VALERO ENERGY CORP/TX
AMENDED AND RESTATED 1996 LONG-TERM INCENTIVE PLAN
<DOCUMENT>
<TYPE>EX-10.28
<SEQUENCE>21
<FILENAME>d13299exv10w28.txt
<DESCRIPTION>AMENDED AND RESTATED 1996 LONG-TERM INCENTIVE PLAN
<TEXT>
<PAGE>


                                  EXHIBIT 10.28

                      ULTRAMAR DIAMOND SHAMROCK CORPORATION
               AMENDED AND RESTATED 1996 LONG TERM INCENTIVE PLAN



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                      ULTRAMAR DIAMOND SHAMROCK CORPORATION
               AMENDED AND RESTATED 1996 LONG-TERM INCENTIVE PLAN


1.     Purposes: Definitions. The purposes of the Plan are to further the
       growth, development and financial success of the Company by providing
       incentives to those officers and other key employees who have the
       capacity for contributing in substantial measure toward the growth and
       profitability of the Company and to assist the Company in attracting and
       retaining employees with the ability to make such contributions. To
       accomplish such purposes, the Plan provides that the Company may grant
       Nonqualified Stock Options, Incentive Stock Options, and Restricted
       Shares.

       Whenever the following terms are used in the Plan, they shall have the
       meaning specified below unless the context clearly indicates to the
       contrary.

       "Board" shall mean the Board of Directors of the Company.

       "Bonus Award" shall mean a cash or Share-based award granted pursuant to
       Section 7.1.

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

       "Committee" shall mean the Compensation-Committee of the Board, appointed
       as provided in Section 2.1.

       "Company" shall mean Ultramar Diamond Shamrock Corporation, a Delaware
       corporation, and any successor corporation.

       "Effective Date" shall have the meaning set forth in Section 9.1.

       "Employee" shall mean any employee (including any officer whether or not
       a director) of the Company, or of any corporation which is then a
       Subsidiary.

       "Exchange Act" shall mean the Securities Exchange Act of 1934, as
       amended.

       "Fair Market Value" of a Share as of a given date shall mean (a) the
       closing sale price per Share as reported on the principal exchange on
       which Shares are then trading, if any, on such date, or if there are no
       sales on such date, on the next preceding trading day during which a sale
       occurred, or (b) if clause (a) does not apply, the fair market value of
       the Share as determined by the Committee from time to time in good faith.

       "Incentive Stock Option" shall mean an Option intended to be and
       designated as an "incentive stock option" within the meaning of section
       422 of the Code.

       "Nonqualified Stock Option" shall mean an Option that is not an Incentive
       Stock Option.

       "Option" shall mean an option to purchase Shares (including Restricted
       Shares, if the Committee so determines) granted pursuant to Section 5.1.



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       "Option Agreement" shall mean the written agreement pursuant to which an
       Option is awarded.

       "Optionee" shall mean an Employee to whom an Option has been granted
       pursuant to the Plan.

       "Participant" shall mean an Employee to whom an award is granted pursuant
       to the Plan.

       "Performance Criteria" shall have the meaning set forth in Section 8.

       "Plan" shall mean this Ultramar Diamond Shamrock Corporation Amended and
       Restated 1996 Long Term Incentive Plan, as hereinafter amended from time
       to time.

       "Restricted Shares" shall mean shares which are awarded to a Participant
       that are subject to the restrictions described in Section 6.1.

       "Rule 16b-3" shall mean Rule 16b-3 adopted by the Securities and Exchange
       Commission under the Exchange Act.

       "Securities Act" shall mean the Securities Act of 1933, as amended.

       "Share" shall mean a share of the Company's Common Stock, $.01 par value.

       "Subsidiary" shall mean any corporation in an unbroken chain of
       corporations beginning with the Company, if each such corporation (other
       than the last corporation in the unbroken chain), or if each group of
       commonly controlled corporations, then owns fifty percent (50%) or more
       of the total combined voting power in one of the other corporations in
       such chain.

2.     Administration.

       2.1    Compensation Committee. The Plan shall be administered by the
              Committee, which shall consist of two or more individuals
              appointed by the Board and holding office at the pleasure of the
              Board. All Committee members shall be members of the Board and
              must be "non-employee directors," as such term is described in
              Rule 16b-3, if and as such Rule is in effect, and "outside
              directors" within the meaning of Section 162(m) of the Code.
              Appointment of Committee members shall be effective upon
              acceptance of appointment. Committee members may resign at any
              time by delivering written notice to the Board. The Board shall
              fill vacancies in the Committee.

       2.2    Duties and Powers of Committee. It shall be the duty of the
              Committee to conduct the general administration of the Plan in
              accordance with its terms and provisions. The Committee shall have
              the power to interpret the Plan and to adopt such rules for the
              administration, interpretation, and application of the Plan as are
              consistent therewith



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              and to interpret, amend or revoke any such rules. All actions
              taken and all interpretations and determinations made by the
              Committee (and by the Company's executive officers in furtherance
              of such interpretations and determinations) shall be binding upon
              all affected persons. In addition to the authority otherwise
              prescribed in the Plan, the Committee shall have the authority in
              it sole discretion to prescribe such limitations, restrictions,
              and conditions upon, provisions for vesting and acceleration of,
              provisions prescribing the nature and amount of legal
              consideration to be received upon the grant or exercise of, any
              award made under the Plan and all other terms and conditions of
              any such award as the Committee deems appropriate, provided that
              none of the foregoing conflicts with any of the express terms or
              limitations of the Plan and that the foregoing are set forth in
              the instrument granting any such award or in the rules referred to
              elsewhere in this Section 2.2.

       2.3    Majority Rule. The Committee shall act by a majority of its
              members in office. The Committee may act either by vote at a
              telephonic or other meeting or by a memorandum or other written
              instrument signed by a majority of the Committee.

       2.4    Compensation: Professional Assistance: Good Faith Actions. Members
              of the Committee shall receive such compensation for their
              services as members as may be determined by the Board. All
              expenses and liabilities incurred by members of the Committee in
              connection with the administration of the Plan shall be borne by
              the Company. The Committee may, with the approval of Board, employ
              attorneys, consultants, accountants, appraisers, or other persons.
              The Committee, the Company and its officers and directors shall be
              entitled to rely upon the advice, opinions or valuations of any
              such persons. No member of the Committee shall be personally
              liable for any action, determination or interpretation made in
              good faith with respect to the Plan or the awards hereunder, and
              all members of the Committee shall be fully protected by the
              Company in respect to any such action, determination or
              interpretation.

3. Shares Subject To The Plan.

       3.1    Shares Subject to the Plan. Subject to adjustment pursuant to
              Section 3.3. the number of Shares that may be the subject of or
              related to awards under this Plan is 11,000.000. Such shares may
              be treasury shares or shares of original issue or a combination of
              the foregoing. In the event that (a) any Participant delivers
              Shares (i) to pay the exercise price of an Option or any other
              award granted hereunder, or (ii) in satisfaction of any tax
              withholding requirement or (b) any other payment made or benefit
              realized under the Plan is satisfied by the transfer or
              relinquishment of Shares, the number of Shares available for
              awards under the Plan shall be increased by the number of Shares
              so surrendered, paid or relinquished. In the event that any award
              under the Plan expires, terminates or is canceled for any reason
              whatsoever without the Participant having received any benefit
              therefrom, the Shares covered by such award shall again become
              available for future awards under the Plan. For purposes of the
              foregoing sentence, a Participant shall not be deemed to have
              received any



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       "benefit" in the case of forfeited Restricted Shares by reason of having
       enjoyed voting rights and dividend rights prior to the date of
       forfeiture.

3.2    Limitations.  Subject to adjustment pursuant to Section 3.3.

              (i)    The maximum number of Shares that may be the subject of
                     Options under the Plan to any Participant shall not, in the
                     aggregate, exceed 600,000 per year;

              (ii)   No more than twenty percent (20%) of the maximum number of
                     Shares available for award under this Plan shall be granted
                     to Participants as Restricted Shares or Share-based Bonus
                     Awards, and the maximum number of Restricted Shares and
                     Share-based Bonus Awards granted under the Plan to any
                     Participant shall not exceed 200,000 Shares per year.

              (iii)  The number of Shares issued or transferred as Restricted
                     Shares that become nonforfeitable solely contingent upon
                     the Participant attaining a certain length of service with
                     the Company shall not in the aggregate exceed 400,000
                     Shares; and;

              (iv)   The aggregate number of Shares actually issued or
                     transferred by the Company upon the exercise of Incentive
                     Stock Options shall not exceed the total number of Shares
                     specified in Section 3.1.

3.3    Changes in Company's Shares. In the event of any stock dividend,
       extraordinary cash dividend, recapitalization, reorganization, merger,
       consolidation, split-up, spin-off, combination, exchange of shares,
       warrants or rights offering to purchase Shares at a price substantially
       below fair market value, or other similar corporate event that affects
       the Shares or other awards granted or made available for issuance under
       the Plan such that an adjustment is required in order to preserve the
       benefits or potential benefits intended to be made available under this
       Plan, then the Committee shall in such manner as the Committee may be
       equitable, adjust any or all of (a) the number and kind of shares which
       thereafter may be awarded or optioned and sold or made the subject of
       other awards granted under the Plan in the aggregate or to any
       Participant, (b) the number and kind of shares subject to outstanding
       Options and other awards, and (c) the grant, exercise or conversion price
       with respect to any of the foregoing; provided, however, that the number
       of Shares subject to any Option or other award shall always be a whole
       number.

              Notwithstanding the above, in the event of any of the following:

              A.     the Company is merged or consolidated with another
                     corporation or entity and, in connection therewith,
                     consideration is received by shareholders of the Company in
                     a form other than stock or other equity interests of the
                     surviving entity;

              B.     all or substantially all of the assets of the Company are
                     acquired by another person.



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              C.     the reorganization or liquidation of the Company; or

              D.     the Company shall enter into a written agreement to undergo
                     an event described in clauses A, B, or C above.

              then the Committee may, in its discretion and upon at least ten
              days advance notice to the affected persons, cancel any
              outstanding Options and/or other awards and pay to the holders
              thereof, in cash or stock, or any combination thereof, the value
              of such Options or awards based upon the price per Share received
              or to be received by other stockholders of the Company in the
              event. The Committee may vary the terms of this Section 3.3 in any
              particular Option or other award agreement.

4.     Eligibility.

       Any Employee who is an officer or who is designated by the Committee as a
       key Employee shall be eligible to receive awards under this Plan. In
       general, an Employee may be designated as a key Employee if such Employee
       is responsible for or contributes to the management, growth, and/or
       profitability of the business of the Company and/or a Subsidiary.

5.     Stock Options.

       5.1    Grant. Subject to the provisions of the Plan, the Committee shall
              have the sole and complete authority to determine the eligible
              Employees to whom Options shall be granted the number of Shares to
              be covered by each Option, the exercise price therefor and the
              terms and conditions applicable to the exercise of the Option. The
              Committee shall have the authority to grant Incentive Stock
              Options. Nonqualified Stock Options, or both. In the case of
              Incentive Stock Options, the terms and conditions of such grants
              shall be subject to and comply with Section 422 of the Code and
              any rules or regulations promulgated thereunder.

       5.2    Terms. Options shall be granted only pursuant to a written Option
              Agreement, which shall be executed by the Optionee and an
              authorized officer of the Company and which shall contain such
              terms and conditions as the Committee shall determine, consistent
              with the Plan, including the following:

              (a)    Price. The exercise price for the Shares subject to an
                     Option, or the manner in which such exercise price is to be
                     determined, shall be determined by the Committee, provided
                     that, the exercise price per Share shall not be less than
                     100% of the Fair Market Value of a Share as of the date the
                     Option is granted.

              (b)    Term. Options shall be for such term as the Committee shall
                     determine, provided that no Option shall be exercisable
                     after the expiration of ten years from the date it is
                     granted.



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              (c)    Vesting. Options shall be exercisable in such installments
                     (which need not be equal) and at such times as may be
                     designated by the Committee and set forth in the Option
                     Agreement. To the extent not exercised, installments shall
                     accumulate and may be exercised, in whole or in part, at
                     any time after becoming exercisable, but not later than the
                     date the Option expires. The Committee may accelerate the
                     exercisability of any Option or portion thereof at any
                     time. Notwithstanding the foregoing, the Committee may, in
                     its sole discretion, provide in the Option Agreement that
                     all or a part of the Shares received by an Optionee upon
                     the exercise of a Nonqualified Stock Option shall be
                     Restricted Shares subject to any or all of the restrictions
                     or conditions prescribed pursuant to Section 6.2(b).

              (d)    Incentive Stock Option Grants to 10% Stockholders.
                     Notwithstanding anything to the contrary in this Section 5,
                     if an Incentive Stock Option is granted to a Participant
                     who owns stock representing more than ten percent of the
                     voting power of all classes of stock of the Company or of a
                     Subsidiary, the term of the Option shall not exceed five
                     years from the date of grant of such Option and the
                     exercise price shall be at least 110 percent of the Fair
                     Market Value (on the date of grant) of the Shares subject
                     to the Option.

              (e)    $100,000 Per Year Limitation for Incentive Stock Options.
                     To the extent the aggregate Fair Market Value (determined
                     as of the date of grant) of Shares for which Incentive
                     Stock Options are exercisable for the first time by any
                     Participant during any calendar year (under all plans of
                     the Company) exceeds $100,000, such excess Incentive Stock
                     Options shall be treated as Nonqualified Stock Options.

   5.3        Method of Exercise. The exercise of an Option shall be made only
              by a written notice delivered in person or by first class mail to
              the Secretary of the Company at the Company's principal executive
              office, or by such other method approved by the Committee. Any
              such notice shall specify the number of Shares to be purchased and
              be accompanied by full payment therefor and shall otherwise be in
              accordance with the Option Agreement pursuant to which the Option
              was granted. The purchase price for any Shares purchased pursuant
              to the exercise of an Option shall be paid in full upon such
              exercise (i) in cash, (ii) by check, (iii) at the discretion of
              the Committee and upon such terms and conditions as the Committee
              shall approve, (A) by transferring Shares to the Company
              (including by means of attestation of ownership of a sufficient
              number of Shares in lieu of actual delivery of such Shares to the
              Company); provided, however, that such Shares are not subject to
              any pledge or other security interest and have either been held by
              the Optionee for at least six months, previously acquired by the
              Optionee on the open market or meet such other requirements as the
              Committee may determine necessary in order to avoid an accounting
              earnings charge in respect of the Option, or (B) by exercising
              pursuant to a "cashless exercise" procedure, or (iv) any
              combination thereof. Any Shares transferred to the Company, as
              payment of the purchase price under an Option, shall be valued at
              their Fair Market Value on the date of exercise of such Option. If



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              requested by the Committee, the Optionee shall deliver the Option
              Agreement evidencing the Option to the Secretary of the Company
              who shall endorse thereon a notation of such exercise and return
              such Option Agreement to the Optionee. Not less than one hundred
              (100) Shares may be purchased at any time upon the exercise of an
              Option unless the number of Shares so purchased constitutes the
              total number of Shares then purchasable under the Option or the
              Committee determines otherwise, in its sole discretion.

       5.4    Reload Options. The Committee may provide for the grant to any
              Optionee of additional Options ("Reload Options") upon the
              exercise of Option, including Reload Options, through the delivery
              of Shares; provided, however, that (i) Reload Options may be
              granted only with respect to the same number of Shares as were
              surrendered to exercise the Options, (ii) the exercise price per
              Share of the Reload Options shall be not less than 100% of the
              Fair Market Value of a Share as of the date the Reload Options are
              granted, and (iii) the Reload Options shall not be exercisable
              after the expiration of the terms of the Options, the exercise of
              which resulted in the grant of the Reload Options.

6.   Restricted Shares.

       6.1    Grants. Subject to the provisions of the Plan, the Committee shall
              have the sole and complete authority to determine the eligible
              Employees to whom, and the time or times at which, grants of
              Restricted Shares will be made, the number of Restricted Shares to
              be awarded, the price (if any) to be paid by the recipient of
              Restricted Shares, the time or times within which such awards may
              be subject to forfeiture, and all other conditions of the awards.
              Awards of Restricted Shares may be granted either alone or in
              addition to other awards granted under the Plan. The Committee may
              condition the grant or vesting of Restricted Shares upon the
              attainment of Performance Criteria or such other factors as the
              Committee may determine, it its sole discretion. The provisions of
              Restricted Share awards need not be the same with respect to each
              recipient.

       6.2    Terms. Restricted Shares awards shall be granted only pursuant to
              a written agreement, which shall be executed by the Participant
              and a duly authorized officer of the Company and which shall
              contain such terms and conditions as the Committee shall
              determine, consistent with the Plan, including the following:

              (a)    Price. The purchase price of Restricted Shares shall be
                     determined by the Committee, in its sole discretion, and
                     may be zero.

              (b)    Restrictions and Conditions.

                     (i)    The award may be subject to such restrictions as may
                            be imposed by the Committee in its sole discretion,
                            including, without limitation, Performance Criteria,
                            as a condition for the grant or vesting of the
                            Restricted Shares; provided, however, that any
                            restrictions based upon the



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                            Participant attaining a certain length of service
                            with the Company shall not exceed five years of
                            service after the date of grant of the Restricted
                            Shares; and provided further, that the period within
                            which Performance Criteria must be achieved shall
                            not exceed ten years after the date of grant of the
                            Restricted Shares. The Committee may provide for the
                            lapse of restrictions imposed on an award in
                            installments.

                     (ii)   Except as provided in clause (i), the Participant
                            shall have, with respect to the Restricted Shares,
                            all of the rights of a stockholder of the Company,
                            including the right to vote the Shares and to
                            receive any cash dividends.

                     (iii)  The Committee may, in its sole discretion, retain in
                            the applicable award agreement the authority to
                            waive in whole or in part any or all restrictions
                            with respect to a Participant's Restricted Shares,
                            based on such factors as the Committee may deem
                            appropriate.

                     (iv)   The Committee may, in its sole discretion, provide
                            that Restricted Shares be held in escrow or trust
                            pending delivery to the Participant upon the
                            satisfaction of any applicable restrictions or
                            delivery to the Company upon forfeiture.

7.     Bonus Awards.

       7.1    Grant. Subject to the provisions of the plan, the Committee shall
              have the sole and complete authority to determine eligible
              Employees to whom Bonus Awards will be awarded. A Bonus Award
              shall entitle a Participant to an award of cash or Shares under
              such terms and conditions and shall be established by the
              Committee.

       7.2    162(m) Bonus Awards. The Committee may designate any particular
              Bonus Award as being a 162(m) Bonus Award: provided that any Bonus
              Award so designated will be subject to the following requirements,
              notwithstanding any other provision of the Plan to the contrary:
              No. 162(m) Bonus Award may be paid unless and until the
              stockholders of the Company have approved the Plan in a manner
              which complies with the stockholder approval requirement of
              Section 162(m) of the code of the Treasury regulations promulgated
              thereunder. The performance goals to which a 162(m) Bonus Award is
              subject must be based solely on Performance Criteria described in
              Section 8.2. Such Performance Criteria, and the Bonus Award
              payable upon attainment thereof, must be established by the
              Committee within the time limits required in order for the 162(m)
              Bonus Award to qualify for the performance-based compensation
              exception to Section 162(m) of the Code. No 162(m) Bonus Award may
              be paid until the Committee has certified the level of attainment
              of the applicable Performance Criteria. The maximum amount of any
              single 162(m) Bonus Award is $7,000,000 (if denominated in
              dollars) or 200,000 Shares (if denominated in Shares).
              Notwithstanding the above, all "Intermediate Incentive Awards" and
              "Excess Performance-Based Restricted Stock Award" granted under
              the Company's



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              Intermediate Incentive and Performance-Based Restricted Stock Plan
              shall be 162(m) Bonus Awards.

8.     Performance Criteria.

       8.1    Grants Subject to Performance Criteria. Options, Restricted
              Shares, and Bonus Awards, when so determined by the Committee, may
              be subject to such financial or non-financial performance or other
              criteria ("Performance Criteria") as may be adopted from time to
              time by the Committee in its discretion. Performance Criteria
              shall not include the attaining of a certain length of service
              with the Company.

       8.2    Performance Criteria. The Performance Criteria applicable to any
              Participant who is, or who is determined by the Committee to be
              likely to become, a "covered employee" within the meaning of
              Section 162(m) of the Code (a "Covered Employee"), shall be
              limited to growth, improvement or attainment of certain levels of:

              (i)    return on capital, equity, or operating costs;

              (ii)   economic value added;

              (iii)  margins;

              (iv)   total stockholder return or market value;

              (v)    operating profit or net income;

              (vi)   cash flow, earnings before interest and taxes, earnings
                     before interest, taxes and depreciation, or earnings before
                     interest, taxes, depreciation and amortization;

              (vii)  sales, throughput, or product volumes;

              (viii) costs or expenses;

              (ix)   capital employed; or

              (x)    any combination of the foregoing.

                  Such Performance Criteria may be expressed either on an
              absolute basis or relative to other companies selected by the
              Committee. This Section 8.2 is intended to comply with the
              exception from Section 162(m) of the Code for qualified
              performance-based compensation, and shall be construed, applied
              and administered accordingly.

       8.3    Change in Circumstances. If the Committee determines that a change
              in the business, operations, corporate structure or capital
              structure of the Company, or the manner in



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              which it conducts its business, or other events or circumstances
              render the Performance Criteria to be unsuitable, the Committee
              may modify such Performance Criteria or the related minimum
              acceptable level of achievement, in whole or in part, as the
              Committee deems appropriate and equitable; provided, however, that
              no such modification shall be made in the case of any award to a
              Participant who is, or is determined by the Committee to be likely
              to become, a Covered Employee if the effect would be to cause the
              award to fail to qualify for the performance-based exception to
              Section 162(m) of the Code. In addition, at the time the award
              subject to Performance Criteria is made and performance goals
              established, the Committee is authorized to determine the manner
              in which the Performance Criteria will be calculated or measured
              to take into account certain factors over which Participants have
              no or limited control including market related changes in
              inventory value, changes in industry margins, changes in
              accounting principles, and extraordinary charges to income.

9.     Miscellaneous.

       9.1    Effective Date. The Plan originally became effective as of October
              22, 1996 (the "Effective Date") and was approved by the Company's
              shareholders on December 3, 1996. The amendment and restatement of
              the Plan is effective February 7, 2001, subject to approval of
              such amendment and restatement by holders of a majority of the
              securities of the Company present, or represented, and entitled to
              vote at a meeting of stockholders duly held in accordance with the
              laws of the State of Delaware no later than February 6, 2002. The
              Plan shall expire on October 21, 2006.

       9.2    Amendment, Suspension or Termination of the Plan. The Plan may be
              wholly or partially amended or otherwise modified, suspended or
              terminated at any time or from time to time by the Board;
              provided, however, that, except as provided in Section 3.3, no
              amendment shall be effective unless approved by the affirmative
              vote of a majority of the votes eligible to be cast at a meeting
              of stockholders of the Company held within twelve (12) months of
              the date of adoption of such amendment, where such amendment will:

              (a)    increase the total number of Shares reserved for the
                     purposes of the Plan; or

              (b)    make such other change as may require stockholder approval
                     (i) under the rules of any exchange on which Shares are
                     traded, or (ii) in order for awards granted under the Plan
                     to qualify for an exception from Section 162(m) of the
                     Code.

              Neither the amendment, suspension nor termination of the Plan
              shall, without the consent of the Participant, alter or impair any
              rights or obligations under any award therefore granted. No awards
              may be granted during any period of suspension nor after
              termination of the Plan, and in no event may any awards be granted
              under the Plan after ten years from the Effective Date.



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       9.3    Amendment of Award. The Committee may amend, modify or terminate
              any outstanding award with the Participant's consent at any time
              prior to payment or exercise in any manner not inconsistent with
              the terms of the Plan, including without limitation, (a) to change
              the date or dates as of which an Option becomes exercisable or
              Restricted Shares become vested, or (b) to cancel and reissue an
              award under such different terms and conditions as it determines
              appropriate; provided, however, that, without stockholder
              approval, (i) no such amendment or modification may reduce the
              exercise price of an Option, and (ii) the Committee may not cancel
              any outstanding Option and replace it with a new Option (with a
              lower exercise price), in either case in a manner which would
              either (X) be reportable in the Company's proxy statement as
              Options which have been "repriced" (as such term is used in Item
              402 of Regulation S-K promulgated under the Exchange Act), or (Y)
              result in any Option being accounted for under the "variable"
              method for financial statement reporting purposes.

       9.4    Nontransferability:

              (a)    Each award shall be exercisable only by the Participant
                     during the Participant's lifetime, or, if permissible under
                     applicable law, by the Participant's legal guardian or
                     representative. No award may be assigned, alienated,
                     pledged, attached, sold or otherwise transferred or
                     encumbered by a Participant otherwise than by will or by
                     the laws of descent and distribution and any such purported
                     assignment, alienation, pledge, attachment, sale, transfer
                     or encumbrance shall be void and unenforceable against the
                     Company or a Subsidiary; provided that the designation of a
                     beneficiary shall not constitute an assignment, alienation,
                     pledge, attachment, sale, transfer or encumbrance.

              (b)    Notwithstanding the foregoing, the Committee may in an
                     Option Agreement or at any time after the date of grant in
                     an amendment to an Option Agreement provide that Options
                     which are not intended to qualify as Incentive Stock
                     Options may be transferred by a Participant without
                     consideration, subject to such rules as the Committee may
                     adopt consistent with any applicable Option Agreement to
                     preserve the purposes of the plan, to:

                     (i)    any person who is a "family member" of the
                            Participant, as such term is used in the
                            instructions to Form S-8 (collectively, the
                            "Immediate Family Members");

                     (ii)   a trust solely for the benefit of the Participant
                            and his or her Immediate Family Members;

                     (iii)  a partnership or limited liability company whose
                            only partners or shareholders are the Participant
                            and his or her Immediate Family Members; or



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                     (iv)   any other transferee as may be approved either (a)
                            by the Board or the Committee in its sole
                            discretion, or (b) as provided in the applicable
                            Award agreement;

                           (each transferee described in clauses (i), (ii),
                           (iii) and (iv) above is hereinafter referred to as a
                           "Permitted Transferee"); provided that the
                           Participant give the Committee advance written notice
                           describing the terms and conditions of the proposed
                           transfer and the Committee notifies the Participant
                           in writing that such a transfer would comply with the
                           requirements of the Plan and any applicable Option
                           Agreement.

              (c)    The terms of any Option transferred in accordance with the
                     immediately preceding sentence shall apply to the Permitted
                     Transferee and any reference in the Plan or in an Option
                     Agreement to an Optionee or Participant shall be deemed to
                     refer to the Permitted Transferee, except that (a)
                     Permitted Transferees shall not be entitled to transfer any
                     Options, other than by will or by laws or descent and
                     distribution; (b) Permitted Transferees shall not be
                     entitled to exercise any transferred Options unless there
                     shall be in effect a registration statement on an
                     appropriate form covering the Shares to be acquired
                     pursuant to the exercise of such Option if the Committee
                     determines, consistent with any applicable Option
                     Agreement, that such registration statement is necessary or
                     appropriate, (c) the Committee or the Company shall not be
                     required to provide any notice to a Permitted Transferee,
                     whether or not such notice is or would otherwise have been
                     required to be given to the Participant under the Plan or
                     otherwise, and

              (d)    the consequences of termination of the Participant's
                     employment by, or services to, the Company or a Subsidiary
                     under the terms of the Plan and the applicable Option
                     Agreement shall continue to be applied with respect to the
                     Participant, following which the Options shall be
                     exercisable by the Permitted Transferee only to the extent,
                     and for the periods, specified in the Plan and the
                     applicable Option Agreement.

       9.5    No Rights as Stockholder. Subject to the provisions of the
              applicable award, no Participant shall be deemed for any purpose
              to be or to have the rights and privileges of the owner of any
              Shares subject to any Option or otherwise to be distributed under
              the Plan until such Participant shall have become the holder
              thereof. Notwithstanding the foregoing, in connection with each
              grant of Restricted Shares, the applicable award agreement shall
              specify if and to what extent the Participant shall not be
              entitled to the rights of a stockholder in respect of such
              Restricted Shares.

       9.6    Deferral. The Committee shall have the authority to establish
              rules governing the deferral of the delivery of Shares upon the
              exercise of Nonqualified Stock Options for tax planning purposes.
              Such rules shall be contained in the applicable Option Agreement
              or in an amendment to such Option Agreement.



                                      -12-
<PAGE>


       9.7    Foreign Participants. Subject to the provisions of Section 9.3,
              the Committee may, in order to fulfill the Plan purposes and
              without amending the Plan, modify previously granted awards to
              Participants who are foreign nationals or employed outside the
              United States to recognize differences in local law, tax policy or
              custom.

       9.8    Effect of Plan Upon Other Compensation and Incentive Plans. The
              adoption of the Plan shall not affect any other compensation or
              incentive plans in effect for the Company of any Subsidiary.
              Nothing in the Plan shall be construed to limit the right of the
              Company or any Subsidiary to establish any other forms of
              incentives or compensation for Employees of the Company or any
              Subsidiary.

       9.9    Regulations and Other Approvals; Governing Law.

              (a)    The obligation of the Company to sell or deliver Shares
                     with respect to Options or any other award granted under
                     the Plan shall be subject to all applicable laws, rules and
                     regulations, including all applicable federal and state
                     securities laws, and the obtaining of all such approvals by
                     governmental agencies as may be deemed necessary or
                     appropriate by the Committee.

              (b)    The Committee may make such changes as may be necessary or
                     appropriate to comply with the rules and regulations of any
                     government authority or to obtain the tax benefits under
                     the applicable provisions of the Code and regulations
                     promulgated thereunder for Employees granted Incentive
                     Stock Options.

              (c)    Each Option and any other award payable in Shares is
                     subject to the requirement that, if at any time the
                     Committee determines, in its sole discretion, that the
                     listing, registration or qualification of Shares issuable
                     pursuant to the Plan is required by any securities exchange
                     or under any state or federal law, or the consent or
                     approval of any governmental regulatory body is necessary
                     or desirable as a condition of, or in connection with, the
                     grant of any Option or the issuance of Shares, no Options
                     shall be granted or payment made or Shares issued, in whole
                     or in part, unless listing, registration, qualification,
                     consent or approval has been effected or obtained free of
                     any conditions as acceptable to the Committee.

              (d)    In the event that the disposition of Shares acquired
                     pursuant to the Plan is not covered by a then current
                     registration statement under the Securities Act, and is not
                     otherwise exempt from such registration, such Shares shall
                     be restricted against transfer to the extent required by
                     the Securities Act or regulations thereunder, and the
                     Committee may require any individual receiving Shares
                     pursuant to the Plan, as a condition precedent to receipt
                     of such Shares, to represent to the Company in writing that
                     the Shares acquired by such individual are acquired for
                     investment only and not with a view to distribution. The
                     certificate for any Shares acquired pursuant to the plan
                     shall



                                      -13-
<PAGE>


                     include any legend that he Committee deems appropriate to
                     reflect any restrictions on transfer.

       9.10   Governing Law. The Plan and the rights of all persons claiming
              hereunder shall be construed and determined in accordance with the
              laws of the State of Delaware without giving effect to the choice
              of law principles thereof.

       9.11   Withholding of Taxes. No later than the date as to which an amount
              first becomes includible in the gross income of a Participant for
              federal income tax purposes with respect to any award granted
              under the Plan, the Participant shall pay to the Company, or make
              arrangements satisfactory to the Company regarding the payment of,
              any federal, state, local or other taxes of any kind required by
              the law of any applicable jurisdiction or the Company to be
              withheld with respect to such amount. The obligations of the
              Company under the Plan shall be conditional on such payment or
              arrangements and the Company and its Subsidiaries shall, to the
              extent permitted by law, have the right to deduct any such taxes
              from any payment of any kind otherwise due to the Participant. In
              its discretion, the Committee may permit Participants to satisfy
              withholding obligations by delivering previously owned Shares or
              by electing to have Shares withheld.

       9.12   No Right To Continued Employment. Nothing in the Plan or in any
              award agreement shall confer upon any Employee any right to
              continue in the employ of the Company or any Subsidiary or shall
              interfere with or restrict in any way the right to the Company and
              its Subsidiaries, which are hereby expressly reserved, to remove,
              terminate or discharge any Employee at any time for any reason
              whatsoever, with or without cause.

       9.13   Titles: Construction. Titles are provided herein for convenience
              only and are not to serve as a basis for interpretation or
              construction of the Plan. The masculine pronoun shall include the
              feminine and neuter and the singular shall include the plural,
              when the context so indicates. Any reference to a section (other
              than to a section of the Plan) shall also include a successor to
              such section.



                                      -14-


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