) of the 1934 Act. If all such
      Alternatives have such a result, the Committee shall take such action,
      which is hereby authorized, to put such

                                                                        [Page 7]
<PAGE>

      optionees in as close to the same position as such optionee would have
      been in had Alternative (1), (2) or (3) been selected but without
      resulting in any payment by such optionee pursuant to Section 16(b) of the
      1934 Act.

            Notwithstanding the foregoing, (1) with the consent of the optionee,
      the Committee may in lieu of the foregoing make such provision with
      respect to any Corporate Change as it deems appropriate, and (2) in the
      event that a Corporate Change described in Clauses (i), (ii) or (iii)
      occurs, but such Corporate Change does not result in any effective change
      in ownership or control of the Company, the Committee shall make such
      adjustments in the designation and number of unpurchased shares subject to
      this Plan, the number of shares subject to Awards outstanding under this
      Plan, the Exercise Price specified in Awards outstanding under the Plan,
      and such other terms and provisions of the Awards outstanding under this
      Plan as the Committee may determine to be appropriate and equitable.

                            VI. Employee's Agreement

            If, at the time of the exercise of any Award, in the opinion of
counsel for the Company, it is necessary or desirable, in order to comply with
any then applicable laws or regulations relating to the sale of securities, for
the individual exercising the Award to agree to hold any shares issued to the
individual for investment and without intention to resell or distribute the same
and for the individual to agree to dispose of such shares only in compliance
with such laws and regulations, the individual will, upon the request of the
Company, execute and deliver to the Company a further agreement to such effect.

                           VII. Withholding for Taxes

            Any cash payment under the Plan shall be reduced by any amounts
required to be withheld or paid with respect thereto under all present or future
federal, state and local taxes and other laws and regulations that may be in
effect as of the date of each such payment ("Tax Amounts"). Any issuance of
Stock pursuant to the exercise of an Award under the Plan shall not be made
until appropriate arrangements have been made for the payment of any amounts
that may be required to be withheld or paid with respect thereto. Such
arrangements may, at the discretion of the Committee, include any arrangements
similar to those permissible for payment of the Exercise Price of Awards.

                 VIII. Termination of Authority to Grant Awards

            No Awards will be made pursuant to this Plan after December 31,
2004.

                          IX. Amendment and Termination

            The Board may from time to time and at any time alter, amend,
suspend, discontinue or terminate this Plan and any Awards hereunder; provided,
that no change in any Award theretofore granted may be made which would impair
the rights of the optionee, or cause the Plan to not satisfy the requirements of
Rule 16b-3, without the consent of such optionee.

                X. Preemption by Applicable Laws and Regulations

            Anything in the Plan or any Agreement entered into pursuant to the
Plan to the contrary notwithstanding, if, at any time specified herein or
therein for the making of any determination, the issuance or other distribution
of shares of Stock, the payment of consideration to an employee as a result of
the exercise of any Right, as the case may be, any law, regulation or
requirement of any governmental authority having jurisdiction in the premises
shall require either the Company or the employee (or the employee's
beneficiary), as the case may be, to take any action in connection with any such
determination, the shares then to be issued or distributed, or such payment, the
issue or distribution of such shares or the making of such determination or
payment, as the case may be, shall be deferred until such action shall have been
taken.

                                                                        [Page 8]
<PAGE>

                                XI. Miscellaneous

            A. No Employment Contract. Nothing contained in the Plan shall be
      construed as conferring upon any employee the right to continue in the
      employ of the Company or any Affiliate.

            B. Employment with Affiliates. Employment by the Company for the
      purpose of this Plan shall be deemed to include employment by, and to
      continue during any period in which an employee is in the employment of,
      any Affiliate.

            C. No Rights as a Stockholder. An employee shall have no rights as a
      stockholder with respect to shares covered by such employee's Award until
      the date of the issuance of shares to the employee pursuant thereto. No
      adjustment will be made for dividends or other distributions or rights for
      which the record date is prior to the date of such issuance.

            D. No Right to Corporate Assets. Nothing contained in the Plan shall
      be construed as giving any employee, such employee's beneficiaries or any
      other person any equity or other interest of any kind in any assets of the
      Company or any Affiliate or creating a trust of any kind or a fiduciary
      relationship of any kind between the Company or an Affiliate and any such
      person.

            E. No Restriction on Corporate Action. Nothing contained in the Plan
      shall be construed to prevent the Company or any Affiliate from taking any
      corporate action that is deemed by the Company or such Affiliate to be
      appropriate or in its best interest, whether or not such action would have
      an adverse effect on the Plan or any Award made under the Plan. No
      employee, beneficiary or other person shall have any claim against the
      Company or any Affiliate as a result of any such action.

            F. Non-assignability. Neither an employee nor an employee's
      beneficiary shall have the power or right to sell, exchange, pledge,
      transfer, assign or otherwise encumber or dispose of such employee's or
      beneficiary's interest arising under the Plan or any Award received under
      the Plan; nor shall such interest be subject to seizure for the payment of
      an employee's or beneficiary's debts, judgments, alimony, or separate
      maintenance or be transferable by operation of law in the event of an
      employee's or beneficiary's bankruptcy or insolvency and to the extent any
      such interest arising under the Plan or an Award received under the Plan
      is awarded to a spouse pursuant to any divorce proceeding, such interest
      shall be deemed to be terminated and forfeited notwithstanding any vesting
      provisions or other terms herein or in the agreement evidencing such
      Award.

            G. Application of Funds. The proceeds received by the Company from
      the sale of shares pursuant to the Plan will be used for general corporate
      purposes.

            H. Governing Law; Construction. All rights and obligations under the
      Plan shall be governed by, and the Plan shall be construed in accordance
      with, the laws of the State of Delaware without regard to the principles
      of conflicts of laws. Titles and headings to Sections herein are for
      purposes of reference only, and shall in no way limit, define or otherwise
      affect the meaning or interpretation of any provisions of the Plan.

            Adopted effective as of January 1, 1990, as amended through January
      5, 2001.

                                                                        [Page 9]

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